1994 Supreme(Raj) 993
RAJASTHAN HIGH COURT
R.R.Yadav, J.
M/s. Mahaveer Textiles - Appellant
Versus
Union of India - Respondent
S.B. Civil Writ Petition No. 2791 of 1984.
Decided On : 7-12-1994
Advocates:
For the Petitioner:Mr. M.L. Kala, Advocate.
For the Respondents No. 1 to 4:Mr. M.S. Vyas, Advocate.
The coverage of an establishment under the Employees Provident Funds and Miscellaneous Provisions Act, 1952, depends on whether it is a separate and independent establishment or part of a larger covered unit.
Headnote:
EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 - SECTION 7-A(1) - SECTION 16 - SECTION 19-A - Coverage of Establishment - Infancy Period - Reasonable Opportunity of Hearing - Natural Justice - Unity of Ownership, Purpose, Proximity, and Employment - Recovery of Dues - Interpretation of Statutory Provisions.
Fact of the Case:
The petitioner, M/s. Mahaveer Textiles, challenged the order passed by the Regional Provident Fund Commissioner (RPFC) under Section 7-A(1) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (the Act), determining the applicability of the Act to the petitioner's establishment and directing the recovery of dues. The petitioner claimed entitlement to the infancy period under Section 16 of the Act and alleged that it was not afforded a reasonable opportunity of being heard as required under Section 7-A(3) of the Act.
Finding of the Court:
The court found that the petitioner was not entitled to the infancy period as it was not a separate and independent establishment but was part of a larger covered unit, M/s. Gandhi Textiles, which was established in 1968. The court also held that the petitioner was afforded a reasonable opportunity of being heard as it had received a notice to appear before the RPFC but had failed to do so without providing a valid reason.
Issues: 1. Whether the petitioner was entitled to the infancy period under Section 16 of the Act. 2. Whether the petitioner was afforded a reasonable opportunity of being heard as required under Section 7-A(3) of the Act. 3. Whether the petitioner was a separate and independent establishment or part of a larger covered unit.
Ratio Decidendi: 1. The court interpreted Section 16 of the Act and held that the petitioner was not entitled to the infancy period as it was not a separate and independent establishment. The court relied on the fact that the petitioner was part of a larger covered unit, M/s. Gandhi Textiles, which was established in 1968. 2. The court interpreted Section 7-A(3) of the Act and held that the petitioner was afforded a reasonable opportunity of being heard. The court relied on the fact that the petitioner had received a notice to appear before the RPFC but had failed to do so without providing a valid reason. 3. The court interpreted the relevant provisions of the Act and held that the petitioner was not a separate and independent establishment but was part of a larger covered unit, M/s. Gandhi Textiles.
Final Decision: The court dismissed the petition and upheld the order passed by the RPFC.
JUDGMENT
1. - The petitioner-establishment has filed the instant writ petition under Article 226 of the Constitution of India with a prayer that he should be declared to be entitled for infancy period under Section 16 of the Employees Provident Funds & Miscellaneous Provisions Act, 1952, (hereinafter referred to as 'the Act of 1952') and order passed by the Regional Provident Fund Commissioner, Jaipur (respondent No. 2) dated 18.5.1982 followed by recovery proceedings dated 17.8.1982 Annx. 9 and 10 respectively be quashed. It is further prayed that the order passed by respondent No. 4 in exercise of his powers under Section 19-A of the said Act passed on 23.10.92 Annx. 12 to the writ petition may also be quashed.
2. The aforesaid reliefs are being prayed by the petitioner-establishment on the ground, inter alia, that it is an establishment which came into existence on 3.9.79 by an instrument of partnership-deed Annx. 1 to the writ petition executed between the partners viz. Shri Shanti Lal and Smt. Premi Bai. It is also stated that prior to the commencement of the partnership, Shri Shantilal was running this concern in his individual capacity as Proprietor w.e.f. 1.3.78, which ultimately, converted into partnership firm under the name and style of M/s. Mahaveer Textiles, Sojat Road, Pali which was constituted by Shri Shanti Lal s/o Shri Mangal Chand having 60 per cent share and Smt. Premi Bai w/o Shri Chanan Mal having 40 per cent share. It is also alleged in para 4 of the writ petition that the petitioner-establishment was never inspected by the Provident Fund Inspector or any other higher authority before the provisions of the Act of 1952 were made applicable to the petitioner-establishment. In the same paragraph, it is alleged by the petitioner-establishment that the impugned order Annx. 9 to the writ petition on 18.5.92 was passed by respondent No. 2 without affording to the petitioner-establishment a reasonable opportunity of being heard as contemplated under sub-section (3) of Section 7-A of the Act of 1952. According to the allegations made in paragraph 5 of the writ petition, the Unit of the petitioner-establishment known as Mahaveer Textiles is a separate and distinct unit. It has its separate power. Its Accounts are maintained separately. The partners/proprietor of this firm were not the partners in any other firm. The petitioner-establishment has no direct or indirect control on any other establishment and it is an independent concern. All its operations are being done in a quite independent manner.
3. It is also alleged in paragraph 13 of the writ petition that earlier to the instant writ petition, the petitioner-establishment had already filed a writ petition being S.B. Civil Writ Petition No. 2065/82 in which notices were issued to the respondents and an ad interim stay order was granted. In the said writ petition, reply was filed by the respondents and rejoinder to the reply was also filed by the petitioner-establishment. It is further stated that the aforesaid writ petition was withdrawn with liberty to file fresh writ petition. The aforesaid prayer was accepted by the learned Single Judge of this Court vide order dated 20.4.84 Annx. 13 to withdraw the said writ petition with liberty to file fresh petition.
4. After service of notices, respondents No. 1 to 4 have filed a detail reply to the writ petition denying the allegations made therein. In reply to the writ petition, it is stated on behalf of respondents No. 1 to 4 that actually the petitioner-establishment has been covered under the provisions of the Act of 1952 by clubbing it with other two Units viz. M/s. Gandhi Textile Agencies and M/s. Shanti Power loom Factory, which are running in the same premises. M/s. Gandhi Textiles was established in the year 1968 and M/s. Shanti Power loom Factory was established in October, 1973. The present establishment M/s. Mahaveer Textiles along with aforesaid two factories are established in one compound and are engaged
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