1985 Supreme(Raj) 461
RAJASTHAN HIGH COURT
Suresh Chandra Agrawal, J.
Shiv Ram Sharma - Appellant
Versus
Union Of India (Uoi) and anr. - Respondent
S.B.C.W.P. No. 879 of 1982.
Decided On : 7-05-1985
In determining whether an establishment is a new establishment or a continuation of a previous establishment for the purposes of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the Commissioner must consider all relevant facts and circumstances, including the period of closure of the establishment, the change in ownership or management, and the change in the workforce.
Headnote:
EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 - SECTION 7A - NEW ESTABLISHMENT - DETERMINATION - FACTORS TO BE CONSIDERED.
Fact of the Case:
The petitioner challenged the validity of orders determining the provident fund dues payable by him under Section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (the Act). The petitioner claimed that his establishment was a new establishment and was not covered by the Act, as it had less than 20 employees and had started operations after the grant of a mining lease in his favor on December 16, 1974. The Commissioner, however, held that the establishment was an old establishment that was previously run by another lessee, M/s Ballabh Ram, and was covered by the Act.
Finding of the Court:
The court found that the Commissioner had not made a proper determination of the necessary facts to establish whether the petitioner's establishment was a continuation of the previous lessee's establishment or a new establishment. The court noted that the mining lease of the previous lessee was canceled on November 25, 1971, and that there were no mining operations in the mine from that date until the petitioner obtained a mining lease on December 16, 1974. The court also noted that the petitioner claimed that the labor employed by him was different from that employed by the previous lessee.
Issues: 1. Whether the petitioner's establishment was a new establishment or a continuation of the previous lessee's establishment. 2. Whether the Commissioner had properly determined the facts relevant to the determination of the above issue.
Ratio Decidendi: The court held that the Commissioner had not properly considered the relevant facts and circumstances in determining whether the petitioner's establishment was a new establishment or a continuation of the previous lessee's establishment. The court noted that the Commissioner had not considered the fact that there were no mining operations in the mine from November 25, 1971, until December 16, 1974, and that the petitioner claimed that the labor employed by him was different from that employed by the previous lessee.
Final Decision: The court set aside the Commissioner's orders and remanded the matter for reconsideration of the question of whether the petitioner's establishment was a new establishment or a continuation of the previous lessee's establishment. The court directed the Commissioner to afford the petitioner an opportunity to produce evidence in support of his case.
JUDGMENT
1. :- In this writ petition, the petitioner is challenging the validity of the order (Ex. 5) dated 29th December, 1981 and the order (Ex. 7) dated 19th February, 1982 passed by the Regional Provident Fund Commissioner, Jaipur (here in after referred to as 'the Commissioner)'.
2. The petitioner holds a mining lease for sandstone in village Binega, Tehsil Karauli. The said mining lease was granted to the petitioner on 16th December, 1974. By notice (Ex. 1) dated 14th September, 1981 the Commissioner required the petitioner to submit monthly returns for the period from December, 1974 to July, 1981 in accordance with the provisions of para 38(2) of the Employees Provident Funds Scheme, 1952 and para 10(1) of the Employees' Deposit Linked Insurance Scheme, 1976 and also to deposit the Employer's share as well as Employee's share of the contributions under the aforesaid schemes. By another notice (Ex.2) dated 11th September, 1981 the petitioner was required to appear before the Commissioner, in person or through an authorised representative, on 19th October, 1981 to give evidence and produce all the relevant records including the records mentioned in the said notice for conducting an enquiry and determining the amount due from him. The petitioner submitted a reply (Ex 3) dated 19th October, 1981 to the letter dated 11th September, 1981 wherein he raised the objections that his establishment was not covered by the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (here in after referred to as 'the Act') and that it is a newly set up establishment. The petitioner submitted another letter (Ex.4) dated 19th October, 1981 in reply to the notice dated 11th September, 1981 wherein he requested that copies of the information, inspection report or any other material which was on record and was relied upon for issuing the summons, may be supplied to him before proceeding further in the matter. In the said letter the petitioner also stated that he was not employing 20 or more persons in his establishment which is a newly set up establishment. The Commissioner by his letter (Ex.5) December, 1981 informed the petitioner that his contention that his establishment is a new establishment and is, therefore, not covered by the Act, was not correct and that he had taken the mine which was already covered under the Act and that it was obligatory for him to comply with the statutory provisions with effect from 16th December, 1974. By the said letter, the Commissioner informed the petitioner that since the petitioner was neither depositing the dues nor was he producing the record, there was no alternative left for him but to determine the amount due from the petitioner under Section 7A of the Act on the basis of the material avilable with Commissioner. The petitioner submitted a reply (Ex. 6) 6th January, 1982 wherein he reiterated the objections that his establishment is a newly set up establishment and is not covered by the provisions of the Act. In the said letter the petitioner also requested that the matter may be referred to the Central Government under Section 19A of the Act. Thereafter the Commissioner passed the order (Ex. 7) dated 19th February, 1982 whereby he made the determination of Provident Fund dues under Section 7A of the Act. In the said order the Commissioner has stated that M/s Ballabh Ram Thekedar, Hindon was covered under the Act with effect from 31st December, 1965 and the said employer paid Provident Fund dues and that it came to notice that the mine at Binega (Karauli) which was run by M/s Ballabh Ram had been taken over by the petitioner and accordingly he was advised by letter dated 13th March, 1977 to comply with the provisions of the Act with effect from 16th December, 1974. In the said order it is also stated that since the petitioner had failed to pay Provident Fund and Insurance Fund dues for the period from December, 1974 to July, 1981, it was decided to determine the said dues und
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