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2008 Supreme(Mad) 4481
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE D. MURUGESAN & THE HONOURABLE MR. JUSTICE V. PERIYA KARUPPIAH
South India Corporation Limited
Versus
Regional Provident Fund Commissioner [Tamil Nadu and Pondicherry]
Writ Appeal No.3680 of 2003 and M.P.No.6016 of 2003
Decided on: 04-12-2008
For the Appellant :Meenakshi Sundaram, Advocate.
For the Respondent: V. Vibhishanan, Spl. Government Pleader.
The benefit of infancy period cannot be deprived from the amalgamated company, and the contribution of Provident Fund by the amalgamated transferor company should have been paid from the actual date of amalgamation, not retrospectively from an earlier date.
Headnote:
Amalgamation - Employees Provident Fund - Sec.16 of the Employees Provident Fund and Miscellaneous Provisions Act 1952 - [Sec.16, Sec.2A] - The court discussed the amalgamation of two companies, the applicability of Sec.16 of the Act, and the interpretation of Sec.2A. The court found that the benefit of infancy period cannot be deprived from the amalgamated company, and the contribution of Provident Fund by the amalgamated transferor company should have been paid from the actual date of amalgamation, not retrospectively from an earlier date.
Fact of the Case:
The case involved the amalgamation of two companies and the applicability of the Employees Provident Fund Act to the employees of the transferor company.
Finding of the Court:
The court found that the benefit of infancy period cannot be deprived from the amalgamated company, and the contribution of Provident Fund by the amalgamated transferor company should have been paid from the actual date of amalgamation, not retrospectively from an earlier date.
Issues: The issues involved the interpretation of Sec.16 of the Employees Provident Fund and Miscellaneous Provisions Act 1952, the applicability of Sec.2A, and the effective date of amalgamation.
Ratio Decidendi: The benefit of infancy period cannot be deprived from the amalgamated company, and the contribution of Provident Fund by the amalgamated transferor company should have been paid from the actual date of amalgamation, not retrospectively from an earlier date.
Final Decision: The order of the respondent was quashed, and the writ appeal was allowed. The order of the learned single Judge upholding the order of the respondent was set aside.
V. Periya Karuppiah, J.
1. This appeal has been directed against the dismissal of the writ petition by the learned Single Judge of this Court made in W.P.No.13757 of 1996 dated 20.08.2003.
2. The aggrieved writ petitioner had filed the appeal against the said order. The above writ petition has been filed before the learned Single Judge for issuing a writ of certiorari to call for the records relating to the order of the respondent dated 28.06.1996 and quash the same.
3. Brief facts of both parties in the writ petitions are as follows:
3(i) The petitioner establishment was incorporated on 31. 1990 as "Chettinad Granites Limited" under the provisions of the Companies Act. The company known as South India Corporation Ltd., incorporated on 9. 1935 under Pudukottai Companies Regulation Act 1929, as a Private Limited company and subsequently became a deemed Public Company and engaged solely in trading activities. The Board of Directors of Chettinad Granites Limited, with a view to utilising the funds generated by the South India Corporation Ltd., which was interested in diversifying in the granite field, proposed an amalgamation of the said Chettinad Granites Limited with the said South India Corporation Limited by resolution dated 25.03.1993 considered and approved a Scheme of amalgamation with South India Corporation Limited. Likewise the Board of Directors of South India Corporation Limited also by resolution dated 25.03.1993 considered and approved a Scheme of amalgamation of Chettinad Granites Limited with South India Corporation Limited.
3.(ii) In pursuance of these resolutions Chettinad Granites Limited filed on 14. 1993 a Company Application No.676 of 1993 before this Honble Court, praying for approval of the scheme of Amalgamation South India Corporation Limited also filed Company Application No.677 of 1993 in this behalf. The companies were directed to file a copy of the order with the Registrar of Companies within 30 days thereof and also process the necessary formalities. The formalities were completed accordingly on 110. 1993 and effective that date Chettinad Granites Limited became amalgamated with as the Granite Division of South India Corporation. Despite the petitioner enjoying the benefit of infancy period under Sec.16 of the Employees Provident Fund and Miscellaneous Provisions Act 1952 [hereinafter referred to as the ACT], it applied to the Respondent for coverage of the employees of the Granite Division from 110. 1993, the date when the amalgamation was completed in terms of the order of the High Court. Though the Scheme of Amalgamation, approved by the High Court, was effective 4. 1992, the actual amalgamation and dissolution of the company known as Chettinad Granites Ltd., was only on 110. 1993. The petitioner also submitted that the infancy protection under Sec.16 of the Act enjoyed by the said Chettinad Granites Limited, cannot be wiped out and the Act made application with retrospective effect from 4. 1992 and that coverage under the Act and the contributions payable shall be effective 110. 1993 only.
3.(iii) The respondent by his order dated 3. 1995, received on 23. 1995 held that since the Scheme of Amalgamation has specified that the merger shall be effective 4. 1992, when the assets and liabilities of Chettinad Granites Limited shall vest with South India Corporation Limited, the petitioner Division will be brought under the purview of the Act as a Branch of South India Corporation Limited, though a separate Code number has been allotted for administrative convenience and the coverage will be from 4. 1992. Against this Order the petitioner Division preferred a petition under Sec.19A of the Act to the Government of India. Mere amalgamation of two companies may not attract Section 2A of the Act unless it is established that the factory run by Chettinad Granites Limited has become a department or branch of South India Corporation Limited. In view of the matter the order dated 3. 1995 of the
