The main legal point established in the judgment is the interpretation of the franchise agreement and the determination of whether a company is an independent establishment entitled to infancy benefits under Section 16 of the Act.

D. Murugesan, J.

1. This writ appeal is directed against the order dismissing the writ petition filed by the appellant herein.

2. The appellant is the Regional Provident Fund Commissioner, Tirunelveli. The first respondent, M/s.Prabha Beverages Private Limited, Marthandam, is a company registered under the Companies Act, 1956. The primary activity of the company is manufacturing of soft drinks and it commenced its trial production on 04.08.1987. The company entered into a Franchise Agreement with M/s.Parle (Exports) Pvt. Ltd., Bombay, which is a covered establishment under the Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter called as 'the Act'). By virtue of the franchise agreement, the first respondent-company was permitted and authorised as bottlers to bottle, sale and distribute beverages known as Gold Spot, Kismet, Limca, Rimzim, Thumsup and Bisleri Club Soda. On the ground that the first respondent-company is an agent of M/s.Parle (Exports) Pvt. Ltd., an enquiry under Section 7-A of the Act was conducted. The first-respondent company claimed the benefit for the period from August 1987 to August 1990, as it would be entitled to the benefit of Section 16 for a period of 3 years for payment of provident fund contribution. However, the said claim was rejected and the appellant, in his order dated 09.03.1998 directed the first respondent to remit a sum of Rs.2,71,572/-, a further sum of Rs.12,826.50, Rs.45,750/-, Rs.9,867/- and Rs.197.35 in various accounts for the above period. The appellant further directed, in the event the first respondent-company fails to pay the said amount, to initiate prosecution under Section 14 of the Act.

3. Being aggrieved by the said order of the appellant, the first respondent-company preferred appeal before the Employees Provident Funds Appellate Tribunal and by order dated 27.08.1998, the appeal was allowed. The Appellate Tribunal held that the first respondent-company is only a contractor of M/s.Parle (Exports) Pvt. Ltd., pursuant to the franchise agreement. The Appellate Tribunal also found that the first respondent-company is an independent manufacturer and therefore, it is entitled to the infancy benefits under Section 16 of the Act.

4. The above order of the Appellate Tribunal was questioned by the appellant in the writ petition, which was dismissed. Hence, the present writ appeal.

5. The only issue to be considered is as to whether the first respondent-company is primarily carrying on manufacturing activity and is a contractor under the franchise agreement or it is an agent of M/s.Parle (Exports) Pvt. Ltd., making it ineligible for payment of provident fund contribution during the infancy period.

6. Section 16(1)(d) of the Act provided that the Act shall not apply to any establishment newly set up until the expiry of the period of 3 years from the date on which such establishment is or has been set up. The above provision was deleted by the Amendment Act X of 1998 with effect from 22.09.1997. The first respondent-company was set up and started its trial production on 04.08.1987 and the actual manufacturing process was started on 17.08.1987. Placing reliance on the above provision of Section 16(1)(d), the first-respondent company claimed that the provision of the Act shall not apply for a period of 3 years from the date when the establishment was set up. This led to an enquiry conducted under Section 7-A of the Act, which ultimately resulted in the order of the appellant directing the first-respondent company to pay the contributions from 04.08.1987.

7. Before the learned single Judge, two questions were raised, viz., i) when the original authority, namely, the Regional Provident Fund Commissioner himself has passed an order on the basis of the enquiry conducted under Section 7-A of the Act, whether he would be competent to file a writ petition challenging the Appellate Tribunal's order reversing his order; and ii) whether the first respondent-company is a contra