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IN THE HIGH COURT OF MADHYA PRADESH
Pranay Verma, J.
Amicus Pharmaceutical Pvt. Ltd. v. The Regional Provident Fund
Writ Petition No. 3778 of 2007 (Indore);
Decided on 11.3.2025
(1) Constitution of India -- Art. 226/227 -- Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 -- S. 7-I (1) -- maintainability of writ petition -- bar of alternative remedy -- impugned order appealable u/s. 7-I (1) -- held -- appeal against said order would lie before appellate authority -- but petition has been pending for past 18 years -- it would not be justifiable to relegate petitioner to avail alternate remedy provided under Act -- petition having been admitted despite availability of alternate remedy and coming up for hearing after a long time deserves to be decided on merits -- exercise of jurisdiction under Art. 226 is a matter of discretion depending upon facts of case -- it can be exercised despite availability of alternate remedy. [Para 13
(2) Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 -- Ss. 1, 7A, 16 and 17B -- applicability of Act -- contention of petitioner company is that it is a new establishment, not a continuation of old establishment, hence is entitled to benefits of infancy provision contained in S.16 -- previous establishment was closed down -- plant and machinery/office equipment, furniture, fittings and premises were leased out to petitioner on monthly rent -- thereafter petitioner obtained registration in its own name from Central Excise Department, and under Shops and Establishments Act, 1958 and Central Sales Tax Act -- it also obtained license to manufacture drugs -- business of old establishment was not transferred to petitioner -- only five employees of old establishment have been employed by petitioner -- Directors of petitioner company are entirely different from Directors of old establishment -- new machinery has also been purchased by petitioner -- none of the licences of previous entity are being utilized by petitioner -- hence, business of previous unit cannot be said to have been continued by petitioner -- financial, managerial and supervisory control of previous unit and petitioner unit also entirely distinct -- no interconnection between them -- hence, petitioner company is a new establishment -- entire setup of petitioner is new hence it cannot be said that previous entity and petitioner entity are same -- provisions of S. 17B of Act are applicable -- petitioner entitled to benefit of infancy provision contained u/s. 16 of Act -- respondent has erred in passing impugned orders holding petitioner not entitled for claiming infancy benefits -- quashed. (1998) 9 SCC 724 and (1998) 2 SCC 446 followed. 2000 (I) MPJR SN 35 and 1996 (74) FLR 2304 relied on. AIR 1994 SC 754, 2004 (4) MPLJ 458 and W. P. No. 14080 of 2010 decided on 13.12.2010 referred to. [Paras 14, 20 to 22
(3) Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 -- Ss. 1 and 17B -- whether old establishment can be considered as new establishment would depend upon facts of each case -- even if business is carried out at same premises using some plant and machinery of former establishment and having some employees as common, it would not result in both establishments being same -- if earlier establishment has been closed, which closure has been accepted, and land is leased to new establishment along with plant, machinery and building, and same is not taken over as a going concern, it cannot be said that there is any continuity between old and new establishment -- even if business is purchased, position would remain same. (1998) 9 SCC 724 and (1998) 2 SCC 446 followed. 2000 (I) MPJR SN 35 and 1996 (74) FLR 2304 relied on. [Para 18
¼1½ Hkkjr dk lafo/kku && vuq- 226@227 && deZpkjh Hkfo";&fuf/k vkSj çdh.kZ mica/k vf/kfu;e] 1952 && /kkjk 7&> ¼1½ && fjV ;kfpdk pyus ;ksX; gksuk && vkuqdfYid mipkj dk otZu && vkf{kIr vkns'k /kkjk 7&> ¼1½ ds v/khu vihy;ksX; && vfHkfu/kkZfjr && mä vkns'k ds fo:) vihy çkf/kdkjh ds le{k vihy gksxh && ijarq ;kfpdk foxr 18 o"kks± ls yafcr gS && ;kph dks vf/kfu;e ds v/khu micaf/kr vkuqdfYid mipkj ds fy, okil Hkstuk mfpr ugha gksxk && vkuqdfYid mipkj dh miyC/krk ds ckotwn ;kfpdk xzg.k fd, tkus rFkk yacs le; ds mijkar lquokbZ ds fy, vkus ds dkj.k xq.kkxq.k ij fofuf'pr fd, tkus ;ksX; vuq- 226 ds v/khu vf/kdkfjrk dk ç;ksx ekeys ds rF;ksa ij fuHkZj foosdkfèkdkj dk fo"k; gS && vkuqdfYid mipkj dh miyC/krk ds ckotwn ç;qä dh tk ldrh gSA ¼iSjk 13
¼2½ deZpkjh Hkfo";&fuf/k vkSj çdh.kZ mica/k vf/kfu;e] 1952 && èkkjk 1] 7d] 16 rFkk 17[k && vf/kfu;e ykxw gksuk && ;kph daiuh dk ladFku gS fd og uohu LFkkiu gS] iqjkus LFkkiu dh fujarjrk ugha] blfy, /kkjk 16 esa varfoZ"V ckY;koLFkk mica/k ds Qk;nksa dh gdnkj gS && iwoZ LFkkiu can gks x;k Fkk && la;a= rFkk e'khujh@dk;kZy; midj.k] lkt&lTtk] lktlkeku rFkk ifjlj ;kph dks ekfld fdjk, ij iês ij fn, x, && rRi'pkr~ ;kph us dsaæh; mRikn&'kqYd foHkkx ls] rFkk nqdku ,oa LFkkiuk vf/kfu;e] 1958 vkSj dsaæh; foØ; dj vf/kfu;e ds v/khu] vius uke ls jftLVªhdj.k djk;k && mlus vkS"kf/k fuekZ.k ds fy, vuqKkfIr Hkh vfHkçkIr dh && iqjkus LFkkiu dk dkjckj ;kph dks varfjr ugha fd;k x;k && iqjkus LFkkiu ds ek= ik¡p deZpkjh ;kph }kjk fu;ksftr fd, x, && ;kph daiuh ds funs'kd iqjkus LFkkiu ds funs'kdksa ls iw.kZr% fHkUu gSa && ;kph }kjk uohu e'khujh Hkh Ø; dh xbZ && iwoZ bdkbZ dh fdlh Hkh vuqKfIr dk ;kph }kjk mi;ksx ugha fd;k tk jgk && blfy,] ;g ugha dgk tk ldrk fd iwoZ bdkbZ dk dkjckj ;kph }kjk vkxs pyk;k tk jgk gS && iwoZ bdkbZ vkSj ;kph bdkbZ dk foÙkh;] çca/kdh; vkSj i;Zos{kh fu;a=.k Hkh iw.kZr% lqfHkUu && muds e/; dksbZ varlZca/k ugha && blfy,- ;kph daiuh uohu LFkkiu gS && ;kph dh laiw.kZ O;oLFkk uohu gS blfy, ;g ugha dgk tk ldrk fd iwoZ bdkbZ vkSj ;kph bdkbZ ,d gh gSa && vf/kfu;e dh /kkjk 17[k ds mica/k ykxw gksrs gSa && ;kph vf/kfu;e dh /kkjk 16 esa varfoZ"V ckY;koLFkk mica/k ds Qk;ns dk gdnkj && çR;FkhZ us ;kph dks ckY;koLFkk Qk;nksa dk nkok djus dk gdnkj ugha gksus dk vfHkfu/kkZj.k djrs gq, vkf{kIr vkns'k ikfjr dj xyrh dh && vfHk[kafMrA ¼1998½ 9 ,llhlh 724 rFkk ¼1998½2 ,llhlh 446 vuqlfjrA 2000 ¼1½ ,eihtsvkj ,l,u 35 rFkk 1996 ¼74½ ,Q,yvkj 2304 voyafcrA ,vkbvkj 1994 ,llh 754] 2004 ¼4½ ,eih,yts 458 rFkk fjV ;kfpdk Ø- 14080 lu~ 2010 fu.khZr fnukad 13-12-2010 fufnZ"VA ¼iSjk 14] 20 ls 22
¼3½ deZpkjh Hkfo";&fuf/k vkSj çdh.kZ mica/k vf/kfu;e] 1952 && /kkjk 1 rFkk 17[k && iqjkus LFkkiu dks uohu LFkkiu ekuk tk ldrk gS ;k ugha] ;g çR;sd ekeys ds rF;ksa ij fuHkZj djsxk && iwoZ LFkkiu ds dqN la;a= ,oa e'khujh dk mi;ksx djrs gq, vkSj dqN deZpkjh lk>k j[krs gq, mlh ifjlj esa dkjckj fd;k tk, rc Hkh blls nksuksa LFkkiuksa dk ,d gh gksus dk ifj.kke ugha fudysxk && ;fn iwoZ LFkkiu can dj fn;k x;k gS] ftl lekiu dks Lohdkj dj fy;k x;k gS] rFkk la;a=] e'khujh vkSj Hkou ds lkFk Hkwfe uohu LFkkiu dks iês ij ns nh xbZ gS] rFkk mls pkyw leqRFkku ds :i esa xzg.k ugha fd;k x;k gS] rks ;g ugha dgk tk ldrk fd iqjkus vkSj uohu LFkkiu ds e/; dksbZ fujarjrk gS && ;fn dkjckj Ø; fd;k tkrk gS rc Hkh fLFkfr ogh jgsxhA ¼1998½9 ,llhlh 724 rFkk ¼1998½ 2 ,llhlh 446 vuqlfjrA 2000 ¼1½ ,eihtsvkj ,l,u 35 rFkk 1996 ¼74½ ,Q,yvkj 2304 voyafcrA ¼iSjk 18
ORDER
1. This petition under Article 226 of the Constitution of India has been preferred by the petitioner being aggrieved by the order dated 20.10.2005 (Annexure P/24) passed by the respondent. The petitioner has also challenged the order dated 31.03.2006 (Annexure P/31) passed by the respondent whereby the review preferred against the order dated 20.10.2005 has been dismissed.
2. As per the petitioner, it is engaged in the business of manufacturing and selling of pharmaceutical products. It has taken on rent premises situated at 44/A-45, Rambali Nagar, Industrial Area, Indore and a rent note was also entered into between the landlord and petitioner. In 1996, petitioner obtained a license for manufacturing drugs and pharmaceutical products under the Drugs and Cosmetics Act, 1940. It got the petitioner factory registered under M.P. Shops and Establishments Act, 1958 as well as under the Central Sales Tax Rules, Central Income Tax Rules and State Sales Tax Rules.
3. The petitioner received a notice dated 13.9.1996 from the respondent, wherein it was advised to report compliance of the Employees Provident Fund Act in respect of the employees under the code number allotted to M/s. Abril Pharmaceuticals Private Limited. Subsequently, the petitioner also received a summon under section 7-A of the Act. The petitioner submitted reply stating that its establishment is a newly set up unit and the provision of the said Act is not applicable under the purview of section 1 of the Act. It is entitled to infancy benefit as provided under section 16 of the Act. An officer of the respondent visited the factory of the petitioner and prepared an inspection note dated 10.12.1996 recording that from April, 1996 to October, 1996 total strength of the employees of the petitioner company's factory was between 9-11. He however incorrectly advised the petitioner to deposit the Employees Provident Fund dues from April, 1996 to October, 1996. Relying upon this report and without taking into consideration the objections preferred by the petitioner, the Assistant Provident Fund Commissioner passed an ex-parte order under section 7(A) of the Act on 4.4.1997 under the code No.MP/5300 allotted to M/s Abril Pharmaceuticals Pvt. Ltd. It held the petitioner company liable for payment of Employees Provident Fund of Rs.14,798/- for the period April, 1996 to September, 1996.
4. The petitioner after receiving the aforesaid order, moved an application before the respondent stating that it has committed an error in determining the amount of dues without determining the question of applicability of the Act. On 16.12.1997, the petitioner was directed to file copies of its representations submitted from time to time. On 2.1.1998, the petitioner filed reply to the aforesaid letter. Its establishment was then visited by two Enforcement Officers of the respondent on 27.1.1999 wherein they issued recovery note for an amount of Rs.2,08,661/- against the petitioner which included the amount determined earlier. The amount included damages in the sum of Rs.1,83,934/- pertaining to M/s. Abril Pharmaceuticals Private Limited vide recovery certificate dated 7.7.1997.
5. The premises of the petitioner company was locked on 28.1.1999. The petitioner then preferred W.P. No.162 of 1999 before this Court in which by an interim order dated 5.3.1999, the respondent was directed to consider petitioner's application dated 12.6.1997. The premises of the petitioner was then inspected on 19.3.1999. Thereafter, the respondent passed an order on 31.3.1999. Compliance report was filed before this Court in the pending writ petition stating that the application dated 12.6.1997 of the petitioner has been dismissed exercising powers conferred under section 7-A(4) of the Act. The said order was challenged in the pending writ petition by way of amendment. However, by order dated 31.3.1999, the petition was dismissed as infructuous since the grievance of the petitioner had been redressed. The petitioner
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