Bombay High Court
Shri Nandkishore Laxminarayan Agarwal vs The Union Of India on 30 September, 2009
Author: P.R. Borkar
Bench: P.R. Borkar
(1)
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT AURANGABAD
WRIT PETITION NO. 4185 OF 1996
Shri Nandkishore Laxminarayan Agarwal .. Petitioner
Aged 33 years, R/o. Plot No. EG-1,
Suraj Apartment, Mustgad, Jalna,
through Power of Attorney
Ghanshyam Dhanraj Gupta, Aged. 39 years,
R/o. As Above.
ig Versus
1. The Union of India, .. Respondents
through the Standing Counsel,
High Court of Judicature of Bombay,
At Aurangabad.
2. The Asst. Regional Provident Fund
Commissioner, N-1, Cidco, Aurangabad.
3. The Jalna People Co-operative Bank Ltd.,
Kavi Ramkrishna Shola Chowk, Sadar Bazar,
Jalna - 431 203, through the
Special Recovery Officer, Class-I.
4. M/s. Mahendra Re-rolls Industries,
through : the Partner Shri Badri Vishal
Pitty, Pitty Complex, Nehru Road,
Saraf, Jalna.
[Res. Nos. 3 & 4 deleted as per order
dated 11.10.1996]
Shri Yugant Marlapalle h/f. Shri T.K. Prabhakaran, Advocate
for the petitioner.
Shri K.B. Choudhari, Advocate for respondent No.2.
::: Downloaded on - 09/06/2013 15:08:27 :::
(2)
CORAM : P.R. BORKAR,J.
DATED : 30.09.2009
ORAL JUDGMENT :-
1. This is a writ petition which challenges the order of attachment passed by the Assistant Commissioner and Recovery Officer, Employees Provident Fund Organization, Maharashtra and Goa. By its order dated 14.08.1996, it attached the property of respondent No.4 that was purchased by present petitioner in the auction sale held by respondent No.3 Bank on 23.07.1996. The petitioner paid amount of Rs.
31,35,000/-. As per the attachment order the attachment was for a sum of Rs. 3,63,230/-. Said amount is said to be deposited under protest on 20.08.1996. According to the petitioner, issuance of recovery certificate and attachment by the order dated 14.08.1996 is illegal and needs to be quashed and set aside.
2. Heard learned advocate Shri Marlapalle for the petitioner. He has argued that, what were purchased were dead assets. The factory was closed long back and therefore ::: Downloaded on - 09/06/2013 15:08:27 ::: (3) it is not an establishment and Section 17-B of the Employees of the Provident Fund and Miscellaneous Provisions Act, 1952, (for short "E.P.F. Act"), is not applicable. Section 17-B of the E.P.F. Act is as follows :-
"17-B. Liability in case of transfer of establishment. - Where an employer, in relation to an establishment, transfers that establishment in whole or in part, by sale, gift, lease or licence or in any other manner whatsoever, the employer and the person to whom the establishment is so transferred shall jointly and severally be liable to pay the contribution and other sums due from the employer under any provision of this Act or the Scheme or the Pension Scheme or the Insurance Scheme, as the case may be, in respect of the period up to the date of such transfer:
Provided that the liability of the transferee shall be limited to the value of the assets obtained by him by such transfer."
3. The words used is not 'employer' so far as transferee is concerned, but the word 'person' is used with reference to transferee. The transfer can be of whole of the establishment or part and the liability of transferor and transferee of establishment is said to be joint and several.
Admittedly, amount of Rs. 3,63,230/- was due towards contribution of employees of respondent No.4.
::: Downloaded on - 09/06/2013 15:08:27 ::: (4)4. The learned advocate for the petitioner argued that 'industrial establishment' is defined under Section 25-L of the Industrial Disputes Act, but as the definition of 'industrial establishment' under Section 25-L of the Industrial Disputes Act states that 'industrial establishment' means a factory as defined in clause (m) of Section 2 of the Factories Act, 1948. Under the Factories Act, 'factory' is defined under clause (m) of Section 2 as any premises including precincts thereof where 10 or more workers are working, or were working at any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power, or is ordinarily so carried on, or whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power, or is ordinarily so carried on.
5. So, it is argued that manufacturing process should be carried on. When the factory assets were purchased it were junk assets/dead assets. No manufacturing activity was going on. If, we consider provisions of the E.P.F. Act, ::: Downloaded on - 09/06/2013 15:08:27 ::: (5) particularly Section 1 (3), idea is not only applying the Act to a factory, but also to other establishments employing ten or more persons. As preamble discloses, the Act is enacted to provide for the institution of Provident Funds, Pension Fund and deposit-linked insurance fund for employees in factories and other establishments. In the statement of objects and reasons, the situation in which the Act came into force are discussed. One thing is clear that under the E.P.F. Act, employer is also liable to contribute to the Provident Fund along with employees or workmen and the funds so collected by the employer are to be remitted to the Provident Fund authorities as per Section 38 of the Act.
Section 17-B of the E.P.F. Act is made for protecting the interest of employees.
6. In the facts and circumstances of the case, it does not appear from reading provisions of the E.P.F. Act that a factory should be running when attachment or other steps for recovery of contribution payable under the E.P.F. Act are contemplated by the authorities. There is no express provision in the Act, which lays down as pre-condition that the factory must be running before the Provident Fund ::: Downloaded on - 09/06/2013 15:08:27 ::: (6) Authorities would resort to attachment of property.
7. In the facts and circumstances of the case, in my opinion, this is not a case where any interference in the extra-ordinary jurisdiction, under Articles 226 and 227 of the Constitution of India, is called for. However, it is made clear that if the amount of Rs. 3,63,230/- is already deposited under protest, present petitioner will be entitled to reimbursement from previous employer of respondent No.2.
8. With these observations, this writ petition is dismissed. Rule discharged.
[P.R. BORKAR,J.] snk/2009/SEP09/wp4185.96 ::: Downloaded on - 09/06/2013 15:08:27 :::