PRASANTHI CASHEW COMPANY Vs. EMPLOYEES PROVIDENT FUND ORGANISATION

JUDGEMENT

(1.) The petitioner is aggrieved with the proceedings taken for realising the liability mulcted under Ss. 7Q and 14B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for brevity, 'E.P.F. & M.P. Act'). The petitioner's specific contention is that, the petitioner had taken a Cashew Factory on lease from the 3rd respondent and the liability now sought to be realised is the liability prior to the said period of lease. The petitioner also contends that, no orders were issued under S. 7Q and 14B of the E.P.F. & M.P. Act. The petitioner had taken lease of the factory premises from the 3rd respondent for a period of 20 years as per Ext. P1 Lease Deed, dated 26.10.1999. True, there is a clause in the said agreement that, the petitioner would not be liable for any dues to the Government prior to such orders. No such agreement between the parties can interdict a recovery based on a statutory provision, which will be noticed later. In any event, the Provident Fund authorities initiated enquiry under S. 7A of the E.P.F. & M.P. Act, which culminated in Ext. P2 order being passed. Ext. P2 order dated 19.7.2000; sought coverage between the period 12/1996 and 07/1998 i.e., prior to the lease of the petitioner. However, the petitioner being in possession of the Cashew Factory was issued with notice and the assessment order was passed as evident at Ext. P2.

(2.) The petitioner was before this Court contending that the petitioner is only a lessee and the prior liability cannot be mulcted on the petitioner. Before this Court, the petitioner undertook to satisfy the contribution. Hence, this Court directed that the contribution would be satisfied and the interest and other dues would depend upon the final decision in the matter. Subsequently, notices have been issued under Ss. 7Q and 14B of the E.P.F. & M.P. Act by Ext. P4. The petitioner filed Ext.P5 objection, which were not considered and the petitioner was issued with a notice of demand as per Ext.P6. The petitioner contends that after the objections were filed, Ext.P8 dated 23.06.2005 alone was issued, which is not an order as contemplated under Ss. 7Q and 14B of the E.P.F. & M.P. Act.

(3.) Dealing with the first contention that the petitioner would not be liable, it is to be noticed that S. 17B of the E.P.F. & MP. Act mulcts such liability on the transferee of an establishment to the extent of the assets so transferred. S. 17B of the E.P.F. & M.P. Act is extracted hereunder:--