P MADHAVAN THAMPI Vs. REGIONAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) THESE writ petitions involve an identical question of law and are, therefore, being disposed of by a common judgment. O. P. No. 4280 of 1975 is by Sri Madhavan Thampy. O. P. No. 4281 of 1975 is by his wife, Saraswathi Amma. O. P. Nos. 4061 and 4315 of 1975 are by his daughters, by name Suriakumari and Kalamalini respectively. O. P. No. 4284 of 1975 is by his son, P. Komala Kumar. I shall refer to the facts of the case in O. P. No. 4061 of 1975 and the counter-affidavit filed therein since the pleadings in that petition cover other cases also.

(2.) SRI Madhavan Thampy was the proprietor of " P. Madhavan Thampy, Vessel Merchant, Chalai, Trivandrum". This shop was started in or about 1944 at Chalai as a vessels shop. Subsequently he started a factory for the manufacture of metal utensils under the name and style of Komilavilas Metal Industries. Originally, vessels were sold only from the shop at Chalai. They began to be sold from the factory as well later. In subsequent years he started new shops in three other places, namely, Saraswathi Metal Stores at Trivandrum, P. Madhavan Thampy, vessel merchant at Attingal and P. Midhavan Thampy, vessel palace at Kottayam. On 16-8-1964 he converted his proprietory business into a partnership firm by taking his son, Komalakumaran Nair as a working partner. The partnership continued until 16-8-1969 on which date the partnership business was dissolved. It is stated in the petition that since Kornalakumaran Nair was only a working partner with no capital investment, the petitioner's father became once again entitled to all the assets of the partnership on its dissolution and, therefore, all assets were transferred to his capital account. On the same date, that is, on 16-8-1969 he gifted the Saraswathi Metal Stores to his major son, M. K. K. Nair, the vessels shop at Attingal to his daughter, Kalamalini, the petitioner in O. P. No. 4315/75, the shop at Kottayam to another daughter, Suriakumari and the factory, Komalavilas Metal Industries, to his wife, Saraswathi Amma. The Gift Tax authorities accepted the gift. Exhibit evidences the individual gift tax assessment for the year 1970-71.

(3.) ACCORDING to the petitioner, the employees of various shops at various places were retrenched by paying closure compensation which the employees accepted without demur. This was prior to the gift deeds. Their provident fund accounts were also closed by furnishing necessary returns. Thus, the business run by Sri Madhavan Thampy was wound up. New businesses came in its place. While so, by memorandum dated 11th November, 1971, Ext. P3, the respondent-Regional Provident Fund Commissioner, Kerala, issued a notice to the petitioner to file Form Nos. 5, 10 and 12 and to make remittances in respect of employees employed under the Unit with effect from 17-81969. The petitioner submitted a reply Ext. P4 on 29-11-1971 stating that new businesses have come into existence after the gift deeds, and that they are independent shops owned and enjoyed by different major members under the gift deeds. After the receipt of Ext. P4, the respondent informed the petitioner that the matter had been referred to the Central Provident Fund Commissioner, New Delhi, for final decision. Thereafter the petitioner was informed by the respondent that the Central Provident Fund Commissioner had decided against him and that the provisions of the Employees' Provident Funds Act, 1952 should be applied to these concerns with effect from 17-8-1969. This is evidenced by Ext. 7. This was followed by Ext. P9 by which the petitioners were informed that legal action would follow failing compliance of the notice of demand. Hence this writ petition challenging Exts. P3, P5, P7 and P9, as being illegal, arbitrary and perverse.