PROVIDENT FUND INSPECTOR Vs. VENKATACHALAM CHETTIAR RECEIVER

JUDGEMENT

(1.) The Special First Class Magistrate (for Labour Laws) acquitted the respondent in these cases, who was prosecuted by the appellant, the Provident Fund Inspector, under Para.76(a), (c) and (e) of the Employees' Provident Fund Scheme read with S.14 and 14A of the Employees' Provident Fund Act. The two grounds of acquittal were that the appellant did not obtain sanction from the Sub Court at Dindigul, which appointed the respondent as receiver in O. S. No. 19 of 1963 on its file; and that the respondent was not an ''employer" coming within S.2(e)(ii) of the Provident Fund Act.

(2.) The counsel of the appellant has argued the second point first. The counsel has pointed out that the reasoning of the Magistrate on this question is palpably wrong. The definition in S.2(e)(ii) states that in relation to an establishment like the one before me "the person who or the authority which has the ultimate control over the affairs of the establishment ..." is the "employer''. The order of the Sub Court appointing the respondent as receiver is before me: and that shows that the respondent was the plaintiff in the suit and that he was appointed receiver for the properties mentioned in the petition with all powers under the provisions of O.40 of the Code of Civil Procedure. The restrictions imposed are that the receiver should take leave of the court to grant leases for terms exceeding three years, to institute suits and appeals and to expend on the repairs of any property more than half its net annual rental. The receiver has also to take permission from the court for withdrawing moneys from the Canara Bank, where he has to deposit all collections excepting Rs. 5,000/- which he could keep with him for current expenses. Again, he has to take permission of court for appointing additional staff Barring these restrictions, all the provisions in the order show that the receiver has full powers of control over the affairs of the estate. The defendant in the suit, the other partner, and all persons claiming under him are directed to deliver possession of properties, movable and immovable, with account books, etc. to the respondent. Thus, all the properties of the partnership came into the possession of the respondent as receiver with all powers under O.40 of the Code of Civil Procedure with the only restrictions specified in the order as pointed out hereinbefore. This can only mean that the respondent has ''ultimate control over the affairs" of the estate. It may also be noted that one of the restrictions is that the respondent should obtain permission from court to appoint additional staff, which means that he has control of the existing staff and has even power to appoint additional staff with the permission of the court. The Magistrate says: