PADMASREE ENTERPRISES Vs. REGIONAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) The Judgment of the court was delivered by Gopalan Nambiyar, C. J.-- The appeal is against dismissal in limine of the appellant's writ petition by a learned Judge of this Court. The writ petition was to quash Ext. P10 order of the Government upholding the decision of the Regional Provident Fund Commissioner treating the appellant's establishment, namely, the Padma Air conditioned Movie House, as a continuation of the old covered establishment and denying infancy protection to the appellant. The appellant is the Managing Partner of a partnership firm by name Padmasree Enterprises carrying on business at Banerji Road, Ernakulam, under a deed of partnership dated 15th February 1972. The appellant took on lease the Padma Theatre situated on the M. G. Road, Ernakulam together with its accessories such as the transformer room, the compressor room, projector/air conditioning plant, furniture etc. for a period of three years from 1st March 1971, on terms and conditions set forth in the registered lease deed dated 21st February 1972. The partnership was registered under the Partnership Act. The object of taking over the theatre was for the exhibition of cinematographic films. The theatre itself belonged to another partnership firm by name The New Guna Shenoy and Company which was carrying on the business of exhibition of cinematographic films even prior to the date of the lease. It is alleged that they closed the theatre on 6th May 1971 for purposes of renovation, remodelling and air conditioning, that all the staff had been retrenched by payment of retrenchment compensation, gratuity and other dues and that their Provident Fund accounts had been settled and the services of all employees had been lawfully terminated, the termination having been accepted. After renovation and air conditioning, the theatre was opened for exhibition of films on 12th March 1972, and the appellant started its cinematographic exhibitions in the theatre. A few of the employees previously employed in the Padma Theatre were taken into the service of the appellant. But the main bulk of the employees was formed by new recruits. The theatre was not taken over as a running concern with all the assets and liabilities of the previous owner. Only the theatre with the equipments were taken over by the appellant. Ext. P1 is a copy of the letter from the appellant to the Provident Fund Inspector enclosing a copy of the lease deed between the appellant and New Guna Shenoy and Company and a copy of the partnership deed. The appellant was asked to comply with the provisions of the Employees' Provident Fund Act from 12th March 1972-vide Ext. P2. This was replied to by Ext. P3 by which the appellant pointed out that the Act did not apply to them, that they are an infant establishment having taken over the Padma Air conditioned Movie House without its staff for a period of three years only and that the owners of the theatre had paid retrenchment compensation to their staff. They requested that the matter may be referred to the Central Government under S.19-A. By Ext. P4 reply, the Regional Provident Fund Commissioner took the view that neither temporary closure nor change of management will effect a change in the date of setting up of the establishment, and that the statutory requirements of the Employees' Provident Fund Act had to be complied with from 1st March 1972 onwards. By Ext. P5, the petitioner again prayed for a reference under S.19-A. By Ext. P6 he was informed that his representation was fixed for hearing to 26th August 1975 at Ernakulam. He was directed to bring the original attendance register, cash register, ledgers and other documents relied on in support of his representation. The appellant did not appear on that date. Ext. P7 is a notice for hearing on 1st May 1978. The appellant sent Ext. P8 telegram requesting adjournment, which was followed by Ext. P9 confirmatory letter. Ext. P10 order was passed on 12th May 1978. It was noted that the Padmasree Talkies owned by New Guna Shenoy and Company had been covered under the Employees' Provident Fund Act and the position continued till 6th May 1971 on which the talkies was closed down for renovation, remodelling and air conditioning, and opened again on 12th March 1972. In the meantime New Guna Shenoy and Co. had leased the remodelled air conditioned theatre to M/s Padmasree enterprises, the appellant firm, in which one of the partners of New Guna Shenoy and Co., namely, Shri A. L. Srinivasa Shenoy and also his family members were partners. By Ext. P10, it was noticed that the petitioner was given three opportunities to appear, one at Trivandrum on 27th February 1978 and the other two at Delhi, on 3rd April 1978 and 1st May 1978. But the petitioner failed to appear. Request for adjournment was rejected and it was held that the Regional Provident Fund Commissioner's decision to treat the petitioner's establishment as a continuation of the one covered already and to deny infancy protection was correct- Ext. P10. The Petitioner's contention is that the petitioner's establishment was an altogether new establishment which had been setup only in 1972, that having regard to the fact that the ownership was different, that the employees of the original establishment had been paid off and new employees have been substantially recruited for the petitioner's establishment, it would be covered only from the date on which it was actually setup in 1972 and not from the earlier date. The fact of the registered lease, of a new partnership, and of the payment of retrenchment compensation to the employees, were all stressed to make out that petitioner's establishment was a new establishment unrelated to the previous one.

(2.) In the midst of all these transformations, the problem posed is the old and familiar one. Do we get only the old wine in new bottles, or do we see new wine altogether No hard and fast rules can be laid down as to when an establishment can be said to be a new establishment or when after transformations relating to management and ownership or regarding mode of operations etc., there had been a termination of the original establishment and a setting up of an altogether new one. The problem assumes importance because under S.16(1)(b) of the Act infancy protection is available for the stated period from the date on which the establishment has been setup. The relevant portion of the section may be noticed.

(3.) Counsel for the petitioner would contend, as stated, that the payment of retrenchment compensation, the closure of the establishment for a time and the registered lease from the original owners in favour of the petitioner, were all powerful indications to show that there was a new establishment. Many decisions were cited in support of the position thus taken up. The answer to the question is essentially one of fact. No universal test or guideline can be laid down as to when an old establishment can be said to have been substituted by a new one. In the instant case, we think the facts have been correctly assessed by Ext. P10. As noticed, the temporary closure of the original establishment was only for ten months; the restarting was for the same purpose of exhibition of cinimatographic films, and the employees were substantially the same. In the result it was concluded that the new establishment was not unconnected with the old one. With that conclusion we find no warrant for interference. The learned Judge was right in dismissing the writ petition and we are in agreement with his view.