S.G.P. EXIM PRIVATE LIMITED AND M/S.WATERFALL ESTATE PVT. LTD. Vs. THE REGIONAL PROVIDENT FUND COMMISSIONER AND THE RECOVERY OFFICER, EMPLOYEES PROVIDENT FUND

JUDGEMENT

(1.) IN both the Writ Petitions, the petitioners have challenged the Prohibitory Order passed by the Employees Provident Fund Organisation prohibiting the petitioners from making payment to any person other than to the respondent organisation on the ground that M/s. NEPC Tea Garden Unit Nos. 1 & 2 have failed to pay the arrears due to the respondent organisation. In the impugned order W.P. No. 28833 of 2010, the total amount claimed is Rs. 20,13,080/ - and in W.P. No. 28834 of 2010, the total amount claimed is Rs. 1,05,02,653/ -.

(2.) IN W.P. No. 28833 of 2010, the petitioner is engaged in the business of export of pharmaceuticals and they are an associate of M/s. Waterfall Estates Pvt. Ltd., which is the petitioner in W.P. No. 28834 of 2010, which in turn has tied up with M/s. NEPC Tea Gardens to manage and purchase the crop of tea leaves. The petitioner M/s. Waterfall Estates Pvt. Ltd., entered into an arrangement with M/s. NEPC Tea Gardens for overseeing the operations and consumption of the crop of Green Tea Leaves at Tea Estates at Valparai from November 2009. It is the contention of the petitioners that they are distinct and separate legal entities and M/s. NEPC Tea Garden is a different entity and the respondent organisation have no authority to proceed against the petitioners in respect of the alleged dues of M/s. NEPC Tea Garden. In support of their contention, the petitioners have stated about the various welfare measures, they have provided to their employees. It is further submitted that M/s. NEPC Tea Garden have challenged the proceedings initiated by the respondent organisation before the Appellate Tribunal constituted under the provisions of the Employees Provident Fund Act and the appeals in Appeal Nos. ATA No. 336 (13) 2009 and ATA No. 623(13) 2010 are pending before the Tribunal and an interim order of stay has been granted restraining the second respondent from taking any coercive measures. Therefore, it is contended that the pending disposal of those appeals filed by M/s. NEPC Tea Garden, the respondents have no jurisdiction to issue recovery notices or prohibitory order against the petitioners. Thus, the contention of the petitioners is that they are independent entities and since the appeals are pending before the Appellate Tribunal at this instances of M/s. NEPC Tea Garden, the impugned notices are without jurisdiction.

(3.) IT is further submitted that the respondent proceeded for recovery of Provident Fund dues, damages and interest payable by the defaulter excluding the dues, where it has been ordered to maintain status -quo as per the order passed by the Appellate Tribunal. When a notice of attachment was issued to the defaulter, M/s. NEPC Tea Garden, it was brought to the notice by the officers that they have entered into an arrangement with the petitioner in W.P. No. 28834 of 2010. Subsequently, it came to the knowledge of the respondent organisation that the petitioner in W.P. No. 28834 of 2010, has taken over the establishment of M/s. NEPC Tea Garden units I & II as a whole by way of lease through a lease deed dated 30.10.2009, for a consideration of Rs. 2.5 crores. They have taken over the properties, absorbed the workmen of the defaulter and they continued to comply with the provisions of the Act under the same code number allotted to the defaulter (NEPC Tea Garden Unit I & II). It is further submitted that this fact was never informed to the respondent organisation inspite of there being a statutory requirement to intimate the same in Form No. 5A prescribed under the Act. Without mentioning these facts, the petitioner has filed these writ petitions. Therefore, it is submitted that the petitioner M/s. Waterfall Estate Pvt., Ltd., are aware of the statutory liability of the defaulter at the time of executing the lease deed. In this regard, clause Nos. 13, 29 & 35 of the lease deed have been referred to, which shows that the petitioner M/s. Windfall Estate are aware of the statutory liability of the defaulter/lessor. Therefore, by relying upon Section 17B of the Act, it is submitted that the establishment of the defaulter having been transferred to the associate/subsidiary of the petitioner by way of lease, they are liable to pay the dues upto the date of transfer by lease, as the transferee steps into the shoes of the employer.