DEVI PRESS Vs. REGIONAL PROVIDENT FUND COMMISSIONER MADRAS

JUDGEMENT

(1.) IN the above two writ petitions. Devi Press is the petitioner. It is a registered partnership consisting of two partners which commenced business form 25-11957. Earlier, there was company known as the Devi Press Ltd. , which went into voluntary liquidation. As a result of the winding up and closure of Devi Press Ltd. , a dispute arose between the workers and the management. That was settled on 23-1-1957. According to the settlement it was agreed that all the workers except those in the binding department would be re-employed by the new management, devi Press, as fresh entrants. It was also agreed that such of the workers as were discharged on account of the closure should be paid ten days' basis wages for each year of service plus one month's basic wage as ex gratia payment.

(2.) THEREAFTER, the registered firm commenced business. It acquired for the purpose of its business the machinery of Devi Press Ltd. , which had been would up. In 1959, the Provident Fund Commissioner called upon the petitioner firm to comply with the requirements of the Provident Fund Scheme. His contention was that the firm had completed three years by the 31st July 1956. The petitioner pointed out that the firm came into existence, only in January 1957, and that the provisions of the Employees' Provident Funds Act would apply only after years of its life had been completed. This claim of the petitioner was rejected, the respondent holding that the liquidation of the former company would not have the effect of postponing the applicability of the Act and that the Act would apply with effect form 1st August 1956. He also contended that as the petitioner firm had taken over the machinery of the former company and was also housed in the same premises as the old company the exemption contemplated by S. 16 (1) of the Act would not apply. The Provident Fund Commissioner also threatened to prosecute the petitioner and to take steps to recover the arrears of provident fund as arrears of land revenue. Subsequently, the Provident Fund Commissioner initiated prosecutions of the partners and the partners were also convicted under para 76 (a) of the Employees' Provident Fund Scheme.

(3.) IN the writ petitions, the first of which is for certiorari to quash the demand notices issued in respect of the alleged arrears, and the second for the issue of a writ of prohibition to restrain the respondent form collecting the contributions and other incidental charges for the period of 3 years commencing form the 25th january 1957, the contention advanced by the petitioner is that the petitioner firm is entitled to the exemption from the Act. The contributions on and after 1960 have been paid by the petitioner. It is also alleged that whatever be the position with regard to he contributions, the Provident Fund Commissioner has no authority to demand the payment of incidental administration charges for the period January 1957 to January 1960, for, in the absence of any contribution, no administrative charges could possibly be undertaken by the Regional Provident Fund commissioner. It is urged that the old company had gone into liquidation and that the firm did not take over the previous company as a running concern. By mutual agreement, the service of all the employees ceased and they became new employees in the service of the firm. The mere fact that it purchased the machinery of the old firm could not make the petitioner firm a successor of Devi press Ltd.