PRAGATI METAL WORKS Vs. REGIONAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) THE petitioner company is aggrieved by the order dated 18th May, 1994 passed by the respondent, Regional Provident Fund Commissioner, under section 7-A of the Employees Provident Fund Act, 1952 (hereinafter referred to as the Act, whereby it was held that the provisions of the Act were applicable to the present establishment of the petitioner which was rightly covered by the department as a continued business of the erstwhile establishment. It was also held that the petitioners were not entitled to infancy protection in terms of section 16 (1) (b) of the Act.

(2.) AFTER passing the said order, the learned Commissioner posted the matter for assessment of dues. According to the respondent, the petitioners were in continuous business which was carried on by its predecessor (the erstwhile establishment) and having completed the requisite number employees i. e. 19 in number, the provisions of the Act were attracted by the petitioners establishment. It was the case of the petitioner before the authority that it had purchased the concern of M/s. Amar Weaving Factory, a textile concern by a Deed of Assignment dated 19th March, 1984 and the petitioners started the new business of trading and/or manufacturing of stainless steel, brass and aluminium articles. According to the petitioner, therefore, there was absolutely no continuity of business and there was complete change of the ownership and the nature of the ownership and the nature of business. Earlier, the establishment which was known as M/s. Amar Weaving Factory had closed down its establishment from 26th March, 1982 and all the workmen had settled their dues with the said company including their accounts with the respondent. The petitioners have purchased the said concern and have started on the entirely new business of trading and manufacturing of stainless steel, brass and aluminium articles by employing new employees, who were about 4-6 in number, during the relevant period. According to the petitioner, the machinery required for the present business of the manufacturing of stainless steel, brass and aluminium utensils was entirely new and the machinery required for textile unit was not of any use at all and therefore, the textile machinery was sold while the furnitures and fixtures were retained. The petitioner further states that the new business required new licences and certain existing licences required modification. According to the petitioner, therefore, the new business was started on entirely new state and there was absolutely no continuity with the textile business carried on by the earlier company which was totally closed down with effect from 26th March, 1982.

(3.) THERE is no dispute that from the year 1992, the petitioners have voluntarily offered to be covered by the Act. The respondent, however, did not accept the said offer and insisted that the petitioner should pay the arrears from 1984 till 31st December, 1991. The petitioners are refusing to pay the same as, according to them, their establishment was a totally new establishment and had nothing to do with its predecessor, which did not exist after its closure. The petitioners have also given emphasis on the fact that they had never employed workmen exceeding 6 in number during the relevant period from 1984 to 1992, and therefore, were not liable to be covered.