GOLDEN SILK MILLS Vs. CENTRAL PROVIDENT FUND COMMISSIONER

JUDGEMENT

(1.) IN these petitions (Civil Writs Nos. 291 of 1955, 383 of 1955, 534 of 1956, 535 of 1956, 579 of 1956, 603 of 1956 and 32 of 1957) under Article 226 of the constitution, the petitioners claim that they are not liable to contribute to the employees' Provident Fund set up under the Employees' Provident Funds Act, 1952, because the factories belonging to the petitioners do not employ fifty or more persons and the Act in question is, therefore, not applicable to them. The respondents, being the Central Provident Fund Commissioner and the Regional provident Fund Commissioner, maintain that the petitioners' factories are still within the mischief of the Act even though, at present, less than fifty men are employed in each of those factories. The facts in these several cases are not identical, but they ultimately raise the same question of interpretation and for the sake of convenience, therefore, I propose to mention the facts concerning one of the petitions first, namely, Civil Writ No. 291 of 1955 (Golden Silk Mills v. The central Provident Fund Commissioner), and to consider the arguments on the question of law and then to determine whether, on a proper view of the law, the facts of the other cases put them outside the Act.

(2.) THE Employees* Provident Funds Act (Act XIX of 1952) came into force on the 1st November, 1952. At that time the Golden Silk Mills as such was not in existence and instead there was a factory carrying on business in the name of golden Textile Mills. This factory was owned by three persons -- Ram Lal, Kanahya lal and Muni Lal, each of them having one-third share. Further, at that time the golden Textile Mills, as it existed, did employ fifty or more than fifty persons. On 10-10-1953, however, the three partners owning the factory decided to dissolve the partnership and accounts were gone into and a deed of dissolution was executed. According to this arrangement, Muni Lal entirely severed his connection with the Golden Textile Mills and-having obtained his share of the assets of the concern, including one-third of the looms, he started the present factory in the name of the Golden Silk Mills. The looms that fell to the share of Muni Lal petitioner were separated from the other looms by erecting a wall in the old factory, and the petitioner actually got his premises registered as a separate factory. The petitioner has since the date of dissolution been running his separate looms and his factory is since then employing only 16 to 18 persons. His claim is that his factory, i. e. , the Golden Silk mills, does not employ fifty or more persons and he therefore cannot be compelled to contribute to the Employees' Provident Fund.

(3.) NONE of the facts is disputed. It is not denied that die dissolution of partnership made on 10-10-1953, was genuine, and there is no suggestion that that transaction or any other transaction connected with this case was only a device, and the case has thus been argued on the assumption that the facts are as stated by the petitioners. The position is the same regarding other connected cases, so that the ground is clear for the legal controversy between the parties.