M/S. VENKTESHWAR SYNTHETICS (PVT.) LTD., JAIPUR Vs. THE REGIONAL PROVIDENT FUND COMMISSIONER RAJASTHAN, JAIPUR AND OTHERS

JUDGEMENT

(1.) -The orders dated 5.7.1982 and 12.7.1982 passed by the Additional. Provident Fund Commissioner, Jaipur (Rajasthan) (hereinafter referred to as the Commissioner) has been challenged in this writ petition, by which the petitioner, M/s. Venkateshwar Synthetics Pvt. Ltd., a Private Limited Company, had been asked to deposit the contribution of the employees towards provident Fund from Sept., 1978 to Oct., 1981 and Feb., 1982 to April, 1982 amounting to Rs. 49,984.5 only.

(2.) The orders of the Commissioner has been questioned on the averments that the petitioner Company had entered into an agreement of sale with respondent No. 3, M/s. Associated Soaptones Distributing Company Private Limited (hereinafter referred to as Vendor Company) dated 26th Nov., 1976 and, thus, purchased the Company for a valuable consideration of Rs. 7 lakhs and 25 thousand free from all encumbrances and other liabilities thereon. It is further averred that as per condition No. 5 of the sale deed, it was made clear that all liabilities known or unknown or disclosed or not disclosed arising out of transaction made upto 15.10.1976 and taken or incurred or standing in the name of the vendor company shall continue to belong to the vendor Company and the petitioner Company shall not be made liable to pay this liability in any circumstances. The petitioner, however, has purchased all construction standing over the plot which earlier belonged to the vendor Company along with all fixtures and fittings, along with a polyethylene Company which had previously been run by the vendor company. Further case of the petitioner is that the Provident Fund Inspector inspected the factory purchased and run by the petitioner Company and also discussed about the implementation of the scheme of Employees Provident Fund & Miscellaneous Provisions Act, 1952, on which date, it was explained to him that the petitioner Company is a newly established company and the same is exempted under the provisions of Sub-section 2 of Sec. 16 of the Employees Provident Fund & Misc. Provisions Act, 1952 and, as such, the provisions of the aforesaid Act were not applicable to the petitioner Company. However, letters were issued to the various Directors of the Company directing them to submit monthly returns and the employer's share of provident contribution which was stated not to have been paid in the months of Jan., 1977 to Dec., 1977 and it was also directed to deposit the contribution within 7 days on receipt of the said notice. Another letter was also issued on 26.12.1977 reiterating the aforesaid direction in response to which the petition sent a reply explaining its position and urging that it is not responsible for the payment of any amount in respect of the period prior to 15.10.1976, as it purchased the company only on 26.11.1976.

(3.) The Regional Provident Fund Commissioner, however, did not agree with the letter which was sent by the petitioner company and, therefore, initiated proceedings under Sec. 7A of the Employees Provident Fund & Miscellaneous Provisions Act, 1952, dated 23.3.1978 and further informed the Chief Executive of the petitioner Company to appear before him in person on 9.5.1978.