REGIONAL PROVIDENT FUND COMMISSIONER Vs. MOTI WARPING FACTORY

JUDGEMENT

(1.) THIS special appeal is directed against the judgment dated 4-5-1993, passed by the learned Single Judge whereby writ petition filed by the respondent was allowed and the order dated 14-9-1980 passed by the Regional provident Fund Commissioner (for short "the commissioner") with regard to coverage of the respondent under section 7a of the Employees' Provident funds and Miscellaneous Provisions Act, 1952 (for short "the Act of 1952") was set aside. Factual matrix of the case is that the respondent m/s. Moti Warping Factory which was a partnership firm comprising of two partners namely Shri shanker Lal Garg and his son Shri Suraj Narain garg, was registered under the Factories Act, the rajasthan Sales Tax, Central Sales Tax, ESIC Act and was also registered as the Small Scale industry. According to the case set up by the respondent petitioner before the learned Single Judge in the writ petition, this factory was erected on a piece of land belonging to Mrs. Uma Garg wife of Shri Suraj narain Garg, who is the partner of the firm by getting lease deed executed in favour of the firm. The factory started its production on 23-9-1973. Number of its employees always remained less than fifty upto 1978. In view of the provisions contained in the Act of 1952, the provisions of the said Act were not applicable to the petitioners' factory for a period of five years from the date such factory was set up i. e. on 23-8-1973. It is so because the factory never employed more than fifty employees for any single day during that period of five years. After 23-8-1973, the petitioners themselves requested the Commissioner for its registration under the provisions of the Act of 1952 with effect from 1-9-1978.

(2.) BONE of contention between the parties is as to from which date the Act of 1952 should apply to the factory in question. According to the respondent, the factory was entitled to 5 years exemption from 23-8-1973 but the case of the appellant is that the factory is entitled to only 3 years exemption from the provisions of the Act of 1952. Thus, dispute in substance is whether the factory would be covered under the Act of 1952 w. e. f. 1-9-1978 as asserted by the respondent or from 31-8-1976 as is the case of the appellant.

(3.) GRIEVANCE of the respondent is that the commissioner applied the provisions of the Act to its factory on the basis of addition in the number of its employees by adding therewith number of employees on the strength of another factory known as m/s. Jyoti Sizing Factory. And as such, the provisions of the Act of 1952 were made applicable to both the factories from 31-8-1976. Provident Fund inspector submitted his report sometime in the year 1978 and on that basis a notice was issued to the petitioners by the respondent on 2-5-1979 that both the factories are to be treated as one establishment and, therefore, covered under the provisions of the act of 1952. The respondent submitted a representation to the appellant on 1-5-1979 requesting them to give it an opportunity of hearing to convince the commissioner as to why their claim that these factories were one establishment was not correct. The commissioner however started the proceedings by issuing notice under section 7a of the Act of 1952 dated 28-9-1979 requiring the respondent to appear before him with relevant records for the period september, 1976 to July 1979. The respondent filed before the Commissioner copies of the relevant records of both the factories alongwith affidavits of the Managers of both the factories contending that two factories cannot be treated as one establishment as their remployees are distinct and separate and are not inter transferable and further that there was no functional integrity between two factories. The Commissioner however by order dated 14-9-1981 held that both, the respondent factory as well as the other factory, namely M/s. Jyoti Sizing factory is one establishment and ordered that contributions be paid fram September 1976 to August 1978 under the Act of 1952 within 15 days failing which further proceedings under section 7a of the act of 1952 would be taken for determining the amount payable by the respondent-firm. The learned Single Judge however allowed the writ petition and quashed the order passed by the commissioner. It is against this order that the present appeal has been preferred by the Commissioner.