O.O.C.J. Writ Petition No. 2049/1993. Case: Associated Polymers Ltd. Vs Union of India (UOI) and Ors.. High Court of Bombay (India)

Case NumberO.O.C.J. Writ Petition No. 2049/1993
CounselFor Appellant: P.K. Rele and S.K. Talsania, Advs., i/b., Crawford Bayley & Co. And For Respondents: R.C. Master, Adv.
JudgesS.H. Kapadia, J.
IssueEmployees' Provident Funds and Miscellaneous Provisions Act, 1952 - Sections 7A and 16(1)
Citation1999 III LLJ 1543 (Bom)
Judgement DateFebruary 19, 1997
CourtHigh Court of Bombay (India)

Judgment

S.H. Kapadia, J.

1. By this Writ Petition, Petitioners seek to challenge the Order passed by the R.P.F.C. on May 4, 1993 under Section 7-A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to for the sake of brevity as "the said Act", 1952). By the impugned order, R.P.F.C. has come to the conclusion that as a subsidiary company, Petitioners are a Department/ Branch of the holding Company Schrader Duncan Limited (S.D.L. for short)

2. The facts giving rise to this petition briefly, are as follows:--

3. Petitioners are a Company incorporated under the Companies Act. It has a registered Office at Nariman Point. It has a factory at M.I.D.C., Tarapor, Boiser in Greater Bombay. Petitioners are engaged in the manufacture of rubber sheets. They obtained loans from the State Industrial Investment Corporation of Maharashtra for purchasing plant and machinery in respect of their factory at Boiser. They commenced their production from November 8, 1977. They employed less than 50 workers under Section 16 of the Act, 1952. They got the benefit of infancy period for five years and they are covered under the Act with effect from November 30, 1982 as they started their production from November 8, 1977. By letter dated February 19, 1982, from the Office of the R.P.F.C., Petitioners were intimated that the Act was made applicable to them from November 30, 1982. By the said letter, they were communicated with a separate Code No. MH/21661 and they were covered under the scheduled item as establishment engaged in manufacturing of rubber and rubber products. Petitioners have made contributions under the Act from November 30, 1982 (sic.) and it is not in dispute that the Petitioners have complied with the provisions of the Act from that date. However, the Petitioners received a letter on December 16, 1985 from R.P.F.C. stating that on re-examination of the records of the Petitioners, it was revealed that the Petitioners were part and parcel of S.D.L. and, therefore, the Petitioners were required to implement the Act from November 1, 1975 i.e. the date on which the Petitioners - Company were incorporated. By reply dated January 16, 1986, Petitioners informed the R.P.F.C. that they were a Public Limited Company; that they were a separate legal entity under the Companies Act; that the Petitioners were not part and parcel of S.D.L.; that they were employing less than 50 workers during the relevant time; that they were entitled to infancy period which was at that time for five years and since the Petitioners have been implementing the Act, they were not liable to be covered from November 1975. In August, 1987, Petitioners received two notices dated August 7, 1987 and August 21, 1987 by which the R.P.F.C. alleged that the petitioners had failed to pay the Employees' Provident Fund and other contributions under the said Act from November 1975 to November 1982 and they were asked to show cause why contributions for the said period should not be recovered as arrears of land revenue. By the said Notices, Petitioners were given an opportunity to show cause under Section 7-A of the said Act 1952. By reply dated August 25, 1987 once again the Petitioners narrated the above facts and inter alia submitted that they were a subsidiary of S.D.L. which was a holding Company and that under the provisions of Section 4 of the Companies Act, they were a separate legal entity and in the circumstances they cannot be treated as a Department or a Branch of S.D.L. By further reply dated April 16, 1988, particulars were furnished by the Petitioner and it was pointed out that machinery utilized by the Petitioners was totally different and distinct from the machinery utilized by the S.D.L. and the items manufactured by the Petitioners were never manufactured by the S.D.L. It was also pointed out that even before incorporation of the Petitioners, S.D. L. used to purchase the said items from the market which subsequently were purchased by S.D.L. as raw material from the Petitioner's Company. On May 29, 1993, Petitioners...

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