Anglo India Jute & Textile Industries ... vs Regional Provident Fund ...
2023 Latest Caselaw 7676 Cal

Calcutta High Court (Appellete Side)

Anglo India Jute & Textile Industries ... vs Regional Provident Fund ... on 12 December, 2023

Form No.J(2)


                IN THE HIGH COURT AT CALCUTTA
               CONSTITUTIONAL WRIT JURISDICTION
                        APPELLATE SIDE
Present :

The Hon'ble Justice Raja Basu Chowdhury

                             WPA 10379 of 2021

        Anglo India Jute & Textile Industries Private Limited & Anr.
                                     v.
             Regional Provident Fund Commissioner-I & Ors.


For the petitioners      :       Mr. Shyamal Sarkar, Sr. Adv.,
                                 Mr. Atish Ghosh,
                                 Ms. Antara Dey,

For the respondent no.1 :        Mr. Satyendra Agarwal,

Mr. Bijoy Bag,

For the respondent no.4 : Mr. Ravi Kumar Dubey,

Heard on : 13.03.2023, 23.03.2023, 16.05.2023 & 11.08, 2023.

Judgment on : 12.12. 2023.

Raja Basu Chowdhury, J:

1. The present writ petition has been filed, inter alia, questioning

jurisdiction and authority of the Regional Provident Fund

Commissioner to treat the jute mill owned by the petitioner

no.1 as an unexempted establishment in terms of Clause 29,

Appendix-A, paragraph 27AA to the Provident Fund Scheme,

notwithstanding, the petitioners claiming that the jute mill

which is owned by the petitioner no.1 continue to remain

exempted from the provisions of the Employees' Provident

Funds and Miscellaneous Provisions Act, 1952 (hereinafter

referred to as the said "Act"), in the light of the exemption

granted under Section 17 of the said Act vide notification dated

7th March, 1960.

2. The petitioner no.1 claims to be a private company and is at

present the owner of two separate jute mills originally owned

by one Anglo India Jute Mills Company Limited, situated at

Bhatpara, Police Station Jagatdal. According to the petitioners,

by a registered Deed of Trust dated 31st August, 1951 entered

into by and between the aforesaid Anglo India Jute Mills

Company Limited and Jack Ronald Vernada and others a trust

was created relating to the provident fund of the Anglo India

Jute Mills. Although, the trust was executed and registered on

21st August, 1951 yet the effect thereof, was given from 24th

January, 1949 being the date of formation of the provident

fund.

3. In the year 1952 the said Act came to be enacted. In terms of

Section 1 of the said Act, the provisions of the said Act applies

to every establishment which is a factory engaged in any

industry specified in Schedule-I, while Section 5 of the said

Act, empowers the Central Government to frame and enforce

the Employees' Provident Fund Scheme. The Central

Government had since, framed and enforced the Employees'

Provident Fund Scheme, 1952 (hereinafter referred to as the

"said Scheme"). Section 17 of the said Act, however, empowers

the appropriate Government to exempt any establishment that

is factory and to whom the Act applies, from the operation of

all or any of the provisions of the said Scheme.

4. The petitioners claim that the Government of West Bengal

being the appropriate Government vide a notification bearing

No. 1581 dated 7th March, 1960 exempted, all three

establishments/factories, namely, Upper Mill, Middle Mill and

Lower Mill of the Anglo India Jute Mills Company Limited from

the operation of all the provisions of the said Scheme subject

to the conditions specified therein. According to the petitioners

the said notification was published in the Official Calcutta

Gazette on 17th March, 1960. As such, consequent upon grant

of exemption as aforesaid the three factories of Anglo India

Jute Mills stood exempted from the provisions of the said

Scheme and the said Scheme could no longer be made

applicable to them. In accordance with the terms of exemption,

from time to time the Board of Trustees had been

reconstituted. The Provident Fund department for its

administrative convenience has, however, identified and

allotted three code numbers, namely, WB/12, WB/21 and

WB/34 to the said three establishments/factories of Anglo

India Jute Mills Company Limited. Insofar as the Upper Mill is

concerned, the establishment/factories of Anglo India Jute Mill

(Upper Mill), an exempted establishment, was sold to one

Jagatdal Jute & Industries Limited and accordingly the

existing code no. WB/12, out of the aforesaid three code

numbers was allotted to Jagatdal Jute & Industries Limited

and the balance two codes numbers relating to the two

factories, namely, Lower Mill and Middle Mill remained intact.

5. In the year 1986 the respondent no.4 became owner of the

aforesaid two establishments/factories being Middle Mill and

Lower Mill. Subsequently, by an Indenture dated 4th May,

2016, the petitioner no.1 purchased the exempted

establishment of the Middle Mill of the said Anglo India Jute

Mills from the existing owner, the respondent no.4 herein.

According to the petitioners as on the date of the purchase of

the said exempted establishment, namely, Middle Mill by the

petitioner no.1, no provident fund was due.

6. Consequent upon purchase of the Middle Mill, the petitioner

no.1 had applied to the Provident Fund Authorities for

allotment of the existing code no. WB/34 earmarked for the

said Middle Mill and to segregate the same from the Lower Mill,

which was still owned by the respondent no.4. Although, in

ordinary course the said code number ought to have been

allotted to the petitioner no.1, however, by a communication in

writing dated 6th December, 2016, the petitioner no.1 was

called upon to comply as an unexempted establishment.

7. Mr. Sarkar, learned Senior Advocate representing the

petitioners, submits that once, an exemption had been granted

under Section 17 of the said Act, till such time such exemption

is cancelled by the appropriate Government in the mode and

manner as provided for under Section 17 of the said Act, the

Provident Fund Authority cannot call upon the petitioners to

comply as an unexempted establishment. By drawing attention

of this Court to the notification dated 7th March, 1960, it is

submitted that the exemption had been granted in favour of all

the three mills of Anglo India Jute Mills Company Limited. On

the grant of the exemption the provisions of the said Scheme

cannot be made applicable. In the factual backdrop as

aforesaid, the petitioners by a letter dated 12th May, 2017 had

called upon the respondents while clarifying the position on

the subject with a request to allot a separate code in terms of

the notification dated 7th March, 1960. In response to the same

by communication in writing dated 25th April, 2017 the

Provident Fund Authorities by placing reliance on paragraph

27AA of the said Scheme, which had been inserted with effect

from 6th January, 2001 has called upon the petitioners to

comply as an unexempted establishment till fresh exemption is

granted.

8. Since then, the Provident Fund Authorities have also been

demanding a sum of Rs. 1.05 crores towards outstanding

provident fund dues. According to the petitioners, the

provisions of the said Scheme cannot be made applicable

insofar as the petitioner no.1 is concerned. Once, an

establishment is granted exemption under Section 17 of the

said Act, the provisions of the said Scheme cannot and do not

apply to the petitioner no.1 who is the owner of the exempted

establishment. In support of his contention reliance has been

placed on a judgment delivered by a Co-ordinate Bench of this

Hon'ble Court in the case of Caledonian Jute & Industries

Ltd. & Anr. v. Union of India & Ors. in W.P. 6138 (W) of

2009 on 14th November, 2011. Reliance has also been placed

on the judgments delivered by the Division Bench of this

Hon'ble Court in the case of M/s. Electric Lamp

Manufactures (India) Ltd. & Anr. v. The Regional

Provident Fund Commissioner & Ors., reported in 1996 (2)

CHN 168. On the issue of the power to cancel the exemption

under Section 17 of the said Act vests exclusively in the

appropriate Government, and the exemption can only be

cancelled by the authority which granted it namely the

appropriate Government, reliance has also been placed on the

judgment delivered by the Hon'ble Division Bench of this Court

in the case of Delta Ltd. and another v. Regional Provident

Fund Commissioner II, West Bengal, Sikkim and the

Andaman and Nicobar Islands, and another, reported in

(2005) 3 LLN 1008.

9. Per contra, Mr. Agarwal, learned advocate representing the

respondents Provident Fund Authorities, submits that the

exemption that was granted under Section 17 of the said Act,

was in favour of the Anglo India Jute & Textile Industries

Private Limited which was a composite exemption, in respect of the

three mills of Anglo India Jute Mills Company Limited being the

Upper Mill, Middle Mill and Lower Mill. The aforesaid exemption was

never granted to the petitioners' establishment/factory individually.

10. By referring to paragraph 8 of the affidavit filed on behalf of the

respondents, it is submitted that Anglo India Jute Mills

Company Limited which was the owner of the Anglo India Jute

Mills Company Limited, the Upper Mill, the Middle Mill and the

Lower Mill, were accorded exemption. Such exemption by no

stretch of imagination could have been extended in favour of

the petitioner no.1s' factory being the Middle Mill. He submits

that the exemption can only be granted when the appropriate

Government is of the opinion that the exempted establishment

has made provisions of Provident Fund and the same is not

less favourable than the terms of the Provident Fund Scheme.

By referring to the notification, he submits that the notification

contains conditions for grant of exemption and not the

scheme. The said notification and the creation of trust fund

has to be considered and read in its proper perspective.

Neither did the notification contemplate of a situation where

not only the mills would be separated but the trust fund itself

would require to be bifurcated having regard to change in

ownership of the respective mills. Admittedly, a notification

contemplates a particular trust fund and not separate or

individual trust funds for separate mills. In the event, if the

individually sold mills are continued to be treated as

exempted establishment, the object of the said Act would stand

frustrated. In support of his contention, he has placed reliance

on the following judgments delivered by the Hon'ble Supreme

Court in the case of Jiyajeerao Cotton Mills Employees'

Provident Fund Institution v. Dev Kumar Holani & Ors.,

reported in (1998) 6 SCC 35, and in the case of Mohmedalli

& Ors. v. Union of India & Ors., reported in AIR 1964 SC

980 and in the case of N. K. Jain & Ors. v. C. K. Shah &

Ors., reported in (1991) 2 SCC 495. According to Mr. Agarwal

the Hon'ble Supreme Court while interpreting the provisions of

Section 17 of the said Act, although, was of the view that the

statutory scheme may not apply to an unexempted

establishment, however, the same does not take away the

power or authority of the appropriate Government to make

amendments to the statutory scheme. This power to amend

had been exercised by the Central Government by amending

the statutory scheme. Upon introduction of paragraph 27AA

with effect from 6th January, 2001 and with the revision of the

condition for grant of exemption as provided in Appendix-A,

Clause 29, the exemption already granted by reason of change

in ownership, stands revoked. This aspect according to Mr.

Agarwal was not considered by the Co-ordinate Bench in the

case of Caledonian Jute & Industries Ltd. (supra). Having

regard to the aforesaid, it is submitted that there is no

irregularity on the part of the respondents in directing the

petitioner no.1 to file returns or to comply as an unexempted

establishment till such time fresh exemption is not granted in

its favour.

11. Heard the learned advocates appearing for the respective

parties and considered the materials on record.

12. In this case, it is noticed that originally Anglo India Jute Mills

Company Limited was the owner in respect of three

mills/establishments, namely, Upper Mill, Middle Mill and the

Lower Mill of the Anglo India Jute Mills Company Limited. It is

also noticed that even prior to enactment of the said Act, a

trust was created relating to the provident fund of the Anglo

India Jute Mills, which though executed and registered on 21st

August, 1951, the effect thereof, was given from 24 th January,

1949 being the date of formation of provident fund. Later when

the said Act was notified, all establishments including that of

Anglo India Jute Mills Company Limited came to be covered by

the Provisions of the said Act. The Central Government since

then, in terms of the powers vested in it under Section 5 of the

said Act had framed a statutory scheme in the year 1952.

Although, the Anglo India Jute Mills Company Limited as an

owner of the establishment was bound to comply with the

provisions of the said Act, however, the appropriate

Government in terms of Section 17 of the said Act being

empowered to exempt an establishment from the operation of

the said Scheme, had by an order dated 7th March, 1960

exempted all three establishments, namely, three factories

being Upper Mill, Middle Mill and Lower Mill of the Anglo India

Jute Mill Company Limited from the operation of all the

provisions of the said Scheme, subject to the conditions

specified therein.

13. Upon grant of exemption, the provisions of the said Scheme no

longer applied to the aforesaid establishments. Consequent

upon grant of exemption as aforesaid, the Board of Trustees

(BOT) of the trust was reconstituted. Be it noted here that for

Administrative convenience the Provident Fund Authority had

identified and allotted three separate code numbers to the

three establishments of Anglo India Jute Mills Company

Limited. With the passage of time, the ownership and control

of the three mills changed. First the Upper Mill appears to

have been sold to one Jagatdal Jute & Industries Limited and

one of the existing code numbers being WB/12, out of the

three code numbers as aforesaid, was allotted to the same and

the balance two codes remained intact. Later, in the year 1986

the respondent no.4 became the owner of two establishments

being the Middle Mill and Lower Mill. Subsequently, by an

indenture dated 4th May, 2016, the petitioner no.1 purchased

one of the exempted establishments being the Middle Mill of

the said Anglo India Jute Mills Company Limited from the

existing owner being respondent no.4 herein. It is when the

petitioner no.1 applied for allotment of the existing code

number of the Middle Mill, for it to comply with the provisions

of the said Act, as an exempted establishment that the issues

forming subject matter of the present petition has cropped up.

It appears that pursuant to the request made by the

petitioners by their letter dated 8th July, 2015 the provident

fund authorities by communication in writing dated 6 th

December, 2016 by placing reliance on the provisions of

paragraph 27AA of the said Scheme had insisted that the

petitioners should now comply as an unexempted

establishment. This had prompted the petitioners to cause the

letter dated 12th May, 2017 to be issued highlighting therein

that exemption granted by the appropriate Government was

still in existence.

14. Records reveal that the PF Authorities had in response to the

petitioners communication by once again placing reliance on

paragraph 27AA of the said Scheme had insisted that the

petitioners should comply as an unexempted establishment till

fresh exemption is granted in its favour having regard to the

change in its status and had also called upon the petitioners to

clear all its dues. The same would appear from the letter dated

25th July, 2017. Subsequently, by a communication in writing

dated 11th March, 2021 the Provident Fund Authorities by

taking note of the subsequent change of ownership and the

provisions of Clause 29 of Appendix-A referred to in paragraph

27AA of the said Scheme and by returning a finding that the

notification for exemption granted by the appropriate

Government vide notification dated 7th March, 1960 having

automatically stood cancelled and was no longer in existence

had called upon the petitioner no.1 to comply as an

unexempted establishment with effect from 1st April, 2021 and

to submit post accumulation dues and statement up to 31st

March, 2021 within 15th April, 2021, failing which appropriate

action would be taken. The relevant portion of the aforesaid

letter is extracted herein below:-

"2. In this regard it has been observed that M/s. A.I. Champdany Industries Ltd. (Unit: Anglo India Jute Mill) has been bifurcated into M/s. A.I. Champdany Industries Ltd., (Unit: Anglo India Jute Mill) and M/s Anglo India Jute & Textiles Industries Pvt. Ltd. and thereby the Trust Fund, i.e. Anglo India Jute Mills Limited Workers Provident Fund consists of the Trust Fund of (i) Anglo India Jute & Textile Industries Pvt. Ltd. and (ii) Anglo India Champdani Industries Ltd. but both the Units are complying under the PF Code of WB/21, that clearly means that the legal status of the original establishment (legal entity) which was granted exemption, has been changed and hence, in view of the conditions for grant of exemption each unit is required to start compliance as Un-Exempted till fresh

exemption is granted to each such units which has became a separate legal entity.

Further no action has been taken on the direction as given in the year 2017 for separate Code Number and compliance as Un-Exempted establishment which is a severe violation of the rule provision and make the authorized persons liable for prosecution. In view of the same, the exemption granted vide Govt. of WB Notification no. 1581-LW/LW/1A-187/58 dated 07/03/1960 automatically stands cancelled since the original legal entity which has been granted Exemption vide Govt. of WB Notification no. 1581- LW/LW/1A-187/58 dated 07/03/1960 is no longer in existence as of now.

Hence, you are directed to start compliance as Un- Exempted w.e.f. 1st April, 2021 and submit Past Accumulation dues and Statement upto 31st March, 2021 within 15th of April, 2021 failing which this office shall be constrained to take legal action against all the responsible persons of the establishment as well as the Trustees."

15. The legal challenge in the present writ petition is primarily

directed against the claim made by the respondents that

consequent upon change of ownership of the Middle Mill of

Anglo India Jute Mills Company Limited whether in terms of

Clause no.29 of Appendix-A to paragraph 27AA of the said

Scheme, the exemption granted by the appropriate

Government vide notification dated 7th March, 1960,

automatically stands revoked. In order to appropriately

appreciate the aforesaid challenge Section 17 of the said Act

and paragraph 27AA, which was introduced by GSR 18 dated

22nd December, 2000 an its relevant clauses from Appendix-A

are extracted herein below:-

"17. Power to exempt.-- (1) The appropriate Government may, by notification in the Official Gazette, and subject to such conditions as may be specified in the notification, exempt from the operation of all or any of the provisions of any Scheme -

(a) any establishment to which this Act applies if, in the opinion of the appropriate Government, the rules of its provident fund with respect to the rates of contribution are not less favourable than those specified in Section 6 and the employees are also in enjoyment of other provident fund benefits which on the whole are not less favourable to the employees than the benefits provided under this Act or any Scheme in relation to the employees in any other establishment of a similar character; or

(b) and establishment if the employees of such establishment are in enjoyment of benefits in the nature of provident fund, pension or gratuity and the appropriate Government is of opinion that such benefits, separately or jointly are on the whole not less favourable to such employees than the benefits provided under this Act or any Scheme in relation to

employees in any other establishment of a similar character:"

"27AA. Terms and conditions of exemption. - All exemptions already granted or to be granted hereafter under section 17 of the Act or under paragraph 27A of the Scheme shall be subject to the terms and conditions as given in the Appendix A."

The following are the revised conditions for grant of exemption

under Section 17 of Act, 1952:-

"Appendix-A:

Relevant clauses

7. Any deficiency in the interest declared by the Board of Trustees is to be made good by the employer to bring it up to the statutory limit.

9. The rate of contributions payable, the conditions and quantum of advances and other matters laid down under the provident fund rules of the establishment and the interest credited to the account of each member, calculated on the monthly running balance of the member and declared by the Board of Trustees shall not be lower than those declared by the Central Government under the various provisions prescribed in the Act and the Scheme framed thereunder.

29. In case of any change of legal status of the establishment, which has been granted exemption, as a result of merger, demerger, acquisition, sale, amalgamation, formation of a subsidiary, whether wholly owned or not , etc., the exemption granted shall stand revoked and the establishment should promptly report the matter to the RPFC concerned for grant of fresh exemption."

16. It appears that the validity of paragraph 27AA was challenged

in a batch of writ petitions before this Hon'ble Court. It is while

considering the said issue the Co-ordinate Bench of this

Hon'ble Court in the case of Caledonian Jute & Industries

Ltd. (supra) while taking into consideration the object and

reasons of such amendment and the judgment delivered by the

Hon'ble Supreme Court in the case of Jiyajeerao Cotton Mills

Employees' Provident Fund Institution (supra) and the

judgment delivered by another Co-ordinate Bench in the case

of Loomtex Engineering Pvt. Ltd. & Ors. v. Chief Provident

Fund Commissioner & Ors. In Re. WP 12477(W) of 2007,

including the judgment delivered in the case of Binny Limited

Bangalore v. Regional Provident Fund Commissioner,

Bangalore & Ors., reported in 1988 ILR (Kar) 2709, which

also considers the case of Mohmedalli & Ors. (supra), and the

case of N. K. Jain (supra) had accepted in paragraph 16 of the

said judgment, the submissions made by the advocates that the

exemption granted is not absolute and the exempted establishment

does not enjoy immunity from all obligations to pay provident

fund dues in respect of its employees under the Act. However,

at the same time in paragraph 18 and 19 of the said judgment

the Co-ordinate Bench upon analysing the aforesaid

judgments had returned a finding, inter alia, as follows:-

"18. Contention of the respondents is that the amendment, which in the opinion of the Supreme Court would have justified recovery of the differential rate from an exempted establishment has already been effected by introduction of paragraph 27AA to the statutory scheme and the consequential actions against the establishments were in tune with the observation of the Supreme Court. I am unable to accept this submission. What has been observed by the Supreme Court in Jiyajeerao is that the exempted scheme is required to be amended to impose obligation on the exempted establishments to ensure return in terms of paragraph 60 of the statutory scheme. In the statute, there is no specific reference to any exempted scheme but it appears that what was referred to as such scheme was the scheme of the trust fund of an exempted establishment as an alternative to the statutory scheme. This would be clear from the following observation of the Supreme Court in the said decision contained in paragraph 8 of the Report :-

"The revised terms and conditions did not and could not have become applicable automatically, and in order to make them applicable, they were required to be incorporated by the appropriate Governments in the notification granting exemption under Section 17(1)(a)."

19. The appropriate government in these cases however has not varied the conditions of exemption but on the other hand the statutory scheme itself has been amended, from following which the concerned

establishments have been exempted. It is the admitted position that in none of these cases the conditions of exemption contain any clause to the effect that the petitioners would be required to follow the rate of interest in accordance with paragraph 60 of the statutory scheme. Since the establishments of the petitioners have been exempted from operation of the scheme itself by the appropriate government, I do not think it would be permissible under the Act to saddle the petitioners with additional obligation to meet the differential rate by amending the statutory scheme itself. As I have discussed earlier, once an exemption is granted, the same does not terminate automatically if the benefits under the establishments' own scheme become less favorable vis-à-vis the statutory scheme as held by a Division Bench of this Court in the case of Electric Lamp Manufactures (supra)."

17. However, the Co-ordinate Bench taking into consideration an

unreported judgment dated 14th September, 2007 passed by a

Co-ordinate Bench of this Court in Loomtex Engineering Pvt.

Ltd. (supra), wherein the obligation of the establishment to

pay the differential amount in terms of the provisions of

Appendix-A to paragraph 27AA of the said Scheme was upheld

and while differing with the ratio of the judgment as laid down

in the case of Loomtex Engineering Pvt. Ltd. (supra) referred

the matter to His Lordship, the Hon'ble the Chief Justice, for

appropriate direction by, inter alia, framing the following

reference:-

"I accordingly refer the matter His Lordship The Hon'ble Chief Justice for appropriate direction as I am not in agreement with views taken by His Lordship in W.P. No. 12477(W) of 2002. The question on which I am respectfully differing with the judgment of an Hon'ble Single Judge of this Court in W.P. No. 12477(W) of 2002 is :-

Whether the provisions of paragraph 27AA of the Employees Provident Fund Scheme read with clauses 7 and 9 of Appendix A of the said scheme can be imposed on establishments exempted under the provisions of Section 17 of the Act from following the said scheme?"

18. In terms of the aforesaid, the matter was referred by the

Hon'ble the Chief Justice to a Division Bench. The Hon'ble Division

Bench took note of the factual position and the arguments advanced

by the parties and by judgment dated 5th February, 2018 reported in

2018 SCC OnLine Cal 3462, was pleased to conclude that the

judgment delivered in the case of Loomtex Engineering Pvt. Ltd.

(supra) and those of the petitioners in the bunch of writ petitions

referred to it were not similar, so far as the question of exempted

category and/or unexempted category were concerned and as such

was of the opinion that it was not required for the Hon'ble Division

Bench to give reply to the terms of reference as indicated therein

and observed that the learned judge is free to grant relief to the

petitioners on the basis of his independent findings with

regard to applicability of the provisions of Clauses 7, 9 and 28

of Appendix-A read with paragraph 27AA of the Employees'

Provident Fund Scheme in respect of the establishments of the

petitioners, which have been enjoying exemption under the

Provisions of Section 17 of the Employees' provident Funds

and Miscellaneous Provisions Act, 1952 by, inter alia,

observing as follows

"14. After careful scrutiny of the subject matter of challenge of the writ application of Loomtex Engineering Pvt. Ltd. & Ors., which is produced before us by the department on requisition as also after considering the judgment dated September 14, 2007 delivered by the learned Single Judge in the above writ application, we find that admittedly the exemption of the above establishment from the provisions of the said Scheme, was cancelled as far back as in the month of September, 2003. The above writ application was filed challenging the summons issued to them on subsequent date, i.e. on May 9, 2007. Taking into the aforesaid facts and circumstances of the case, the learned Single Judge framed the two issues as recorded hereinabove for decision taking into consideration the admitted fact of enjoying exemption by the establishment till 2003 as also the fact that no restraining order was in force on the date of delivery of the judgment.

15. Therefore, the judgment delivered in case of an establishment, which was not of an exempted category, was considered by the learned Single Judge with further observation that exemption from applying the provisions of Appendix A of the said Scheme did not arise merely because of pendency of the writ petition challenging the order of cancellation of exemption.

16. We find that the status of Loomtex Engineering Pvt. Ltd. and those of the petitioners in this bunch of writ petitions, were not similar so far as the question of exempted category and/or unexempted category was concerned. Therefore, the Loomtex Engineering Pvt. Ltd. (supra) was neither the decision on the issue involved in this bunch of writ petitions nor there was any scope to arrive at a conclusion with regard to the issues involved in this bunch of writ petitions, as discussed hereinabove."

19. Although, Mr. Agarwal, learned advocate representing the

respondents, has submitted that the issue raised in the case of

Caledonian Jute & Industries Ltd. (supra) has never been

decided, however, in the light of the observations made by the

by the Co-ordinate Bench in the case of Caledonian Jute &

Industries Ltd. (supra) and the disposal of terms of reference

by the Hon'ble Division Bench, I am of the view that the

original observations and the finding reached by the Co-

ordinate Bench in the case of Caledonian Jute & Industries

Ltd. (supra) in paragraph 19 of such judgment cannot be

overlooked and is binding on this Court. Admittedly, in this

case the exemption had been granted, which has not been

cancelled. The appropriate Government in this case has also

not varied the conditions of exemption, despite there being

change in ownership of the three mills. When admittedly, the

provisions of Section 17(4) of the said Act, which are inbuilt

safeguards, have not been invoked, paragraph 27AA of the said

Scheme despite having statutory force, cannot have the effect

of overriding the exemption already granted. Nor can clause 29

of the Appendix-A be resorted to, for the respondents to

contend that the exemption earlier granted stands revoked or

any fresh grant is necessary. Admittedly, the aforesaid

conditions has not been inserted by way of amendment to the

original terms of exemption granted vide order dated 7th

March, 1960. Having regard to the aforesaid and based on the

observations made by the Co-ordinate Bench in paragraph 19

of the judgment delivered in the case of Caledonian Jute &

Industries Ltd. (supra), I am of the view since, the Middle

Mill/establishment had been exempted from the operation of

the Scheme itself by the appropriate Government, it is not

permissible under the amended provisions of the statutory

scheme to saddle the petitioner no.1 with the obligation to comply

as an unexempted establishment, by placing reliance on

Clause 29 of Appendix-A under paragraph 27AA of the said

Scheme. It would be apparent and clear from the above that

neither the said scheme nor its amendment can be made

applicable to the petitioner no.1 especially when, the

appropriate Government did not think it fit to cancel or amend

the terms of the exemption, by exercising its powers under

Section 17 and its sub-section under the said Act. Although, it

has been strenuously argued by Mr. Agarwal that the original

notification for exemption contemplate a particular trust and

does not stipulate individual trust fund, for separate mills and

if the individually sold mills are continued to be treated as

unexempted establishments, the object of the said Act would

stand frustrated, I am afraid and I am unable to accept the

same. It is well settled that what cannot be done directly

cannot be permitted to be done indirectly. Since, substantial

safeguards have been provided for and inbuilt in Section 17

and its various sub-sections under the said Act, there is no

reason to conclude that the appropriate Government shall not

exercise such power, if necessary.

20. Having regard to the aforesaid, I am also of the view that there

cannot be any automatic cancellation or termination of the

exemption granted, nor can it be said that the original

exemption granted in the year 1960 is no longer in existence or

stands revoked by reasons of insertion of Clause 29 of

Appendix-A to paragraph 27AA of the said Scheme. Since, the

basis for making the Provisions of Clause 29, Appendix-A to

paragraph 27AA of the said Scheme applicable on the

petitioner no.1 cannot be sustained, as a sequel thereto, the

consequential directions issued by the respondents calling

upon the petitioner no.1 to comply as an unexempted

establishment with effect from 1st April, 2021 also cannot also

be sustained The demand made by the respondents for not

only complying as an unexempted establishment from 1st

April, 2021 is set aside and quashed. This order, however,

shall not stand in the way of the appropriate Government to

reconsider the continuance of the grant of exemption in the

changed circumstances as noted hereinabove.

21. With the aforesaid observations/directions, the writ petition

stands disposed of.

22. There shall, however, be no order as to costs.

23. Urgent photostat certified copy of this order, if applied for, be

given to the parties upon compliance of necessary formalities.

(Raja Basu Chowdhury, J.)