Madras High Court
Indian Potash Limited vs The Regional Provident Fund ... on 2 June, 2023
W.P.No.26114 of 2014
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 02.06.2023
CORAM
THE HONOURABLE Mr. JUSTICE V. LAKSHMINARAYANAN
W.P.No.26114 of 2014
and
M.P.No.1 of 2014
Indian Potash Limited,
727, Anna Salai,
Chennai - 600 006,
rep.by its Managing Director
Dr.P.S.Gahlaut ... Petitioner
Vs.
The Regional Provident Fund Commissioner - I,
Employees Provident Fund Organization,
37, Royapettah High Road,
Chennai - 600 014. ... Respondent
PRAYER: Writ Petition is filed under Article 226 of the Constitution of
India praying for issuance of a Writ of Certiorari calling for the records of
the respondent dated 27.08.2014 in Proceeding No.TN/MAS/2840/Exem/'C'
Sec/CAI/2011 - 12 & 2012 - 13, and to quash the same.
1/7
https://www.mhc.tn.gov.in/judis
W.P.No.26114 of 2014
For Petitioner : Mr.G. Anand
for M/s.T.S.Gopalan and Co.,
For Respondent : Mr.T.R.Sundaram
JUDGMENT
The petitioner challenges the order of the respondent in Proceeding
No.TN/MAS/2840/Exem/'C' Sec/CAI/2011 - 12 & 2012 - 13 dated
27.08.2014.
2.The petitioner is covered under the Employees' Provident Funds
and Miscellaneous Provisions Act, 1952. By virtue of Section 17(1)(a) of
the said Act, exemption was granted to the writ petitioner. During the
course of business, the writ petitioner had acquired five Sugar Units from
M/s.Uttrapradesh State Sugar Corporation Limited. The five factories are
located in Sakhotitanda, Rohanakalan, Jarwal Road, Siswa Bazar and
Khadda. These establishments are registered with the Provident Fund
Commissioner's Office in Meerut and Gorakhpur. The aforesaid
establishments which have been acquired are NOT operating any Exempted
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W.P.No.26114 of 2014
Trust and as stated above, are registered with the Regional Provident Fund
Office.
3.Mr.G.Anand, learned counsel appearing for the petitioner would
submit that it is being continued till date. After acquisition of these
Companies in 2010, the non-wage workers were shifted to M/s.Indian
Potash Limited Staff Provident Fund. However, the wage board workers
continued to be registered with the respective Provident Fund
Commissioner at Meerut and Gorakhpur.
4.In and around September 2013, a compliance audit inspection was
conducted for the Indian Potash Limited Staff Provident Fund Trust.
During the time of inspection, it was reported that only non-wage
employees have been brought under the Exempted Trust and the wage board
employees continued to have their registration as before. Finding a
discrepancy in the same, a Show Cause Notice was issued on 18.11.2013.
5.During the course of enquiry, the writ petitioner had submitted that
there are about 1700 wage board employees in the five Sugar Units and
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W.P.No.26114 of 2014
since they mainly belonged to the areas in and around Uttar Pradesh and are
illiterates, the writ petitioner would find it administratively difficult to cater
them centrally to Chennai. This explanation was not satisfactory and the
impugned order came to be passed.
6.Heard Mr.G.Anand, learned counsel for the appellants and
Mr.T.R.Sundaram, learned counsel for the respondent.
7.From the arguments, the entire matter turns on Condition 29 of
Appendix - A of the revised conditions of grant of exemption under Section
17 of the Employees' Provident Funds and Miscellaneous Provisions Act,
1952. Exemption is granted to a class of employees under Section 27A of
the said Scheme. The terms of conditions are governed under Condition
27AA. Condition 29 of the revised conditions reads as follows:
"Condition 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 the subsidiary, whether wholly owned or not
etc., The exemption granted shall stand revoked and the
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W.P.No.26114 of 2014
establishment should promptly report the matter to the RPFC
(Regional Provident Fund Commissioner) concerned for
grant of fresh exemption."
8.A reading of this provision shows the conditions precedent for
application of Condition 29 is that there should be a change in legal status
of the establishment. It does not prevent an establishment from acquiring or
selling its assets. If by virtue of the several modes mentioned under
Condition 29, there is a change in legal status, it is only then the
establishment loses the exemption.
9.The Judgment of this Court relied upon by the learned counsel
appearing for the respondent in the case of Sundaram Motors Limited,
(Establishment of T.V.Sundaram Iyengar & Sons Private Limited), 180,
Anna Salai, Chennai - 600 002, rep. by its General Manager in
W.P.Nos.6763 and 16443 of 2008 dated 07.06.2011 does not improve the
case of the respondent as it deals with the case of change in legal status of
an establishment, which is not the facts in the present case.
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W.P.No.26114 of 2014
10.In the present case, by virtue of acquiring the five Sugar Units the
legal status of the Indian Potash continues to remain the same. There has
been no change in the said status. Therefore, Condition 29 does not apply.
No other condition has been pointed out for the purpose of revoking the
exemption granted under Section 17(1)(a). As I have held the Condition 29
does not apply to the facts of the case, the basis of the impugned order
stands removed. Consequently, the Writ Petition is allowed. The impugned
order is quashed. There shall be no order as to costs. Consequently,
connected Miscellaneous Petition is closed.
02.06.2023
Index : Yes / No
Internet : Yes / No
Neutral Citation : Yes / No
mps
To
The Regional Provident Fund Commissioner - I,
Employees Provident Fund Organization,
37, Royapettah High Road,
Chennai - 600 014.
https://www.mhc.tn.gov.in/judis
W.P.No.26114 of 2014
V. LAKSHMINARAYANAN, J,
mps
W.P.No.26114 of 2014
and
M.P.No.1 of 2014
02.06.2023
https://www.mhc.tn.gov.in/judis
