NEW AHMEDABAD BANSIDHAR MILLS PRIVATE LTD Vs. UNION OF INDIA
LAWS(GJH)-1966-3-8
HIGH COURT OF GUJARAT
Decided on March 17,1966

NEW AHMEDABAD BANSIDHAR MILLS PRIVATE LIMITED Appellant
VERSUS
UNION OF INDIA Respondents

JUDGEMENT

A.S.SARELA - (1.) In this second appeal by the original plaintiffs the short question which arises for determination is whether the appellant-company known as The New Ahmedabad Bansidhar Mills Pvt. Ltd. Ahmedabad was as claimed by it an infant factory established only on 11-3-1954 and as such entitled to an exemption for a period of three years from the said date namely 11-3-1954 under sec. 16(b) of the Employees Provident Fund Act 1952 (Act No. XIX 1952) (hereinafter to be referred to as the Act) in respect of the application of provisions of the Employees Provident Fund Scheme framed under sec. 5 of the Act. The respondents are the Union of India the State of Gujarat the Regional Provident Fund Commissioner State of Gujarat and the Provident Fund Inspector Ahmedabad. The learned trial Judge found in favour of the appellant on this question and gave it a declaration that the appellant company was not under any obligation to implement the Scheme framed under the Act before 11th March 1957 In appeal by the respondents against that judgment the learned appellate Judge found against the plaintiffs on that point and dismissed the suit. Against that judgment and decree plaintiffs have come to this court in appeal.
(2.) The material facts may first be stated in brief. A proprietary firm in the name Bansidhar Process House was carrying on business of bleaching dyeing and printing in the compound of Madhubhai Mills at Ahmedabad. On 2-10-53 the appellant company was incorporated under the Indian Companies Act 1913 In the memorandum of association (Exh. 66) one of the objects for which the appellant company was established is to acquire and take over as a going concern the business carried on in the name and style of Bansidhar Process House situated at Ahmedabad and with a view thereto to enter into an agreement in terms referred to in the articles of the association of the Company. This is stated to be the first among the objects for which the appellant company was established. On 5 the contemplated agreement came into existence between the appellant company and the owner of Bansidhar Process House one Ravjibhai Mathurbhai Patel. Under that agreement a copy of which is at Exh. 65 the business of bleaching dyeing and printing carried on at Ahmedabad in the name and style of the firm of Bansidhar Process House was agreed to be sold to the appellant company alongwith goodwill the tenancy rights pending contracts plant and machinery etc. It is not the case of the appellant that any separate document of sale was made thereafter. However, it is common ground that the consideration of Rs. 1 87 705 referred to in the agreement of sale was paid and possession of the property of the Bansidhar Process House was taken by the appellant company. It is in evidence that the appellant company purchased some more machinery. According to the trial court the value of the new machinery so purchased was Rs. 2 55 0 It appears that the appellant company decided to carry on the business not at the premises where the Bansidhar Process House was situated namely in the compound of the Madhubhai Mills but at a different place namely in the compound of Laxmi Hosiery Mills at Naroda Road Ahmedabad. The factory at the Naroda Road according to the appellant company commenced on 11 The appellant was asked by the Regional Provident Fund Commissioner to implement the Employees Provident Fund Scheme from 1 of June 1953. The appellant did not accept that liability on the ground that its factory was a new factory a new establishment and a new undertaking having no connection with the factory of Bansidhar Process House. As this stand of the appellant was not accepted by the Regional Provident Fund Commissioner the present suit was filed.
(3.) In the suit the appellant first asked for a declaration that its establishment was not a factory at all covered by the provisions of the Act and therefore it was not under an obligation to implement the Employees Provident Fund Scheme. In the alternative the appellant prayed for a declaration that if its factory was so governed by the provisions of the Act or the Scheme it was entitled to an initial exemption from the operation of those provisions for a period of three years under sec. 16(b) of the Act. The first prayer was negatived by the trial court but the second prayer was granted. Against that decree the defendant-respondents went in appeal and the plaintiffs-appellants did not file any cross-objections. In appeal the learned appellate Judge held that the appellant was not entitled to an initial exemption under sec. 16(b) of the Act. Hence this appeal.;


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