Decided on August 01,1974



- (1.) This petition has come up before us on a reference order made by Isaac J. on the 27th June, 1973 and pursuant to the direction of the Chief Justice to post the case before a Full Bench. The order of reference of Isaac J. is in these terms: "The question raised in this case is precisely covered by a Division Bench decision of this Court in Mohammed Kutti (K. M.) v. R. P. F. Commr. 1968 (2) LLJ 466 . This decision was cited before me in O. P. 6131 of 1970 which was decided by me on 28 5 1970. It appears to me that in the light of the clear provision contained in sub-s.(5) of S.1 and S.2A of the Employees' Provident Fund Act, 1952, and the decisions of the Supreme Court in Lakshmi Rattan Engineering Works v. The Regional Provident Fund Commissioner, Punjab and others 1966 (1) LLJ 741 , and The State of Punjab v. Satpal, 1970 (2) LLJ 64 , the view expressed by the Division Bench is open to doubt. I, therefore, direct the case to be placed before the Honourable Acting Chief Justice for being posted before a larger Bench."
(2.) The petitioner is one of the legal heirs of the late Sri Abdul Kadir Musaliar. Musaliar died on 21st May, 1961. In 1962 the heirs of Abdul Kadir formed a partnership for running the rubber estate left behind by Abdul Kadir. According to the petitioner, this firm consisting of Abdul Kadir managed the estate, which remained undivided, till the 13th of March, 1966. By that time, it is alleged, dissensions among the heirs reached a stage which made it impossible for the firm to continue the management of the estate. It is said that the management of the estate was therefore entrusted, as agreed upon by the partners, with one Sri O. M. Abraham, an advocate. Sri. O. M. Abraham managed the estate on behalf of the sharers till the end of June 1966 and according to him the estate, as desired by the sharers, was partitioned into eight plots and he handed over possession of specific portions of the estate to the erstwhile partners of the firm, the heirs of the said Abdul Kadir. He also said that the services of the workmen were terminated after payment of retrenchment compensation after due notice, and provident fund benefits. He filed an affidavit dated 14-2-1970 before the 1st respondent, the Regional Provident Fund Commissioner dated 14-2-1970, and a copy of that affidavit has been produced as Ext. P4. The case of the petitioner is that the old establishment which admittedly was governed by the Employees' Provident Funds Act, 1952 (for short the Act) got disintegrated and gave rise to separate and distinct establishments and that the Act was not applicable to these different units since the owners of those units did not employ 20 or more persons. This case was placed before the 1st respondent is clear and it can be seen from the order Ext. P5 passed by him rejecting the claim put forward by the petitioner and others. The relevant part of the order Ext. P5 in this regard is Para.2 thereof which we shall extract: "It has been intimated that the estate was partitioned among 8 partners on 30-6-66 and that after the partition the estate was not functioning till 8/66. As the partition of the estate took place subsequent to coverage of the estate under the Act, the change in management/ownership which occurred subsequently does not affect the continuity of coverage under the Employees' Provident Funds Act and Scheme thereunder. The employers were repeatedly requested to comply with the requirements so as to avoid action under the penal provisions of the Employees' Provident Funds Act and the Scheme, 1952."
(3.) It is clear from what is stated in Para.2 that the 1st respondent has proceeded on the basis that even if there was a partition as alleged by the petitioner and others there will be no change in the liability under the Act as the original establishment was covered by the provisions of the Act. This view is clearly opposed to that taken by this court in Mohammed Kutti v. Regional Provident Fund Commissioner, Trivandrum and others (1968 (2) LLJ 466). Chief Justice M.S. Menon concluded his Judgment thus: "What we have before us, however is not a change in the ownership of an establishment which continues to exist as before; but the cessation of an establishment by disruption into three separate establishments by the partition effected among the petitioner and his two sisters on 1 July 1964. The questions to be considered in such a case are: (a) Is the partition real and bona fide (b) Did it disrupt the integrity of the establishment and create three separate establishments (c) And does the separated establishment with which we are concerned employ less than twenty persons -;

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