Prem Chand Pandit, J. - (1.) THIS is a letters patent appeal filed by M/s. Tip Ton Drycleaners and Dyers of Amritsar, against the (sic) of a learned Single Judge of this Court by which their petition under Articles 226 and 227 of the Constitution of India had been dismissed.
(2.) ACCORDING to the appellants it was a partnership firm carrying on the business of drycleaning and dying, registered under the Indian Partnership Act and the partnership deed was executed on 17th August, 1962. As a matter of fact, Bishan Singh and Harbhajan Singh originally started the said business in 1958, but later Kishan Singh and Smt. Harnam Kaur joined them for the first time in 1962, under the said partnership deed. On 18th March, 1966, the Regional Provident Fund Commissioner Punjab issued a notice to the said Firm informing them that enquiries made by his Department revealed that their establishment fell under the class of "establishments" to which the Employees' Provident Fund Act, 1952 (hereinafter called the Act) and the Scheme framed thereunder was applicable and further that the said establishment had employed 20 persons on 1st November, 1963. On 27th March, 1965, the firm acknowledged the said notice and informed the Commissioner that a few days back an Inspector visited their establishment and got the signatures of one of the partners of the firm on a paper on which the employment strength was noted. They had impressed upon him that their firm had come into existence on 17th August, 1962, and according to section 16 of the Act the said Act could not be made applicable to them for 5 years, that is, till 17th August, 1967. They were, therefore, not covered by the provisions of the Act. Instead of waiting for the reply of the Commissioner to their letter dated 27th March, 1966, the firm, on 16th April, 1966, addressed a communication to the Secretary, Government of India, Ministry of Labour and Employment, under section 19 -A of the Act, saying that the Commissioner had illegally applied the provisions of the Act and the scheme to them retrospectively with effect from 1st November, 1963, because their firm did not employ 20 or more persons continuously for a period of one year as provided by law. Their work depended upon the season and the customers and sometimes they had been employing labour on casual basis. Their employment strength had never been 20 or more for a continuous period of one year since 1963. They referred to the judgment of the Division Bench of the Andhra Pradesh High Court in Nazeena Traders Ltd. v. Regional Provident Fund Commissioner, Hyderabad : AIR 1965 AP 200 in support of their plea. It was also stated in the said communication that the firm had come into existence on 17th August, 1962, and the same had not computed the five years' infancy period contemplated under section 16 of the Act. Besides, the Act could not be applied retrospectively. A prayer was therefore, made that necessary direction under section 19 -A be issued to the Commissioner for quashing his order.
(3.) ON 23rd February, 1967, the Under Secretary, Ministry of Labour and Employment informed the firm by a letter that the Provident Fund authorities had reported that their establishment was registered with the Shops Inspector on 23rd July, 1958, and it had been carrying on the business of dry cleaning and dying since then. The deed of partnership, dated 17th August, 1962, showed that the firm was doing that business even prior to the said date and further that the employment strength of the establishment was 23 in November, 1963, and that fact was duly confirmed by one of their partners, namely, Kishan Singh. In the light of these facts, there appeared to be a prima facie case for treating 23rd July, 1958, as the date of the setting up of the establishment, and for coverage of the firm under the Act with effect from 1st November, 1963. It was also mentioned in the letter that before the Central Government passed an order under Section 19 -A of the Act, the firm was asked to state their views within a month of the receipt of that letter. On 12th June, 1967, the firm replied that their employment strength had never been 23. In November 1963, it was only 17. There was apparently some discrepancy in the method of counting adopted by the Inspector which formed the basis of the statement in the records of the Department and which was alleged to have been countersigned by Kishan Singh. The statement was signed by the said gentleman in good -faith without actually going deep into the records prepared by the Inspector. After a careful, scrutiny, the firm had prepared a statement giving the exact number of the staff employed by them from January, 1963 to December, 1965 and the same was attached with their reply. From that it would be evident that except for 5 months of February 1964, December 1964. January February and March 1965, the said number had never risen beyond 17 or so. A prayer was, therefore, made that a reverification of the figures from the records be made. It appeared that the Inspector had counted even few days in a month, when only casual labour was employed for a short period. Their dry cleaning concern had a seasonal business and it was liable to expand and contract during the winter and summer months respectively. During the peak winter season the firm had been employing casual labour for short periods and dispensing with the same immediately their services were no longer required. As such any person beyond the number of 17 had never been in their employment for a continuous period of more than three or four months and under those circumstances their firm did not become liable under the provisions of the Act. It was applicable only to those concerns where the number of employees had remained more than 20 for a minimum number of 240 days in a year. The records showed that the firm had never more than 17 persons in their employment for continuous period of more than three or four months, not to speak of 240 days in a year Although the firm was registered with the Shops Inspector on 23rd July, 1958, but it was registered as a proprietorship concern and the same was converted into a partnership establishment only with effect from 17th August, 1962. With the partnership concern coming into being, the previous proprietorship business ceased to exist. That being so, it could not be said that 23rd July, 1958, was the date of the establishment of the present firm. The partners of the new firm were, therefore, entitled to the benefit of the five years' grace period as provided by law. A prayer was then made that the provisions of the Act should not be made applicable to them. If this was not possible, then the date of the establishment of the business be determined as 17th August, 1962, and they be given the benefit of 5 years' grace period upto 16th August, 1967.;