2003 (12) TMI 627 - HC - Companies Law

Summary

Issues:
1. Challenge to the letter advising compliance with EPF Act provisions.
2. Interpretation of Section 17B of the EPF Act.
3. Liability of the transferee in case of establishment transfer.
4. Application of Section 17B to the facts of the case.
5. Analysis of the transfer of establishment from the OSFC to the petitioner.
6. Determination of liability for unpaid provident fund dues.

Detailed Analysis:
1. The petitioner challenged a letter (Annexure-1) advising compliance with the EPF Act provisions regarding the establishment code number. The petitioner argued that carrying on the code number of the transferor company would impose past liabilities on them. The petitioner contended that a fresh code number should have been allotted to avoid taking over the liabilities of the transferor company.

2. The counter affidavit by O.P. Nos. 1 and 2 cited Section 17B of the EPF Act, which imposes liability on the transferee for unpaid provident fund dues of the transferor company. The argument presented was that due to the acquisition of assets from the transferor company, the provisions of Section 17B were applicable to the petitioner.

3. Section 17B of the EPF Act states the joint and several liability of the transferor and transferee to pay contributions and other sums due from the employer upon transfer of an establishment. The liability of the transferee is limited to the value of the assets obtained through the transfer.

4. The judgment analyzed the application of Section 17B to the case at hand. The court considered the facts, including the transfer of assets from the transferor company to the petitioner. The court examined whether the provisions of Section 17B were relevant to the circumstances of the transfer.

5. The court reviewed the transfer of the establishment from the transferor company to the petitioner through an agreement with the OSFC. The judgment highlighted the involuntary nature of the transfer due to the seizure of assets by the OSFC, distinguishing it from a typical transfer by the employer.

6. The judgment concluded that the transfer of assets to the petitioner did not fall under the purview of Section 17B of the EPF Act. Therefore, the refusal to allot a new code number and the order advising compliance with the EPF Act provisions were deemed unsustainable in the eyes of the law. The court allowed the writ petition, quashing the order dated 23.3.2000 passed by O.P. No. 1.