Mr.S.Sethuraman, learned counsel has taken notice for the respondent.
2.By mutual consent, the writ petition itself is taken up for final hearing at the stage of admission.
3.The petitioner has come forward with this petition seeking for the relief of quashing the impugned demand notice of the respondent dated 05.10.2009 in No.M15/TN/MDU/20353/RECY/RO/2009.
4.The learned counsel for the petitioner contended that the impugned order dated 05.10.2009 is issued against the petitioner, directing the petitioner to pay a sum of Rs.32,03,181/- towards 14B & 7Q and non remittance of Employees' Provident Fund amount by M/s.Sri Sri Ragavendira Textiles, Dindigul, holding that the petitioner is the principal employer. The learned counsel for the petitioner further contended that the petitioner is only a landlord of the building, in which the said M/s.Sri Sri Ragavendira Textiles, Dindigul, was running the business and the petitioner has absolutely nothing to do with the establishment of the said firm. The learned counsel further contended that as per Section 17-B of the Employees' Provident Fund Act, 1952, only in the event of transfer of establishment, the petitioner is liable and as far as the case on hand is concerned, the petitioner is only owner of the building and he has not transferred any establishment in favour of M/s.Sri Sri Ragavendira Textiles, Dindigul and as such the petitioner cannot be fastened with the liability of default in payment of Employee's Provident Fund. It is contended by the learned counsel for the petitioner that already the respondent proceeded against the said M/s.Sri Sri Ragavendira Textiles, Dindigul and the properties of the said firm was also attached and therefore, it is open to the respondent to work out his remedy in the manner known to law.
5.Mr.Sethuraman, learned counsel for the respondent contended that the petitioner is also jointly and severally liable in view of Section 17-B of the Employee's Provident Fund Act. It is contended by the learned counsel for the respondent that M/s.Sri Sri Ragavendira Textiles was functioning at the building premises of the petitioner herein and as such the petitioner is liable.
6.I have carefully considered the rival contentions put forward by either side and also perused the materials available on record.
7. The fact remains from the perusal of the impugned demand cause notice and other materials available on record, that the petitioner is only the owner of the building wherein, M/s.Sri Sri Ragavendira Textiles, Dindigul, is running a textile business and as such, there is no difficulty for this Court to come to the conclusion that the petitioner is only a lessor and M/s.Sri Sri Ragavendira Textiles is the lessee and there is only a landlord-tenant relationship between the petitioner and M/s.Sri Sri Ragavendira Textiles, Dindigul, and the petitioner has not transferred any establishment in favour of M/s.Ragavendira Textiles, Dindigul.
8. The earlier order passed by this Court in W.P.(MD)No.671 of 2006 dated 23.01.2006 also reveals that M/s.Sri Sri Ragavendira Textiles, Dindigul, is running the textile mills and the said firm was directed to pay a sum of Rs.29,29,454/- based on 8F(2) of the Employees' Provident Funds and Miscellaneous Act, 1952. The Regional Provident Fund Commissioner of the Employees Provident Fund Organization, Madurai, by his proceedings dated 06.10.2005 directed the petitioner to pay a sum of Rs.22,05,453/- towards damages and also for interest and the said order was challenged by preferring an appeal before the Employees' Provident Fund Appellate Tribunal at New Delhi and the same was pending at that time and as such, this Court directed the Employees' Provident Fund Appellate Tribunal, New Delhi, to consider and dispose of the appeal filed by the petitioner as expeditiously as possible and till such time, the Regional Provident Fund Commissioner, Madurai, was directed to keep the proceedings in abeyance till the disposal of the statutory appeal. Therefore, it is crystal clear that the proceedings were initiated only against M/s.Sri Sri Ragavendira Textiles.
9. But, now the respondent in the impugned demand notice dated 05.10.2009 called for the petitioner to pay an amount of Rs.32,03,181/- towards 14B & 7Q and non remittance of such amount by M/s.Sri Sri Ragavendira Textiles stating that the petitioner is also liable to pay the said amount as Principal Employer. It is also seen from the impugned order that the respondent informed the petitioner that in the event of not remitting such amount, recovery action will be initiated against the petitioner without any further notice under 8B to 8G of the Employees' Provident Fund & Miscellaneous Provisions Act, 1952.
10. At the outset, this Court is of the considered view that issuance of the demand notice against the petitioner is unwarranted one, in view of the above said admitted facts. The respondent is entitled to issue the impugned demand notice only in the event of transfer of the establishment was made, wherein, the principal employer is liable under Section 17B of the Employee's Provident Fund and Miscellaneous Provisions Act, 1952.
11. Section 17-B of the Employee's Provident Fund and Miscellaneous Provision Act, 1952 reads as follows :
"Liability in case of transfer of establishment.- Where an employer, in relation to an establishment, transfers that establishment in whole or in part, by sale, gift, lease or licence or in any other manner whatsoever, the employer and the person to whom the establishment is so transferred shall jointly and severally be liable to pay the contribution and other sums due from the employer under any provision of this Act or the Scheme or the period up to the date of such transfer:
Provided that the liability of the transferee shall be limited to the value of the assets obtained by him by such transfer."
12. A Reading of the above said provision makes it crustal clear that only in the event of the transfer of the establishment, the original owner of the establishment is liable for default of Employee's Provident Fund amount jointly and severally as a principal employer. But, as far as the case on hand is concerned, as already pointed out, the petitioner is only the landlord of the building and the petitioner has let out the building to another company viz., M/s.Sri Sri Ragavendira Textiles, Dindigul and there is absolutely no material available on record to disclose that the petitioner has transferred the establishment. It is pertinent to note that there is absolutely no indication in the demand notice to the effect that the petitioner has transferred the establishment in favour of M/s.Sri Sri Ragavendira Textiles, Dindigul, and as such, the petitioner is not a Principal Employer. It is curious to note that there is also no reference to Section 17-B of the Employee's Provident Fund Act in the impugned demand notice.
13. In view of the aforesaid reasons, this Court is constrained to quash the impugned demand notice and accordingly, the impugned demand notice issued by the respondent in No.M15/TN/MDU/20353/RECY/RO/2009 dated 5.10.2009 is hereby quashed.
11. This writ petition is ordered accordingly. Consequently, connected miscellaneous petition is closed. No costs.
gcg/gg To
1.The Recovery Officer, Employees' Provident Fund Organisation, Regional Officer, Lady Doak College Road, Chokkikulam, Madurai-2.