Allowed

Manoj K. v. Employees Provident Fund Organisation

Kerala HC8 Apr 2014WP(C)/3566/2010

Case brief

AI extract

What is this about?

The Kerala High Court held that a lessee holding only leasehold rights is not liable for the EPF dues of the lessor's previous establishment. Since the transferee did not acquire assets other than the lease, attachment of the lessee's goods for the prior debt was improper. The writ petition challenging the attachment order was allowed, and proceedings were quashed.

What did the court decide?

The writ petition challenging the assessment order and attachment proceedings was allowed; the attachment proceedings against the petitioner's finished goods were stayed and not to be proceeded with.

Manoj K. Vs Employees Provident Fund Organisation — Service and Employment | Kerala HC (2014)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN

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TUESDAY, THE 8TH DAY OF APRIL 2014/18TH CHAITHRA, 1936

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WP(C).No. 3566 of 2010 (U)

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PETITIONER(S):

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MANOJ K., AGED 32 YEARS, S/O.I.KUNJUKUNJU, PROPRIETER, M/S.MOUNT MORIA CASHEWS CHERUVAKKAL, AYOOR, KOLLAM DISTRICT KERALA.

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BY ADVS.SRI.RAJA VIJAYARAGHAVAN SRI.R.RANJITH

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RESPONDENT(S):

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1. THE EMPLOYEES PROVIDENT FUND ORGANISATION, BHAVISHYANIDHI BHAVAN, P.B.NO.1016 THIRUVANANTHAPURAM, REP. BY ITS COMMISSIONER.

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2. THE RECOVERY OFFICER, EMPLOYEES PROVIDENT FUND ORGANISATION SUB REGIONAL OFFICE, ANNEX, MANNANIYYA COMPLEX CHINNAKKADA, KOLLAM-1.

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3. BIJU, S/O.KAMALASANAN, PURAMBIL VEETTIL, ODANAVATTOM, KOTTARAKKARA KOLLAM DISTRICT REP. BY HIS POWER OF ATTORNEY HOLDER RAVEENDRAN S/O.KAMALASAN, SUNIL MANDIRAM, VAPPALA KOTTARAKKARA, KOLLAM DISTRICT.

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R,R1 & 2 BY ADV. SRI.V.V.SURESH,SC,EPF.ORGANISATION R,R3 BY ADV. SRI.T.M.CHANDRAN R,R3 BY ADV. SRI.V.A.SASIDHARAN R,R3 BY ADV. SRI.JOSEPH ALBIN NEDUNTHALLY

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 08-04-2014, ALONG WITH W.P.(C) NO. 17309 OF 2010,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No. 3566 of 2010 (U)

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APPENDIX

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PETITIONERS EXHIBITS:

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EXHIBIT-P1 COPY OF THE RENT AGREEMENT DATED 21.01.2009 ENTERED INTO BETWEEN THE PETITIONER AND THE 3RD RESPONDENT.

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EXHIBIT-P2 COPY OF THE WARRANT OF ATTACHMENT OF MOVABLE PROPERTY DATED 7-1-2010, ISSUED BY THE 2ND RESPONDENT.

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EXHIBIT-P3 COPY OF THE REPRESENTATION DATED 23-1-2010 SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT.

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EXHIBIT-P4 COPY OF THE PETITION SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT, SEEKING TO LIFT THE ORDER OF ATTACHMENT.

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RESPONDENTS EXHIBITS:

NIL

// TRUE COPY //

P.A TO JUDGE.

K. VINOD CHANDRAN, J.

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=====================

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W.P.(C) No. 3566 of 2010 & 17309 of 2010

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====================== Dated this the 8^th day of April, 2014

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J U D G M E N T

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The Writ Petitions are filed against the assessment

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order issued against one M/s. Kairali Cashew Factory, Vappla, Kottarakara, Kollam and the recovery proceedings initiated thereon. Admittedly, one Mandakini, who is the petitioner in W.P.(C) No. 17309/2010 was the owner of a cashew factory by name Kamala Cashew Factory. The said Mandakini also owned the premises of the factory, which she leased out to the 3^rd respondent in her Writ Petition. The 3^rd respondent was running an establishment in the said factory premises obtained on lease hold rights, by name M/s Kairaly Cahsew. It was against the said establishment that an order under Section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for brevity 'the Act'), was passed for the period between October 2001 and July 2008.

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W.P.(C) No. 3566 of 2010 & 17309 of 2010

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Apprehending recovery proceedings against her; Mandakini filed W.P.(C) No.17309/2010, and also filed Ext.P10 appeal before the Appellate Tribunal. Mandakini in the Writ Petition sought for stay of coercive proceedings, during the pendency of the appeal. It is now informed that, Ext.P10 appeal filed by the petitioner in W.P.(C) No. 17309/2010 has been allowed by the Tribunal and the same has attained finality. In such circumstance, no proceedings could be taken against the petitioner in W.P.(C) No. 17309/2010. The Writ Petition hence stands closed as infructuous since the appeal filed by the petitioner has ended in her favour.

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The recovery proceedings against the very same assessment order, is challenged by one Manoj K., who is the petitioner in W.P.(C) No.3566/2010. The said petitioner was the subsequent lessee of the property of the aforesaid Mandakini. It is seen that, the 3^rd respondent in the said Writ Petition, the son of Smt. Mandakini executed a lease deed Ext.P1 in favour of Sri. Manoj K., which lease is

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W.P.(C) No. 3566 of 2010 & 17309 of 2010 3

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operative from 01.01.2009. The petitioner therein was before this Court when a warrant of attachment was issued against the petitioner's finished goods contending that the order of assessment was against a different establishment.

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The learned Standing Counsel appearing for the respondent organization would rely on Section 17B of the Act, to contend that, even if transfer is made, transferee shall be liable for the earlier dues of the establishment, to the respondent Organization. It is to be noticed that, the Proviso to Section 17B specifically provides that, the liability of transferee shall be limited to the value of the assets obtained by him by such transfer. In the present case, petitioner in W.P.(C)No.3566/2010 has only lease hold rights on the property. There is no question of any assets being transferred to him. The petitioner had been carrying on the business on the strength of a lease deed and the finished goods in such business are not liable for attachment for the dues of a different establishment which was carried on in the factory premises, earlier to the lease

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W.P.(C) No. 3566 of 2010 & 17309 of 2010 4

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period of the petitioner. The finished goods of the petitioner cannot be deemed to be assets transferred to the lessee by the lessor, when the lease was only of the factory premises.

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In such circumstance, W.P.(C) No. 3566/2010 stands allowed. It is made clear that, no proceedings as is seen in Ext.P2 can be proceeded with against the petitioner therein. The petitioner, on compliance of interim order issued by this Court is said to have executed a bond of Rs.1,00,000/- (Rupees One lakhs only/-). The same shall be released within, a month of production of the certified copy of this judgment.

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Ordered accordingly. Parties to bear their respective

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costs.

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Sd/- K. VINOD CHANDRAN, JUDGE

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Manoj K. v. Employees Provident Fund Organisation

Case brief

What is this about?

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Manoj K. v. Employees Provident Fund Organisation

Case brief

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