K.K. Dube, J.
1. By this petition under Articles 226 and 227 of the Constitution of India, the petitioner challenges the order of the Regional Provident Fund Commissioner calling upon him to submit returns and to deposit provide at fund according to the provisions of the Employees' Provident Funds and Family Pension Fund Act 1952 (Act 19 of 1952) hereinafter referred to as 'the Act').
2. On the relinquishment by M/s. Norman F. Latif, the licence to run a refreshment restaurant was given to the petitioner tot three years. Messrs. Norman F. Latif, was running a non-vegetarian restaurant on platform No. 1 of Itarsi Railway Station. The petitioner started running the restaurant from 8.1.1969. The grant in favour of the petitioner to run the restaurant was made by the railway and he had no connection with the previous licensee, namely, M/s. Norman F. Latif. The Employees' Provident Funds and Family Pension Fund Act, 1952, subject to the exceptions carved by Section 16, applied to an establishment employing twenty or more persons when the class of such establishment was either a factory engaged in any industry specified 'in Schedule I or belonging to class of such establishment which the Central Government by notification in the Official Gazette may specify. The establishment to run a restaurant has been notified by the Central Government and the provisions of the Act applied to restaurants, Messrs. Noman F. Latif were contributing towards the provident fund of their employees on the faith that the provisions of the Act applied to the establishment. Some of the discharged employees of Noman F. Latif were engaged by the petitioner on fresh terms. It is also not disputed that the present petitioner is not a transferee of the business of M/s. Noman F. Latif. The servants employed by the petitioner were employed on new terms and conditions. So far as the petitioner was concerned, he started his establishment on 8.1.1969.
3. The Regional Provident Fund Com missioner first only wanted to know whether the services of the employees under M/s. Noman F. Latif were continued by him. By a letter dated 30.12.1970, the Regional Provident Fund Commissioner, Indore, threatened the petitioner to initiate action against him for failing to comply with the provisions of the Act. Thereafter, on 20.7.1970, respondent No. 1 gave a notice to appear before him for the purpose of conducting an enquiry and assessing the extent of liability under the Act and the scheme made under it The petitioner replied by a letter dated 3.9.1970 contending that he was entitled to infancy benefit under Section 16(1)(b). The petitioner also requested that the matter may be referred to the Central Government under Section 19A of the Act for a direction.
4. The Central Provident Fund Commissioner by its letter dated 9.6.1971 informed the petitioner that he would not be entitled to infancy benefits under Section 16(1)(b) of the Act. It was further stated that the stall was handed over to him in a running condition and was continued in the same premises with some earlier stock. The petitioner has been advised to comply with the instructions of the Regional Provident Fund Commissioner, Madhya Pradesh. The petitioner immediately wrote back that he had not been handed over a running stall and no enquiry had been made in that regard.
5. The Regional Provident Fund Commissioner, Indore, respondent No. 1, thereafter served on the petitioner a notice asking him to remit the amount of provident fund contribution and to submit the returns within 10 days from the date of receipt of the letter. The petitioner was again asked to comply by a letter dated 5.1.1973.
6. The petitioner now contends that he is entitled to the infancy benefits provided under Section 16(1)(b) of the Act. He further contends that the authorities were bound to make enquiries and collect information from the railway to ascertain the precise nature of transaction under which the petitioner was granted the licence. The authorities have acted without any enquiry and unwarrantedly assumed that he was given a running concern and that there was mere change of ownership and thus making him liable for payment under the Act.
7. The respondents contend that when the petitioner took up business from M/s. Noman F. Latif there was a mere change in the ownership and the same establishment was continued. Secondly, the doubt whether the petitioner was entitled to the infancy benefit or not has been set at rest by the reference made under Section 19A of the Act to the Central Government. The order made under Section 19A was final and the petitioner is bound by it.
8. The main question that falls to be decided for consideration is whether the establishment of the petitioner which he started on 8.1.1969 came into being for the first time or it was a continuation of business. Section 16(1)(b) runs as under:
16. Act not to apply to certain establishment.-(1) This Act shall not apply-
(a) - - -(b) to any other establishment employing fifty or more persons or twenty or more, but less than fifty persons, until the expiry of three years in the case of the former and five years in the case of the latter, from the date on which the establishment is, or has been, set up.
Explanation. - For the removal of doubts, it is hereby declared that an establishment shall not be deemed to be newly set up merely by reason of a change in its location.
9. In State of Punjab v. Satpal and Anr. : 1970CriLJ738 , explaining the scheme of the Act, the Supreme Court pointed out as under:
The law takes into account only the existence of establishments and the employment of a certain number of persons in factories over a given period, It is for this purpose that change of location or change of composition of partners or even a change in the manufacturing process is not considered vital in the application of this law.
(Para. 7, p. 65 ).
In the above case, the business was started by one Tirath Ram. Thereafter, the name of the business was changed to M/s. Jai Bharat Metal. Industries Subsequently, some partners were introduced into the business. The partnership was then dissolved and Tirath Ram went out of business. The remaining partners continued the factory in the same premises for some time. The premises were changed and later on they also started manufacturing new products which were considered more profitable. Neither on the change in the partnership nor the mere fact that something different was now being produced nor shifting the premises, a new establishment came into being. The Supreme Court held that there was a continuation of the establishment.
10. It would be seen that in the Supreme Court case there was a devolution of interest of Tirath Ram while the existence of establishment was not affected. In the instant case, M/s. Noman F. Latif relinguished their licence and wound up their establishment. The railway now provided a room to the petitioner for a non-vegetarian restaurant. Such a restaurant was considered necessary to provide non vegetarian meals to the travelling public. It may be that some furniture belonging to the railway was also given to the petitioner. It may also be a fact that when M/s. Noman F. Latif wound up their business, the petitioner purchased some of the stock from them for his use. But it is clear that the business run by M/s. Noman F. Latif did not devolve on the petitioner. That he was not a transferee is plain enough. Now, merely that a non-vegetarian restaurant was always run at the railway station, it could not be said that an establishment was continued by the successive contractor. With the change in the contractor, the servants changed. The new contractor has his own paraphernalia, his own cook and he could not be said to be continuing an establishment already existing. The new contractor has his own organisation and everything associated with his establishment came into being with the new licence in his favour.
11. A distinction has to be made between a similar establishment and the same establishment. If the subsequent establishment is similar, it would not be on that account a continuation of the earlier establishment. If a business of catering if. carried on in one room given by the railway under a licence regulating the terms and conditions of such business and thereafter, the licence is terminated and someone else sets up an organisation of his own on fresh terms and conditions, it could not be said that the prior establishment continued even when the business was similar and the establishment is run on similar terms and conditions. The servants employed by the petitioner served under new terms and conditions as agreed with the petitioner We do not, therefore, think that by merely running a canteen in the railway premises, the establishment was regarded as an old one or one that had been continued from time to time by different contractors. In Satpal'a (supra), there was devolution of interest and the establishment as such continued. There is no such devolution of interest in the present case.
12. We may now deal with the question as to the finality of the order passed by the Central Government under Section 19A of the Act. The Central Provident Fond Commissioner by his letter dated 9.1.1971 informed the petitioner that he was not entitled to infancy benefits as he was handed over a running business. It is contended that under Section 19A, the Central Government having given its direction on the matter on which doubt had been expressed in regard to the provisions of this Act, its order became final and the petitioner was bound by it. Under Section 19A, if any difficulty arises in giving effect to the provisions of the Act mid if any doubt arises as to the matter adumberated in the section, the Central Government can, by order, make such provisions or give such directions not inconsistent with the provisions of the Act, as appear to it to be necessary or expendient for the removal of the doubt or difficulty. The power is given to the Central Govern, merit to remove difficulty in the working of the Act for the purpose of giving effect to the provisions of the Act. This may be done by making provisions as appear to be necessary or expedient for the removal of such difficulty. The provision made, however, must not be inconsistent with any of the provisions of the Act. The Central Government is also empowered under Section 19A of the Act to remove any doubt as to the matter adumbrated. The doubt is thus resolved by the Central Government under this provision by giving directions. The idea is that the Central Government may step in to remove such doubts as would come in the way of giving effect to the provisions of the Act.
13. It is contended that under Clause (ii) of Section 19A of the Act, if any doubt arises as to whether any particular establishment Is an establishment falling within the class of establishments to which this Act applies by virtue of a notification under Clause (b) of Sub-section (3) of Section 1, the doubt would be resolved by the Central Government. The Central Provident Fund Commissioner, respondent No. 2 purported to act under the above provision and decided that the petitioner was not entitled to benefits under Section 16(1)(b) of the Act. Now, by virtue of the notification, the Act has been applied to restaurants. There does not appear to be any doubt as regards applicability of the provisions of a Act to restaurants. it would be observed that whether or not the infancy benefits are to be given to a particular establishment would depend on the conditions specified under Section 16 of the Act. When such conditions are fully satisfied the benefits available to an establishment could not be refused. The Central Government would not have power to take away such infancy benefits if legally available to an establishment. The Central Government could not give direction under Section 19A which are inconsistent with the provisions of the Act The view taken by the Central Provident Fund Commissioner that the petitioner was not entitled to infancy benefits was, as pointed out before, formed on wrong premises and was erroneous The petitioner was entitled to such benefits provided under the Act. The direction of the respondent No. 2 was clearly inconsistent with the provisions of the Act and liable to be struck down.
14. We accordingly quash the order passed by the respondent No. 2, the Central Provident Fund Commissioner (Annexure 1) as also the order passed by the respondent No. 1 the Regional Provident Fond Commissioner (Annexure 1) The petition is allowed with costs. Counsel's fee Rs. 100. The security amount deposited by the petitioner be refunded to him.