TMI Blog1999 (1) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... i in the State of Uttar Pradesh, at Udaipur in the State of Rajasthan and in the Union Territory of Pondicherry. The case of the petitioners is that during the period 1974 to 1978, the textile industry suffered enormous losses which were due to the circumstances beyond control, as a result of which, the first petitioner-company's liquidity was adversely affected and it had to borrow large sums of money for payment of wages to the workers and even the Receiver appointed by the Collector could not pay wages of the workers at Kanpur unit, except by borrowing money from the State Government of Uttar Pradesh and there was some delay in payment of wages as well as in the payment of provident fund dues by the company. It is further stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April 19, 1986 passed an ordinance 5 of 1986 known as Swadeshi Cotton Mills Company, Ltd. (Acquisition and Transfer of Undertakings) Ordinance, 1986 , by which the said six textile units of the first petitioner were acquired retrospectively with effect from April 1, 1985. For such acquisition and/or transfer of the said six textile units of the first petitioner, a sum of ₹ 24,32,00,000/- was fixed to be the payment to be made in cash in the manner specified in Chapter VI of the Ordinance. There were certain conditions stipulated in the Ordinance for payment of the provident fund. The said Ordinance has been replaced by an Act of Parliament being Act 30 of 1986 known as The Swadeshi Cotton Mills Company Ltd. (Acquisition and Transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rding to the Act, the Central Government issued a notification, dated January 23, 1987, inviting claims which were to be filed before the Commissioner of Payments within 30 days from the specified date February 1, 1987, which was given a wider publicity. It is also the case of the petitioners that all the dues on account of provident fund and all other amounts payable to the employees in respect of the period whether before or after taking over the units shall be paid in the first instance in priority to all other claims. While the things stood thus the second respondent issued the impugned order seeking to recover the damages amounting to ₹ 46,221.35 for the delay in payment of provident fund dues for the period September, December 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of unpaid salaries, wages, provident fund, Employees' State Insurance contribution or premium relating to the Life Insurance Corporation of India and any other amounts due to employees in respect of any period whether before or after the date of taking over of the textile undertaking. In the schedule, Category I was given priority for the discharge of liabilities. According to Clause 3(1) of Chapter II of the Act, on the appointed day, every textile undertaking and the right, title and interest of the company in relation to every such textile undertaking shall, by virtue of the Act stand transferred to and shall vest in the Central Government. As per Clause 4(1), the textile undertakings referred in Section 3 shall be deemed to in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the guidelines given by the High Court, the matter was considered and accordingly the impugned order was issued. 7. The impugned order is very clear and elaborate. It is stated that the first petitioner-company is liable to pay the provident fund contributions under Section 6 of the Act; the Family Pension Fund contributions under Section 6 of the Act read with Para. 9(1) of the Family Pension Fund Scheme, 1971; Administrative charges under Para. 38 of the Employees Provident Fund Scheme, 1952, the Employees Deposit Linked Insurance Contributions. Every contention raised by the first petitioner-company was dealt with according to law by the respondent with reference to the evidence available. Further Section 5(1) of the Act makes it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the provisions of the Provident Funds Act. The liability was incurred by the company and as such as per Sub-clause (c), it shall not be enforceable against the Central Government or the National Textile Corporation. Further, under Section 9(1) of the Act, the Central Government has paid the amounts to the company for the deprivation of the management of the company by the first petitioner at the rate of ₹ 10,000 per annum for the period commencing on the date on which the management of the textile undertaking of the company was taken over in pursuance of the order made by the Central Government under Section 10-AA of the Act. In the circumstances, it has to be held that the company alone is liable under Section 5 of the Act to pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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