Oral Judgment:

1. Heard Mr Sardessai, learned counsel who appears with Ms Bangera for the petitioner and Mr Agrawal, learned counsel for respondent No.2.

2. The petitioner challenges the order dated 11.02.2024 made by the Assistant Provident Fund Commissioner/Recovery Officer, RO, Goa, determining an amount of Rs.6,65,173/- as payable by the petitioner herein towards the provident fund dues under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (the said Act).

3. Mr Sardessai, learned counsel for the petitioner raised the following grounds in support of the present petition: -

                   (a) That the dues, in fact, pertain to M/s Pushparti Packs Pvt. Ltd. The present petitioner was only an auction purchaser of this company's assets, i.e. an industrial shed, in pursuance of the Court auction. Therefore, this was not some case of "voluntary transfer" to which the provisions of Section 17-B of the said Act could have been applied and liability foisted. He relied on Vibhu Drinks Pvt. Ltd. Vs Assistant Provident Fund Commissioner(2018(2) Mh. L.J. 89) and ANK Seals, Nagpur Vs Employees' State Insurance Corporation, Nagpur and others(2007(2) L.L.N. 373), to support this plea;

                   (b) Without prejudice, the liability, if any, can be that of the firm M/s Dynaquip Engineers but not of the partners of the firm;

                   (c) Further, without prejudice, liability, even if in terms of Section 17-B, can be "up to the date of such transfer" and further, the liability will have to be limited to "the value of assets obtained by him by such transfer";

                   (d) Further, without prejudice, no liability can be imposed without identifying the employees who are intended to benefit from the recovery. For this, reliance was placed on Himachal Pradesh State Forest Corporation Vs Regional Provident Fund Commissioner((2008) 5 SCC 756);

                   (e) Finally, the demand was barred by inordinate delay and laches. Prejudice, was inherent in the facts and circumstances of the present case because the original liability was never of M/s Dynaquip Engineers but of M/s Pushparti Packs Pvt. Ltd. To expect that M/s Dynaquip Engineers would have records or being in position to effectively throw any light on any alleged liability was expecting them possible. In any case, no such burden could have been placed upon M/s Dynaquip Engineers at this point of time on account of delay and laches attributable to Provident Fund Authority.

4. Mr Agrawal defended the impugned order based on the reasoning reflected therein. He stressed on clause 9 of the auction/tender conditions, which had clearly provided that all statutory dues shall be paid by the transferee M/s Dynaquip Engineers. He submitted that, having accepted this condition and purchased the assets of M/s Pushparti Packs Pvt. Ltd., the petitioner could not be permitted to resile and now resist payments. He submitted that the decisions relied upon by Mr Sardessai were distinguishable because in those cases the liability was specifically retained by the Liquidator or there were no provisions for transfer of such liability.

5. Mr Agrawal submitted that the dues in the present case, together with interest, had reached Rs.15,03,133/- as on the date the warrant of arrest dated 17.08.2012 was issued. He submitted that this includes statutorily provided interest. He submitted that the warrant of arrest was not issued to the partner of the petitioner firm. Still, to Vallabh Bandodkar and another, both directors of M/S Pushparthi Packs Pvt. Ltd. He pointed out that in Writ Petitions Nos. 618 of 2012 and 619 of 2012 instituted by these two directors, approximately Rs. 7 lakh was deposited. Further, some security has been provided in respect of the balance amount.

6. For the above reasons, Mr Agrawal submitted that this petition may be dismissed.

7. The rival contentions now fall for determination.

8. In this case, there is no serious dispute that M/s Pushparti Packs Pvt. Ltd. (Company) had defaulted in payment of provident fund dues to its employees. This company also defaulted in paying dues towards the EDC Ltd. but dealt with the State Financial Corporation. Therefore, EDC Ltd. attached the assets of the company, which included an industrial shed and ultimately, auctioned the same through the Court.

9. One of the terms of the auction/tender (clause 9) had clarified that the auction purchaser shall pay all statutory dues and that the transfer of the property is subject to all such liabilities. In the sale deed dated 21.07.2006, which was executed, this term/condition was reiterated.

10. Since this is a case where there were specific contractual terms under which the petitioner herein agreed to purchase the assets of M/s Pushparti Packs Pvt. Ltd., subject to liability to clear all statutory dues, even without going through the provisions of Section 17-B of the said Act, the petitioner cannot avoid liability.

11. In any event, Section 17-B provides that 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 [Pension] Scheme or the Insurance Scheme], as the case may be, in respect of 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. Relying on Vibhu Drinks Pvt. Ltd. (supra) and ANK Seals (supra), it was contended that the transfer contemplated under Section 17-B of the said Act or pari materia provisions under Section 17-A of the Employees' State Insurance Act, 1948 would be only a "voluntary transfer" and not a transfer under the statutory provisions.

13. This is misreading the ratio of the two judgments by trying to focus on the stray sentences therein. The ratio has to be determined by evaluating the facts in their entirety. Even a single crucial fact can make a difference.

14. In Vibhu Drinks Pvt. Ltd., (supra) the sale/transfer was executed by the Official Liquidator after the company which had defaulted in payment of provident fund dues went into liquidation. The conveyance deed executed by the Official Liquidator in favour of the petitioner specifically provided that the property/assets were being sold free from all claims and demands of whatsoever nature so that the petitioner could hold the same as absolute owner thereof, as per terms and conditions approved by the High Court. There was yet another specific clause in the conveyance deed that the vendor i.e. the Official Liquidator, hereby agrees and undertakes to pay all such charges, taxes, cess and dues up to the terms and conditions of the bid approved by the Hon'ble High Court.

15. The aforesaid term has been specifically incorporated in Para 6 of this Court's decision in Vibhu Drinks Pvt. Ltd. (supra). Focusing upon these terms and conditions and given these specific facts, this Court noted that the property was transferred to the petitioner free from all encumbrances, attachments, charges and any other claims whatsoever, and the petitioner is entitled to have and hold the said property as the absolute owner of the same.

16. The Court noted that in terms of the aforesaid two clauses, it was the vendor i.e. the Official Liquidator who had agreed and undertaken to pay all such charges, taxes, cess and dues up to the terms and conditions of the bid approved by the High Court. It noted that there was absolutely no ambiguity and the liability to pay the provident fund dues, as proposed in the show cause notices, was that of the Official Liquidator and not of the auction purchaser i.e. the petitioner.

17. The fact situation in the present case is precisely opposite. Here, the terms and conditions made it clear that the property and assets had been sold, subject to the liability to clear the statutory dues, including provident fund dues. These terms were incorporated in the sale deed, which was executed by the petitioner herein. There was no compulsion on the petitioner to either bid at the auction or to execute sale deed containing such terms and conditions. Therefore, there was nothing involuntary in either taking part in the Court auction or executing sale deed and accepting the liability to pay all taxes, statutory dues etc. Therefore, based upon Vibhu Drinks Pvt. Ltd. (supra), no relief is due to the petitioner.

18. In ANK Seals, Nagpur (supra), this Court after accepting the provisions of Section 93A of the Employees' State Insurance Act, 1948 were similar to the provisions in Section 17-B of the said Act, noted in the context of Kerala High Court decision which was relied upon in the said case that transferee bought establishment from the Court receiver free from such liabilities and not from previous employer.

19. Further, in Para 11 of this decision, the reference was made to the terms and conditions of the auction and clause 6 of the eventual lease deed in which it was made clear that the parties have agreed and declared that all the liabilities as to rights, rents, rates, taxes and dues in respect of the said assets, if any which may be due or which may hereinafter fall due and the MIDC charges, G. P. taxes, local cess, if any, outstanding upto this date and transfer fees as may be demanded by MIDC and of the MSEB shall be paid and satisfied by the purchasers and the Corporation shall not be in any way liable to make good the expenses incurred by the purchasers on any account.

20. The Court noted that except for this liability, the petitioners have not taken over any liability of the establishment which was registered under ESI Act with respondent Nos. 1 and 2. Therefore, after noting that the term of the transfer or term of the lease deed did not provide for taking over of the ESI liability by the transferee, transfer was effective. Again, the facts situation in the present case is diametrically opposite. Therefore, the ratio in ANK Seals (supra) cannot be read or construed dehors from the facts situation in the said matter or be applied to the facts situation of the present matter which is diametrically opposite.

21. Thus, the contention based upon interpretation of Section 17-B of the said Act, urged on behalf of the Petitioner cannot be accepted in the clear facts and circumstances of the present case. Based upon such interpretation the petitioner, cannot avoid liability or resist payment of provident fund dues.

22. The second contention is about the liability of the firm and not of its partners. This contention is sought to be made good inter alia by reference to Section 14A which is concerned with offences by Companies. However, the explanation to this Section provides that for the purposes of this section, "director" in relation to a firm means a partner of the firm. This section provides that if a person committed offence under the Act etc. is a company, every person, who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. Provided that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.

23. Firstly, in this matter, I am not concerned with any criminal prosecution. I am only concerned with civil liability to which provisions under Section 14A would not ipso facto apply. Section 14A has been enacted for Company or firm which is a juridical entity for certain purposes, cannot imprisoned if found guilty, only directors or partners of the firm can be imprisoned and that too if it is established that they were incharge and responsible to the company for the conduct of its business.

24. Therefore, notice issued to the petitioner in this matter cannot be defended on the ground or the plea now raised. In any event, this plea is raised in the abstract because none of the partners claims that they were not in charge of or responsible for the firm's business. Even otherwise, a firm is nothing but a collection of the partners. In law, it lacks a separate legal identity.

25. The third contention is that the liability of the transferee under Section 17-B of the said Act, shall be in respect of dues up to the period of transfer and further, the same shall be limited to the value of assets obtained by the transferee by such transfer. This contention is correct.

26. The transferee, under Section 17-B is not made liable for any dues of the previous establishment post the transfer provided the previous establishment has continued to function on some other premises or location. Further, transferee, will be liable only to the extent of value of the assets obtained by such transferee by such transfer.

27. However, in this case, the petitioner has not placed any material to show that any demands have been raised against the petitioner for the period after the date of transfer. The record in fact, suggest otherwise. Similarly, there can be no dispute that liability shall be limited to the value of the assets obtained by transferee by such transfer. However, there is no material produced on record to suggest that the value of the industrial shed obtained by the petitioner is not sufficient to recover the provident fund liabilities. In any event, if it is insufficient, then there is no question of Provident Fund Authorities going against any other assets of the petitioner as may have been owned or acquired by the petitioner, other than by way of such transfer. The Provident Fund Authority can only go against the transfer of assets and not any other assets of the petitioner. To that extent, the petitioner is correct and the Provident Fund Authority will have to comply with the provisions contained in proviso to Section 17-B of the said Act.

28. On the aspect of identification, again, the petitioner has not laid any factual foundation to suggest that the recovery is in respect of an employee who has not been identified or is not capable of being identified. Such a plea was never raised in the detailed reply filed by or on behalf of the petitioner on 17.02.2014. Therefore, by merely relying upon the decision in Himachal Pradesh State Forest Corporation (supra), such a plea cannot be raised for the first time in a writ petition and based there upon, recovery can be stalled or at least delayed.

29. Finally, regarding delay and laches, it is significant to note that the provisions of the said Act do not provide for any such limitation. Still, going by the theory of reasonable period and also accounting for aspect of prejudice, it is necessary to note in detailed reply furnished by the petitioner, there is no whisper regards either delay or consequence prejudice. In any event, the original liability was that of M/s Pushparti Packs Pvt. Ltd. They have not disputed liability or pleaded any prejudice. The petitioner is liable, firstly on account of the contractual terms voluntarily agreed to by the petitioner and secondly, even without prejudice, on account of the provisions under Section 17-B of the said Act. In such circumstances, by raising the issue of delay and prejudice for the first time before this Court without there being any factual foundation whatsoever earlier, the recovery cannot be stalled or further delayed.

30. Accordingly, there is no merit in this petition, and the same is dismissed without any order as to costs.