Liquidator held liable under EPF Act to pay contributions, costs borne by Commissioner, permitted to retain costs.

The court held that the liquidator is liable as an "employer" and "occupier" under the Employees' Provident Funds Act, 1952, to make the required contributions. The liquidator was directed to pay the employer's contribution from the estate's funds and was not held liable for contributions in respect of employees not covered by the Act. The costs of the application were to be borne by the Regional Provident Fund Commissioner, and the liquidator was permitted to retain costs from the company's funds.

---

---

Issues:
Liquidator's liability to pay employer's contribution of the provident fund under the Employees' Provident Funds Act, 1952 and rule 29 of the Employees' Provident Fund Scheme.

Analysis:
The judgment delivered by P.B. Mukharji, J. addresses the issue of the liquidator's liability to pay the employer's contribution of the provident fund under the Employees' Provident Funds Act, 1952. The liquidator contended that he is not liable under the Act to make this contribution. The argument was based on the liquidator not qualifying as an "employer" or "occupier" as defined under the Act. The liquidator argued that he does not have ultimate control over the affairs of the factory, as the control is with the court. However, the court rejected this argument, emphasizing that the liquidator is the statutory custodian of the property and effects of the company under the Companies Act. The court interpreted the term "ultimate control" in a practical sense, holding that the liquidator has control over the factory's affairs for all practical purposes.

The court also examined the main principle and object of the Employees' Provident Funds Act, 1952, which aims to provide for provident funds for employees in factories and establishments. The court highlighted that the Act's impact is on factories engaged in specified industries, and the Act's operation should not be defeated by a narrow interpretation of the term "employer." In this case, the court noted that the liquidator was ordered to keep the factory engaged in the industry and sell it as a going concern, making him liable as an employer under the Act.

Furthermore, the court addressed the argument regarding the priority of payment of contributions over other debts under the Act and the Companies Act. The court clarified that the statutory liabilities of making contributions to the provident fund are essential, and the liquidator, in this case, must fulfill these obligations to ensure the factory's continuity and eventual sale as a going concern. The court emphasized that such contributions are not liabilities for preferential payments but are necessary statutory obligations.

In conclusion, the court held that the liquidator is liable as an "employer" and "occupier" under the Employees' Provident Funds Act, 1952, to make the required contributions. The liquidator was directed to pay the employer's contribution from the estate's funds and was not held liable for contributions in respect of employees not covered by the Act. The costs of the application were to be borne by the Regional Provident Fund Commissioner, and the liquidator was permitted to retain costs from the company's funds.

---