IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWELFTH DAY OF AUGUST TWO THOUSAND AND TEN PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH WRIT PETITION No.25350 of 2002 Between: T.Bhanumathi ..... PETITIONER AND Asst.Provident Fund Commissioner, Visakhapatnam and another .....RESPONDENTS The Court made the following: THE HON'BLE MR JUSTICE V.ESWARAIAH WRIT PETITION No.25350 of 2002 O R D E R: It is stated that the petitioner purchased the properties of M/s.Visakha Milk Base Private Limited in public auction conducted by the Andhra Pradesh Cooperative Bank Limited. As M/s.Visakha Milk Base Private Limited was fallen certain dues to the 1st respondent-Assistant Provident Commissioner, the 1st respondent raised a demand for payment of levy of damages payable by the petitioner. Questioning the said order of the 1st respondent dated 12.11.2002 this writ petition is filed. 2. The brief facts of the case are that M/s.Visakha Milk Base Private Limited, Visakhapatnam obtained a loan of Rs.61.938 lakhs from the Andhra Pradesh Cooperative Bank of Visakhapatnam branch by mortgaging the land, plant and machinery in favour of the 2nd respondent for running the milk processing and packing unit. As M/s.Visakha Milk Base Private Limited committed default in paying the loan installments, the 2nd respondent bank initiated proceedings for recovery of the loan amount and on a petition filed by the 2nd respondent before the Registrar of Cooperative Societies, Hyderabad, the Registrar of Cooperative Societies, Hyderabad passed an award No.6/01/F/39 dated 02.12.2000 in favour of the 2nd respondent. Pursuant to which, the 2nd respondent bank held auction for the sale of the mortgaged properties of M/s.Visakha Milk Base Private Limited vide public auction notification in ARC.337/99/R1, E.P.No.06/01/F39 notifying the particulars of the properties. The petitioner participated in the said auction and became the highest bidder for a sum of Rs.15 lakhs and accordingly, sale confirmation orders were issued in favour of the petitioner vide Annexure-XII Form-9(A) dated 27.05.2002 stating that the highest offer in favour of the petitioner for a sum of Rs.15 lakhs was knocked down on 25.04.2002 and the sale was conducted in accordance with Rules-52 (ii) of APCS Rules 1964. 3. While so, the 1st respondent-Assistant Provident Fund Commissioner issued a notice to the petitioner under Sec.7A of the Employees Provident Funds and Miscellaneous Provisions Act 1952 dated 12.09.2002 stating that the petitioner already received the earlier notice issued by him on 11.09.2002 and at the request of the petitioner in order to give one more opportunity to the petitioner, the matter was adjourned to 23.09.2002 for appearance of the petitioner in person or through representative. Pursuant to the said notice, the petitioner made a representation dated 02.09.2002 stating that the petitioner did not have any details of payment and she has purchased the properties like machinery, land & buildings in an open auction conducted by the 2nd respondent bank and accordingly, requested the 1st respondent to go through the documents and finalize the matter. Thereafter, the 1st respondent issued the impugned proceedings dated 12.11.2002 holding that the petitioner who is the purchaser of the property of M/s.Visakha Milk Base Private Limited shall also be liable for payment of the dues under Sec.17B of the Act in respect of the period up to the date of transfer. Therefore, the impugned order was passed levying the damages of Rs.1,47,768-60 ps demanding the petitioner to pay the same within 15 days from the date of receipt of the said order, failing which it is stated that they would take appropriate action. 4. Admittedly, against the impugned order passed under Sec.14(B) of the Act, an appeal lies under Sec.7(i) of the Act before the Employees Provident Fund Appellate Tribunal. 5. The learned counsel for the petitioner submits that the impugned order itself is illegal and without jurisdiction and Sec.17B of the Act is not applicable to the case of the petitioner, as the properties are not sold by M/s.Visakha Milk Base Private Limited directly to the petitioner. Pursuant to the auction conducted by the A.P.Cooperative Bank, the petitioner purchased the said properties. Therefore, it cannot be said that the establishment of M/s.Visakha Milk Base Private Limited transferred its land, assets and machinery by way of sale and gift and therefore, Sec.17B has no application. In support of his contention, the leaned counsel for the petitioner relied upon a judgment of the Hon’ble Supreme Court of India in the case of Isha Marbles v Bihar State Electricity Board[1] ./ 6. I have perused the said judgment. The facts of the aforesaid judgment relate to the Electricity Act. Admittedly, the consumer was the previous owner who has consumed the electricity and the subsequent purchaser is neither the consumer nor the occupier within the meaning of the provisions of the Electricity Act, and in those facts and circumstances of the case, and in view of various provisions which have been discussed, it was held that the purchaser is not liable to pay the electricity dues and the purchaser is liable to pay the electricity dues from the date of reconstruction of disconnected power supply after entering into the premises. Therefore, the facts of the above case are not applicable to the facts of the present case. 7. Under Sec.17B where an employer, in relation to establishment, transfers that establishment in whole or in part, by way of 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, as the case may be, in respect of the period up to the date of such transfer. But, however, the liability of transferee shall be limited to the value of the assets obtained by him by such transfer. 8. In the instant case, the value of the properties obtained by the petitioner is 15 lakhs though the dues payable to the 2nd respondent bank was 70 lakhs. The demand made by the 1st respondent was only for Rs.1,47,768-60ps. Under Sec.17B where the establishment is transferred in any other manner whatsoever, the employer and the person to whom the establishment is so transferred shall jointly and severally liable to pay the contribution and other sums due from the employer. When M/s.Visakha Milk Base Private Limited itself has no right to transfer its properties and if such transfer is made, M/s.Visakha Milk Base Private Limited as well as transferee both are jointly and severally liable to pay the amount demanded and therefore, it cannot be said that the petitioner is not liable to pay the amount, demanded by the 1st respondent. 9. I do not see any merits in this writ petition and the same is accordingly dismissed. No order as to costs. ___________________ V.ESWARAIAH,J Dated: 12.08.2010 Dsr [1] (1995) 2 Supreme Court Cases 648