SADANANTASWAMY, J. ( 1 ) THIS appeal is presented against the order dt. 24/27-2-1975 in WP. 2992 of 1973 passed by Jagannatha Shetty, J. The writ petition presented under art. 227 of the Constitution was directed against the order made by the regional Provident Fund Commissioner in Mysore, Bangalore, under S. 7a of the Employees Provident Funds Act, 1952, hereinafter referred to as the Act. Mis Sutaria Automobiles (P) Ltd is a company having its registered office at Fort Road, Belgaum. It was carrying on automobile business at Belgaum and also at Hubli where it had its branch office. Its establishment was covered by the provisions of the Act. On 31-12-1970 a meeting of the Board of Directors of the Company was held and a resolution was passed authorising the sale of the building, lease plot and all the spare parts which were in slock at the Branch Office at Hubli, to a partnership firm called 'sutaria Automobiles'. Pursuant to the resolution, the partnership firm Sutaria Automobies became an assignee of the lease-hold interest of the company in its Hubli Branch for a consideration of Rs,32,000 under a deed of assignment dt. l-l-1971. The partnership firm also purchased all the stock-in-trade of the Branch Office of the company at Hubli for Rs. 67,575. The partnership firm, Sutaria Automobiles, came into existence with effect from 1-1-71 under a registered deed of partnership. According to the case of the appellant partnership firm, the previous employees of the company working in that part of the establishment at hubli resigned as on 31-12-70 and were taken on duty by the partnership firm on the next day i. e. on 1-1-71. The firm did not pay the contribution of providet fund payable in respect of those employees. The Regional provident Fund Commissioner after hearing the representative of the firm, made an order under S. 7a calling upon the firm to pay the provident fund contribution and administrative charges for the period from 1-1-1971 to decr 1972. The partnership firm Sutaria Automobiles presented the writ petition challenging the above-said order. The learned single Judge held that the petitioner-firm is not entitled to exemption under S. 16 (1) ' (b) of the Act since he found that the same old business of the company was continued by the petitioner with all the establishment, stock-in-trade and fixtures. The partnership firm Sutaria Automobiles presented the writ petition challenging the above-said order. The learned single Judge held that the petitioner-firm is not entitled to exemption under S. 16 (1) ' (b) of the Act since he found that the same old business of the company was continued by the petitioner with all the establishment, stock-in-trade and fixtures. But since it was contended by the petitioner that the employees who had resigned frcm their jobs had also been included as members of the fund while determining the provident fund contribution for the period during which they were not in service, the learned single Judge quashed the impugned order reserving liberty to the Provident Fund Commr to redetermine the amount of contribution payable by the firm after notice to the petitioner according to law. It is against this order that the petitioner firm has come up in appeal. ( 2 ) IT is the contention of Mr. B. P. Bopanna, appearing for the appellant, that the appellant is entitled to exemption from the application of the provisions of the Act. The relevant part of S. 16 reads as follows : 16. Act not to apply to certain establishments : (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. " the term 'establishment' has not been defined in the Act. The contention of the appellant is that the appellant-firm is a different legal entity which came into existence on 1-1-71 and has nothing to do with the company which was carrying on its business at the branch office at Hubli before 1-1- 1971, that the business carried on by the appellant-firm is an establishment newly set up on 1-1-71 and therefore entitled to exemption under s. 16 (1) (b) of the Act. On the other hand, the respondent contends that the mere change of ownership of the business carried on at Hubli does not entitle the appellant to such an exemption. ( 3 ) THE scope of S. 16 (l) (b) was considered by the Supreme Court in Lakshmi Rattan Engineering Works v. Regl PF Commr (1966) 1 LLJ. 741. . In that case, the Govt of India had started a diesel engine factory at Faridabad in 1952. The appellant purchased the factory from the Govt of India in 1955. The main dispute was whether the factory must be deemed to have been established in 1952, as contended by the Commr or whether the period of three years allowed under Sec. 16 (1) (b) should count from the date on which the appellant purchased the factory from the Govt of India. The relevant part of S. 16 (l) (b) which was applicable to the factory in that case read as follows : (1) This Act shall not apply to- (a) * * (b) any other establishment, established whether before or after the commencement of this Act, unless three years have elapsed from its establishment. Rejecting the contention of the appellant, it was observed as follows : the words of S. 16 (1) (b) are quite clear and leave no room for doubt that the period of three years should count from the date on which the establishment was first established and the fact that there has been a change in the ownership makes no difference to the counting of this period of three years, so long as the establishment has continued to work all along. It was held that under the terms of the agreement between the appellant and the Govt of India, the appellant took over the running factory and therefore, there was a mere change of ownership in 1955 and that the date of establishment must remain the date of its first establishment in 1952. ( 4 ) IN the present case, the business of the branch office of the company at Hubli was being carried on by the company till 1-1-71. On and from 1-1-71 the same business has been taken over by the appellant-partnership firm and carried on by it. ( 4 ) IN the present case, the business of the branch office of the company at Hubli was being carried on by the company till 1-1-71. On and from 1-1-71 the same business has been taken over by the appellant-partnership firm and carried on by it. Out of the ten employees who were working at that branch office, nine have been re-employed by the appellant from 1-1-71 though resignation letters had been obtained from each of the employees to the effect that each of them had resigned from the service of the company from 31-12-70. The other employee who also had given a similar resignation letter, has been taken as a partner of the appellantfirm with effect from 1-1-71. Hence, what has happened in the present case is that there is a change of ownership of the business which was being carried on at the branch office of the company at Hubli. Though Sec. 16, (1) (b), as it stands now, is different from what it was at the time it was considered by the Supreme Court in the case of Lakshmi Rattan engineering Works (1), it makes no difference to the principle laid down in that decision. In fact, the above provision, as it now stands, make's the intention of the legislature clear that exemption is meant to be granted to an establishment for the period of three years, or five years as the case may be from the date on which the establishment is, or has been set up. The appellant-firm therefore is not entitled to exemption under S. 16 (l) (b ). ( 5 ) MR. Bopanna, however relied on the later decision of the Supreme court in PF Inspector, Trivandrum v. NSS Co-op Society (1969) 2 LLJ. 693 ,. In that case, a printing press was purchased by the NSS Co-op Society in 1961 from the Travancore-Cochin Central Printing and Publishing Co-operative society Ltd. This establishment of the printing press had been set up in 1946 and according to the Commr it continued in existence even subsequently when the press was purchased by the NSS Co-op. Society in 1961. Until the purchase by the NSS Co-op Society, the establishment had employed only nine workmen, but after the NSS Co-op Society purchased the press the number of workmen increased beyond twenty. Society in 1961. Until the purchase by the NSS Co-op Society, the establishment had employed only nine workmen, but after the NSS Co-op Society purchased the press the number of workmen increased beyond twenty. Since the commr had filed criminal cases for prosecution of the NSS Co-op Society, it was held that the burden of proving that the old establishment had continued and that a new establishment was not set up in the year 1961 was on the Commr. According to the evidence of the PF Inspector, there were only nine employees at the date of the purchase by the NSS Co-op Society and of these nine employees six were re-empioyed by the purchasers. The witness also admitted that after the purchase, the press was removed from the original place and additional machineries were purchased and added to the press. The compensation due to the workers till the date of sale was disbursed by the previous owner. According to his evidence, none of the employees was continued in service by the purchaser. On a discuss'on of the entire evidence and in view of the fact that the burden of proof lay on the Commr, the conclusions of fact which were accepted were as follows : at the time of the purchase a new owner came in place of the previous owner; the work of the press was stopped on sale and was re-started after a break of about three months the machinery in the press was also alte red; the persons employed previously were not continued in service whil a fresh recruitment of empolyees took place amongst whom only six hap pened to be previous employees and compensation was paid to the work men at the time of the sale by the previous owner. On these facts it was held that the only conclusion which can be drawn was that the old establishment was completely closed when the transfer of ownership took place and an entirely new establishment was set up three months later, and that the benefit of non-applicability of the act under S. 16 (1) (b) of the Act for a period of three years was available to the purchaser from the date when the new establishment was set up. The decision in the case of Lukshmi Rattan Engg Works (1) was held not to apply to the facts of the case before the Court since there was no continuity of the business and there were the additional factors of termination of services of all the workmen and a new establishment being set up by fresh recruitment of workman, in addition to alteration in machinery in the press. The following principle stated by the learned single Judge of the Madras High Court in Vittaldas Jagannathadas v. RPF Commr (1966) 1 LLJ, 240 was referred to with approval :. . . . . if, in a particular case, it appears that the new establishment is not genuinely such, but is only an old one formally resuscitated in order to avoid the legal obligation, it is always open to the Court to hold that it is the old establishment which is substantially continuing, and that the liability to contribute must be affixed to the apparently new firm also. But where, in reality the old establishment has come to an end, and there is a new establishment, this establishment is enti tied to infancy protection in its own right, even if it happens by coincidence to have employed a large part of the personnel of the previous establishment. . . . . . Mr. Bopanna relied also on the decision in Venwood v. RPF Commr, madras 1972 Lab. Law Notes 338. . In that case, a company carrying on manufacturing furniture business sold some of its machinery to a firm, and the premises itself to a third party, who, in his turn, leased the premises to the petitioner-firm. The petitioner-firm started carrying on the business in the premises taken on lease by it. It employed some of the workmen discharged by the Company before it started its business elsewhere. The firm occupied the premises previously occupied by the Company after an interval of time. The firm took as new employees persons who were working in the Company after a break in their former service. The Company continued to be a going concern and carried on its business elsewhere. The employees were paid compensation by the Company. It was therefore held that there was break in their service and that they were taken as new employees under the petitioner-firm, though they were employed by the petitioner firm the very next day. The Company continued to be a going concern and carried on its business elsewhere. The employees were paid compensation by the Company. It was therefore held that there was break in their service and that they were taken as new employees under the petitioner-firm, though they were employed by the petitioner firm the very next day. There was no evidence to show the' extent of the business carried on by the Company, how much machinery they had, what proportion the machinery bought by the petitioner-firm bore to the entire machinery owned by the Company and what all kinds of pusiness were carried on by the Company. It was further held that simply oecause the petitioner-firm purchased some old machineries from the company and employed a few workmen who were previously under the employ of the Company, it cannot be said that the petitioner-firm continued the same business. Importance was also attached to the fact that the company continued to be a going concern and continued to carry on its business' at its new business premises. The petitioner-firm was held to have not purchased any right of the Company as a going concern. It was under those circumstances that the petitioner-firm was held entitled to the exemption under S. 16 (l) (b ). He next relied on the decision in M. N. Rangachari v. RPF Commr, Madras (1973) 44 FJR. 506. . In that case, the owners of a coffee estate closed down the estate and paid off all the workers the dues payable to them under the Industrial Disputes Act, Employees PF act, etc and were waiting for a purchaser to sell the estate. They wanted to sell the estate by dividing it into four parts. About two months later, they sold three parts of the estate to the three petitioners. The three petitioners reworked the estate with a new establishment of theirs after their purchase. They did not employ any of the previous workmen but they chose to take in fresh workers for each of the parts of the estate they purchased. There was no provident fund scheme in force on the date when the purchase was effected. There was no operation or working of the estate when the sale was made. They did not employ any of the previous workmen but they chose to take in fresh workers for each of the parts of the estate they purchased. There was no provident fund scheme in force on the date when the purchase was effected. There was no operation or working of the estate when the sale was made. There was total disbandment of the labour force of the quondam estate and fresh recruitment by each of the petitioners of new workers to work in the property purchased by each of the petitioners and which in turn was carved out from the whole estate. It was held that there had been a cessation and snapping in the activity resulting in the labour force of the entire establishment being once and for all discharged for all purposes. It was also held that though the property purchased by each of the petitioners was a coffee estate, that was an estate which had ceased to work and which did not have an establishment attached thereto for the purpose of any commercial activity and which was not even on the date of purchase liable to contribute under the Employees pf Act. It was therefore held that there was no continuity in the trading activity of the old establishment by the former owners of the entire estate. Since there was no continuity in the business or in the activity of the old etsablishment and the petitioners' estates were distinct from the old estate, it was held that a new establishment came into existence and was therefore entitled to exemption under S. 16 (l) (b ). ( 6 ) IN Sundara Rao v. RPF Commr the Bar Association, Bangalore was enjoying canteen facilities in a canteen in the Association premises. The petitioner in that case operated the canteen under agreement between the Bar Association and himself. He employed his own labour when he commenced the canteen and used his own materials for that purpose. He was under an obligation to supply refreshments to the members of the Bar Association at the rates fixed under the agreement. He also stated in his affidavit that there was no canteen existing or establishment when he started his canteen. He employed his own labour when he commenced the canteen and used his own materials for that purpose. He was under an obligation to supply refreshments to the members of the Bar Association at the rates fixed under the agreement. He also stated in his affidavit that there was no canteen existing or establishment when he started his canteen. The members of the Bar Association had been, during a long period of time, getting food and refreshments supplied to them from the canteen operated by some person or the other in the association premises. The un-interrupted canteen facilities available to members of the Association, was held not to obliterate the distinction between the successive contractors who ran the canteen. It was held that since the canteen which was commenced by the petitioner under the agreement was set up by him for the first time, since it had no manner of association whatsoever with the old canteen which might have been established by some one else under some other agreement to which the Bar association was a party, the petitioner was entitled to exemption under s. 16 (l) (b) In S. V. Palanimalai v. RPF Commr (1971) 1 LLJ. 44= (1969) 2 Myslj. 392. , the petitioner along with his father and brothers was carrying on business of sale and manufacture of agarbattis. The partnership firm was dissolved on 13-4-63 and the petitioner started new partnership business in agarbattis with his sons as partners on 29-4-63. The allegation in the affidavit of the petitioner that the old partnership was wound up on April 13, 1963 remained uncontroverted in the counter-affidavit produced on behalf of the Commr in which there was no allegation that the dissolution of the old partnership was a mere artifice for the circumvention of the provisions of the Act. It was held that the dissolution was therefore to be presumed to be a good dissolution which had for its object the termination of the business which was being carried on in partnership. It was also held that the petitioner was entitled to exemption under S. 16, since the establishment of the new i artnership was different from the establishment of the old partnership in spite of the similarity of the business carried on by the two partnerships, following the decision in Sundara Rao's case (1967) 2 Myslj. 439. . Mr. It was also held that the petitioner was entitled to exemption under S. 16, since the establishment of the new i artnership was different from the establishment of the old partnership in spite of the similarity of the business carried on by the two partnerships, following the decision in Sundara Rao's case (1967) 2 Myslj. 439. . Mr. Bopanna relied on the decision in Vittaldas Jagannathadas's case (3 ). In that case, the lessee of a cinema theatre building and its equipment closed his business, discharged all his employees and handed over possession of the properties to the lessor. Thereupon there was a fresh lease granted to another lessee which was a partnership firm the members of which were related to the lessor. The new lessee took possession of the theatre and discharged the ex-employees of the previous lessee. The lease in favour of the former lessee expired and the lessee thereupon ended his business, discharged all his employees after notice and payment of bonus, and delivered possession of the lease-hold premises and machinery to the owners. After this, there was a fresh lease in favour of the petitioners. The definition of the word "establishment" available in the Oxford Diction Hry, namely "organised body of men maintained for a purpose" was adopted by the learned Judge of the Madras high Court and it was held that on the emtire complex of facts, the legal entity "the establishment' came totally to an end and was succeeded by a fresh legal entity in that case and that the petitioner was entitled to exemption under 9. 16. This decision was appealed against in 1969 (2) llj 145 (1969) 2 LLJ. 145 . . The decision of the learned single Judge was reversed. The decision in R. L. Sahni and Co v. Union of India (1966) 2 LLJ. 230 . was followed. In that decision, the Division Bench of the Madras High Court differed from the view taken by the learned single Judge by the same Court in Vittaldas jagannahdas v. RPF Commr, as to the meaning of the word "establishment". The other meaning of the word "establishment" given in the Oxford dictionary, namely, "house of business" was adopted by the Division bench as the meaning which fits in with the object and policy of the enactment. The other meaning of the word "establishment" given in the Oxford dictionary, namely, "house of business" was adopted by the Division bench as the meaning which fits in with the object and policy of the enactment. It was held that the change of ownership or change of hands will not make the establishment a new one, that the mere fact that there is a new lessee or a new owner at different points of time does not mean that the establishment comes into existence on each of such occasions. It is to be noticed that the meaning attached to the word "establishment" in sahani's case (9) is in consonance with the view taken by the Supreme court in NSS Society's case (2), where the test laid down is the continuity of the business. In Nveena Traders Ltd v. RPF Commr AIR, 1965 AP. 200 it was held that a change of management of an establishment does not attract the provisions of S. 16 since that does hot amount to starting of a new establishment and consequently does not get protection afresh from the date of the lease. In United Hoteliers, Calicut v. Gout of India (1972) 2 LLJ, 596. a private limited company was running a Boarding and Lodging Establishment at Calicut. That business was wound up by the company. Its good-will, licence and other privileges as well as the utensils used in that establishment were sold individually to certain persons who entered into a partnership. The company retrenched all their workers settling their claims in full. A few days later, the partnership firm took a usufructuary mortgage of the building and started business of its own. It claimed protection under S. 16 (l) of the Act. It was held that the old business was completely wound up for all purposes and there was an interval of 15 days between the winding up of the old business and commencing of the new one. Most of the workers employed in the new business were not the persons employed in the old business. Under these circumstances it was held that the new business was not a continuation of the old one, that there was no connection between the two and the partnership firm was entitled to exemption under S. 16 (l) (b ). In P. Naiayan Nair v. RPF Commr (1973) 1 LLJ, 236. Under these circumstances it was held that the new business was not a continuation of the old one, that there was no connection between the two and the partnership firm was entitled to exemption under S. 16 (l) (b ). In P. Naiayan Nair v. RPF Commr (1973) 1 LLJ, 236. a private limited company was running a Printing Press establishment. The company was wound up by the Court. The Official Liquidator terminated the services of all the employees of the company fully settling their claims. Then he took possession of the assets of the company and put them for sale by public auction in separate lots. The whole establishment was closed down; the printing press was given on lease to one person; and the right to publish the newspaper was leased to another person; the lessees conducted the press and the paper separately in their own way and subsequently the petitioner purchased in public auction the goodwill of the newspaper and part of the machines of the press in separate lots employed some of the former employees, and started the business of running the press and published the newspaper under a different name Applying the test laid down by the Supreme Court in NSS Co-op Society's case (2) it was held that the purchaser was entitled to protection under S. 16 (l) (b) of the Act. ( 7 ) THE learned Junior Standing Counsel for the Central Govt relied on the decision in Sayaji Mills Ltd v. P. A. Bhaskar AIR. 1970 Bom. 418. wherein it was held that the question whether the exemption under S. 16 (l) of the Act could apply, i. e. , whether a particular establishment is an inlant factory, must primarily depend upon the facts and circumstances of each case and that the mere circumstance that the ownership has changed hands, cannot justify the conclusion that the Act will cease to apply to the particular establishment if prior to the change of hands, the Act was applicable to it it was also held that S. 16 (l) creates an exemption in favour of infant factories and not in favour of new or infant owners or in favour of persons who run those factories. In that case a public limited company was running a Cotton Mill and the same was wound up under an order of the court. In that case a public limited company was running a Cotton Mill and the same was wound up under an order of the court. The plaintiffs, another public limited company, purchased the assets of the Mills from the Official Liquidator. The Mills had discharged the workers prior to the winding up order. The manufacturing operations of the Mills had come to an end prior to the date of the winding up order. The plaintiffs did not acquire the goodwill of the business or the assets of former public limited company which was running the Mills as a going concern There was no evidence to support the plea of the plaintiffs that they had brought in fresh capital or had renovated the old machinery or had purchased new machinery. On the facts and circumstances of that case it was held that the plaintiffs were not entitled to the exemption under S. 16 (l) since it was found that the identity of the old establishment was not shown to have been destroyed. ( 8 ) THE test laid down by the Supreme Court in NSS Co-op Society's case (2) for the purpose of exemption under S. 16 (l) (b) of the Act is whether there is continuity of the business. This question has to be decided on the facts and circumstances of each case. In the present case, the company was carrying on business of the branch office at Hubli till 1-1-71. The assets and stock-in-trade of the business were purchased by the appellant-firm on 1-1-71. Nine of the ten employees of the company were employed by the appellant-firm. The business which was being carried on by the company till 1-1-71 was carried on by the appellant after 1-1-71. There was thus a change of ownership of the business which was being carried on by the company at its branch office at Hubli. These facts and circumstances of the case show that the same business was continued by the appellant after 1-1-71. The learned single Judge was, therefore, justified in coming to the conclusion that the appellant is not entitled to exemption under section 16 (1) (b) of the Act. ( 9 ) THIS appeal is accordingly dismissed. The parties shall bear their own costs. --- *** --- .