My father was a sole proprietor of an Industrial unit in Bhopal, M.P. In 2001, there was an inspection by Employees Provident Fund Department which found over 20 workers working at that time (which is over the exemption limit) The department raised a fine of Rs 5.3 Lakhs. He paid Rs 2.7 Lakhs under protest as EPF had seized the bank accounts. He subsequently approached EPF Tribunal, New Delhi claiming that these were temporary construction workers. Tribunal gave the decision in our favour and asked EPF to return Rs 2.7 Lakh. EPF subsequently went to High Court which remanded the case back to EPF. The unit went into losses and was shut down in 2004. In 2015 it was sold by PNB (Lending Bank) in an eAuction. My father who was pursuing the matter died last year. EPF department is now following up with me (being the legal heir) and asking me to furnish Employee data to reassess the case (remanded to them). I wrote them a letter stating: 1. I was in no way part of the Firm (My Dad was the Sole Propreitor) and I do not have these records. These records were already produced during Tribunal and High Court cases and is already with them. 2. Due to losses, the unit was shut down in 2004 and sold off in an eAuction in 2015. The New owner should be approached in case of liabilities, if any. They are in turn asking me if there is any law which transfers liabilities to new owner. My questions are: 1. Are there any laws where Government department liabilities get transferred to new owner? 2. Can they hold me liable for any dues?
1) you would be liable to pay your father debts if you have inherited any property from your father
2) properties bought in e-auctions are sold at an ‘as is where is basis’
3) buyer has to bear any unknown risks associated with it,
4) check the terms of auction of your father property
Thanks for your reply. You said "buyer has to bear unknown risks". Is there a specific law stating this? If so, please provide Act details. I have inherited property from my father but do these account for in case of Industrial liabilities as well?
1) your father was sole proprietor . on his demise you would be liable for his debts if you have inherited any property
2) terms of auction generally provide that unit is being sold on as where is basis
3) purchaser has to do due diligence .
4) if there is any pending litigation buyer may be saddled with the liability to clear the dues
1. Are there any laws where Government department liabilities get transferred to new owner?
The liabilities cannot be transferred to the new owner if he has not taken over the assets of the company
Can they hold me liable for any dues?
If you have not acquired any property or assets of the company then you cannot be held liable
