Transfer, Good Faith, Misuse and Transitional Provisions

In one line

If a business is sold both the old and the new owner are liable, officials acting honestly are protected, a worker's fund balance cannot be attached by his creditors, and the old boards carry on until the new ones are made.

In exam wording: sections 145 to 153 of the Code on Social Security 2020 provide for joint and several liability on transfer of an establishment, for members and officers to be public servants, for protection of action taken in good faith, for deprivation of benefits misused, for Central directions, for framing schemes, for protection of fund balances against assignment and attachment, for amendment of the Schedules, and for the continuance of existing organisations.

Why the law has these at all

Each closes a gap that would otherwise let the scheme fail quietly.

Section 145 stops the oldest trick of all: sell the business and leave the liabilities behind in a shell. The buyer takes the liabilities with the assets.

Sections 146 and 147 are the two sides of official status. The people running the scheme are public servants, so the criminal law about bribery and public duty applies to them; and they are protected for acts done in good faith, so they can decide without fear of personal suit.

Section 151 answers a question a student will not think to ask: what happens when the worker himself owes money? If his provident fund could be attached by his creditors, the compulsory saving the Code imposes would simply be transferred to whoever sued him first.

Section 153 is the bridge across the repeal. Section 164 abolished nine Acts on 21 November 2025. The bodies constituted under them did not vanish that day, and section 153 says so.

Some words this chapter uses

Jointly and severally liable means each of two or more persons is liable for the whole, and the creditor may sue either or both. Assign means to transfer a right to another. Charge means to make property security for a debt. Attachment is the legal seizure of property to satisfy a decree. Public servant under section 21 of the Indian Penal Code 1860 attracts the offences relating to public servants. Good faith means honestly, whether or not negligently. Previous publication means publishing a draft before making the final instrument.

Section 145: liability on transfer of an establishment

Where an employer transfers his 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 it is transferred shall jointly and severally be liable to pay the amount due in respect of any liabilities, cess or any other amount payable under the Code in respect of the periods up to the date of the transfer.