9911796707
TMI Blog1992 (9) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... and notices were issued, are the subject-matter of challenge. 2. The petitioner in Writ Petition No. 1199/1988 is M/s. Sunder Transport. This is a partnership firm. It was registered under the Indian Partnership Act in the year 1964. At the relevant time, it had been carrying on the business of transport of chassis and trucks and products of Bharat Petroleum to Dhule and various other places. It is composed of three partners. The petitioner in W.P. No. 1200 of 1988 is M/s. Bafna Motors which is also a partnership firm with 4 partners. It holds the dealership of International Tractors and parts thereof. It is also registered as a firm under the Partnership Act. Another firm M/s. Bafna Investment, petitioner in Writ Petition No. 1175 of 1988, is also a partnership duly registered under the Indian-Partnership Act. It comprises of five partners. Business of the firm consists of letting out of premises on rent and commission agency. Similarly, Bafna Finance is - a separate firm registered with the Registrar of Firms. It comprises of four partners. All these four partnership firms are registered as independent firms with the Registrar of Firms and are also registered separately under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that Section 2A of the Act referred only to branches and departments of one establishment - it did not apply to different establishments. He was also informed that one of the establishments, namely, Sunder Transport had already been closed from 25.10.1986. The respondent, however, did not accept the contentions of the petitioners and by order dated 27.1.1988 held that the petitioners were liable to pay provident fund contributions, etc. as on clubbing the four firms together the total employees' strength of Sunder Transport including the other three establishments was more than 20 for the month of January 1975.In pursuance of the aforesaid order, a notice dated 10.2.1988 was also served on all the four petitioners asking them to pay the provident fund contributions as stated in the said notice from 1.1.1975 to October 1987. The order was passed against Sunder Transport (petitioner in Writ Petition No. 1199/1988) including the other three firms (petitioners in the other three petitions) and copy of the order was served on all the petitioners. The petitioners have challenged the aforesaid order of the Regional Provident Funds Commissioner and the notice issued in pursuance the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicability of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the contention that the establishment is a separate legal entity is not at all relevant . In reply to the objection of the petitioners to the clubbing of their four independent establishments, the respondent has reiterated the factors such as situation of all these establishments in one premises, use of one telegraphic address and post box number, maintenance of accounts by a common accountant etc. The respondent, in his affidavit, has also referred to certain decisions of different Courts, including two decisions of the Gujarat High Court, wherein according to him clubbing together of two independent firms for the purpose of applicability of the Provident Funds Act had been upheld. No report or copy of such judgments could be produced at the time of hearing. Under the circumstances, it was not possible to ascertain the facts and the circumstances of those cases and the reasoning of the Court in support of such a conclusion. 5. I have heard at length the Counsel for the parties. There is no dispute about the factual situation. It is categorically admitted by the respondent in his affidav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oses one establishment having different departments or branches. It does not provide that different establishments may be clubbed together and treated as one establishment for the purposes of this Act. In my opinion, there is a clear distinction between different departments or branches of one establishment and different establishments . It is the omission to take note of this glaring distinction that has given rise to the controversy in the present case. Most of the decisions that have been referred are decisions rendered in cases where the dispute was whether the different factories or departments of one company constituted one establishment or not. It was in this context, that the various tests were laid down. These decisions, in my opinion, do not have any bearing on the controversy in the cases before me. Take for example the decisions of the Supreme Court in Associated Cement Co. v. Their Workmen . It was a case under the Industrial Disputes Act, 1947. A dispute has arisen in this case also as to the meaning of one establishment. In that enactment no specific test had been prescribed for determining what is one establishment as has been done in the Provident Fund Act by in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the aforesaid case were quite different from the present ones. In this case, a company owned a cement factory and also a limestone quarry which supplied limestone exclusively to the factory. The quarry was a feeder to the factory and without limestone from the quarry, the factory could not work. There was a manager or the quarry but he was under the manager of the factory. There was thus unity of ownership, unity of management, supervision and control, unity of finance and employment, unity of labour and conditions of service of workmen, functional integrality; general unity of purpose and geographical proximity. It was under such circumstances that the Supreme Court came to a conclusion that the limestone quarry and the factory constituted one establishment. This decision is not an authority for the proposition that two independent establishments under different ownership may be treated as one establishment by applying these tests. 6. More opposite to the controversy in this case is the Full Bench decision of the Kerala High Court in T.A. Zainulabdeen v. R.P.F. Commissioner Kerala reported in 1975 L.I.C. 412, where dealing with Section 2-A of the Provident Funds Act, as ins ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 when the provisions of the Provident Funds Act were made applicable to the activities undertaken by one of the firms, namely, Sunder Transport. It is also, therefore, not possible to contend that these firms were created as separate and independent firms to avoid the liability under the Provident Funds Act. The factors, such as, situation of the office of these firms in one premises, user of a common telephone number and post box number and employing the services of the same person to write the accounts, on which reliance has been placed by the Regional Provident Fund Commissioner for the purpose of clubbing together these four firms and treating them as one establishment within the meaning of Section 2-A of the Act are, in my opinion, not relevant once they are considered in the background of the totality of the facts and circumstances of the case. 7. A partnership, as defined by Section 4 of the Indian Partnership Act, 1932, is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Persons who have entered into partnership with one other are called individually as partners and collectively a firm . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artners. Each firm is separately registered with the Registrar of Firms and under all other relevant enactments. The income of all these firms is also being assessed under the Income -tax Act treating them as separate firms. On the face of these facts, it is difficult or rather impossible to hold that any of these firms is a branch or department of the other. The respondent in this case has clubbed the three firms, namely, (1) M/s. Bafna Motors, (2) Bafna Investment and (3) M/s. Bafna Finance with M/s. Sunder Transport, meaning thereby that they are branches or departments of Sunder Transport. This action, on the face of it, is not tenable because at no stretch of imagination, the three firms can be said to be branches or departments of the firm M/s. Sunder Transport. The partners of each of these three firms are different from those of Sunder Transport. In fact, none of these firms is a branch or department of the other. They are in no way dependent on each other for their existence or functioning. They are carrying on separate and independent businesses. All these circumstances clearly go to show that these four firms are distinct and separate firms. 8. However, before finally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. In the premises aforesaid, it is difficult to hold that Section 2-A is attracted in the present case. The orders of the Regional Provident Funds Commissioner allotting a Code number to one of the firms by clubbing all the four firms together and the impugned order dated 27.1.1988 determining the amount payable by them under Section 7-A of the Act (Annexure A) and the impugned notice dated 27.1.1988 directing them to pay the same are all illegal and as such being set aside. 10. It appears from Annexure-D that even on the basis of the material available with the respondent, M/s. Sunder Transport, M/s. Bafna Investment Corporation and M/s. Bafna Motors were not employing 20 or more persons. The maximum number of employees according to the records (Exh.D) in the year 1975 in these three firms was 6, 10 and 5, respectively. These firms are, therefore, clearly outside the purview of the Act. So far as Bafna Motors is concerned, the report (Exh.D) shows that maximum number of employees in 1975 was 25. Counsel for the petitioner submits that neither the number is correct nor does this firm fall within the purview of the Act under Section 1(5) read with the relevant notification is ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
