REGIONAL PROVIDENT FUND COMMISSIONER JAIPUR Vs. NARAINIUDYOG

JUDGEMENT

(1.) Though Respondents 1 and 2, namely, M/s Naraini Udyog, Kota and M/s Modern Steels, Kota were served, they are not appearing either in person or through counsel. Leave granted. In these appeals, we are concerned only with the legality of the order of the division bench of the Rajasthan High court in Writ Petitions Nos. 120-121 of 1990 etc. etc. made on 7/7/1993. As regards the aforesaid two concerns, their functional integrity was found by the Commissioner in his report as under:

(2.) On the basis thereof, the appellant has called upon them to contribute the amount under Section 7-A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for short 'the Act') holding that the above two concerns are establishments within the meaning of Section 1 (3 (a) of the Act. The division bench in the impugned order had held that they were registered under the Companies Act as two different individual identities, though they are represented by the members of the same family. Therefore, they are two independent companies. Both cannot be clubbed together for the purpose of levying contribution under Section 7-A of the Act. We have gone through the reasoning given by the High court. We find that the High court is wholly unjustified in reaching the above conclusion. It is true, as found by the High court, that they are registered as two independent units and represented separately by the members of a Hindu Undivided Joint Family. Nonetheless the Commissioner recorded, as a fact, the functional unity and integrality between the two concerns. Consequently, the definition of 'establishment' which was widely defined would encompass within its ambit the two units as an establishment for the purpose of the Act. Accordingly, the High court had not considered in proper perspective the provisions of the Act which is a beneficial legislation to provide healthy security to the workmen. In the ultimate analysis the employer gets maximum out-turn of his production by ensuring health insurance to its employees which is the fundamental right to the latter.

(3.) The appeals are accordingly allowed. The order of the High court is set aside and that of the Commissioner stands confirmed to the above extent. No costs.