KAPEELA RUBBERS Vs. EMPLOYEES PROVIDENT FUND ORGANISATION

JUDGEMENT

(1.) In these two Writ Petitions, petitioners are calling in question the order passed by the Employees' Provident Fund Appellate Tribunal, New Delhi dated 4.7.2011 in Appeal No. ATA No. 418(06)/ 2008 vide Annexure-M and seeks for quashing of the same. Heard Sri Kasturi, learned Senior counsel appearing for petitioners and Smt. Nandita Haldipur, learned counsel appearing for respondent. As directed by this court, learned counsel appearing for respondent has also made available the original records. Perused the impugned order, records, statement of objections and the order passed by respondent under section 7A of the Employees' Provident Fund & Miscellaneous Provisions Act, 1952 (hereinafter referred to as 'Act' for the sake of brevity).

(2.) Respondent has brought the first petitioner under the purview of the Act with effect from 1.6.2002 by coverage memo dated 27.1.2004. Enforcement Officer submitted a report dated 23.1.2004 stating that another unit by name M/s. Kashyap Industries (petitioner No. 2) is also running the unit in the same building. On account of petitioners' establishment raising the dispute with regard to applicability of the Act, they were summoned by the respondent under section 7A of the Act and opportunity of personal hearing was extended. On behalf of petitioners, learned advocate appeared and filed certain records. Enquiry was adjourned from time to time. Copies of squad inspection report dated 23.1.2004 and 6.12.2006 were furnished to the petitioners as prayed for. Partner of second petitioner also appeared and requested time, to file written arguments on the Issue of applicability of the Act. With regard to applicability of the Act, objections were filed and on behalf of second petitioner, Attendance Register, Wage Register and Bonus Register for the period from June 2002 to April 2005 and books of accounts were produced. Balance-sheet for the period 2003-04 was not produced and at the request of second petitioner, enquiry was adjourned from time to time. On account of non appearance of parties on 8.2.2009, Asstt. Provident Fund Commissioner (Enforcement) by order dated 27.2.2008 directed the first petitioner to remit the dues from the date of coverage by concluding the proceedings ex-pane. It has been held in the said order as follows:

(3.) Aggrieved by this order, first petitioner preferred an appeal before the Employees Provident Fund Appellate Tribunal. New Delhi in ATA No. 418(6)/ 2008. The Appellate Tribunal dismissed the appeal and affirmed the order of the Asst. Provident Fund Commissioner (Enforcement) by arriving at a conclusion that establishments have a common telephone number which proves the functional integrality and these establishments share professional charges, which is an indicator of financial integrality and by taking into consideration the functional integrality as the test, it held that there is functional integrality between two petitioners. The records produced by the learned Counsel appearing for petitioner and the reports of the Enforcement Squad was the basis on which the Asst. Provident Fund Commissioner brought the establishment i.e., 1st petitioner under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952. When records are perused it would go to show that authority has not considered, examined, or evaluated the grounds urged by petitioners in their statement of objections filed before the authority whereunder, specifically they have denied the fact of functional integrality between two units, in fact, order passed by the Assistant Provident Fund Commissioner (Enforcement) dated 27.7.2008 which has been produced by the learned counsel appearing for respondent along with a memo dated 14.2.2012 would go to show and that there is no discussion on the issue of functional integrality at all. The authority proceeded to conclude the enquiry ex-pane based on the records available. As seen from the order, which is extracted herein supra, as to what are those records which was perused and the basis on which issue of functional integrality between two units have been arrived at, is not explained in the order nor there is iota of discussion in the said order. As seen from the order, reason for bringing first petitioner under the purview of the Act is on the ground that there is functional integrality between the first petitioner and the second petitioner is based on the report of Enforcement Officer alone.