REGIONAL PROVIDENT FUND COMMISSIONER TAMIL NADU AND PONDICHERRY STATES EMPLOYEES PROVIDENT FUNDS Vs. INDIA PISTONS LTD

JUDGEMENT

(1.) THIS writ petition was filed seeking the relief of Writ of certiorari, calling for the records of the second respondent relating to the order dated 24-11-1998 passed in Appeal No. ATA-13 (84)98 and quash the said order dated 24-11-1998.

(2.) M/s. India Piston Limited is part of M/s. Simpson Group of Companies. The main factory of M/s. India Piston Limited is situate at sembium and in the year 1987 it started another unit at Maramalai Nagar, which is the first respondent in this writ petition. M/s. India Piston Limited is covered under the provisions of the Employees' Provident Fund and miscellaneous Provisions Act, 1952 ( hereinafter referred to as 'the Act' ). In the year 1990, the first respondent unit sought for the allotment of separate code number for the purpose of the Act on the ground that it is totally a different legal entity and hence entitled to the infancy protection under Sec. 16 (d) of the Act. The Department, however, held that the first respondent unit is part and parcel of the main unit at Sembium and that, therefore, it is not entitled to infancy protection. The first respondent raised a dispute under Sec. 7a of the Act before the petitioner for determining the question of infancy, who, by order dated 23-6-1998, rejected the claim of the first respondent holding that the two units of India Pistons Limited, one at Sembium and another at Maraimalai Nagar constitute an integrated whole for the purpose of the Act, that the Maraimalai Nagar unit is not entitled to infancy protection under Sec. 16 (d) of the Act and that the Maraimalai Nagar unit shall comply with the provisions of the Act from January 1987 in the subcode number allotted to them. Aggrieved by the order passed by the regional Provident Fund Commissioner, the first respondent preferred an appeal before the Employees Provident Fund Appellate Tribunal. The appellate authority, by the impugned order dated 24-11-1998, set aside the order passed by the Regional Provident Fund Commissioner and allowed the appeal holding that the new unit at Maraimalai Nagar should be treated as an independent unit and not a part or a branch of the main unit at Sembium and that the new unit is entitled for infancy protection under the Act. Aggrieved, the petitioner has filed the present writ petition.

(3.) LEARNED counsel for the petitioner vehemently argued that the factory unit of M/s. India Pistons Limited at Maraimalai Nagar is a branch of the main factory situated at Sembium. Though both the units manufacture the very same products, they cater the needs of different segments of the automobile industry. It is an admitted fact that India Pistons Limited is one of the group companies of M/s. Simpson Group of Companies and thus the common ownership of the establishment is very well accepted and that even though the factories maintain separate accounts, the accounts get merged as a single balance sheet for the purpose of preparation of Annual Report and that there is financial integrality and interdependency between the two units. Therefore, the first respondent unit is not entitled for infancy protection due to the existence of interdependency and unity of management. Merely because, the other statutory authorities treat the first respondent unit with separate registration that by itself will not be a criteria for deciding the question of entitlement of infancy. Learned counsel further argued that the tribunal erred in coming to the conclusion that the two units are different units and that the first respondent unit is entitled for infancy protection. According to the learned counsel, the units of M/s. India Pistons Ltd, one at sembium and the new one at Maraimalai Nagar, have to be clubbed and treated as one unit for the purpose of compliance of the provisions of the Act and that the first respondent unit should comply with the provisions of the Act from 1-1-1987 and that it is not entitled to infancy protection under Sec. 16 (d) of the Act.