NAV FINANCIERS Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner is a partnership firm, duly registered under the provision or the Indian Partnership Act and is engaged in the Hire Purchase business. The petitioner is aggrieved by the application of the Employees Provident Funds and Misc. Provisions Act and the action of the respondents in clubbing three other Companics incorporated under the Companies Act with the petitioner's firm treating all the four entities as one unit. It transpires that notices were issued by the respondents under Section 7-A for the determination of the money due from the petitioner under the Act. It transpires that the petitioner contended that the Act was not applicable, and therefore, an enquiry was constituted under sub-clause (2) of Section 7-A to enquire, as to whether the Act was applicable on the petitioner's firm or not. The Assistant Provident Fund Commissioner by an order dated August 21,2006, held that the Act was applicable to the petitioner's firm and that the coverage was also extended to the three other units.

(2.) Heard Sri A.K. Srivastava, the learned counsel for the petitioner Sri D.M. Chaudhry, the learned counsel appearing for the Regional'. Provident Fund Commissioner. The bone of contention before this Court is, that the petitioner is a partnership firm and that the other three units are separate legal entities under the Companies Act, 1956 and that the said companies cannot be clubbed together for the purposes of coverage under the Employees Provident Funds Act. The learned counsel for the petitioner further submitted that the other units have different shareholders and that there is no unity or interdependance between the petitioner's firm with the other companies. The companies have separate independent accounts and are independent legal entities. The learned counsel for the petitioner further submitted that there is no financial integrality with regard to finance, employment and labour between the petitioner's partnership firm and the other companies and that the petitioner's firm cannot be clubbed together with the other companies for the purposes of coverage under the Act.

(3.) Before dealing with the questions involved in the present case, it is necessary to observe here that one should not lose sight of the fact that the provisions of the Act is a beneficial piece of legislation to provide healthy security to the workmen. The Supreme- Court in Regional Provident Fund Commissioner, Jaipur v. Naraini Udyog and Others, (1996) 5 SCC 522:1996-II-LLJ-1063 held that 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.