REGIONAL PROVIDENT FUND COMMISSIONER Vs. LAKHANI INDIA LIMITED

JUDGEMENT

(1.) The Regional Provident Fund Commissioner has preferred this writ petition against the order dated 10.02.2011 (P-4) passed by the Employee's Provident Fund Appellate Tribunal, New Delhi. By the impugned order, the assessment order passed by the lower authority has been set aside. The appeal has been allowed.

(2.) The short dispute involved is that a business was started in the name of M/s Lakbros Shoe Company (P) Ltd. in 1982 which availed benefits of infancy period protection under the provisions of the Employees' Provident Fund & Miscellaneous Provisions Act, 1952 (for short "the Act"). In 1994 the company changed its name to Lakhani India Ltd. There were two other sister concerns of M/s Lakbros Shoe Company (P) Ltd. i.e. M/s Lakhani Rubber Udyog and M/s Lakhani Footwear Ltd. which were covered under the Act. Therefore, the infancy protection under Section 16 of the Act would not be available to M/s Lakhani India Ltd. - the respondent in this petition. The assessment order proceeded on the premise that M/s Lakhani India Ltd. was part and parcel of M/s Lakhani Rubber Udyog and M/s Lakhani Footwear Ltd. which was already covered under the Act with code numbers assigned, and therefore liability was passed down or inherited. The company is said to be also manufacturing a common product: footwear (Chappals), with common management (Lakhani Group), with possibility of transferability of employees, common financial control with reference to Annexures P-5 to P-7. Therefore, the present respondent company cannot be treated as separate and thus not entitled to avail benefit of period of infancy protection under Section 16 of the EPF & MP Act.

(3.) Aggrieved by the order of assessment, the appeal was filed before the Presiding Officer, Employees' Provident Fund Appellate Tribunal. The reasoning given in appeal is that though two or more establishments can be treated as one when there is financial, managerial or functional integrality between the two separate juristic entities but such a finding is not recordable on the material on record. The Appellate Authority has returned its findings as follows:-