1 Bsb IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 2420 OF 1998 M/s.Fortuna Industries ... Petitioner v/s 1. The Regional Provident Fund Commissioner, Nashik’ 2. Asstt. Provident Fund Commissioner, Nashik; 3. Fortuna Engineering (Nasik) P. Ltd. ... Respondents Mr.M.S.Karnik for the petitioner. Mr.Suresh Kumar for respondent Nos.1 and 2. CORAM: SMT.NISHITA MHATRE, J. DATED: 16TH AUGUST, 2010 ORAL JUDGMENT: 1. The petitioner has challenged the order passed by the Regional Provident Fund Commissioner i.e. the 1st respondent, on 4.8.1997. The Commissioner has held that there is functional integrality between the petitioner and respondent No.3 and, therefore, both the units could be clubbed together. As a consequence the petitioner was 2 denied the infancy protection available to a new unit. Several tests have been considered by the Commissioner to ascertain whether the petitioner and respondent No.3 could be clubbed together for treating the two establishments as one. There is material on record to indicate that the petitioner and respondent No.3 had financial integrality, managerial control and geographical proximity. The Commissioner has also found that the two firms are being managed by members of one family and has therefore concluded that the petitioner and respondent No.3 should be clubbed together to ascertain the number of employees employed by them for the purpose of applying the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. The Provident Fund Commissioner has found that the employees of concern are not transferred to the other. However, there was financial inter-dependence and geographical proximity between the two concerns and on this basis the Commissioner has concluded that the two units should be clubbed together. 2. Mr.Karnik appearing for the petitioner has relied on the judgment of the Supreme Court in the cases of the - (1) Management of Pratap Press, New Delhi v/s Secretary, Delhi Press Workers’ Union, Delhi, reported in A.I.R. 1960 SC 1213; (2) Regional Provident Fund 3 Commissioner v/s Raj’s Continental Exports (P) Ltd., reported in (2007) 4 SCC 239; (3) Regional Provident Fund Commissioner & anr. v/s Dharamsi Morarji Chemical Co. Ltd., reported in ( 1998) 2 SCC 446. Besides this, the learned counsel has also relied on the judgment reported in the case of Ebrahim Currim & sons. v/s Regional Provident Fund Commissioner, Maharashtra & Goa, reported in 1994 Mh.L.J. 549. 3. In the case of Management of Pratap Press (supra), the Supreme court observed as under:- “Of all these tests the most important appears to us to be that of functional “integrality” and the question of unity of finance and employment and of labour. Unity of ownership exists ex hypothesi. Where two units belong to a proprietor there is almost always likelihood also unity of management. In all such cases therefore the Court has to consider with care how far there is “functional integrality” meaning thereby such functional interdependence that one unit cannot exist conveniently and reasonably without the other and on the further question whether in matters of finance and employment the employer has actually kept the two units distinct or integrated.” 4. It appears from the order of the Commissioner that he 4 did not consider the test, which according to the Supreme Court, was the principle test, namely, whether one unit can co-exists without the other. 5. In these circumstances, in my opinion, it would be appropriate to remand the matter to the Regional Provident Fund Commissioner to hear the matter afresh. 5. The petitioner will be at liberty to produce such material on record as is necessary to establish its case that there is no functional integrality between it and respondent No.3. 6. The Commissioner shall consider all the material on record and pass appropriate orders bearing in mind the various judgments of the Supreme Court which hold the field. While doing so, the Commissioner will also consider whether one unit can exist without the other. 7. The petitioner will appear before the Regional Provident Fund Commissioner, Nasik, on 13.9.2010 at 11.00 a.m. 8. Rule made absolute accordingly. No order as to costs. ..... 5 6