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PETITIONER: M/S. RAJASTHAN PREM KRISHAN GOODSTRANSPORT CO.

       Vs.

RESPONDENT: REGIONAL PROVIDENT FUND COMMISSIONERNEW DELHI AND OTHERS

DATE OF JUDGMENT:       20/05/1996

BENCH: PUNCHHI, M.M. BENCH: PUNCHHI, M.M. PARIPOORNAN, K.S.(J)

CITATION:  1996 SCALE  (4)638

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T Punchhi, J.      This appeal  by  special  leave  is  against  a  limine dismissal of  a writ  petition preferred  by  the  appellant before the Delhi High Court.      The appellant  before us is M/s. Rajasthan Prem Krishan Goods Transport  Co. (in short hereinafter to be referred as ’the goods  transport Company’). The concerned party with it is  the   3rd  respondent  -  M/s.  Rajasthan  Prem  Krishan Transport Co.  - (in  short hereafter  referred  to  as  the Transport Company).  The appellant  is aggrieved against the action and  orders of  the authorities established under The provident Funds  Act, 1925 [for short ’the Act’] in treating the appellant  and the  3rd respondent  as one  and the same entity, holding  the ostensible  separate existence of these two as artificial and non-existent.      Significantly, both  these  companies  are  partnership concerns. According  to the  appellant, ’the Goods Transport Co.’ was constituted on 16.4.1976, composing of 10 partners, stood composed  of 13 persons; 10 of whom compose the "Goods Transport Company’.  Their place  of business and address is common, being  Behind Fire  Brigade,  S.P.  Mukherjee  Marg, Delhi.  Their   telephone  numbers   are  also  common.  The management of  the two  was also  common. From  this, is was inferred  by   the  Inspectorate   functioning   under   the aforementioned  Act  that  there  was  unity  of  ownership, management, supervision and control, employment, finance and general purpose to justify both the units being treated as a single establishment  under the Act, as they constituted one integrated whole.      It is  beyond dispute that if the two supposed entities were to be treated separate, the provisions of the Act would not apply. But, if they be treated as one, the provisions of the Act  would apply.  It can otherwise be not disputed that on proper  facts being  established two  apparently separate entities can  be clubbed  into one to carry out the purposes

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of the  Act and  a fraudulent  device adopted by a designing management can  be exploded  and matters put to their proper perspective.      The appellant  and the  third respondent  received  the requisite notices  to show  cause why  the provisions of the Act be not made applicable treating both of them as one. The appellant and  the third respondent showed cause. Their main defence was  that these  entities for  the  purpose  of  the Income-tax Act,  were being  treated separate  and that fact should govern  the fate  to keep these entities separate and singular. The  Regional Provident  Fund Commissioner,  after thorough enquiry,  ordered on 31.3.1978, clubbing of the two entities  together,   -  with   effect  from  1.6.1976.  The application of  the appellant under Section 19 of the Act to the Central Government was dismissed on 7.12.1982, upholding the order  of the  Regional Provident Fund Commissioner. The writ petition  against the  orders of the Central Government was dismissed in limine. This is how the appellant is before us.      The finding  recorded by  the Regional  Provident  Fund Commissioner is that there is unity of purpose on each count inasmuch as  the place of business is common, the management is common,  the letter heads bear the same telephone numbers and 10  partners of  the appellant  are common out of the 13 partners of  the third  respondent. The  trucks plied by the two entities  are owned  by the partners and are being hired through both  the units. The respective employees engaged by the two  entities when  added together, bring the integrated entities within the grip of the Act: so is the finding. Now, this finding  is essentially  one of  fact or  on legitimate inferences drawn  from facts.  Nothing cold  be suggested on behalf of  the  appellant  as  to  why  could  the  Regional Provident Fund  Commissioner not  pierce the  veil and  read between the  lines  within  the  outwardliness  of  the  two apparents. No  legal bar could be pointed out by the learned counsel as  to why  the views of the Regional Provident Fund Commissioner, as  affirmed by  the  Central  Government,  be overturned.      For the  reasons aforestated,  this appeal fails and is hereby dismissed but without any order as to costs.