TMI Blog1991 (2) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... ose as to how the Patalganga unit should be treated. On 4-7-1985 petitioner addressed Ex. A to the respondent No. 1 Commissioner claiming that the two units were distinct and different, that the Patalganga unit was not a branch or division of the Bhiwandi unit and that the said unit was entitled to a separate code number denoting coverage as an independent identity under the Act. However the petitioner was given to understand that until a decision was taken on the subject by the commissioner, the Commissioner wanted it to make remittances in respect of the Patalganga unit employees under the very code number which had been allotted for the workers of the Bhiwandi unit. This it was doing but without prejudice to its contention that the Patalganga and Bhiwandi units were distinct and different establishments and that the Patalganga unit was not to be taken as already covered under the Bhiwandi unit code number by application of section 2-A of the Act. This communication merited the reply which is at Ex. B and it averts that the Patalganga unit was a division of the Bhiwandi unit. The reply was taken exception to by a subsequent communication dated 25-9-1985. The Commissioner having b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions. Before I come to those decisions it is necessary to get a clear picture of the factual position. Petitioner owns the two units and it may be taken that there is unity of ownership so far as the petitioner is concerned. Both the units are engaged in an industry which is covered by the entry heavy and fine chemicals occurring in Schedule-1 of the Act. But the two units are manufacturing different products. The Bhiwandi unit manufactures zinc oxide, while the patalganga unit manufactures sulphuric acid. Petitioner asserts that neither unit is a feeder or dependent upon the other. This assertion has to be accepted as reflecting the true position. Petitioner further asserts that the workers of the two units are different and that the same is the position in regard to maintenance of books of accounts. It is only for the purposes of the Income-Tax Act and certain requirements of the Companies Act, that there is a consolidation of the accounts and other information. But this consolidation cannot bring about a functional integrality, which alone has a bearing upon the application of section 2-A of the Act. The factors pointed out by the commissioner for the application of section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stinct. That is a decision of a Division Bench of this Court given on 3-8-1981 in Special Civil Application No. 198 of 1978. In that case the petitioners were having a factory manufacturing rubber goods at Bombay since 1942. To avail of certain concessions given to industrialists establishing industries establishing industries in backward areas and backward regions of the State, the petitioners established a new factory at Aurangabad. This factory also was engaged in the manufacture of rubber goods. An attempt was made to treat the two factories as a single establishment. This was taken exception to by the filing of the afore-mentioned civil application. The Division Bench sustained the stand taken by the petitioners in that case. In so doing it was observed - to attract the provisions of section 2-A of the Act, it is necessary that the Unit must be described or treated as a branch or the department of the main establishment. Such a branch or a department cannot have separate existence but is purely dependent on the main establishment. The branch or the department, even if a factory, are merely subsidiary, minor or feeding industries and which are started for the purpose of ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and its raw materials or products and its accounts. Establishments for this purpose must be viewed in a larger sense than the process of manufacture. But the petitioner contends that the work in the Mint Street office is not exclusively connected with the work of the factory. The factory business is only one of a number of activities which are carried out in that office. The petitioner is aggrieved because all the employees in the Mint Street Office have been automatically assumed to have done work connected with the factory, while there is room for a more careful examination of the work which the employees at the office are asked to do and determine where there is integral connection between their work and the work of the factory. In this connection the petitioners Counsel offered to produce data which would show that it is possible to segregate the work done by the individual employees in the Mint Street Office in the above manner, and according to him only such of those employees whose work can be shown to be connected with the factory could be brought under the provisions of the Employees Provident Fund Act. . . . Of course, there is a further extension of the definition in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h reported in 41 F. J. R. 329 (Mahipalsingh Shankarsingh and another v. Regional Provident Fund Commissioner, Mysore) In that case an employer was having independent establishments one, dealing in cigarettes, petrol and kerosene, the second, in food-grains and the third, an oil-mill. All these were situated at different places and in none of the establishments was the number of employees in excess of twenty. The RPFC tried to treat the three establishments as functionally integrated. This contention was negatived - it being held that they could not be treated as one establishment, merely because they were all owned by the same employer. The test in all the decisions relied upon is whether the new factory constitutes a distinct and different entity from the one already existing? That they are owned by the same company is not enough and a learned Single Judge of this Court has gone to the extent of holding that some employees of the old factory being sent to the new factory in the initial stages, is not a reason for treating the two factories as being part of the same establishment. In (Gujchem Distillers India Ltd. v. Regional Provident Fund Commissioner) reported in 1986 (l) L. L. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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