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CLUBBING OF ESTABLISHMENTS UNDER EMPLOYEES PROVIDENT FUND AND MISCELLANEOUS PROVISIONS ACT 1952

Other Topics - By: - Mr. M. GOVINDARAJAN - Dated:- 28-5-2016 - The Employees Provident Funds and Miscellaneous Provisions Act, 1952 is applies to every establishment which is a factory engaged in any industry specified in Schedule I and in which 20 or more persons are employed and to any other establishment employing 20 or more persons or class of such establishments which the Central Government may, by notification in the official gazette, specify in this behalf. Section 2A of the Act provides .....

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se of this Act with reference to decide case laws. There is a number of disputes in the interpretation of Section 2A of the Act. In Noor Nivas Nursery Public School V. Regional Provident Fund Commissioner - 2000 (12) TMI 900 - SUPREME COURT the Supreme Court held that an establishment will include all departments and branches and if the two units are put together as a single establishment, the Act will be applicable and otherwise not. The dominant test to determine as to one unit forms the part .....

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ts which has arisen in the past in regard to treatment of different department or branches of an establishment situated in the same place or different places. It presupposes that one establishment having different departments or branches. It does not provide that different establishments may be clubbed together and treated as one establishment for the purposes of this Act. There is a clear distinction between different departments or branches of one establishment and different establishments . I .....

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for coverage under the EPF Act. In Evans Food Corporation V. Union of India - 1994 (1) TMI 279 - KERALA HIGH COURT it was held that two different establishments will not be clubbed together for application of Employee s Provident Fund and Miscellaneous Provisions Act merely because they carry on business at the same place. In Devesh Sandeep Associates V. Regional Provident Fund Commissioner - 1996 (6) TMI 348 - KARNATAKA HIGH COURT it was held that mere common ownership of two establishments wil .....

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, the concerns are altogether different in their work, functions, though the owner or finances is the same, they cannot be clubbed together to bring them in the ambit of the Act. Thus where three concerns were registered separately and there has been no connection inter se between them, they cannot be regarded as one establishment, though the owner is the same. The following case laws justified the clubbing of establishments for the purposes of EPF Act: In Katari Coloring Factory V. Regional Pro .....

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of control and supervision of one over the other are sufficient to justify in piercing the veil for clubbing of two units for coverage of the establishments under the Act. In Nav Financiers V. Union of India - 2007 (3) TMI 755 - ALLAHABAD HIGH COURT it was held that clubbing of four establishment allegedly shown to be different entities cannot be held to be improper when all the four units belong to the same family and have interconnectivity amongst them with a common management, functional int .....

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ing the order clubbing the establishments the Authority should give reasonable opportunity to the party concerned. In Indersons Motors Private Limited V. Regional Provident Fund Commissioner- II - 2013 (1) TMI 862 - DELHI HIGH COURT the establishment of the petitioner was clubbed with Bombay Okara Carriers by the EPF Authority, covering the establishment of the petitioner under the Act, thereby demanding arrears of contributions right from 1985 onwards by initiating proceedings under Section 7A .....

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