Full Judgment Text
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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.