Rajasthan Prem Krishan Goods Transport Co. Vs. Regional Provident Fund
Commissioner New Delhi & Ors  INSC 748 (20 May 1996)
M.M.Punchhi, M.M.Paripoornan, K.S.(J) Punchhi, J.
1996 SCALE (4)638
appeal by special leave is against a limine dismissal of a writ petition
preferred by the appellant before the Delhi High Court.
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
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
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 of the Act and a fraudulent device adopted
by a designing management can be exploded and matters put to their proper
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.
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.
the reasons aforestated, this appeal fails and is hereby dismissed but without
any order as to costs.