Noor Niwas Nursery Public School Vs. Regional Provident Fund Commr. & Ors  INSC
633 (8 December 2000)
BABU, J. :
appellant is aggrieved by the application of the Employees Provident Funds and
Miscellaneous Provisions Act, 1952 [hereinafter referred to as the Act]. The
appellant-institution is run by Baptist Union North India, a registered Society
under the Registration of Societies Act, 1860. The said Society runs two
schools at 17, Darya Ganj, Delhi, namely,
Francis Girls Higher Secondary School which was established in 1916 and the appellant-school
which runs nursery classes. The appellant-school was started in the year 1971.
The claim of the appellant-school is that Francis Girls Higher Secondary
School and the
appellant-school, Noor Niwas Nursery Public School, are two different institutions having separate and
independent accounts and are managed by two different Managing Committees. The
appellant has four employees, namely, 1 Head Mistress, 1 Teacher, 1 Peon and 1 Aaya
and it being a separate establishment is not covered by the provisions of the
Act. Therefore, it is contended that Francis Girls Higher Secondary
School and the
appellant-school cannot be treated as one establishment for the purpose of the
contention is that an Inspector of the Department visited Francis Girls Higher Secondary School when Mrs. P. Wadhavan, the Head Clerk in Francis Girls Higher Secondary School gave particulars not only in regard to Francis Girls Higher Secondary School but also in regard to the appellant-school. The said
Inspector was examined as a witness before the Provident Fund Commissioner. He
was thoroughly cross-examined suggesting that the letter seeking for a common
number for depositing the contribution to the provident fund was obtained under
duress. But while denying the same he clearly stated that this information had
been furnished by Mrs. P. Wadhavan on 21.04.1982 voluntarily.
Provident Fund Commissioner on this material held that the two institutions
constitute one and the same establishment and, therefore, is covered by the
Act. This order of the Provident Fund Commissioner was unsuccessfully
challenged before the High Court. Hence this appeal.
two units are one or distinct will have to be considered in the light of the
provisions of Section 2-A of the Act which declares that where an establishment
consists of different departments or has branches whether situate in the same
place or in different places, all such departments or branches shall be treated
as parts of the same establishment. In such cases, the court has to consider
how far there is functional integrality between the two units, whether one unit
cannot exist conveniently and reasonably without the other, and on the further
question, in matters of finance and employment, the employer has actually kept
the two units distinct or integrated. In fact, this Court set out certain tests
in Management of Pratap Press, New Delhi v.
Secretary, Delhi Press Workers Union, Delhi, AIR 1960 SC 1213. However, we may point out that each case would
depend upon its own peculiar facts and has to be decided accordingly.
present case, when two units are located adjacent to one another and there are
only two Teachers with an Aaya, a Clerk and a Peon, it is difficult to believe
that the Society which runs 30 schools would run a separate school consisting
of such a small number of staff. If the unit of the appellant-school was not
part of the unit of Francis Girls Higher Secondary School, the Head Clerk, Mrs.
could not have been in possession of the particulars of the appellant-school
and could not have furnished such particulars to the Inspector when he visited
the school in connection with the grant of a code number.
the two units are run by the same Society and they are located in one and the
same address thereby establishing geographical proximity and nothing worthwhile
has been elicited in the cross- examination of the Inspector in regard to
inquiries made by him from Mrs. P. Wadhavan.
P. Wadhavan was not examined before the Provident Fund Commissioner. All these
facts clearly point out to one factor that the two units constitute one single
establishment. After all appellant-school caters to nursery classes, while the
higher classes are provided in Francis Girls Higher Secondary
School. Thus, the
link between the two cannot be ruled out. In the facts and circumstances of the
case, we hold that the view taken by the Provident Fund Commissioner as
affirmed by the High Court in this regard is correct.
the learned counsel for the appellant drew our attention to the letter sent to Francis Girls Higher Secondary School wherein the said school has been excluded from the purview
of the Act in view of the fact that the provident fund in respect of all the
employees is subscribed under another scheme. The learned counsel submitted
that if the two units were put together as a single establishment, the Act would
be applicable and otherwise not, inasmuch as it falls short of the number of
minimum of employees for the applicability of the Act under Section 1(3)(b) of
not impressed with this argument. The two establishments have more than 20
employees and the exemption granted under Section 17 of the Act is subject to
the condition that such exclusion will not apply to the appellants unit because
the same would not be covered under another scheme for subscribing to the
provident fund. When the entire establishment is covered by the Act, only part
of the establishment is excluded and condition of exclusion being applicable
only to a part, we fail to understand as to how the appellant can rely upon the
said letter to claim non- applicability of the Act on the ground that it falls
short of the number of employees.
not find any good reason to interfere with the order made by the High Court
affirming the view taken by the Provident Fund Commissioner. This appeal is,