M/S. SHREE VISHAL PRINTERS LTD., JAIPUR versus REGIONAL PROVIDENT FUND COMMISSIONER, JAIPUR & ANR.

Citation: [2019] 12 S.C.R. 146 · Decided: 12-09-2019 · Supreme Court of India · Bench: SANJAY KISHAN KAUL · Disposal: Dismissed

Cited by 2 judgment(s) · cites 1 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2019] 12 S.C.R.
M/S. SHREE VISHAL PRINTERS LTD., JAIPUR
V.
REGIONAL PROVIDENT FUND COMMISSIONER, JAIPUR
& ANR.
(Civil Appeal No.4474 of 2010)
SEPTEMBER 12, 2019
[SANJAY KISHAN KAUL AND K. M. JOSEPH, JJ]
Employees’ Provident Funds and Miscellaneous Provisions
Act, 1952:
ss. 16, 7A – Act not to apply to certain establishments – On
facts, three establishments sought exemption u/s. 16(1)(d) that the
Act will not apply to their establishments – Order by the Regional
Provident Fund Commissioner that establishments not entitled to
exemption on the ground that they are effectively part of the same
parent establishment – Said order upheld by the Appellate tribunal
as also Single Judge and the Division Bench of the High Court –
On appeal, held: Findings qua all the three establishment satisfy
the functional integrality and the general unity of purpose test, and
the same are met in the facts of the instant case – They may be
different legal entities, an arrangement may have been made to have
different directors and shareholders, but the nature of control and
integrality of functionality, between the three entities is quite
apparent from the facts set out – Each one of the facts by itself may
not be conclusive, but taken as a whole, the conclusion arrived at
by the Regional Provident Fund Commissioner is upheld –
Furthermore, exact amount of liability of each of the establishments
is to be determined and would be co-extensive with the parent
company – Costs is imposed on all the three establishments, but of
varying amounts – Industrial Disputes Act, 1947 – s. 2A.
Nature of – Exemption from the aegis of Act – Object of –
Held: Act is a beneficial legislation - Object of excluding the infancy
period of five years which was later reduced to three years from the
rigours of the Act, was only to provide to new establishments, a
period to establish their business, and not to permit different kinds
of routes to be created to evade the liability under the Act.
 [2019] 12 S.C.R. 146
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Dismissing the appeals, the Court
HELD: 1.1 Civil Appeal No.4475/2010 is by BCCL, Jaipur,
which is not a separate legal entity but was really claimed to be
an establishment of the parent company, albeit set up in Jaipur.
The counsels appearing for the appellants were of the belief that
it was facts of this case which had caused confusion in the mind of
the Regional Provident Fund Commissioner as, in their
perspective, exemption could not have been really sought within
the provisions of the Employees’ Provident Funds and
Miscellaneous Provisions Act, 1952. This is so, as BCCL, Jaipur
was not a separate legal entity, but, part of the parent company
directly. The case would, thus, be fully covered by the provisions
of Section 2A of the said Act and mere location of departments
and branches in other cities would not have extended the benefit
of the exemption to this company. [Para 4, 11][153-B; 157-C-D]
1.2 As regards Civil Appeal No. 4476/2010, the agreement
dated 25.7.1986 between the two parties, which gave rise to the
Provident Fund Commissioner to initiate proceedings, was in
supersession of an earlier agreement dated 13.12.1985. The
business reason stated for entering into this agreement was the
commencement of publication of the Jaipur edition of the daily
newspapers of BCCL, Mumbai, i.e., The Times of India and
Navbharat Times. The agreement records that TPHL had opened
an office in Jaipur, where it had equipped itself with trained and
experienced staff and all infrastructural, secretarial,
administrative and marketing facilities. Since 23.9.1985, it had
been providing various services to BCCL, Mumbai, including
office space for use and occupation, accounting facilities,
stenographers, typing, and so on. The services which were now
further sought to be provided to BCCL, Mumbai included
marketing, development work, realisation of dues, adequate office
space, accounting facilities, infrastructure, packing/bundling of
daily newspapers (at the cost of BCCL, Mumbai), etc. BCCL,
Mumbai was to pay to TPHL an amount calculated @ 5% as
commissions on Net Advertisement Revenue and Net Circulation
Revenue. [Para 12, 13, 14][157-E-H; 158-A, D]
M/S. SHREE VISHAL PRINTERS LTD., JAIPUR V. REGIONAL PROVIDENT
FUND COMMISSIONER, JAIPUR
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SUPREME COURT REPORTS
[2019] 12 S.C.R.
1.3 Once that is conceded that BCCL, Jaipur was really
only a part of BCCL, Mumbai. The connection of the other two

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