The main legal point established in the judgment is the application of the test of functional integrality to determine the applicability of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 to separate establishments.

( 1 ) PETITIONERS are before this Court, inter alia questioning the correctness or otherwise of the order passed by Regional provident Commissioner dated 9-9-1986 holding that M/s. Devesh Sandeep Associates-lst petitioner herein, is bound to comply with the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for short 'the P. F. Act') for the period from 1-8-1985 to July, 1986 in respect of employees working in the firm M/s. Devesh Sandeep Associates and Mody Sales Service, No. 23, Ulsoor Road, Bangalore.

( 2 ) BRIEF facts are: First petitioner is a partnership firm of which petitioners 2 to 4 are partners. Main business of the firm is selling and marketing of leather cloth upholstery, wall paper and tiles. Between 1-7-1985 and 30-6-1986, the total sales of the firm has been approximately to the tune of Rupees Eighty Five lakhs. It is asserted in the petition that out of the aforesaid turnover leather cloth sale alone constitute Rs. 76 lakhs. Sale of leather cloth is mainly to dealers in the market and bulk consumers such as furniture makers. The remaining sales of Rs. 9 lakhs is of other items like Marbles flooring, tiles, wall fabric covering wall paper, floor covering sheets etc. , to outside dealers, contractors and bulk consumers, out of 9 lakhs, approximately 1/10oth of the sales to Mody Sales and Services.

( 3 ) M/s. Mody Sales and Services was constituted on16-12-1983, which is also a partnership firm, registered under Indian Partnership Act. Petitioners 2 and 3 are partners in the said firm. At the relevant point of time, the firm was engaged in sale of Marblex tiles, wall paper and wall fabric covering and laying and fixing of those products. The main business activity of the firm seems to be servicing of wall paper and tiles.

( 4 ) PROVISIONS of the P. F. Act were made applicable to M/s. Devesh and Sandeep Associates and M/s. Mody Sales and services both are situate in the same premises with effect from 1-6-1985 on the combined strength of the employees of the two units exceeded 19 during the month of May, 1985 and the establishment also satisfied the other conditions stipulated under Section l (3) (b) of the P. F. Act. After giving a code number to the units, they were asked to comply with the provisions of the P. F. Act. In reply to this direction, petitioners 2 and 3 for and on behalf of two firms, contended that the firms are two different establishments and distinct legal entities and separately registered under the Partnership Act and therefore clubbing of the two units for the purpose of bringing them into the net of the provisions of the P. F. Act is improper and illegal. Thereafter, the 1st respondent has taken up the matter under Section 7-A of the p. F. Act to determine the question whether two units in which petitioners 2 and 3 are partners are separate establishments or formed part of the composite unit. On behalf of the two units, the commercial Manager and Chartered Accountant appeared in the proceedings. Their main stand in the proceedings is that the two units are independent of each other, since both units are registered separately as 'firms' under the Indian Partnership Act and hold separate Registration Numbers. Under all fiscal legislations the units are separate and distinct establishments and both establishments are not interdependent. They had further stated before the 1st respondent that the employees strength in both the units is less than 20 and the provisions of the Provident Fund Act would not apply to them. They had further stated that the business activity of M/s. Devesh Sandeep associates is mainly wholesale and retail business of wall paper and tiles and that of M/s. Mody Sales and Services is that of servicing of wall papers and tiles. Their further statement is that even though both the firms are situate in the same premises and the partners in both the firms are same, the two units could not be clubbed together as one unit as the act