The main legal point established is the interpretation and application of Section 2a of the Employees Provident Funds and Misc. Provisions Act, 1952, to determine the unity of establishments for the purpose of the Act.

SHIV NARAYAN DHINGRA, J, J.

( 1 ) BY this writ petition, the petitioner has challenged the validity of the EPF Tribunal's order dated 25. 10. 2000 passed in an appeal against the order of Regional Provident Fund Commissioner dated 28. 1. 2000.

( 2 ) BRIEFLY the facts are that the Regional Provident Fund Commissioner, under Section 7a of the Employees Provident Funds and Misc. Provisions Act, 1952 (hereinafter referred to as 'the Act) held that the respondent No. 1 and 2 were two units of single establishment. He directed the two to be clubbed together and be treated as one establishment for compliance with the provisions of the Act and directed the parties to appear for determination of the dues.

( 3 ) AGAINST the order of Regional Provident Fund Commissioner, both the respondents i. e. 1 and 2, preferred an appeal pleading that the companies were separate establishments engaged in different business and could not be clubbed together. The respondent No. 1 M/s L. N. Gadodia and Sons Pvt. Ltd. was established in the year 1941 and registered under the Companies Act and respondent No. 2 M/s Delhi Farming and Constructions, Pvt. Ltd. was incorporated in the year 1930. The respondent No. 2 M/s Delhi Farming and Constructions Pvt. Ltd. was earlier known as Delhi Cattle Firm Pvt. Ltd. Its name was changed in the year 1983. This company was acquiring lands for purposes of cultivation and carrying on other agricultural activities. Subsequently, all lands of the company was acquired by Delhi Administration and thereafter it entered into fresh activities of purchasing of gas cylinders and giving them on hire. It later started business of supplying security equipments to Government of India. It also entered into supply of gray/processed fabrics to ready made garment manufacturers as a side business. This company was carrying on its business and commercial activities presently at 116 Hans Bhawan Bahadur Shah Jaffar Marg. M/s l. N. Gadodia and Sons Pvt. Ltd. had its branch at Bombay, Amritsar, Ahmedabad and Kanpur and its registered office was situated at 1112, Kucha Natwa,chandni chowk and the establishment was mainly working as selling agents for Calico mills, Ahmedabad, Tata Mills, Ahmedabad etc. and also doing trading in wholesale business in cloth.

( 4 ) MR. T. P. Gadodia and Smt. Sudha Gadodia were the two directors in both the companies. Mr. T. P. Gadodia was the managing director in both the companies. The enquiry revealed that a loan of Rs. 5 lacs was given by one company to other. The two companies were having Mr. Venkatasheran as a common Technical Manager and Mr. S. K. Shema as common commercial manager. On inspection, it was found that both the companies were functioning from the same office at 1122, Kucha natwa, Chandi Chowk, Delhi. They were having their common telephone numbers on the companies stationary being 3318668 ( New numbers being 2512890 and 2513009 ). The Regional Provident Funds Commissioner, on the basis of two companies having common directors, two common employees, having inter-se loan transaction with each other, using same office and same telephone numbers, came to conclusion that there was functional and financial integretity between the two companies and clubbed the two companies for counting their employees for the purpose of provisions of the Act.

( 5 ) THE order of the Regional Provident Funds Commissioner was challenged before the Tribunal on the ground that no notice was served under Section 2a of the Act on the appellants. Both the companies were incorporated with a gap of about 11 years. The two companies were engaged in different type of business and they were having separate managements. Advancement of loan of Rs. 5 lacs in a period of 50 years of incorporation would not create financial integrity. It was denied that Mr. Sema and Mr. Venkatesh were the common employees in both the companies. It was submitted that at one time they were employee of one company only. It was, however, not denied tha