The main legal point established in the judgment is the requirement for reasons in decision-making and the consideration of factors such as unity of purpose, financial and functional integrity, and common ownership in determining the clubbing of establishments under the EPF Act.

Rajesh Bindal, J.

Employees' Provident Fund Organization is before this court challenging the order dated 31.5.2010, passed by the Employees' Provident Fund Appellate Tribunal (for short 'the Tribunal'), whereby in an appeal filed by respondent No. 1-establishment, order dated 3.2.2006, passed by Assistant Provident Fund Commissioner-9, Amritsar (for short, 'the Commissioner') u/s 7A of the [Employees' Provident Fund and Miscellaneous Provisions] Act, 1952 (for short, 'the EPF Act') directing clubbing of two establishments, namely, respondent No. 1-M/s. Bombay Selection House and M/s. Best Choice for the purpose of coverage under the EPF Act, was set aside. Briefly, the facts are that respondent No. 1-establishment was allotted a code for compliance of the provisions of the EPF Act while treating another establishment, namely, M/s. Best Choice as part of it for the purpose of considering the number of employees employed in the establishment. The applicability was challenged by respondent No. 1-establishment on the plea that M/s. Best Choice has been wrongly clubbed. Both the units are independently owned by two different partnership concerns. They are having different registration under the Shops and Commercial Establishments Act. They are assessed to income tax separately and carrying on business at different places. They never employed more than 20 or more persons. Whereas the stand of the petitioner was that considering the fact that their line of business was same and these were family concerns, it is nothing else but expansion of business, hence, clubbing was not illegal. Rejecting the plea raised by respondent No. 1-establishment, vide order dated 3.2.2006, the Commissioner, while accepting the submissions of the Enforcement Officer, upheld coverage of respondent No. 1 under the EPF Act. Aggrieved against the order, respondent No. 1-establishment preferred appeal before the Tribunal. The same was allowed vide order dated 31.5.2010. It is the aforesaid order, which has been impugned by the Employees' Provident Fund Organization before this court.

2. Learned counsel for the petitioner submitted that the order passed by the Commissioner rejecting the plea of respondent No. 1-establishment upholding the clubbing of respondent No. 1 with M/s. Best Choice was strictly in conformity with law. Both are family concerns, where the partners are family members. Two of the members are even common. They are in same line of business. It is nothing else but expansion of business for which separate firms were floated just to avoid coverage under the EPF Act. The place of business is also the same. He further submitted that the Tribunal had gone wrong in accepting the appeal filed by respondent No. 1-establishment while not dealing with the contentions raised by the petitioner. In support of his submissions, reliance was placed upon M/s. Rajasthan Prem Krishan Goods Transport Co. v. Regional Provident Fund Commissioner, New Delhi and others, 1996 II CLR 217 SC L.N. Gadodia and Sons and Another Vs. Regional Provident Fund Commissioner, AIR 2012 SC 273.

3. In response, learned counsel for respondent No. 1 submitted that both the firms are independent. Separate partnership deeds have been executed. Respondent No. 1-establishment has three partners, whereas M/s. Best Choice has four partners. Even if two of the persons are common, that does not mean that both the firms are owned by one person as there are other partners as well. Both are independently registered under Shops and Commercial Establishments Act and assessed to income tax Act, 1961 separately. The place of business is different. Respondent No. 1-establishment is being run from a shop in a self-owned premises, whereas the business is being run by M/s. Best Choice in a rented premises. There is no financial or functional integrity between the two establishments. Merely because family members are the partners and same type of business is being carried on, cannot be said to be