The burden of proving functional integrity and applicability of the Act of 1952 to the establishment rests on the department, and without proper enquiry and determination, the assessment of liability for provident fund dues is not permissible.

Rajendra Menon, J.

This appeal u/s 2(1) of the MP. Uchcha Nyayalaya (Khand Nyay Peeth Ko Appeal) Adhiniyam, 2005, calls in question the tenability of an order dated 29.8.2000 passed by the learned Single Judge in W.P. No. 374/2000.

Appellant herein M/s. Mahakoushal Gasolene Enterprises is a propriety concern engaged in the business of distribution of Liquid Petroleum Gas Cylinder in the township of Jabalpur. It is a case of the appellant that it has awarded the distributorship on behalf of M/s. Hindustan Petroleum Corporation a Government of India undertaking. Distributorship was allotted in the year 1980 and since then the said business is being carried out from the establishment of petitioner situated in Shastri Bridge Road, Jabalpur. It is said that appellant has also received a separate contract from M/s. Bharat Petroleum Corporation Ltd. and M/s. Hindustan Petroleum Corporation for the purpose of transportation of LPG Cylinders and for the said purpose the appellant has deployed six trucks, has engaged drivers and cleaners. It is said that the total strength of the appellant's establishment which has engaged in the business of distribution of LPG was less than 19. It has never crossed 10 at any point of time. It is stated that on 2.11.1996 certain officer of Provident Fund Department visited the establishment of appellant and thereafter proceedings were initiated for assessment of provident fund dues by clubbing together the business activities of both the different establishments carrying out the work of distributorship and transportation. Proceedings were held u/s 7-A of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as "the Act of 1952") and by an order dated 14.8.1998 it was held that the establishment of appellant comes within the purview of the Act of 1952 and assessment of provident fund dues were made. As this order was passed ex-parte, without giving due opportunity of producing documents and evidence to the appellant, an application for review was filed which was dismissed on 4.9.1998. Aggrieved by both these orders an appeal was preferred before the Employees Provident Fund Appellate Tribunal, New Delhi and the Tribunal having dismissed the appeal vide order dated 30.11.2009, the writ petition was filed before this Court being W.P. No. 374/2000 and vide order dated 29.8.2000 the writ petition was also dismissed and therefore, this writ appeal has been filed.

It is the case of the appellant that the authorities exercising the powers u/s 7-A for determining the applicability of the Act of 1952 to the appellant's establishment have clubbed together two different business organization of the appellant. It is said that clubbing together has been done in an arbitrary manner without giving due opportunity of defense to the appellant and by holding that appellant has not produced substantial evidence, therefore, liability is imposed.

2. It was the case of the appellant in the proceedings held u/s 7-A that it is owning six trucks which are used for transportation of LPG Cylinders of two different Oil Companies and two contracts have been entered into, and therefore, clubbing together of both the establishment covered under the different contract was said to be not permissible. However, the grievance of the appellant before the Competent Authority, Appellate Authority and in the writ petition before the learned Single Bench was that in the absence of a finding recorded with regard to functional integrity of the different establishments, clubbing of the different establishment for the purpose of coverage under the Act of 1952 only on the ground of common ownership was not permissible. In the writ petition also the ground canvassed was that in the absence of proper enquiry with regard to functional integrity of the establishment clubbing together was not permissible.

3. Shri R.N. Shukla, learned Senior Counsel placing reliance on various judgments submits that clubbing to