Landmark Supreme Court Judgment on Provident Fund Act
In a landmark judgment, the Supreme Court ruled that "When two establishments are run by the same family under common management with a common workforce and financial integrity, they are to be treated as branches of one establishment for the purposes of the Provident Fund Act."
In the appeal case L.N. Gadodia & Sons & ANR. Vs. Regional Provident Fund Commissioner, the firm argued that the authorities had clubbed two establishments as one and demanded provident fund contributions from both. It argued that they were in separate business enterprises and registered as separate private limited companies.
However, the Delhi High Court and the Supreme Court accepted the contention of the PF Commissioner that they were not separate entities. They stated that the tests in such cases were whether there was unity of ownership, unity of management and control, unity of finance, unity of labor, and unity of functional integrity.
Regards,
Kamal
In a landmark judgment, the Supreme Court ruled that "When two establishments are run by the same family under common management with a common workforce and financial integrity, they are to be treated as branches of one establishment for the purposes of the Provident Fund Act."
In the appeal case L.N. Gadodia & Sons & ANR. Vs. Regional Provident Fund Commissioner, the firm argued that the authorities had clubbed two establishments as one and demanded provident fund contributions from both. It argued that they were in separate business enterprises and registered as separate private limited companies.
However, the Delhi High Court and the Supreme Court accepted the contention of the PF Commissioner that they were not separate entities. They stated that the tests in such cases were whether there was unity of ownership, unity of management and control, unity of finance, unity of labor, and unity of functional integrity.
Regards,
Kamal