NOOR NIWAS NURSERY PUBLIC SCHOOLversusREGIONAL PROVIDENT FUND COMMISSIONNER AND ORS.

A                   NOOR NIWAS NURSERY PUBLIC SCHOOL
                                            v.
         REGIONAL PROVIDENT FUND COMMISSIONNER AND ORS.

                                 DECEMBER 8, 2000

B                [S. RAJENDRA BABU AND S.N. V ARIA VA, JJ .]


           Employees' Provident Funds and Miscellaneous Provisions Act, 1952-
     Sections 1(3)(b), 2-A, 17-Appellant, a Nursery School situated adjacent to
C    a Higher Secondary School run by the same Society sought to be covered
     by the EJJ1ployees' Provident Funds and Miscellaneous Provisions Act-Held
     Clerk of the Higher Secondary School found to have furnished particulars
     in regard lo the appellant School also t~ the Inspector of the respondent
     department-The two schools being located in one and the same address and
     thus having geographical proximity-Held, all these facts clearly point out
D    that the two units constitute one single establishment and, therefore, is
     covered by the Act-The Jae~ that the Higher Secondary School has been
     excluded from the purview of the Employees' Provident Funds and
     Miscellaneous Provisions ~ct cannot be of any help to the appellant-When
     the entire establishment is covered by the Act and only part ofthe establishment
E    is excluded, the appellant cannot claim non-applicability of the Act on the
     ground that it falls short of the minimum number of employees.

           The appellant, a Nursery School situated zdjacent to a Higher Secondary
     School run by the same Society was sought to the covered by the Employees'
     Provident Funds and Miscellaneous Provisions Act, 1952 considering the two
F    units to constitute one and the same establishment. The appellant was
     aggrihed as according to it the two were different institutions managed by
     two different Managing Committees. The Provident Fund Commissioner held
     that the two institutions constituted one and the same establishment and,
     therefore, was covered by the Act. The order of the Provident Fund
     Commissioner was challenged unsuccessfully before the High Court. Hence
G    the present appeal.

           On behalf of the appellant, it was contended that the appellant had four
     employees and it being a separate establishment was not covered by the
     provisions of the Employees' Provident Funds and Miscellaneous Provisions
     Act; that the Higher Secondary School had been excluded from the purview
fl                                        478
            NOOR NtWAS NURSERY PUB. SCHOOL v. REG. PROV. COMMR.            479

of the Act in view of the fact that the provident fund in respect of all the      A
employees was subscribed under another scheme; that if the two units were
put together as a single establishment, the Act would be applicable and
otherwise not, inasmuch as it fell short of the number of minimum of
employees for the applicability of the Act under Section 1(3)(b) of the Act.

      On behalf of the respondent, it was contended that when the Provident       B
Fund Inspector visited the Higher Secondary School, the Head Clerk therein
gave particulars not only in regard to the said school but also in regard to
the appellant-school; hence the nexus between the two schools.

      Dismissing the appeal, the Court
                                                                                  c
        HELD : I.I. In the present caff, when two units are located adjacent to
one another and there are only two. teachers with an Aaya, a Clerk and a Peon,
it is difficult to believe that the Society which runs 30 schools would run a
separate school consisting of such a small number of staff. If the unit of the
appellant-school was not part of the unit of Higher Secondary School, the Head    D
Clerk could not have been in possession of the particulars of the appellant-
school and could not have furnished such particulars to the Inspector when
he visited the school in connection with the grant of the code number.
Undisputably, the two units are run by the same Society and they are located
in one and the same address thereby establishing geographical proximity. All
these facts clearly point out to one factor that the two units constitute one     E
single establishment. After all appellant-school caters to nursery classes,
while the higher classes are provided in Higher Secondary School. Thus, the
link between the two cannot be ruled out. (481-G, H; 482-A, Bl

       1.2. Whether two units are one or distinct will have to be considered in
the light of the provisions of Section 2-A of the Employees' Provident Funds F
and Miscellaneous Provisions Act which declares that where an establishment
consists of different departments or has branches whether situate in the same
place or in different places, all such departments or branches shall be treated
                            0

as parts of the same establis hment. In such cases, it has to be considered how
far there is functional integrality between the two units, whether one unit G
cannot exist conveniently and reasonably without the other, and on the further
question, in matters of finance and employment, the employer has actually
kept the two units distinct or integrated. Each case would depend upon its
own peculiar facts and has to be decided accordingly. (481-D, E, F(

     Management of Pratap Press, New Delhi v. Secretary, Delhi Press H
    480                      SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A Workers' Union, Delhi, AIR (1960) SC 1213, referred to.
          2. The fact that the Higher Secondary School has been excluded from
    the purview of the Employees' Provident Funds and Miscellaneous Provisions
    Act in view of the fact that the provident fund ia respect of all the employees
    is subscribed under another scheme cannot help the appellant in any way.
B   The two establishments have more than 20 employees and the exemption
    granted under Section 17 of the Act is subject to the condition that such
    exclusion will not apply to the appellant's unit because the same would not be
    covered under another scheme for subscribing to the provident fund. When
    the entire establishment is covered by the Act, only part of the establishment
C   is excluded and condition of exclusion being applicable only to a part, the
    appellant cannot rely upon that fact to claim non-applicability of the Act on
    the ground that it falls short of the minimum number of employees.
                                                                   (482-C, D, E, Fl

          CIVIL APPELLATE JURJSDICTION : Civil Appeal No. 3320 of 1997.
D
          From the Judgment and Order dated 30.10.96 of the Delhi High Court
    in C.W. No. 3742of1994.

         H.S. Parihar, D.R. Thadani, A.C. David and Kuldeep S. Parihar for the
    Appellant.
E
         Ms. B. Sunita Rao, Ajay Sharma, C. Radhakrishnan and B.K. Prasad for
    the Respondents.

          The Judgment of the Court was delivered by

F         RAJENDRA BABU, J. : The appellant is aggrieved by the application
    of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952
    [hereinafter referred to as 'the Act']. The appellant-institution is run by
    Baptist Union North India, a registered Society under the Registration of
    Societies Act, 1860. The said Society runs two schools at 17, Darya Ganj,
G   Delhi, namely, Francis Girls Higher Secondary School which was established
    in 1916 and the appellant-school which runs nursery classes. The appellant-
    school was started in the year l 971. The claim of the appellant-school is that
    Francis Girls Higher Secondary School and the appellant-school, Noor Niwas
    Nursery Public School, are two different institutions having separate and
    independent accounts and are managed by two different Managing
H   Committees. The appellant has four employees, namely, I Head Mistress, I
   NOOR NIWAS NURSERY PUB SCHOOL v. REG. PROV. COMMR.[KAJENDRA BABU, J J   48 J
 Teacher, I Peon and I Aaya and it ~irig a separate establishment is not          A
 covered by the provisions of the Act. Therefore, it is contended that Francis
 Girls Higher Secondary School and the appellant-school cannot be treated as
 one establishment for the purpose of the Act.

       The respondents' contention is that an Inspector of the Department
visited Francis Girls Higher Secondary School when Mrs. P. Wadhavan, the          B
Head Clerk in Francis Girls Higher Secondary School gave particulars not only
in regard to Francis Girls Higher Secondary School but also in regard to the
appellant-school. The said Inspector was examined as a witness before the
Provident Fund Commissioner. He was thoroughly cross-examined suggesting
that the letter seeking for a common number for depositing the contribution       C
to the provident fund was obtained under duress. But while denying the same
he clearly stated that this information had been furnished by Mrs. P. Wadhavan
on 21.04.1982 voluntarily.

       The Provident Fund Commissioner on this material held that the two
institutions constitute one and the same establishment and, therefore, is         D
covered by the Act. This order of the Provident Fund Commissioner was
unsuccessfully challenged before the High Court. Hence this appeal.

        Whether two units are one or distinct will have to be considered in the
 light of the provisions of Section 2-A of the Act which declares that where
 an establishment consists of different departments or has branches whether       E
 situate in the same place or in different places, all such departments or
branches shall be treated as parts of the same establishment. In such cases,
the court has to consider how far there is functional integrality between the
two units, whether one unit cannot exist convenient:y and reasonably without
the other, and on the further question, in matters of finance and employm.:nt,
the employer has actually kept the two units distinct or integrated. In fact,     F
this Court set out certain tests in Management of Pratap Press, New Delhi
v. Secretary, Delhi Press Workers' Union, Delhi, AIR (1960) SC 1213. However,
we may point out that each case would depend upon its own peculiar facts
and has to be decided accordingly.
                                                                                  G
       In the present case, when two units are located adjacent to on~ another
and there are only two Teachers with an Aaya, a Clerk and a Peon, it is
difficult to believe that the Society which runs 30 schools would run a
separate school consisting of such a small number of staff. If the unit of the
appellant-school was not part of the unit of Francis Girls Higher Secondary
School, the Head Clerk, Mrs. Wadhavan, could not have been in possession          H
    482                      SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A of the particulars of the appellant-school and could not have furnished such
  particulars to the Inspector when he visited the school in connection with the
  grant of a code number. Undisputably, the two units ·are run by the same
  Society and they are located in one and the same address thereby establishing
  geographical proximity and nothing worthwhile has been elicited in the cross-
B examination of the Inspector in regard to inquiries made by him from Mrs. P.
  Wadhavan. Mrs. P. Wadhavan was not examined before the Provident Fund
  Commissioner. All these facts clearly point out to one factor that the two units
  constitute one single establishment. After all appellant-school caters to nursery
  classes, while the higher classes are provided in Francis Girls Higher Secondary
  School. Thus, the link between the two cannot be ruled out. In the facts and
C circumstances of the case, we hold that the view taken by the Provident Fund
  Commissioner as affitl'lled by the High Court in this regard is correct.

           However, the learned counsel for the appellant drew our attention to the
    letter sent to Francis Girls Higher Secondary School wherein the said school
    has been excluded from the purview of the Act in view of the fact that the
D   provident fund in respect of all the employees is subscribed under another        ..
    scheme. The learned counsel submitted that if the two units were put together
    as a single establishment, the Act would be applicable and otherwise not,
    inasmuch as it falls short of the number of minimum of employees for the
    applicability of the Act under Section 1(3)(b) of the Act. We are not impressed
E   with this argument. The two establishments have more than 20 employees and
    the exemption granted under Section 17 of the Act is subject to the condition
    that such exclusion will not apply to the appellant's unit because the same
    would not be co\'ered under another scheme for subscribing to the provident
    fund. When the entire establishment is covered by the Act, only part of the
    establishment is excluded and condition of exclusion being applicable only to
F   a part, we fail to understand as to how the appellant can rely upon the said
    letter to claim non-applicability of the Act on the ground that it falls short
    of the number of employees.

          We do not find any good reason to interfere with the order made by
    the High Court affinning the view taken by the Provident Fund Commissioner.
    This appeal is, therefore, dismissed.

    M.P.                                                        Appeal dismissed.