M/S TORINO LABORATORIES PVT. LTD.versusUNION OF INDIA & ORS.

                 [2025] 8 S.C.R. 174 : 2025 INSC 849

                   M/s Torino Laboratories Pvt. Ltd.
                                   v.
                         Union of India & Ors.
                       (Civil Appeal No. 9540 of 2018)
                                 15 July 2025
           [K.V. Viswanathan* and Joymalya Bagchi, JJ.]


                           Issue for Consideration
       Whether the EPF Authorities were justified in treating the appellant
       and the Respondent No.3 as one unit for the purpose of the
       Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

                                  Headnotes†
       Employees’ Provident Funds and Miscellaneous Provisions
       Act, 1952 – s.2A – Establishment to include all departments
       and branches – Appellant’s unit manufactured tablets and
       syrups, while the Respondent No.3 manufactured injections
       and capsules – Assistant Provident Fund Commissioner (APFC)
       held that the appellant was part and parcel of the Respondent
       No.3 for the purpose of applicability of the EPF Act on account of
       having various common factors inter alia unity of management
       with commonality of some Directors belonging to the same
       HUF; unity of finance; both the units dealing with products of
       pharmaceutical industry, etc. – Order upheld by the Appellate
       Tribunal and High Court:
       Held: Appellant and respondent No.3 were engaged in the same
       industry i.e. pharmaceutical; they carried on business in premises
       built on contiguous plots of land; shared common telephone and
       facsimile numbers; had common website and e-mail IDs; their
       Registered Office/Head Office and administrative office were the
       same; both employed common security to guard the premises; there
       was unity of management inasmuch as while the two brothers were
       Directors of respondent No.3; one of them was also the Director
       of the appellant while another brother and wife of one the brothers
       were Directors in the appellant Company – There was also unity
       of finance inasmuch as the HUF of one the brothers and his family
       members funded both the companies – These findings by the APFC
       cumulatively establish beyond doubt that the two entities were

* Author
[2025] 8 S.C.R.                                                                 175

        M/s Torino Laboratories Pvt. Ltd. v. Union of India & Ors.


     rightly treated as common for the purpose of the EPF Act – Plea
     of the appellant that since the appellant and respondent No.3 are
     two different juristic entities thus, s.2A cannot be applied and also,
     the theory of clubbing cannot be invoked is rejected – Authorities
     justified in seeking remittance of the dues from September 1995 –
     No merit in the appeal – Theory of clubbing. [Paras 12, 31, 34-37]

     Theory of clubbing – Determination of unity of ownership;
     unity of management and control; features demonstrating the
     presence of functional integrality – Tests for:
     Held: No absolute and invariable test can be laid down for all cases –
     The real purpose of the test is to find out the true relation between
     the Parts, Branches and Units – If in their true relation they constitute
     one integrated whole, it could be said that establishment is one and
     if not, they are to be treated as separate units – Each case has to
     be decided on its own peculiar facts, with regard to the scheme
     and object of the statute under consideration and in the context
     of the claim – In a given case, unity of ownership, management
     and control may be the important test, while in certain other cases
     Functional Integrality or general unity may be the determinative
     consideration – In some instances, unity of employment could be
     the most vital test – The employer/management’s own conduct in
     mixing up or not mixing up the capital, staff and management could
     in a given case be a significant pointer – Mere separate registration
     under the different statutes cannot be a basis to claim that the
     units are separate – Similarly, maintenance of separate accounts
     and independent financial statement is also not conclusive – Onus
     lies on the employer/management to lead necessary evidence to
     bring home their contention – Employees’ Provident Funds and
     Miscellaneous Provisions Act, 1952 – s.2A. [Para 34]

     Employees’ Provident Funds and Miscellaneous Provisions
     Act, 1952 – s.2A – Establishment to include all departments
     and branches – Plea of the appellant that since the appellant
     and respondent No.3 are two different juristic entities thus,
     s.2A cannot be applied and also, the theory of clubbing cannot
     be invoked:
     Held: Rejected – While s.2A sets out that the establishment will
     include all departments and branches it does not deal with a scenario
     as to the tests for determining whether two juristic entities are set up
     as an artificial device and subterfuge to sidestep the provisions of
     the Act – Artificial devices, subterfuges and facades are commonly
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       resorted to, to create a smokescreen of separate entities for a variety
       of purposes – Courts faced with such a scenario have a duty to
       lift the veil and see behind applying the well-established tests to
       determine whether the entities are really separate entities or are
       they really a single entity – Hence, the contention that s.2A cannot
       be applied if ostensibly two separately registered entities under the
       Companies Act are involved is rejected, especially when the Court is
       interpreting a beneficial legislation like the EPF Act. [Paras 12, 31]

       Employees’ Provident Funds and Miscellaneous Provisions Act,
       1952 – s.16(1)(d) – Benefit of infancy protection for the period
       26.09.1995 to 22.09.1997 u/s.16(1)(d) as it then stood, if to be given:
       Held: No – In the present case, the claim for infancy protection
       under the erstwhile s.16(1)(d) would not arise in view of the finding
       of clubbing – Being an integrated unit of respondent no.3 since
       1995, no separate infancy protection will enure to the benefit of
       appellant. [Para 36]

                                 Case Law Cited
       Management of Pratap Press, New Delhi v. Secretary, Delhi Press
       Workers’ Union, Delhi and Another, AIR 1960 SC 1213; Regional
       Provident Fund Commissioner and Another v. Dharamsi Morarji
       Chemical Co. Ltd. (1998) 2 SCC 446; Regional Provident Fund
       Commr. v. Raj’s Continental Exports (P) Ltd. [2007] 3 SCR 636 :
       (2007) 4 SCC 239; Associated Cement Companies Limited,
       Chaibassa Cement Works, Jhinkpani v. Workmen [1960] 1 SCR
       703 : AIR 1960 SC 56; L.N. Gadodia & Sons v. Regional Provident
       Fund Commissioner [2011] 11 SCR 5008 : (2011) 13 SCC 517;
       Shree Vishal Printers Ltd. v. Provident Fund Commissioner
       [2019] 12 SCR 146 : (2019) 9 SCC 508; Regional Provident
       Fund Commissioner v. Naraini Udyog [1996] Supp. 3 SCR 202 :
       (1996) 5 SCC 522; Sayaji Mills Ltd. v. Regional Provident Fund
       Commissioner [1985] 2 SCR 516 : (1984) Supp. SCC 610; The
       Honorary Secretary, South India Millowners’ Association and
       Others v. The Secretary, Coimbatore Distruict Textile Workers’
       Union [1962] Supp. 2 SCR 926; Management of Wenger and
       Co. v. Their Workmen [1963] Supp. 2 SCR 862; Rajasthan
       Prem Krishan Goods Transport Co. v. Regional Provident Fund
       Commissioner, New Delhi and Others, [1996] Supp. 3 SCR 1 :
       (1996) 9 SCC 454; Sumangali v. Regional Director, Employees’
       State Insurance Corporation [2008] 10 SCR 1129 : (2008) 9 SCC
       106 – referred to.
[2025] 8 S.C.R.                                                                 177

        M/s Torino Laboratories Pvt. Ltd. v. Union of India & Ors.


                                  List of Acts
     Employees’ Provident Funds and Miscellaneous Provisions Act,
     1952.

                               List of Keywords
     Establishment to include all departments and branches; One unit for
     the purpose of the Employees’ Provident Funds and Miscellaneous
     Provisions Act, 1952; Two entities treated as common for the
     purpose of the EPF Act; Common factors; Both units dealing with
     products of Pharmaceutical industry; Both units engaged in the
     same industry; Part and parcel; Tablets and syrups, Injections
     and capsules; Assistant Provident Fund Commissioner (APFC);
     Business in premises built on contiguous plots of land; Common
     telephone and facsimile numbers; Common website and e-mail
     IDs; Same registered Office/Head Office and administrative office;
     Common security to guard the premises; Unity of ownership; Unity
     of finance; Unity of management; Two different juristic entities;
     Theory of clubbing invoked; Remittance of the dues; Functional
     integrality; General unity; Unity of employment; Mixing up/not
     mixing up the capital, staff and management; Separate registration
     under different statutes; Separate units; Maintenance of separate
     accounts; Independent financial statement; Artificial devices,
     subterfuges and facades; Duty to lift the veil; Infancy protection;
     Integrated unit; Beneficial legislation; Unity of labour; Transferability
     of employees.

                              Case Arising From
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9540 of 2018
     From the Judgment and Order dated 22.04.2016 of the High Court
     of Madhya Pradesh at Indore in WP No. 2503 of 2011

                          Appearances for Parties
     Advs. for the Appellant:
     Gagan Gupta, Sr. Adv., Ananta Prasad Mishra.
     Advs. for the Respondents:
     Brijender Chahar, A.S.G., Vishnu Jain, Ms. Mani Munjal, Shantanu
     Sharma, Aaditya Dixit, Amrish Kumar, Raj Bahadur Yadav,
     Siddharth, Prateek Goyal, Harshit Manwani, Ujjwal Singh.
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                 Judgment / Order of the Supreme Court

                                 Judgment

       K.V. Viswanathan, J.

1.     The present appeal arises out of a judgment and order of the
       Division Bench of the High Court of Madhya Pradesh, Bench at
       Indore dated 22.04.2016 in Writ Petition No. 2503 of 2011. By the
       said judgment and order, the High Court dismissed the writ petition
       under Article 227 of the Constitution of India filed by the appellant-
       herein and upheld the order of the Employees’ Provident Fund
       Appellate Tribunal, (for short ‘the Appellate Tribunal’) New Delhi
       dated 24.01.2011 which order had, in turn, upheld the order dated
       17.02.2006 passed by the Assistant Provident Fund Commissioner,
       (for short ‘APFC’) Indore. The APFC had held that the appellant
       was part and parcel of M/s Vindas Chemical Industries Private
       Limited (hereinafter referred to as ‘Vindas’) – the third respondent
       herein for the purpose of applicability of the Employees’ Provident
       Funds and Miscellaneous Provisions Act, 1952 (for short the ‘EPF
       Act’) with effect from September, 1995. Appropriate consequential
       directions to remit the dues were also passed. Aggrieved by the
       judgment and order of the High Court, the appellant has preferred
       this appeal, by way of special leave.

       BRIEF FACTS: -
2.     Indisputably, on 22.11.1988, Dr. Darshan Kataria and his brother
       Niranjan Kataria set up the respondent No.3-Vindas for manufacturing
       injections and capsules of certain specified drugs.
       2.1 The factory was situated at Plot No.65, Sector-1, Pithampur,
           District Dhar, Madhya Pradesh. Vindas was incorporated with
           the Registrar of Companies, Madhya Pradesh.
       2.2 Subsequently, on 05.09.1990, Shri Vasudev Kataria and
           Smt. Rajni Kataria, wife of Darshan Kataria incorporated the
           appellant-Company with the Registrar of Companies in the
           State of Maharashtra. Later it transpires from the record that
           Mr. Darshan Kataria was also a director in the appellant-
           Company.
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        M/s Torino Laboratories Pvt. Ltd. v. Union of India & Ors.


     2.3 However, the factory of the appellant was set up and business
         of production of tablets and later liquid syrups was set up at
         Plot No. 65/1, Sector-1, Pithampur, Dhar, Madhya Pradesh. It
         is also undisputed that Vindas was covered under the EPF Act.
     2.4 Inspections were carried out at the appellant’s premises on
         17/20.01.2005 and a communication was sent on 24.01.2005
         to deposit the provident fund contribution and administrative
         charges w.e.f. 01.04.2004, though it was mentioned that the
         date was liable to change and a final decision would be taken
         after the inspection of previous records.
     2.5 The appellant, by its reply of 04.02.2005, opposed the
         applicability of the EPF Act on the ground that the workers/
         employees did not exceed the prescribed number. It must also
         be pointed out that in the communication of 20.01.2005, the
         issue that was highlighted by the Department was about the
         number of employees exceeding twenty.
     2.6 Another inspection was carried out on 28.03.2005 and in the
         inspection note it was categorically stated that the establishment
         of the appellant was situated within the premises of Vindas-the
         third respondent and common security was employed for both
         the establishments and that the Managing Director of Vindas
         was Dr. Darshan Kataria.
     2.7 Thereafter, on 29.04.2005, a summons to appear in person
         under Section 7A of the EPF Act was issued to the appellant.
         Section 7A empowers the authorities to conduct such enquiry
         as they may deem necessary and pass orders with regard to
         disputes about coverage of establishments under the EPF Act.
         The appellant was asked to produce all the attested copies of
         the relevant records to determine the amount due for the period
         April, 2004 to March, 2005.
     2.8 The appellant, though by its reply dated 03.05.2005, denied
         any liability however, stated that they were voluntarily accepting
         coverage of the unit and will start contributing from 01.04.2005.
         Hence, this appeal really concerns the period prior to 01.04.2005
         and the liability thereon. The appellant also responded to
         the summons by its letters of 13.06.2005, 10.10.2005 and
         17.10.2005.
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       2.9   What is significant is in the submission of 10.10.2005, the
             appellant adverted to the proceedings at the hearing on
             23.09.2005 wherein they were informed that the authorities are
             evaluating the possibility of clubbing the unit of the appellant
             with Vindas-respondent No.3 and that the appellant was
             provided with the inspection reports of the unit of Vindas-
             Respondent No.3. The appellant also in the submission of
             10.10.2005 dealt with in detail as to how clubbing with Vindas-
             Respondent No.3 was not warranted and how the appellant
             was an independent and separate entity.
       2.10 It is also not in dispute that the Inspection Report of 28.03.2005
            along with the Inspection Report of 17.01.2005 and 20.01.2005
            have been furnished to the appellant on 10.10.2005, as set
            out in the written submissions filed before us.
       2.11 When matters stood thus, it appears that there was a further
            report of 10.11.2005 where again clubbing of the two units,
            namely, of the appellant and of Vindas was adverted to by
            the Department to which the appellant filed its submission on
            20.12.2005 disputing the said position.
       2.12 On 17.02.2006, the APFC passed an order rejecting the
            contentions of the appellant, including the contention on the
            locus standi of the Trade Union which had raised the issue of
            the two units being the same by holding that the issue of locus
            standi was immaterial if otherwise a case for clubbing was
            established. The APFC found the following common factors:-
             a)    that both the units dealt with products of pharmaceutical
                   industry;
             b)    that both worked from the same premises with the
                   common entry and without any visible demarcation with
                   addresses of the appellant being Plot No. 65/1, Sector-1,
                   Pithampur and of Vindas – Respondent No.3 being Plot
                   No. 65, Sector-1, Pithampur, District Dhar;
             c)    that the telephone nos. of both the appellant and Vindas-
                   respondent No.3 were common and the order set out the
                   actual telephone no. That the entire factory was guarded
                   by the same security personnel, namely, M/s Benaras
                   Security Services;
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        M/s Torino Laboratories Pvt. Ltd. v. Union of India & Ors.


            d)      that both the companies maintained their common
                    Administrative Office at 102, Prabhudeep Apartment, 11
                    Indrapuri Colony, Indore and the Administrative Office
                    had common telephone nos. and facsimile no.;
            e)      That the two companies shared the same website and
                    same e-mail IDs;
            f)      that the Registered Office of the appellant at 210, Adamji
                    Building, 413, Narsi Natha Street, Masjid Bunder Road,
                    Mumbai was the Head Office of Respondent No.3-Vindas
                    with same telephone no. and facsimile no.
            g)      That there was commonality of some Directors and that
                    too belonging to the same Hindu Undivided Family.;
            h)      That the source of finance was the same Hindu Undivided
                    Family in the name of Director, Creditor or Shareholder;
     2.13 In view of this, the APFC found that there was Unity of
          Purpose and Functional Integrality as there was common
          factory, common administration/Head Office/Registered Office,
          common e-mail ID/website and common source of finance.
          The APFC disregarded the aspect of separate registration
          with the Registrar of Companies and different Government
          Departments and held that the two units are one and the
          same for the purpose of the EPF Act.
     2.14 The appellant filed an appeal under Section 7-I of the EPF Act
          before the Appellate Tribunal. According to the appellant, after
          the Appellate Tribunal adjourned the hearing to 09.12.2010,
          the files were not traceable and no further notice of hearing
          after 09.12.2010 was received. In spite of that, on 24.01.2011,
          the Appellate Tribunal dismissed the appeal.
     2.15 A Writ Petition being W.P. No. 2503 of 2011 filed before the High
          Court of Madhya Pradesh, Indore Bench was unsuccessful.
          That is how the case presents itself before us.

     CONTENTIONS OF LEARNED COUNSEL: -
3.   We have heard Mr. Gagan Gupta, learned Senior Advocate, for
     the appellant and Mr. Siddharth, learned counsel for the APFC-
     Respondent No. 2 Authorities and Mr. Brijender Chahar, learned
     Additional Solicitor General for the Union of India.
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4.     Mr. Gagan Gupta, learned Senior Advocate, contends that initially
       the Authorities proceeded on the basis of the numerical strength of
       the employees being in excess of 20 at the appellant’s unit and the
       aspect of clubbing was introduced as an afterthought. That notice
       of clubbing ought to have been issued to Vindas-respondent No.3
       instead of issuing to the appellant; that Section 2A of the EPF Act
       cannot apply to two juristic entities; that both the appellant and the
       respondent No.3-Vindas are separately registered under the Drugs
       and Cosmetics Act, 1940, the Factories Act, 1948 and the two entities
       hold separate account numbers/registrations under the Central Sales
       Tax, Central Excise, Service Tax, ESI and also hold separate PAN
       and Corporate Identification Nos.
5.     Learned Senior Advocate contends that the electricity and water
       connections for both the establishments are separate and that
       the Municipal Corporation Property Tax is being separately levied.
       Learned Senior Advocate further contends that the summon issued
       was for the period April, 2004 to March, 2005. However, the APFC,
       by its order, has directed compliance from September, 1995. Learned
       Senior Advocate contents that admittedly there was no interchange
       of employees. Learned Senior Advocate relied on the award of the
       Labour Court dated 21.07.2010 where the stand of the employees of
       the appellant that they should be permitted to work at Respondent
       No.3-Vindas was rejected. Learned Senior Advocate contended that
       there was no functional integrality or interdependence between the two
       establishments and that while the appellant manufactures tablets and
       syrup, respondent No.3-Vindas manufactures injections and capsules.
       Without prejudice, learned Senior Advocate contends that in the event
       of the submissions being rejected, the benefit of infancy protection be
       given for the period 26.09.1995 to 22.09.1997 under Section 16(1)(d)
       of the EPF Act as it then stood. Learned Senior Advocate relied on the
       judgments of this Court in Management of Pratap Press, New Delhi
       vs. Secretary, Delhi Press Workers’ Union, Delhi and Another,
       AIR1960 SC 1213, Regional Provident Fund Commissioner and
       Another vs. Dharamsi Morarji Chemical Co. Ltd., (1998) 2 SCC
       446 and Regional Provident Fund Commr. vs. Raj’s Continental
       Exports (P) Ltd, (2007) 4 SCC 239 in support of his submissions.
6.     Mr. Siddharth, learned counsel for the EPF Authorities countered the
       submissions by contending that the question as to what constitutes
       an establishment is a mixed question of fact and law which ought to
[2025] 8 S.C.R.                                                      183

        M/s Torino Laboratories Pvt. Ltd. v. Union of India & Ors.


     be answered in the context of the facts of the given case, keeping in
     mind the object of the statute. The learned counsel contended that
     the appellant and Vindas-Respondent No.3 constituted a common
     establishment for the purpose of the EPF Act and that the findings
     of the APFC on the aspect of the two entities being engaged in
     the pharmaceutical business, carrying on the business in the same
     factory premises by sharing the common telephone/facsimile nos.,
     same website and e-mail ID called for no interference. According to
     the learned counsel the unity in management and unity in finance
     and the existence of common administrative/Head Office/Registered
     Office also pointed to the functional integrality. Learned counsel
     contended that the burden to establish that there was no unity was
     on the appellant which the appellant failed to discharge; that since
     the appellant and respondent No.3 would be collectively assessed
     but since the liability will be only for the respective employees of
     the units there was no need to issue separate summons to Vindas-
     Respondent No.3; that the order of the Labour Court cannot bind
     the authorities under the EPF Act as the rights under the two Acts
     are different and that the Labour Court when it decided that there
     was no unity of employment did not have occasion to deal with the
     other aspects dealt with by the APFC. Learned counsel refuted the
     arguments of the appellant that they were not heard by the Tribunal
     since no document was placed to establish the fact that no notice
     was issued to the appellant by the Tribunal and that, in any event,
     the said argument was not raised before the High Court. Learned
     counsel relied on the judgments of this Court in Associated Cement
     Companies Limited, Chaibassa Cement Works, Jhinkpani vs.
     Workmen, AIR 1960 SC 56, L.N. Gadodia & Sons vs. Regional
     Provident Fund Commissioner, (2011) 13 SCC 517, Shree Vishal
     Printers Ltd. vs. Provident Fund Commissioner, (2019) 9 SCC 508
     and Regional Provident Fund Commissioner vs. Naraini Udyog,
     (1996) 5 SCC 522 to make good his submissions.
7.   We have considered the submissions of the respective parties and
     carefully perused the records of the case.

     QUESTION FOR CONSIDERATION: -
8.   The question that arises for consideration is whether the EPF
     Authorities were justified in treating the appellant and the Vindas-
     Respondent No. 3 as one unit for the purpose of the EPF Act?
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       CERTAIN PRELIMINARY ASPECTS: -
9.     Before we deal with the main issue, we would, at the outset, dispose
       of certain preliminary points raised for consideration. The aspect
       of violation of natural justice before the Tribunal was not argued
       before the High Court. In any event, we are considering the matter
       in detail on merits here and, as such, that aspect need not detain us
       any further. The contention based on the award of the Labour Court
       dated 21.07.2010 also does not carry the case of the appellant any
       further. First of all, the APFC, by its order of 17.02.2006, elaborately
       considered the matter applying the various tests and concluded that
       the two units are the same for the purpose of the EPF Act. The issue
       before the Labour Court was about the entitlement of the workers of
       the appellant to claim employment in Vindas-respondent No.3 and
       while answering that reference the Labour Court held that there was
       no clear evidence regarding the aspect of the workers of the appellant
       having worked in the unit of respondent No.3-Vindas. None of the
       other indicia for clubbing referred to by the APFC were considered
       relevant. In any case, in view of the multiplicity of factors adverted
       to by the APFC, the award has no bearing for the determination of
       the issue.

       ANALYSIS AND REASONS: -

       EPF ACT - A BENEFICIAL LEGISLATION
10. The EPF Act is a beneficial legislation intended to provide for the
    institution of provident funds, pension fund and deposit-linked
    insurance fund for employees in factories and other establishments.
    It is a welfare legislation intended to ameliorate the conditions of
    workmen in factories and other establishments. This Court in Sayaji
    Mills Ltd. vs. Regional Provident Fund Commissioner, 1984 Supp.
    SCC 610 has held that the EPF Act should be construed so as to
    advance the object with which it is passed and any construction
    which would facilitate evasion of the provisions of the Act should
    be avoided.

       LAW ON CLUBBING: -
11. The crucial issue that arises for consideration in this case is - whether
    the authorities were justified in treating the appellant and Vindas-
    respondent No.3 as one unit for the purpose of the EPF Act and
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        M/s Torino Laboratories Pvt. Ltd. v. Union of India & Ors.


     were the correct tests to determine the same applied? Section 2-A
     of the EPF Act reads as under:-
           “2A. Establishment to include all departments and
           branches.—For the removal of doubts, it is hereby
           declared 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 as parts of the same
           establishment.”
12. The argument of the learned Senior Counsel for the appellant that
    since the appellant and Vindas-respondent No.3 are two different
    juristic entities and that would not be covered within the sweep of
    Section 2A is only stated to be rejected. While Section 2A sets out
    that the establishment will include all departments and branches it
    does not deal with a scenario as to the tests for determining whether
    two juristic entities are set up as an artificial device and subterfuge
    to sidestep the provisions of the Act.
13. The question in this case has to be answered by applying the well-
    established theories to determine what would constitute unity of
    ownership or unity of management and control and the features
    that will demonstrate the presence of functional integrality. This
    issue is no longer res integra and has been settled by a long line
    of judgments of this Court.
14. The earliest case where this issue was discussed was in Associated
    Cement Companies Ltd. (supra) where this Court had to examine the
    question whether the lay off of the workers in certain sections of the
    Chaibasa Cement Works due to a strike on the part of the workmen
    at the Rajanka limestone quarry was justified under Section 25-E (iii)
    of the Industrial Disputes Act, 1947. Section 25-E (iii) of the I.D. Act
    stated that no compensation was to be paid to workmen who have
    been laid off due to a strike or slowing-down of production on the
    part of workmen in another part of establishment. In the process of
    examining the said question, this Court held as under:-
           “11. The Act not having prescribed any specific tests for
           determining what is ‘one establishment’, we must fall
           back on such considerations as in the ordinary industrial
           or business sense determine the unity of an industrial
           establishment, having regard no doubt to the scheme and
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       object of the Act and other relevant provisions of the Mines
       Act, 1952, or the Factories Act, 1948. What then is ‘one
       establishment’ in the ordinary industrial or business sense?
       The question of unity or oneness presents difficulties
       when the industrial establishment consists of parts, units,
       departments, branches etc. If it is strictly unitary in the
       sense of having one location and one unit only, there is
       little difficulty in saying that it is one establishment. Where,
       however, the industrial undertaking has parts, branches,
       departments, units etc. with different locations, near or
       distant, the question arises what tests should be applied for
       determining what constitutes ‘one establishment’. Several
       tests were referred to in the course of arguments before
       us, such as, geographical proximity, unity of ownership,
       management and control, unity of employment and
       conditions of service, functional integrality, general unity
       of purpose etc. To most of these we have referred while
       summarising the evidence of Mr Dongray and the findings
       of the Tribunal thereon. It is, perhaps, impossible to lay
       down any one test as an absolute and invariable test for
       all cases. The real purpose of these tests is to find out
       the true relation between the parts, branches, units etc. If
       in their true relation they constitute one integrated whole,
       we say that the establishment is one; if on the contrary
       they do not constitute one integrated whole, each unit is
       then a separate unit. How the relation between the units
       will be judged must depend on the facts proved, having
       regard to the scheme and object of the statute which
       gives the right of unemployment compensation and also
       prescribes disqualification therefor. Thus, in one case the
       unity of ownership, management and control may be the
       important test; in another case functional integrality or
       general unity may be the important test; and in still another
       case, the important test may be the unity of employment.
       Indeed, in a large number of cases several tests may
       fall for consideration at the same time. The difficulty of
       applying these tests arises because of the complexities
       of modern industrial organisation; many enterprises may
       have functional integrality between factories which are
       separately owned; some may be integrated in part with
[2025] 8 S.C.R.                                                           187

        M/s Torino Laboratories Pvt. Ltd. v. Union of India & Ors.


           units or factories having the same ownership and in part
           with factories or plants which are independently owned.
           In the midst of all these complexities it may be difficult to
           discover the real thread of unity. In an American decision
           (Donald L. Nordling v. Ford Motor Company, (1950) 28
           AIR, 2d 272 there is an example of an industrial product
           consisting of 3800 or 4000 parts, about 900 of which came
           out of one plant; some came from other plants owned
           by the same Company and still others came from plants
           independently owned, and a shutdown caused by a strike
           or other labour dispute at any one of the plants might
           conceivably cause a closure of the main plant or factory.”
15. As was rightly pointed out, it is impossible to lay down any one test
    as an absolute and invariable test for all cases.
16. Associated Cement Companies Ltd. (supra) was followed in
    Pratap Press (supra). In Pratap Press (supra), the issue was
    whether the profit or loss of the Press and the publications “Vir
    Arjun” and “Daily Pratap” were to be pooled for the question of
    deciding bonus. While the employer contended that the press and
    Vir Arjun were one establishment and Daily Pratap was a separate
    partnership firm, the workers contended that the accounts of all the
    three should be taken into account or alternatively only the Press
    should be taken into account. While answering the issue, the Court
    acknowledged that the question whether the two activities in which
    the single owner is engaged are one industrial unit or two distinct
    industrial units was not always easy of solution and no hard and fast
    rule could be laid down. It was also acknowledged that each case
    has to be decided on its own peculiar facts. It was held that in some
    cases, two activities would be so closely linked that no reasonable
    man would consider them as independent industries. Para 2 of the
    said judgment is set out hereunder:-
           “2. The question whether the two activities in which the
           single owner is engaged are one industrial unit or two
           distinct industrial units is not always easy of solution. No
           hard and fast rule can be laid down for the decision of
           the question and each case has to be decided on its own
           peculiar facts. In some cases the two activities each of
           which by itself comes within the definition of industry are
           so closely linked together that no reasonable man would
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          consider them as independent industries. There may
          be other cases where the connection between the two
          activities is not by itself sufficient to justify an answer one
          way or the other, but the employer’s own conduct in mixing
          up or not mixing up the capital, staff and management
          may often provide a certain answer”.
17. This Court first examined the question whether the Press and the
    paper were so interdependent that one could not exist without the
    other. It concluded that there was no functional interdependence
    between the press unit and the paper unit for the two to be considered
    one industrial unit. Not stopping there, this Court also held that it
    was necessary to further consider the conduct of the businessman
    himself to see whether he mixed up the capital of the two, the profits
    of the two and the labour force of the two units. This Court also
    considered whether there was evidence to show as to whether the
    capital employed in the two units came out from one fund. Para 6
    and 7 of Pratap Press (supra) are extracted hereinbelow:-
          “6. Coming now to the facts of the present appeals we
          find that the functions of the Press and the Vir Arjun paper
          cannot be considered to be so interdependent that one
          cannot exist without the other. That many presses exist
          without any paper being published by the same owner is
          common knowledge and is not seriously disputed. Nor
          is it disputed that an industry of publishing a paper may
          well exist without the same owner running a press for
          the printing of the paper. The very fact that Daily Pratap
          owned by a partnership firm, was being printed at the
          Pratap Press belonging to Shri Narendra itself shows this
          very clearly. It cannot therefore be said that there is such
          functional interdependence between the press unit and the
          paper unit that the two should reasonably be considered
          as forming one industrial unit.
          7. Along with this it is necessary to consider the conduct
          of the businessman himself. Has he mixed up the capital
          of the two, the profits of the two and the labour force of
          the two units? These are matters on which the employer
          is the best person to give evidence from the records of
          his concerns. No evidence has however been produced
[2025] 8 S.C.R.                                                            189

        M/s Torino Laboratories Pvt. Ltd. v. Union of India & Ors.


           to show that at any time before the dispute was raised he
           treated the capital employed in the two units as coming
           from one single capital fund, nor anything to show that
           he pooled the profits or that the workmen were treated as
           belonging to one establishment. It is interesting to note that
           there is no record showing whether for his own purposes
           he treated the assets of the two units as forming one
           composite whole or the assets of two distinct units has
           been produced. The profit and loss accounts which we find
           on the record appear to have been prepared sometime in
           26-12-1951, — apparently after the reference had been
           made and the dispute whether these units were one or
           two, had arisen. No weight can therefore be attached to
           the fact that in this profit and loss account — both the
           receipts from the press and the receipts from the Vir Arjun
           were shown as the income.”
     Ultimately, this Court concluded that the Press was a standalone unit.
18. The Honorary Secretary, South India Millowners’ Association and
    Others vs. The Secretary, Coimbatore Distruict Textile Workers’
    Union, [1962] Supp. 2 SCR 926, was a case that arose in the context
    of award of bonus to employees. This Court considered the question
    whether Saroja Mills Ltd. Coimbatore and Thiagaraja Mills, Madurai
    run by Saroja Mills Ltd. constituted separate units or they were to
    be treated as one. While the Management contended that the units
    were separate, the workmen contended to the contrary. Answering
    the question, this Court while acknowledging that the issue has to
    be determined in the light of the facts of each case (at page 943)
    set out the following principles:-
           “The question thus raised for our decision is not always
           easy to decide. In dealing with the problem, several
           factors are relevant and it must be remembered that the
           significance of the several relevant factors would not be the
           same in each case nor their importance. Unity of ownership
           and management and control would be relevant factors.
           So would the general unity of the two concerns; the unity
           of finance may not be irrelevant and geographical location
           may also be of some relevance; functional integrality can
           also be a relevant and important factor in some cases. It is
190                                                         [2025] 8 S.C.R.

                         Supreme Court Reports


          also possible that in some cases, the test would be whether
          one concern forms an integral part of another so that the
          two together constitute one concern, and in dealing with
          this question the nexus of integration in the form of some
          essential dependence of the one on the other may assume
          relevance. Unity of purpose or design, or even parallel or
          co-ordinate activity intended to achieve a common object
          for the purpose of carrying out the business of the one or
          the other can also assume relevance and importance, vide
          Ahmedabad Manufacturing & Calico Printing Co. Ltd. v.
          Their Workmen [1951] 2 LLJ 657.”
19. It will be seen that this Court held that several factors are relevant
    and the significance and importance of the several relevant factors
    would not be the same in each case. It was also held that unity of
    ownership and management and control, general unity of the two
    concerns; unity of finance; geographical location, functional integrality
    would all be relevant factors depending on the facts of each case.
    It was further held that unity of purpose or design or even parallel
    or coordinate activity intended to achieve a common object for the
    purpose of carrying out the business of the one or the other would
    also assume relevance and importance.
20. Specifically repelling the argument of the Management that the
    test of functional integrality was the only test and absent functional
    integrality the units will have to be considered separate, this Court
    in South India Millowners’ Association (supra) held as under: -
          “Mr Sastri, however, contends that functional integrality
          is a very important test and he went so far as to suggest
          that if the said test is not satisfied, then the claim that
          two mills constitute one unit must break down. We are
          not prepared to accept this argument. In the complex
          and complicated forms which modern industrial enterprise
          assumes it would be unreasonable to suggest that any
          one of the relevant tests is decisive; the importance and
          significance of the tests would vary according to the facts in
          each case and so, the question must always be determined
          bearing in mind all the relevant tests and corelating them
          to the nature of the enterprise with which the Court is
          concerned. It would be seen that the test of functional
[2025] 8 S.C.R.                                                              191

        M/s Torino Laboratories Pvt. Ltd. v. Union of India & Ors.


           integrality would be relevant and very significant when
           the Court is dealing with different kinds of businesses run
           by the same industrial establishment or employer. Where
           an employer runs two different kinds of business which
           are allied to each other, it is pertinent to enquire whether
           the two lines of business are functionally integrated or
           are mutually inter-dependent. If they are, that would, no
           doubt, be a very important factor in favour of the plea
           that the two lines of business constitute one unit. But the
           test of functional integrality would not be as important
           when we are dealing with the case of an employer who
           runs the same business in two different places. The fact
           that the test of functional integrality is not and generally
           cannot be satisfied by two such concerns run by the same
           employer in the same line, will not necessarily mean that
           the two concerns do not constitute one unit. Therefore, in
           our opinion, Mr Sastri is not justified in elevating the test
           of functional integrality to the position of a decisive test
           in every case. If the said test is treated as decisive, an
           industrial establishment which runs different factories in
           the same line and in the same place may be able to claim
           that the different factories are different units for the purpose
           of bonus. Besides, the context in which the plea of the
           unity of two establishments is raised cannot be ignored. If
           the context is one of the claim for bonus, then it may be
           relevant to remember that generally a claim for bonus is
           allowed to be made by all the employees together when
           they happen to be the employees employed by the same
           employer. We have carefully considered the contentions
           raised by the parties before us and we are unable to come
           to the conclusion that the finding of the Tribunal that the
           two mills run by the Saroja Mills Ltd. constitute one unit,
           is erroneous in law.
           In this connection, it would be necessary to refer to
           some of the decisions to which our attention was drawn.
           In the case of Associated Cement Companies Ltd. and
           their Workmen, this Court held that on the evidence on
           record, the limestone quarry run by the employer was
           another part of the establishment (factory) run by the
192                                                        [2025] 8 S.C.R.

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          same employer within the meaning of Section 25-E(iii)
          of the Industrial Disputes Act. It would thus be seen that
          the question with which this Court was concerned was
          one under Section 25-E(iii) of the Act and it arose in
          reference to the limestone quarry run by the appellant
          Company and the cement factory owned and conducted
          by it which are normally two different businesses. It was
          in dealing with this problem that this Court referred to
          several tests which would be relevant, amongst them
          being the test of functional integrality. In dealing with the
          question, S.K. Das, J., who spoke for the Court, observed
          that it is perhaps impossible to lay down any one test as
          an absolute and invariable test for all cases. The real
          purpose of these tests is to find out the true relation
          between the parts, branches, units, etc. If in their true
          relation they constitute one integrated whole, we say
          that the establishment is one; if, on the contrary, they do
          not constitute one integrated whole, each unit is then a
          separate unit. It was also observed by the Court that in
          one case, the unity of ownership, management and control
          may be the important test; in another case, functional
          integrality or general unity may be an important test; and
          in still another case, the important test may be the unity
          of employment. Therefore, it is clear that in applying the
          test of functional integrality in dealing with the question
          about the interrelation between the limestone quarry and
          the factory, this Court has been careful to point out that
          no test can be treated as decisive and the relevance and
          importance of all the tests will have to be judged in the
          light of the facts in each case.”
21. In Management of Wenger and Co. vs. Their Workmen, (1963)
    Supp. 2 SCR 862, one of the questions considered was whether
    industrial establishments owned by the same management constituted
    separate units or they constituted one establishment. In the said
    case, the question was whether the wine shops and the restaurants
    form part of one establishment or not. For the Management, in that
    case, it was contended that absent functional integrality, it has to
    be necessarily concluded that the units are separate in all cases.
    Rejecting this argument, this Court held as under:-
[2025] 8 S.C.R.                                                           193

        M/s Torino Laboratories Pvt. Ltd. v. Union of India & Ors.


           “The question as to whether industrial establishments
           owned by the same managements constitute separate units
           or one establishment has been considered by this Court on
           several occasions. Several factors are relevant in deciding
           this question. But it is important to bear in mind that the
           significance or importance of these relevant factors would
           not be the same in each case; whether or not the two units
           constitute one establishment or are really two separate and
           independent units, must be decided on the facts of each
           case. Mr Pathak contends that the Tribunal was in error in
           holding that the restaurants cannot exist without the wine
           shops and that there is functional integrality between them.
           It may be conceded that the observation of the Tribunal
           that there is functional integrality between a restaurant and
           a wine shop and that the restaurants cannot exist without
           wine shops is not strictly accurate or correct. But the test
           of functional integrality or the test whether one unit can
           exist without the other, though important in some cases,
           cannot be stressed in every case without having regard to
           the relevant facts of that case, and so, we are not prepared
           to accede to the argument that the absence of functional
           integrality and the fact that the two units can exist one
           without the other necessarily show that where they exist they
           are necessarily separate units and do not amount to one
           establishment. It is hardly necessary to deal with this point
           elaborately because this Court had occasion to examine this
           problem in several decisions in the past, vide Associated
           Cement Companies Ltd. v. Their Workmen; Pratap Press,
           etc. v. Their Workmen, Pakshiraja Studios v. Its Workmen;
           South India Millowners’ Association v. Coimbatore District
           Textile Workers Union; Fine Knitting Co. Ltd. v. Industrial
           Court and D.C.M. Chemical Works v. Its Workmen.”
22. Hence, it is very clear that while the test of functional integrality,
    namely, the test whether one unit can exist without the other may
    be important in some cases, it may not be stressed in every case
    without having regard to the relevant facts of the case and it is not
    the correct legal position that absent functional integrality the units
    have to be necessarily concluded as separate. Thereafter, applying
    the law to the facts, this Court held as under:-
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       “Let us then consider the relevant facts in the present
       dispute. It is common ground that wherever the employer
       runs a restaurant and a wine shop, the persons interested
       in the trade are the same partners. The capital supplied
       to both the units is the same. Prior to 1956, wine shops
       and restaurants were not conducted separately, but after
       1956 when partial prohibition was introduced in New
       Delhi, wine shops had to be separated because wine
       cannot be sold in restaurants. But it is significant that
       the licence for running the wine shop is issued on the
       strength of the fact that the management was running a
       wine shop before the introduction of prohibition. In fact,
       LII licence to run wine shops has been given in many
       cases to previous restaurants on condition that the wine
       shops are run separately according to the prohibition
       rules. It is true that many establishments keep separate
       accounts and independent balance-sheets for wine shops
       and restaurants; but that clearly is not decisive because
       it may be that the establishments want to determine
       from stage to stage which line of business is yielding
       more profit. Ultimately, the profits and losses are usually
       pooled, together. Thus, generally stated, there is unity of
       ownership, unity of finances, unity of management and
       unity of labour; employees from the restaurant can be
       transferred to the wine shop and vice versa. Besides, it is
       significant that in no case has the establishment registered
       the wine shops and the restaurants separately under
       Section 5 of the Delhi Shops and Establishments Act,
       1954 (7 of 1954). In fact, when Mr Nirula, the Secretary
       of the Employers’ Association, was called upon to register
       his wine shop separately, he protested and urged that
       separate registration of the several departments was
       unnecessary; and that clearly indicated that wine shop
       was treated by the establishment as one of its departments
       and nothing more. The failure to register a wine shop as
       a separate establishment is, in our opinion, not consistent
       with the employers’ case that wine shops are separate and
       independent units. Having regard to all the facts to which
       we have just referred, we do not think it would be possible
[2025] 8 S.C.R.                                                        195

        M/s Torino Laboratories Pvt. Ltd. v. Union of India & Ors.


           to accept Mr Pathak’s argument that the Tribunal was in
           error in holding that the wine shops and restaurants form
           part of the same industrial establishments.”
23. Thus, it will be seen that this Court considered unity of ownership,
    unity of finance, unity of management and unity of labour and the
    transferability of employees as relevant indicia.
24. It will be clear from South India Millowners’ Association (supra),
    Wengers (supra) and Pratap (supra) that Courts cannot stop with
    only examining whether the two units are so functionally integrated
    that one cannot exist without the other and absent functional
    integrality conclude that the units are separate. In the facts of the
    present case, it is the case of the appellant that while the appellant’s
    unit manufactures tablets and syrups, the respondent No.3-Vindas
    manufactures injections and capsules. According to the written
    submissions, the appellant contends that the establishments have
    completely different range of products and any movement of man and
    material between the two of these may cause gross contamination
    and there is no interdependence of any raw material. On the other
    hand, the authorities contend that while the manufactured products
    may be different the industrial activity is common, namely, they are
    part of the pharmaceutical industry.
25. In Rajasthan Prem Krishan Goods Transport Co. vs. Regional
    Provident Fund Commissioner, New Delhi and Others, (1996)
    9 SCC 454, the authorities found unity of ownership, management,
    supervision and control, employment, finance, and general purpose
    to treat M/s Rajasthan Prem Krishan Goods Transport Co. and
    M/s Rajasthan Prem Krishan Transport Company as a single
    establishment for the purpose of the EPF Act. This was on the finding
    that ten partners were common for both the entities; the place of
    business, address and telephone numbers were common and the
    management was also common. It was also found that the trucks
    plied by the two entities were owned by the partners and were being
    hired through both the units. This Court endorsed the finding of the
    authorities and upheld the clubbing of the two units.
26. In Regional Provident Fund Commissioner, Jaipur vs. Naraini
    Udyog and Others, (1996) 5 SCC 522, the question was whether
    two entities M/s Naraini Udyog, Kota and M/s Modern Steels, Kota
    were to be treated as one for the purpose of the EPF Act. The
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                           Supreme Court Reports


       authorities found that there was common Head Office, common
       Branch Office, common telephone for residence and factories. It was
       found that the submission of the Department that the office of M/s
       Modern Steels was situated in the premises of M/s Naraini Udyog
       and accounts of the two units were maintained by the same set of
       clerks was not controverted by the employer. The contention of the
       employer was that they have registered the two entities separately
       under the Factories Act, Sales Tax Act and ESIC Act; that the
       units were located at a distance of three kilometers apart and had
       separate central excise nos. and were registered as separate small-
       scale industries and hence should be treated as separate units. The
       employer also denied the assertion of the authorities that workers
       of one unit were working in the other. The authorities considered
       the aspect of separate registration as a point devoid of merit. With
       regard to denial of interchange of workers, the authorities held that
       the aspect was not crucial to the point at issue. On a challenge
       before the High Court, the Division Bench in the said case held in
       favour of the employer by holding that since they were registered
       under the Companies Act as two different individual identities though
       represented by members of the same family, and that the companies
       were independent. On a challenge to the said judgment by the
       authorities, this Court held that the findings of the High Court that
       due to the separate registration under the Companies Act, they were
       different individual identities was wholly unjustified. This Court held
       that there was functional unity and integrality and that the authorities
       were justified in clubbing the two units.
27. In Regional Provident Fund Commissioner and Another vs.
    Dharamsi Morarji Chemical Co. Ltd., (1998) 2 SCC 446, this
    Court held in favour of the employer on the finding that there was no
    evidence of supervisory, financial or managerial control and the only
    communicating link was that both was owned by the common owner.
    It was held on facts that that by itself was not sufficient unless there
    was interconnection between the two units and there was common
    supervisory, financial or managerial control. This case cannot help
    the appellant as it turned on its own peculiar facts as was clearly
    recorded in para five of the said judgment.
28. In Raj’s Continental Exports (P) Ltd. (supra), this Court found for
    the employer that there was total independence of the two units and
    upheld the judgment of the learned Single Judge and of the Division
[2025] 8 S.C.R.                                                       197

        M/s Torino Laboratories Pvt. Ltd. v. Union of India & Ors.


     Bench. Here again, the case turned on the peculiar facts of the case
     and can be of no assistance to the appellant.
29. In Sumangali vs. Regional Director, Employees’ State Insurance
    Corporation, (2008) 9 SCC 106, this Court found that the authorities
    had held that the clubbing of the entities was justified and there
    was functional integrality, unity in management, financial unity,
    geographical proximity, unity in supervision and control and general
    unity of purpose. It was also found by the authorities and the High
    Court that even if each unit had separate registration under different
    statutes, all units were inter-dependent and were supplementary and
    complementary to each for the sake of their textile business. This
    Court upheld the finding of the authorities and the High Court and
    dismissed the appeal of the employer.
30. In L.N. Gadodia and Sons and Another vs. Regional Provident
    Fund Commissioner, (2011) 13 SCC 517, the issue was whether the
    appellant - L.N. Gadodia and Sons and appellant No.2 in that case
    M/s Delhi Farming and Construction (P) Ltd. were rightly clubbed
    by the authorities as one entity for the purpose of the EPF Act? The
    Registered Office was common; one Director was admittedly common;
    the authorities found that there was a common Managing Director;
    that there were loans advanced by the appellant No.2 in that case to
    appellant No.1; two officers were found to be common, the telephone
    numbers were common and even the gram nos. “Gadodia Son” were
    common. The Tribunal reversed the finding of the authorities on the
    ground that the entities were separately registered. On a challenge
    by the authorities before the High Court, the High Court restored the
    finding of the Provident Fund Commissioner, after holding that the
    Tribunal was swayed by the factum of the companies being separate
    legal entities. On a further challenge to this Court, this Court upheld
    the finding of the Provident Fund Commissioner. D e a l i n g w i t h
    the question on the interpretation of Section 2-A of the Act and the
    submission that only different departments of an establishment can
    be clubbed but not different establishments altogether, this Court,
    while rejecting the submission held as under:-
           “23. The petitioners have contended that the two entities
           are two separate establishments. They have tried to draw
           support from Section 2-A of the Act which declares that
           where an establishment consists of different departments
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                         Supreme Court Reports


          or has branches whether situated in the same place or in
          different places, all such departments or branches shall
          be treated as parts of the same establishment. It was
          submitted that only different departments or branches
          of an establishment can be clubbed together, but not
          different establishments altogether. In this connection,
          what is to be noted is that, this is an enabling provision
          in a welfare enactment. The two petitioners may not be
          different departments of one establishment in the strict
          sense. However, when we notice that they are run by the
          same family under a common management with common
          workforce and with financial integrity, they are expected
          to be treated as branches of one establishment for the
          purposes of the Provident Funds Act. The issue is with
          respect to the application of a welfare enactment and the
          approach has to be as indicated by this Court in Sayaji Mills
          Ltd. [1984 Supp SCC 610.] The test has to be the one as
          laid down in Associated Cement Companies Ltd. [AIR 1960
          SC 56] which has been explained in Pratap Press [AIR
          1960 SC 1213].”
31. Hence, it will be clear from this judgment that the contention of the
    appellant herein that once there are two separate juristic entities,
    theory of clubbing cannot be invoked is completely untenable and
    is only stated to be rejected. It is common knowledge that artificial
    devices, subterfuges and facades are commonly resorted to, to create
    a smokescreen of separate entities for a variety of purposes. The
    Court of law faced with such a scenario has a duty to lift the veil and
    see behind applying the well-established tests to determine whether
    the entities are really separate entities or are they really a single
    entity. Myriad fact situations may arise. Hence, the contention that
    Section 2A cannot be applied if ostensibly two separately registered
    entities under the Companies Act are involved, has only to be stated
    to be rejected. This is especially so when the Court is interpreting a
    beneficial legislation like in the present case, namely, the EPF Act.
32. In L.N. Gadodia (supra), dealing with the aspect of burden of proof,
    this Court had the following pertinent observations to make:-
          “24. The Provident Fund Department had issued notice to
          the petitioners on 11-6-1990 on the basis of their inspection.
          It had relied upon the 1988 Audit Report of the petitioners.
[2025] 8 S.C.R.                                                            199

        M/s Torino Laboratories Pvt. Ltd. v. Union of India & Ors.


           The petitioners had full opportunity to explain their position
           in the inquiry before the Provident Fund Commissioner
           conducted under Section 7-A of the Provident Funds Act.
           The petitioners, however, confined themselves only to a
           facile explanation. If according to them, the management,
           workforce and financial affairs of the two companies
           were genuinely independent, they ought to have led the
           necessary evidence, since they would be in the best know
           of it. When any fact is especially within the knowledge of
           any person, the burden of proving that fact lies on him.
           This rule (which is also embodied in Section 106 of the
           Evidence Act) expects such a party to produce the best
           evidence before the authority concerned, failing which
           the authority cannot be faulted for drawing the necessary
           inference. In the facts and circumstances of the present
           case, the Provident Fund Commissioner was therefore
           justified in drawing the inference of integrity of finance,
           management and workforce in the two petitioners on the
           basis of the material on record.”
33. The last in the line that we propose to discuss is Shree Vishal Printers
    Limited, Jaipur vs. Regional Provident Fund Commissioner,
    Jaipur and Another, (2019) 9 SCC 508. This Court emphasised
    that facts would have to be viewed as a whole while each one of the
    facts by itself may not be conclusive. What is important is to consider
    cumulatively the facts of the case while applying the different tests
    laid down (See para 40).
34. A survey of the cases cited hereinabove reveal that it will be impossible
    to lay down any one test as an absolute and invariable test for all
    cases. The real purpose of the test is to find out the true relation
    between the Parts, Branches and Units. If in their true relation they
    constitute one integrated whole, it could be said that establishment
    is one and if not, they are to be treated as separate units. Each case
    has to be decided on its own peculiar facts, regard being had to
    the scheme and object of the statute under consideration and in the
    context of the claim. In a given case, unity of ownership, management
    and control may be the important test, while in certain other cases
    Functional Integrality or general unity may be the determinative
    consideration. In some instances, unity of employment could be the
    most vital test. Several tests may fall for consideration at the same
200                                                         [2025] 8 S.C.R.

                          Supreme Court Reports


       time since the mandate of the law is that the facts will have to be
       viewed as a whole. While each aspect may not by itself be conclusive,
       what is important is to consider cumulatively the facts while applying
       the different tests. The employer/management’s own conduct in
       mixing up or not mixing up the capital, staff and management could
       in a given case be a significant pointer. Mere separate registration
       under the different statutes cannot be a basis to claim that the units
       are separate. Similarly, maintenance of separate accounts and
       independent financial statement is also not conclusive. The onus
       lies on the employer/management to lead necessary evidence to
       bring home their contention.
35. Applying the above principles to the case, the findings arrived at
    by the APFC that the appellant and Vindas-respondent No.3 were
    engaged in the same industry; they carried on business in premises
    built on contiguous plots of land; that they shared common telephone
    and facsimile numbers; they shared common website and e-mail IDs;
    that their Registered Office/Head Office and administrative office
    were the same; they have employed common security to guard the
    premises; that there was unity of management inasmuch as while
    Dr. Darshan Kataria and Niranjan Kataria – the two brothers were
    Directors of respondent No.3-Vindas; Dr. Darshan Kataria was also
    the Director of the appellant while the other brother Vasudev Kataria
    and Mr. Rajni Kumari – wife of Darshan Kataria were Directors in the
    appellant-Company; that there was unity of finance inasmuch as the
    Hindu Undivided Family of Darshan Kataria and his family members
    funded both the companies, cumulatively establish beyond doubt that
    the two entities were rightly treated as common for the purpose of
    the EPF Act. If a common man were to be asked as to whether the
    two units are the same, the answer will be an emphatic yes.
36. The claim for infancy protection under the erstwhile Section 16(1)
    (d) would also not arise in view of our finding of clubbing. Being an
    integrated unit of Vindas respondent no. 3 since 1995 no separate
    infancy protection will enure to the benefit of appellant. Equally,
    untenable is the argument that the show cause notice originally
    being issued for coverage from 01.04.2004 the authorities were
    not justified to direct deposit of dues from September 1995. In fact,
    as would be clear from the factual narration hereinabove from the
    submissions of 10.10.2005 of the appellant itself it is clear that the
    authorities were evaluating the possibility of clubbing. Apart from
[2025] 8 S.C.R.                                                        201

           M/s Torino Laboratories Pvt. Ltd. v. Union of India & Ors.


     this, in the communication of 24.01.2005 it was clearly indicated
     that the stipulated date of 01.04.2004 was liable to change and a
     final decision was to be taken after inspection of previous report.
     The further report of 10.11.2005 furnished to the parties clearly
     dealt with the aspect of clubbing and appellant also responded to
     the same by its submission of 20.12.2005. In view of the same, we
     have no hesitation in rejecting the submissions of the appellant that
     the authorities were not justified in seeking remittance of the dues
     from September 1995. Similarly, the contention of the appellant that
     notice of clubbing ought to have been issued to Vindas-respondent
     No.3 also lacks merit. As rightly contended for the Authorities since
     the ultimate contribution was to be levied only for the respective
     employees of the units and since employees of Vindas-respondent
     No.3 were already covered for the period in question, there was no
     necessity for issuing notice to Vindas-respondent No.3.
37. For the reasons stated above, we find no merit in the appeal. The
    appeal is dismissed. No order as to costs.

     Result of the case: Appeal dismissed.




     †
         Headnotes prepared by: Divya Pandey