Functional integrality governs EPF coverage; common ownership and premises alone cannot justify clubbing two partnership firms.

Common ownership, common premises and similar business objects do not by themselves justify treating two partnership firms as one establishment under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952; the controlling test is functional integrality, including whether one unit can survive independently if the other closes and whether finance and employment remain distinct. Reliance only on common management and location, without examining mutual dependence and survivability, is insufficient. On that basis, the clubbing of the firms as one establishment was held unsustainable and the matter was directed for fresh inquiry.

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Issues: Whether the two partnership firms could be treated as one establishment for the purpose of coverage under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, on the basis of common ownership, common premises and common business objects.

Analysis: Coverage of establishments under the Provident Fund Act depends on whether the units form one integrated whole, and the relevant inquiry is functional integrality. The decisive test is whether the later unit can survive independently if the other unit is closed, and whether the employer has kept the units distinct in matters of finance and employment. Common partners, common premises and similarity of business by themselves do not establish functional integrality. The authority below relied mainly on common management and location, without examining the controlling question of mutual dependence and survivability.

Conclusion: The clubbing of the two firms as one establishment was unsustainable, and the impugned order was set aside with a direction for fresh inquiry.

Ratio Decidendi: For determining whether units constitute one establishment under the Provident Fund Act, common ownership or common premises is insufficient by itself; the governing test is functional integrality, namely whether one unit can reasonably survive without the other.

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