Functional integrality test under provident fund law: separate units with distinct operations remain independent establishments despite common ownership.

Common ownership and administrative convenience do not, by themselves, make two industrial units one establishment under section 2-A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The decisive test is functional integrality: the units must be so interdependent that one cannot conveniently and reasonably exist without the other. Where the units are separately located, employ different workmen, manufacture different products, and maintain separate books, they remain distinct establishments. On those facts, the statutory condition for treating them as one establishment was not met, so the infancy benefit under section 16(1)(b) remained available.

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Issues: Whether the two industrial units, after amalgamation, constituted one establishment within the meaning of section 2-A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 so as to deny the petitioner the infancy benefit under section 16(1)(b) of that Act.

Analysis: The decisive test was whether the units were functionally integrated so that one could not conveniently and reasonably exist without the other, or whether they were merely separately located units under common ownership. The units were at different places, employed different workmen, manufactured different products, and maintained separate books of account. Common ownership, common administrative arrangements, and year-end consolidation of accounts were held insufficient to establish that one unit was a branch or department of the other. The statutory object of section 2-A was not attracted in the absence of functional interdependence.

Conclusion: The two units were distinct establishments and not branches or departments of one establishment. The petitioner was entitled to the infancy exemption under section 16(1)(b), and the contrary determination was unsustainable.

Final Conclusion: The petition succeeded and the petitioner retained the benefit of separate treatment for the two units under the Act.

Ratio Decidendi: For the purposes of section 2-A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, common ownership or administrative convenience is not enough; the decisive criterion is functional integrality and real interdependence between the units.

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