Coverage of Two Educational Institutions Under EPF Act Is Valid: Supreme Court

In a significant decision, the Supreme Court of India has upheld the coverage of two educational institutions, managed by the same Society, under the Employees' Provident Fund (EPF) Act. The judgment, delivered on October 12, 2023, dismisses the appeal by M/s Mathosri Manikbai Kothari College of Visual Arts, challenging the applicability of the EPF Act.

The Supreme Court, in its ruling, made several crucial observations:

1. "There is financial integrity between the Society of the appellant as well as the Ideal Institute as substantial funds have been advanced to the Institutes by the Society."

  "Both the Institutes are functioning from the same premises."

3. "Documents such as accreditation certificates, audit reports, and bank statements establish the connection between the establishments."

The judgment underscores the importance of functional integrity between establishments managed by the same entity for the purpose of coverage under the EPF Act. The Court emphasized the need for transparency and compliance with EPF regulations to ensure the welfare of employees.

The case revolved around M/s Mathosri Manikbai Kothari College of Visual Arts, which challenged the applicability of the EPF Act to its establishment. The dispute arose when the Enforcement Officer reported that a total of 26 employees were working in both the College and the Ideal Institute, managed by the same Society.

Despite the appellant's claims of independence between the institutions, the Court found compelling evidence of financial integration and geographic proximity. The Court also noted that both institutions received grants and were located on the same premises.

With this judgment, the Supreme Court has reaffirmed the principles governing the coverage of establishments under the EPF Act. The decision underscores the importance of transparency and adherence to EPF regulations in institutions managed by the same entity.

The judgment serves as a significant legal precedent for cases involving the applicability of the EPF Act to educational institutions and other establishments under common management.

Date of Decision: October 12, 2023

M/s MATHOSRI MANIKBAI KOTHARI   COLLEGE OF VISUAL ARTS vs THE ASSISTANT PROVIDENT FUND  COMMISSIONER

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