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2.7. Aggrieved by the award passed by the labour Court, the Management of TI Diamond Chain Limited had filed the writ petition before this Court, in W.P.No.23614 of 2006.

2.8. The learned counsel appearing on behalf of the petitioner in the writ petition had stated that there was no functional integrality between the two units. The question as to whether the two independent units, namely, the cycle chain manufacturing unit and the industrial and automotive chain manufacturing unit had functional integrality ought to have been considered from the point of interdependency of the two units. Even though there were no materials available on record, the labour Court had erroneously held that there was functional integrality between the two units.

14. It had been further stated that for finding out the existence of functional integrality between two entities, a bundle of facts should be in existence. No single factor could be taken into account, separately, to find out the existence of the functional integrality between the entities. Even though one of the factories had been closed down, the other has been carrying on its manufacturing process. Therefore, it is not open to the appellants to contend that functional integrality had been established, based on the evidence available on record. There can be functional integrality only if both the factories are functioning.

"Keeping in view the law laid down by the Apex Court in the aforesaid cases the question that requires to be considered in this proceeding is, whether the petitioner Company can survive even if the trading establishment of other three entities are closed forever. To answer and set aside the test of functional integrality, as is apparent from the impugned order, the respondent has applied only the test of geographical proximity and alleged financial dependency to hold that all the said four units can be clubbed together for the purpose of the said Act. Therefore, in our considered view, the facts recorded and test applied by the respondent in the impugned order is not the relevant test to consider the applicability of Section 2-A of the said Act. The pre-determining test as enunciated by the Supreme Court is, whether subsequent units would survive on the closure of the petitioner unit and whether in matters of finance and employment the employer has actually kept the two units in common, distinct or integrated. Mere fact of common ownership of the two units and mere location of the two units in common building complex by itself is not sufficient to satisfy the test of functional integrality and further mere common object of common ownership of the two units and mere location of the two units in common premises or building by itself would not be sufficient to satisfy the test of functional integrality. The first and foremost test to establish the functional integrality would be, whether the second unit would survive in the absence of first unit or when the first unit is closed whether the second unit continue to do its business activity. This aspect has not been noticed by the respondents at all in its impugned order."
While pointing out that it was impossible to lay down any one test as an absolute and invariable lest for all cases it observed that the real purpose of these tests would be to find out the true relation between the parts, branches, units etc. This court however mentioned certain tests which might be useful in deciding whether two units form part of the same establishment. Unity of ownership, unity of management and control, unity of finance and unity of labour, unity of employment and unity of functional "integrality" were the tests which the Court applied in that case. It is obvious there is an essential difference between the question whether the two units form part of one establishment for the purposes of Section 25E(iii) and the question whether they form part of one single industry for the purposes of calculation of the surplus profits for distribution of bonus to Workmen in one of the units. Some assistance can still nevertheless be obtained from the enumeration of the tests in that case. Of all these tests the most important appears to us to be that of functional "integrality" and the question of unity of finance and employment and of labour. Unity of ownership exists ex hypothesi. Where two units belong to a proprietor there is almost always likelihood also of unity of management. In all such cases therefore the Court has to consider with care how far there is "functional integrality" meaning thereby such functional interdependence that one unit cannot exist conveniently and reasonably without the other and on the further question whether in matters of finance and employment the employer has actually kept the two units distinct or integrated."