THE HONOURABLE JUSTICE G. SRI DEVI
C.M.A. No. 17 of 2007
JUDGMENT:
This Civil Miscellaneous Appeal is filed under Section 82 (2) of the Employees State Insurance Act, 1948 (for short "the Act"), against the dismissal order, dated 19.06.2006, passed in E.I. Case No.96 of 2002 on the file of the Employees Insurance Court and Chairman, Industrial Tribunal-I, Hyderabad, which was filed under Section 75 (1) (g) of the E.S.I. Act for setting aside the order, dated 29.10.2002.
Brief facts of the case are as under:
M/s. Balaji Grand Bazar at Hyderabad, a Factory/ Establishment covered under the E.S.I. Act, 1948 with Code No.52- 15219, was required to pay contribution and submit Return of Contribution under Section 40/44 of the Act read with Regulations 26, 29 and 31 of the E.S.I.(General) Regulations. As the Principal Employer failed to pay contribution and file Return, a show cause notice in C.18 Form of even number, dated 25.07.2002, was issued to the employer to show cause within 15 days why contribution as proposed in the said notice be not recovered from him affording an opportunity to represent his case in person with records on 22.08.2002. After receiving the said notice, the appellant neither replied nor appeared before the respondent herein. It is found from the Inspection Report that the factory/establishment was required 2 to submit Return of Contribution along with payment challans for the period from 4/2000 to 9/2001. As the appellant failed to comply with the statutory requirements, a show cause notice invoking Section 45-A of the Act was issued proposing to determine the contribution indicated in the said notice. As the appellant failed to respond to the notice and failed to make any personal appearance opposing the proposed determination, the respondent having no other alternative, passed the order dated 29.10.2002, determining the contribution totalling to Rs.71,107/- for the period from 4/2000 to 9/2001 and directed the appellant to pay the said amount within a period of 15 days from the date of the said order, failing which the same shall be recovered under Section 45-C to 45-I of the Act. Aggrieved by the same, the petitioner filed E.I.Case No.96 of 2002 before the Chairman, Industrial Tribunal-I, Hyderabad, to set aside the order, dated 29.10.2002 passed by the respondent.
During the course of hearing, on behalf of the appellant P.Ws.1 to 3 were examined and got marked Exs.P1 to P18 and Exs.X1 to X7. On behalf of the respondent, R.Ws.1 to 3 were examined and got marked Exs.R1 to R8.
After considering the oral and documentary evidence, the Chairman, Industrial Tribunal-I, Hyderabad, dismissed the petition and permitted the respondent to withdraw the amount of Rs.18,000/- deposited by the appellant under Section 75(2-B) of the 3 ESI Act towards part-payment of the impugned order after appeal time is over. Challenging the same, the appellant has preferred the present Civil Miscellaneous Appeal.
Heard learned Counsel appearing for the appellant, learned Counsel appearing for the respondent and perused the record.
Learned Counsel for the appellant would submit that the Tribunal did not properly appreciate various documents that were filed on behalf of the appellant with regard to the fact that Balaji Grand Bazar and Balaji House of Child Care are two separate and distinct entities; that while Balaji Grand Bazar deals with general items, Balaji House of Child Care deals with general and child related items; that the respondent failed to see that the appellant did not engage more than ten employees at any point of time since both the entities are separate and distinct; that the Tribunal also failed to look into the fact that the Proprietor of Balaji Grand Bazar is Rameshchand Agarwal and the Proprietor of Balaji Child Care Unit is Rajesh Kumar Agarwal and the same is clear from Exs.P13 to P18 and Exs.X4 to X.7; that without scrutinizing the documentary evidence, the Tribunal has come to an erroneous conclusion that the appellant did not mention about the claim statement of Balaji Child Care Unit at all, which is contrary to Exs.X4 to X7 documents pertaining to Balaji House of Child Care unit; that the Tribunal, without proper appreciation of facts and circumstances of the case, clubbed the two different and distinct entities together and has 4 come to the erroneous conclusion that there are 29 persons employed in the appellant's firm i.e. 10 in Balaji Grand Bazar, 10 in Balaji House of Child Care and 9 in godown purely relying on and giving undue importance to the statements made by the respondent's representative with regard to the fact that its officials visited the firm of the appellant and found that there are 20 employees working in Balaji Grand Bazar and Balaji House of Child Care and both the entities were located in the same premises. It is also submitted that the appellant has not received any notice from the respondent on 20.03.2002 as has been stated in the order, dated 29.10.2002. The findings of the Tribunal and the respondent that the appellant has employed more than 20 persons, because of which the appellant was brought under the purview of the E.S.I. Act is contrary to the documentary evidence filed by the appellant. Both the Tribunal and the respondent did not properly appreciate the fact that the notice, dated 16.01.2001, was issued to the appellant that the Inspector of the Respondent would verify the records on 08.02.2001. However, no such enquiry was ever conducted. Without conducting any enquiry and without properly scrutinizing the documents, the order has been passed, bringing the appellant herein under the purview of the E.S.I. Act. In support of his contentions, he relied on the judgments of the Madras High Court in Fenner Garments v. Dy.Regional Director, E.S.I.C.1 and in 1 Manu/TN/0265/1993 5 E.S.I.C. v. Trichy Dist.Co-op. Milk Producer's Union Ltd., Tiruchirapalli2.
Learned Counsel for the respondent would submit that the appellant/employer himself admitted that 20 or more persons worked on a particular date. Therefore, there is no substantial question of law involved and as such the appeal is liable to be dismissed on this ground alone. It is also submitted that both Balaji Grand Bazar and Balaji's House of Child Care are one unit and not separate units as contended by the appellant and for both the said units Ramesh Chand Agarwal is the Proprietor, but not P.W.3- Rajesh Kumar Agarwal and that nowhere under Exs.X1 to X7, Rajesh Kumar Agarwal was referred as Proprietor of Balaji Child Care Unit. It is further submitted that P.W.2, in his cross- examination, admitted that Balaji Grand Bazar and Balaji House of Child Care are situated in one building and phone numbers of the two units is one and the same. He further submits that in similar circumstances the Apex Court in Sumangali v. The Regional Director, Employees State Insurance Corporation3 upheld the coverage of the establishment under E.S.I. Corporation. He also relied on the judgment of Madras High Court in Regional Director, Employees State Insurance Corporation v. Aruna Stores, Proprietrix J.Shantha4.
2 Manu/TN/0421/1994 3 (2008) 9 SCC 106 4 (2005) 1 Mad.LJ 354 6 Now the main point that arises for consideration is "whether the Balaji Grand Bazar and Balaji House of Child Care are one unit or they are different and distinct"?
As seen from the material on record, P.W.1, who is the Proprietor of Balaji Grand Bazar, in his cross-examination admitted that Balaji Grand Bazar is situated in the ground floor, whereas Balaji House of Child Care is situated in the first floor and the entrance for both the units is one and the same. P.W.1 also admitted that there is a godown to Balaji Grand Bazar and two workers are working in the godown. P.W.2, who is the Accountant of Balaji Grand Bazar, in his cross-examination, admitted that Balaji Grand Bazar and Balaji House of Child Care Unit are situated in one building and the entrance for both the units is one and the same. He further admitted that the phone numbers of both the units are also one and the same. He also admitted that there is a godown to Balaji Grand Bazar and he does not know whether there are ten workers in Balaji Grand Bazar, ten workers in Balaji House of Child Care and nine workers in the godown of Balaji Grand Bazar. He also admitted that there are no branches to the appellant anywhere in Hyderabad City. P.W.3, who is the proprietor of Balaji House of Child Care, in his cross-examination, admitted that he has no document to show that he was the Proprietor of the said Balaji House of Child Care and that he was using the phone of the down stairs building. He also admitted that the names of the employees, 7 which were shown to him as part of the inspection report of the Inspector, were written by him and in the said list, he has shown Balaji Grand Bazar and Balaji House of Child Care separately with twenty employees each in the said list.
The E.S.I. Act is enacted with a view to ensuring social welfare and for providing safe insurance cover to Employees who were likely to suffer from various physical illness during the course of their employment. Such a beneficial piece of legislation has to be construed in its correct perspective so as to fructify the legislative intention underlying its enactment. I have carefully gone through the impugned judgment and the order passed by the respondent and also the oral and documentary evidence available on record. The Tribunal has framed the issues on the basis of the pleadings of the parties and has given cogent reasons while dismissing the petition. It is evident from the Preliminary Inspection Report, dated 10.01.1998 and 12.01.1998, submitted by the Inspectors of the ESI Corporation, who have visited the appellant establishment, that 29 employees were working on the date of inspection. Accepting Exs.P2 to P7, the Tribunal has rightly concluded that there was no violation of the principles of natural justice as it was an admitted fact in the evidence that opportunity of personal hearing was given to the appellant. In view of the admissions made by P.Ws.1 to 3 and since both M/s. Balaji Grand Bazar and Balaji House of Child Care are functioning in the same premises, there is common bill 8 counter, common entrance, the Tribunal has considered these crucial facts and has accepted the version of the Corporation. Therefore, the order under challenge does not suffer from any illegality or infirmity warranting interference of this Court. Hence, I do not find any merit in the appeal and the same is liable to be dismissed.
Accordingly, the Civil Miscellaneous Appeal is dismissed. There shall be no order as to costs.
Miscellaneous petitions, if any, pending shall stand closed.
___________________ JUSTICE G. SRIDEVI 24.03.2021 Gsn/gkv