THE HONOURABLE SMT. JUSTICE P. MADHAVI DEVI
CIVIL MISCELLANEOUS APPEAL NO.620 OF 2012
JUDGMENT
This is an Appeal filed by the appellant against the order dt.15.11.2010 made in E.I.C.No.18 of 2006 on the file of the Employees Insurance Court and Chairman, Industrial Tribunal-1, Hyderabad.
2. Brief facts leading to filing of this case are that the appellant/petitioner is an industry situated at Lingojiguda, Choutuppal Mandal, Nalgonda District. The Inspector of the respondent Corporation visited the industry premises on 23.10.2003 and found 10 employees working in the industry for wages. The Managing Partner of the petitioner confirmed that 10 persons are working in their establishment and on the basis of the same, the respondent Corporation came to the conclusion that the petitioner is covered by ESI Act and accordingly a letter allotting code No.52-22723-05 dt.12.11.2003 was issued to the petitioner requiring it to make compliance of the provisions of the ESI Act by registering/insuring their employees. The petitioner failed to comply with the provisions of Section 44 of the ESI Act by filing necessary returns and therefore it was issued notice in Form C-18 dt.01.03.2006 informing it of its failure to pay the contributions and submit returns. However, there 2 was no response from the petitioner and therefore an order under Section 45-A was passed directing the petitioner to pay a sum of Rs.30,724/- for the period from 01.10.2003 to 31.03.2005 within a period of 15 days from the date of the order, failing which the amount shall be caused to be recovered under Sections 45-C to 45-I of the EST Act. Against this order, the petitioner has filed the present Appeal.
3. It is submitted that the petitioner was not granted any time by the respondent before issuing the order under Section 45-A of the ESI Act and therefore it is in violation of the principles of the natural justice. It is further submitted that the petitioner unit was mainly seasonal and was having only 8 workers and therefore it was not covered under the provisions of the ESI Act. As regards the statement given by the Managing Partner to the Inspector of the ESI stating that there were 10 people working in the factory, the petitioner submitted that the said statement was given by its Managing Partner under a misconception and therefore the same should not have been considered.
4. Heard Sri Raj Kumar Rudra, learned counsel for the appellant who relied upon the following decisions seeking remand of the issue: 3
(1) M/s. Srinivasa Rice Mill Vs. Employee State Insurance Corporation1 (2) Amar Service Station Vs. The Assistant Regional Director2
5. Sri Venkateswarlu Gummadaveli, learned counsel for the respondent was also heard.
6. This Court finds that the Managing Partner of the petitioner himself has given the statement before the Inspector that 10 persons were working in their establishment at the time of the inspection and therefore ESI Act was applicable. It is also recorded by the officer who passed the order under Section 45-A of the ESI Act that in spite of the show-cause notice being given to the petitioner, the petitioner has failed to respond to it and has not given any details much less raised any objections on the applicability of the ESI Act to their industry. Except for stating that the petitioner is not covered by ESI Act as it was having only 8 persons working under it, the petitioner has not been able to produce any evidence to support this contention of the respondent. The learned counsel for the appellant now seeks another opportunity to represent and prove that ESI Act was not applicable to the appellant.
7. The Employees' State Insurance Act is an Act promulgated to benefit the employees of an establishment and in the absence of any 1 (2007) 1 SCC 705 2 Judgment in CMA No.898 of 2006 dt.27.07.2007 of A.P. High Court 4 evidence that the ESI Act is not applicable to the petitioner industry at the relevant point of time, it cannot be excluded from the applicability of the Act. However, the Hon'ble Supreme Court and also the Hon'ble A.P. High Court in the cases referred above (1 and 2 supra) in similar circumstances have remanded the issue to the ESI Authorities to reconsider the applicability of the provisions of the Act to the appellants therein. Therefore, this Court also sets aside the order passed under Section 45-A of the ESI Act dt.06.07.2006 and directs the respondent to reconsider the applicability of the provisions of the Act to the appellant. The appellant shall appear before the respondent and produce the necessary evidence on or before 30 days from the date of receipt of this order and thereafter, the respondent shall reconsider the issue in accordance with law within a period of 90 days thereafter.
8. The Civil Miscellaneous Appeal is accordingly disposed of. No order as to costs.
9. Pending miscellaneous petitions, if any, in this CMA shall stand closed.
___________________________ JUSTICE P. MADHAVI DEVI Date: 16.11.2021 Svv