Khadi Gramdyog Emporium vs Deputy Regional Director
2017 Latest Caselaw 930 Bom

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                IN THE HIGH COURT OF JUDICATURE AT BOMBAY,

                        NAGPUR BENCH : NAGPUR



First Appeal No. 762 of 2004



Appellant               :          Khadi Gramodyog Emporium, Gandhi

                                   Sagar, Nagpur by its Secretary & Manager

                                   versus

Respondent              :          Deputy General Director In-charge, 

                                   Employees State Insurance Corporation,

                                   ESIC Bhavan, Ganeshpeth, Nagpur

                                   ---------

First Appeal No. 766 of 2004

Appellant : Khadi Gramodyog Emporium, Gandhi

Sagar, Nagpur by its Secretary & Manager

versus

Respondent : Deputy General Director In-charge,

Employees State Insurance Corporation,

ESIC Bhavan, Ganeshpeth, Nagpur

Shri S. S. Ghate, Advocate for appellant in both appeals

Shri V. P. Maldhure, Advocate for respondent in both appeals

Coram : A. S. Chandurkar, J

Dated : 21st March 2017

Oral Judgment

1. In these appeals filed under Section 82 of the Employees

State Insurance Act, 1948 the following substantial question of law have

been framed :

"Wether the Spinners and Weavers are the

employees within the meaning of Section

2 (9) of the Employees State Insurance

Act, 1948 ?"

2. The Employees' State Insurance Court, Nagpur by order

dated 29th September 2004 decided two applications under Section 75 (1)

of the Employees State Insurance Act, 1948 (for short, "the said Act")

and held that in view of relationship of employer and employee being

established by the Corporation, the demand as made under Section 45A of

the said Act was legal and valid.

3. Shri S. S. Ghate, learned counsel for the appellant submitted

that the relationship of employer and employee was not duly proved by

the Corporation on which said burden was cast as it had demanded

contribution on that basis from the employer. It is submitted that no

evidence was led by the Corporation in that regard and thus, the stand of

the appellant that the engagement was purely on piece work basis has

been duly proved. He submits that in matters where similar demands

were made the appellant had filed appeal being First Appeal No. 765 of

2004 and First Appeal No. 753 of 2004 and this Court had held that there

was no relationship of employer and employee between the appellant and

piece-rated workers. He submitted that identical evidence was led by the

appellant before the Insurance Court. He placed reliance upon the

adjudication in Khadi Gramodyog Emporium v. Deputy Regional

Director, Incharge reported in 2016 (4) Mh. L. J. 631 in that regard.

4. Shri V. P. Maldhure, learned counsel for the respondent supported

the impugned judgment. According to him, as per the inspection report

and the other material on record, the relationship of employer and

employee had been duly established. He, however, does not dispute the

adjudication in other appeals which were filed by the appellant herein.

5. After hearing respective counsel and after perusing the

material on record as well as the adjudication in First Appeal Nos. 753 of

2004 and 765 of 2004, it is found that similar evidence was taken into

consideration and it was held that the relationship of employer and

employee between the appellant and piece-rated workers was not

established. The evidence on record brought by the appellant indicates

the spinners and weavers merely received honorarium from the appellant

but they were not subjected to any disciplinary or administrative control.

The work of weaving was being done by the weavers at their own

residence and they were paid on piece-rate basis. As noted above, the

Corporation did not lead any evidence to substantiate this aspect of the

matter. On consideration of the evidence led by the appellant in these

appeals, it can be seen that the demand of contribution as made by the

Corporation is without establishing the relationship of employer and

employee between the appellant and the persons who were doing the

work of spinning and weaving. Hence, for the reasons recorded in the

judgment referred to by learned counsel for the appellant in similar

proceedings initiated against the appellant as well as on consideration of

the evidence on record in the present proceedings, the substantial

question of law will have to be answered in favour of the appellant by

holding that the workers engaged in weaving and spinning activities were

not employees within the meaning Section 2 (9) of the said Act.

6. In view of the aforesaid, the judgment of the ESI Court,

Nagpur dated 29.9.2004 is quashed and set aside. The appellant would

be entitled for refund of the amount paid by it in accordance with the

rules. The appeals are allowed in aforesaid terms. No costs.

The amount deposited by the appellant pursuant to the

interim orders passed, shall be repaid to the appellant with accrued

interest.

A. S. Chandurkar, J

joshi