Bombay High Court
The Regional Director, Employees ... vs M/S. Kargaindia Roadways Pvt. ... on 27 April, 2023
Bench: P. K. Chavan
2023:BHC-AS:12786 11-FA-259-2021.doc
Shailaja
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
FIRST APPEAL NO.259 OF 2021
The Regional Director ]
Employee's State Insurance Corporation ]
108, Panchdeep Bhavan, N.M. Joshi ]
Marg, Lower Parel, Mumbai - 400 013. ] Appellant
Vs.
M/s. Kargaindia Roadways Pvt. Ltd. ]
(Formerly known as M/s. Soften ]
Carriers Pvt. Ltd.) 207, Swastik ]
Chambers, CST Road, Chembur, ]
Mumbai - 400 071. ] Respondent
.....
Ms. Anita M. Bafna, for Appellant.
Mr. S.C. Naidu a/w Mr. Manoj Gujar, Mr. T.R. Yadav, Ms. Divya
Yajurvedi, Mr. Sudeshkumar Naidu, Mr. Pradeep Kumar i/b C.R.
Naidu & Co., for Respondent.
.....
CORAM : PRITHVIRAJ K. CHAVAN, J.
RESERVED ON : 19th April, 2023.
PRONOUNCED ON : 27th April, 2023.
ORDER:
1. Heard Ms. Bafna, learned Counsel for the appellant and Mr.
Naidu, learned Counsel for the respondent.
2. The appellant had passed an order under section 45-A of the
Employee's State Insurance Act, 1948 (for short "E.S.I Act".). The
operative part of the said order which was passed by the Deputy
Director of the appellant reads thus;
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" In the above circumstances, it is fair and reasonable to
conclude that the employer has no case to represent and that
he has nothing to say against in the matter. Since the
employer has not raised any objection and not furnished any
records for verification, I am left with no other alternative
but to confirm the claim as already intimated to the employer
during the course of final hearings.
Considering the period of limitation applicable under the
section 45 A, the contribution is being determined as per
following details;
Sr. Nature of Period Amount of Basis For
No. Dues ------------------------ Contribution Calculation
(Omitted From To Payable
Wages)
1 Handling '12/2012 '03/2013 Rs.25,615/- (Rs.11,82,24
Charges 3.00/12* 4
Months) X
6.5%
2. Handling '04/2012 '09/2013 Rs.20,817/- (Rs.6,40,535.
Charges 00/12* 6
Months) X
6.5%
3. Own '12/2012 '3/2013 Rs.3,99,799/ (Rs.1,84,52,2
Vehicle - 82.00/12* 4
Expenses Months) X
6.5%
4. Own '04/2013 09/2013 Rs.4,63,449/ (Rs.1,42,59,9
Vehicle - 84.00/12* 6
Expenses Months)
6.5%
Total Rs.9,09,680/-
For the above reasons, I, Sanjiv Mishra, Deputy Director in
exercise of the powers delegated to me by the E.S.I
CORPORATION, think fit and accordingly order that
contributions totaling sum Rs.9,09,680/- (Rupees Nine Lakhs
Nine Thousand Six Hundred and Eighty only) is finally
determined as arrears of contribution payable by the employer in
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respect of the claim of the said show cause notice for the period
12/2012 to 09/2013 and you as one of the Principal employers
is hereby ordered to pay the said amount within 60 days from
the date of this order failing which it shall be caused to be
recovered under Sec 45 C to 45 I of the ESI Act, 1948".
3. Respondent-original applicant challenged the said order
before the Judge, Employees Insurance Court at Mumbai. The
learned Judge after considering the record and hearing the
respective Counsel passed the impugned order, thereby allowing the
application of the respondent, inter alia, holding that the order
passed by the appellant under Section 45-A of the ESI Act claiming
contribution of Rs.9,09,680/- is unjust, improper and illegal and,
therefore, it was quashed and set aside. It was, inter alia, directed to
the respondent to withdraw the amount deposited by it with the
office of the said Court under section 75 (2B) of the ESI Act, against
which, the present appeal has been preferred.
4. At the outset, it is argued by the learned Counsel for the
appellant that though the respondent had paid certain amount
under the head of "Handling Charges" and under "Vehicle
Expenses", however, the said payment involved wages and,
therefore, the respondent is liable to pay the contribution.
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5. Upon being asked, as to what is the substantial question of
law involved in this appeal, learned Counsel has simply submitted
that the issue involved is of general public importance which,
according to her is the substantial question of law and, therefore,
the appeal needs to be admitted. She further submits that the
learned Judge has committed an error in setting aside a well
reasoned order passed by the appellant under Section 45-A of ESI
Act. She has invited my attention to the fact that the respondent is
into a business of transportation and delivery of goods at various
places all over the country for which he owns trucks and trailers.
He has been paying handling charges and incurs vehicle expenses
which are shown in the balance-sheets. The respondent could not
justify from any document as to why the expenses were incurred by
it and how it will not fall under the definition of "Wages".
6. Learned Counsel for the respondent, however, vehemently
urged to dismiss the appeal as it does not involve any substantial
question of law under section 82 (2) of the E.S.I Act.
7. I have considered the impugned judgment. Section 82 (2) of
the E.S.I Act contemplates that an appeal shall lie to the High Court
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from an order of an Employees' Insurance Court if it involves a
substantial question of law. Learned Counsel for the respondent has
invited my attention to a judgment of this Court in Letters Patent
Appeal No.97 of 1985 in First Appeal No.445 of 1984 in case of
Dainik Deshdoot and others Vs. The Employees' State Insurance
Corporation and others1. The Division Bench of this Court
comprising then Chief Justice has laid down the meaning of
"substantial question of law" by referring to a judgment of five
Judges of Hon'ble Supreme Court in case of Sir Chunilal V. Mehta
Vs. Century Mills2 while considering the expression "substantial
question of law" in Article 133 of the Constitution, as it stood then,
it was held as under:-
"The proper test for determining whether a
question of law raised in the case is substantial
would, in our opinion, be whether it is of
general public importance or whether it
directly and substantially affects the rights of
the parties and if so whether it is either an
open question in the sense that it is not finally
settled by this Court or by the Privy Council or
by the Federal Court or is not free from
difficulty or calls for discussion of alternative
views. If the question is settled by the highest
Court or the general principles to be applied in
determining the question are well settled and
there is a mere question of applying those
1 1995 I CLR 446
2 AIR 1962 SC 1314
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principles or that the plea raised is palpably
absurd, the question would not be a substantial
question of law".
8. The Division Bench has further referred to a judgment of the
Hon'ble Supreme Court in the case of Mahindra and Mahindra Ltd
Vs. The Union of India and another 3. A three Judge Bench has
observed thus;
"What should be the test for determining whether
a question of law raised in an appeal is substantial
has been laid down by this Court in Sri Chunilal V.
Mehta and Sons Ltd. v. The Century Spinning and
Manufacturing Co. Ltd., 1962 Supp. (3) SCR 549:
(AIR 1962 SC 1314) and it has been held that the
proper test would be whether the question of law
is of general public importance or whether it
directly or substantially affects the rights of the
parties, and if so, whether it is either an open
question in the sense that it is not finally settled by
this Court or by the Privy Council or by the
Federal Court or is not free from difficulty or calls
for discussion of alternative views".
9. As already stated hereinabove, the learned Counsel for the
appellant has not been able to formulate any substantial question of
law, much less, a substantial question of law to be involved in this
appeal. All that has been argued is that the question is of general
public importance. The learned Employees Insurance Court has
3 AIR 1979 SC 798
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rightly appreciated the evidence on record while coming to the
conclusion, as stated hereinabove. The learned trial Court in
paragraph 26 has observed thus;
"26. As far as order u/s. 45-A of the Act is
concerned, the Opponent Authority in its order,
nowhere discussed how the wage component is
involved in the handling charges and own vehicle
expenses. Further, nowhere discussed that, any
employee defined under the ESI Act was involved.
Therefore, this Court comes to the conclusion
that, the Applicant succeed to show that, the
amount spent by Applicant under the head of
handling charges and own vehicle expenses
during the period December - 2012 to September
- 2013 not attract wages defined u/s. 2 (22) of the
ESI Act, 1948. Further, the Applicant succeed to
prove that, the order u/s. 45-A of the ESI Act
dated 27/11/2017 claiming contribution of
Rs.9,09,680/- is unjust, improper and illegal".
10. Section 45-A of the E.S.I Act clearly provides that Employees
State Corporation may on the basis of information available to it, by
order, determine the amount of contributions payable in respect of
the employees of the factory or establishment. Before determining
the liability under section 45-A of the Act, it is necessary to give
reasonable opportunity of being heard to the employer. The
compliance of the principles of natural justice by the Corporation
before determination of such contribution is not ruled out.
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11. Thus, in view of the aforesaid discussion, no substantial
question of law is involved in the present appeal and, therefore, it
stands dismissed.
[PRITHVIRAJ K. CHAVAN, J.]
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