Esic vs M/S. Computal System & Services
2011 Latest Caselaw 5477 Del

*    IN THE HIGH COURT OF DELHI AT NEW DELHI

                         FAO 132/2009

                   Judgment delivered on: 15th November, 2011

     ESIC                                 ..... Appellant
                         Through:    Mr. K.P. Mavi, Adv.

                   versus

     M/S COMPUTAL SYSTEM & SERVICES. ..... Respondent
                  Through: Mr. O.P. Saxena, Adv.

CORAM:
HON'BLE MR. JUSTICE KAILASH GAMBHIR (ORAL):

*

1. By this appeal filed under Section 82 of the Employees

State Insurance Act, 1948, the appellant seeks to set aside the order

dated 22.11.2008, whereby in the learned court held the ESI Act not

applicable to the respondent organization.

2. The brief sequence of events that has led to the filing of

the present appeal is that the appellant held the Employees State

Insurance Act to be applicable to the respondent organization. That

the respondent organization claims itself to be an educational

institution and hence exempted from the coverage by the said Act and

hence filed a suit under section 75 of the ESIC Act wherein vide

judgment and decree dated 6.3.1997 the said Act was held to be

inapplicable to the respondent organization. The said order was

challenged by the appellant wherein this court vide order dated

6.2.2008 remanded the matter back for fresh adjudication. Thereafter

vide order dated 22.11.2008, the learned court held that the said Act

is not applicable to the respondent organization as it is not a shop but

an educational institution. Feeling aggrieved with the same, the

appellant has now preferred the present appeal.

3. Mr. K.P. Mavi, learned counsel representing the appellant

submits that the respondent has been running commercial

establishment as the respondent hires teachers from the market and

then sends them to different schools against consideration. The

contention of learned counsel for the appellant is that the respondent

is not carrying on any educational activity from its premises and, in

fact, is engaged in commercial activities and providing services of

teachers to other establishments and, therefore, the respondent is a

shop under sub-section(5) of Section 1 of the Employees State

Insurance Act, 1948. Learned counsel also submits that the

respondent in fact is registered under the Delhi Shops and

Establishments Act, 1954 and that fact again would show that the

respondent has been carrying on activity which can be easily termed

as an activity for running commercial establishment or a shop.

Learned counsel for the petitioner also submits that the judgment in

the case of Hindu Jea Band -vs- Regional Director, Employees' State

Insurance Corporation, AIR1987SC1166 was misconstrued and

misinterpreted by the learned Trial Court. Learned counsel also

places reliance on the judgment of the Hon'ble Supreme Court in the

case of Employees State Insurance Corporation -vs- R.K. Swamy &

Ors., AIR1994SC1154 wherein the Hon'ble Apex Court has also

placed reliance on the said Hindu Jea Band case (supra).

4. Opposing the present petition, Mr. O.P. Saxena, learned

counsel representing the respondent submits that the respondent is

engaged in the educational activity as after giving training to the

teachers they are sent to render services to various public schools on

hire basis. Counsel thus states that the activity of the respondent

cannot be treated either in the nature of the shop and, therefore, the

provisions of Employees State Insurance Act, 1948 cannot be made

applicable to the respondent. Counsel further submits that the order

passed by the ESI Court is a reasoned order and the same does not

warrant any interference of this Court.

5. I have heard learned counsel for the parties at

considerable length and gone through the records.

6. The case of the appellant is that the ESI Act is applicable

to the respondent organization as it is a shop doing commercial

activity as it hires teachers and sends them to various schools for

giving computer education. The case of the respondent on the other

hand it is an educational institution imparting computer training to

students at its centre at Mayapuri and also sends its teachers to

various schools for imparting computer education. The onus was on

the appellant to prove that the respondent organization was a shop

and covered under the ESI Act. During the course of arguments, a

copy of the survey report dated 11.7.89 was produced before the

Court. In part B column 2(b) of the said report, which relates to

nature of work, the remark states "providing teachers to public

schools for teaching computer science", but the entire report nowhere

reveals that what information was collected or available with the

inspector to form an opinion that the respondent can be considered as

a shop by virtue of which the ESI Act would be applicable to the

respondent organization. A look at the deposition of the witnesses of

the appellant also does not disclose the reason for forming such an

opinion. RW1, RW 2 and RW have nowhere disclosed any material on

record to show that the respondent organization is a shop and not an

educational institution. The respondent organization's witnesses by

virtue of their deposition and cross examination have been able to

prove that the respondent organization is imparting computer

education to students in their own centre and also by giving the

services of the teachers to other school and educational institutions.

The respondent also placed on record certain agreements executed by

the respondent with the schools to prove that the respondent was

rendering services of teachers training to schools and under certain

clauses the respondent was not charging anything from the schools

for delivering them the computers and necessary equipment and

books .In the absence of any evidence produced on record, it is

difficult to believe that the respondent is engaged in the any activity

of any nature which can be said to come within the ambit of a shop to

which the ESI Act would be applicable.

7. The word shop is nowhere defined in the Act but by virtue

of judicial pronouncements there are factors which can be helped to

determine whether the organization or establishment in question is a

shop or not. The judgment in Employees State Insurance Corporation

-vs- R.K. Swamy & Ors., AIR1994SC1154 relied upon by the appellant

also reiterates some factors which can be taken into consideration to

find whether the establishment is a shop or not and there is no

dispute with this settled legal position. But in the light of the fact that

the appellant has not been able to bring any material on record, oral

or documentary to show that the nature of activity carried on by the

respondent organization is a shop, the said judgment would not come

to its rescue.

8. Hence, after having carefully perused the impugned order

and evidence adduced by both the parties, this Court does not find

any illegality or perversity in the impugned order. There is no merit in

the present petition and the same is hereby dismissed.

KAILASH GAMBHIR,J NOVEMBER 15, 2011 tp/rkr