Sushil Goyal vs Luckson Siddique & Ors.
2014 Latest Caselaw 483 Del

29

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

+                       FAO No. 244/2010

%                                               27th January, 2014

SUSHIL GOYAL                                   ......Appellant
                        Through: Mr. Pardeep Gupta, Advocate

                        VERSUS

LUCKSON SIDDIQUE & ORS.                     ...... Respondents

Through: Mr. Abhay Singh, Ms. Veena Singh, Ms.Vindhya Singh, Advocates for respondent Nos. 1 to 5.

Mr. Hari Kishan, Mr. H.S. Kohli, Advocates for respondent No. 6.

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not? Yes

VALMIKI J. MEHTA, J (ORAL)

1. By this first appeal filed under Section 30 of the Workmen's

Compensation Act, 1923 challenge is laid to the judgment of the

Employees Commissioner dated 20.5.2010 by which the Commissioner

allowed the compensation claim filed by respondents herein, and who

were the legal representatives/dependents of the deceased workman Sh.

Aftab Alam.

2. The Commissioner by the impugned judgment has upheld the

relationship of employer and employee between the appellant/employer

(respondent before the Commissioner) and the deceased Sh. Aftab Alam

who on 12.7.2007 was working as the supervisor/operator while

discharging his duties under the electricity pole at B-2521, DSIDC

Industrial Area Narela, Delhi. The deceased Sh. Aftab Alam died

because an iron pipe hit the electricity line and the same resulted in

electrocution of Sh. Aftab Alam, who died on the spot. An FIR bearing

no. 384/2007 was also registered with the Police Station at Narela, Delhi

under Section 304A IPC.

3. Appellant admitted that the deceased Sh. Aftab Alam was his

workman, however, it was claimed that the appellant was not liable, but

that the liability was of ESIC. The argument urged on behalf of the

appellant is crystallized in the admission order of this appeal on

13.10.2011 and which reads as under :

"CM No. 11616/2010 Interim orders are made absolute till the disposal of the appeal.

CM stands disposed of.

FAO No. 244/2010 Admit.

It is urged by learned counsel for the appellant relying upon Bharagath Engineering Vs. R.Ranganayaki and Anr. (2003) 2 SCC 138 that once the establishment of

the appellant was covered/registered under the Employees' State Insurance Act, 1948 (in short 'ESI Act'), then employees will be entitled to the benefits from the ESI Corporation, even assuming the contributions to the corporation are not paid by the appellant. Reliance is also placed upon Section 53 of the Employees' State Insurance Act, 1948, which states that once an establishment is covered under the ESI Act, then the provisions of Employee's Compensation Act, 1923 would not apply. Accordingly, it will therefore be necessary to issue notice to the ESI Corporation which is added as respondent no.6 in this appeal. Amended memo of parties be filed within two weeks along with the process fee for service.

Notice now be issued to the respondent no.6/ESI Corporation, on filing of process fee, both in the ordinary method as well as by registered AD post, returnable on 27th January, 2012.

Copy of this order be sent along with the notice."

4. Before me, learned counsel for the appellant/employer refers to

various paragraphs of the judgment of the Supreme Court in the case of

Bharagath Engineering Vs. R. Ranganayaki and Anr. (2003) 2 SCC

138 to argue that once the employee was an insured person from his date

of employment, consequently, even if insurance premium is not paid, the

liability will be of ESIC and not of the appellant. Reliance is placed by

learned counsel for the appellant on paras 9 to 12 of the said judgment

which read as under:

"9. It is to be noted that the crucial expression in Section 2(14) of the Act is 'are or were payable'. It is the

obligation of the employer to pay the contribution from the date the Act applies to the factory or the establishment. In E.S.I. v. Harrisson Malayalam Pvt. Ltd. (1994)ILLJ12SC , the stand of the employer that employees are not traceable or that there is dispute about their whereabouts does not do away with the employer's obligation to pay the contribution. In E.S.I. Corporation v. Hotel Kalpaka International (1993)ILLJ939SC , it was held that the employer cannot be heard to contend that since he had not deducted the employee's contribution on the wages of the employees or that the business had bene closed, he could not be made liable. Said view was reiterated in Employees' State Insurance Corporation v.Harrisons Malayalam Limited (1999)ILLJ284SC That being the position, the date of payment of contribution is really not very material. In fact, Section 38 of the Act cases a statutory obligation on the employer to insure its employees. That being a statutory obligation, the date of commencement has to be from the date of employment of the concerned employee.

10. The scheme of the Act, the Rules and the Regulations clearly spell out that the insurance covered under the Act is distinct and different from the contract of insurance in general. Under the Act, the contributions go into a Fund under Section 26 for disbursal of benefits in case of accident, disablement, sickness, maternity, etc. The contribution required to be made is not paid back even if an employee does not avail any benefit. It is to be noted that under Regulation 17-A, if medical care is needed before the issuance of temporary identification certificate, the employer is required to issue a certificate of employment so that the employee can avail the facilities available. 'Wage period', 'benefit period' and 'contribution period' are defined in Section 2(23) of the Act, Rule 2(1C) and Rule 2(2-A) of the Rules. Rule 58(2)(b) is a very significant provision. For a person who becomes an employee for the first time within the meaning of the Act, the contribution period under

Regulation (4) commences from the date of such employment from the contribution period current on that day and corresponding benefit period shall commence on the expiry of the period of nine months from the date of such employment. In cases where employment injuries results in death before the commencement of the first benefit period, Rule 58(2)(b)(ii) provides the method of computation of dependent benefit. It provides for computation of dependent benefits in the case of an employee dying as a result of employment injuries sustained before the first benefit period and before the expiry of the first wage period.

11. Rule 58(2)(b)(ii), insofar as it is relevant, reads as follows:

"Dependents's benefits.

2(b) Where an employment injury occurs before the commencement of the first benefit period in respect of a person the daily rate of dependent's benefit shall be:

(i) xxx xxx xxx

(ii) where a person sustained employment injury before the expiry of the first wage period in the contribution period in which the injury occurs, the rate, forty per cent more than the standard benefit rate, rounded off to the next higher multiple of five paise corresponding to the group in which wages actually earned or which would have been earned had he worked for a full day on the date of accident/fall."

12. When considered in the background of statutory provisions, noted above, the payment or non-payment of contributions and action or non-action prior to or subsequent to the date of accident is really inconsequential. The deceased employee was clearly an

'insured person', as defined in the Act. As the deceased employee has suffered an employment injury as defined under Section 2(8) of the Act and there is no dispute that he was in employment of the employer, by operation of Section 53 of the Act, proceedings under the Compensation Act were excluded statutorily. The High Court was not justified in holding otherwise. We find that the Corporation has filed an affidavit indicating that the benefits under the Act shall be extended to the persons entitled under the Act. The benefits shall be worked out by the Corporation and shall be extended to the eligible persons."

5. On the basis of the aforesaid paras it is contended that for

payment or non-payment of the contributions, an action or non-action

prior to or subsequent to the date of the accident is really

inconsequential, and that once the employer is registered with ESIC,

liability will be of ESIC and not the appellant.

6. I may note that in this case ESIC was added as a respondent vide

the aforesaid admission order dated 13.10.2011. ESIC as respondent no.

6 has filed an affidavit in this Court stating that Form No. 16 with

respect to deceased-employee Sh. Aftab Alam was filed only after one

year of the accident and that the appellant has neither submitted the

contract for employment and nor the name of the deceased was shown

in the register of the employees. Therefore, the claim made by the

dependents under the ESIC Act was rejected. In essence what is

contended by ESIC is that a fraud cannot be played upon it by asking it

to incur the liability under the Act when the deceased-employee was

actually not an employee of the employer on the date of the

incident/accidental death.

7. In my opinion, in the facts of this case, the argument urged on

behalf of the appellant placing reliance on the judgment of the Supreme

Court in Bharagath Engineering (supra) case is misconceived because

the judgment in the case of Bharagath Engineering proceeds in a

factual basis where an employee is in fact an employee and his name is

shown in the register of employees as duly registered with ESIC. It is

not the law as per Bharagath Engineering(supra) case that even if a

person is not shown in the register of employees and is not an employee

on the date of the accident, even then ESIC still incurs liabilities for an

employee who is not in the register and who is not registered with ESIC

as per the returns filed by the employer. Section 44 of the ESIC Act

talks of filing of returns with ESIC, and, maintenance of a register of

employees by the employer. Contributions are to be made therefore

with respect to specified employees existing on the employment register

whose total number have to be specified in the returns made as per the

register. A mere registration of an employer under ESIC Act cannot and

does not mean that such registration applies with respect to un-specified

number of employees inasmuch as registration is applicable only for

specific employees and specified number of employees. There cannot

be any other interpretation of the liability of ESIC Act under the

provisions of the Act otherwise it will be very easy for an employer to

give a lesser number of employees in the employment register, pay

lesser contribution, and then after happening of an accident seek to

include employees who have suffered as a result of the accident, by

filing returns with ESIC thereafter, and thereby deny its/employers'

liability by seeking to fasten the liability upon ESIC. If the employer is

permitted in such a case to plead that it is not liable then it will be as if to

permit a fraud to be played upon ESIC, and which interpretation of the

provisions of the Act I cannot subscribe to. I cannot permit the argument as

urged on behalf of the appellant to succeed because admittedly in the

documents filed with ESIC by the employer of the previous year of the

accident the deceased Sh. Aftab Alam was not shown as an employee and he

was sought to be shown as an employee only by filing returns after one year.

Registration with ESIC is valid only with respect to such employees who are

employees as duly shown in the returns with ESIC and also in the employees'

register maintained by the employer for being covered under

the ESIC Act. If I permit the argument urged on behalf of the appellant

to succeed then grave fraud can be played upon ESIC because a person

would not be an employee covered under ESIC and yet, liability would

be thrown on ESIC. The object of the observations of the Supreme

Court in the case Bharagath Engineering (supra) is to ensure that once

an employer with a particular number of specified employees with

details is registered with ESIC, then, even when premiums are not paid

by the employer, ESIC would still be liable to the dependents of the

deceased, inasmuch as, it is the duty of ESIC to recover the premiums

and other amounts recoverable under the ESIC Act from the employer.

The argument, therefore, urged on behalf of the appellant/employer is

rejected and the liability in the present case falls upon the appellant and

not upon ESIC.

8. In view of the above, there is no merit in the appeal, and the same

is dismissed with costs of Rs. 20,000/-. At this stage, learned counsel

for the appellant prays for waiver of costs and, therefore, on request,

costs imposed are waived.

JANUARY 27, 2014                               VALMIKI J. MEHTA, J
godara