Gujarat High Court
Regional Director vs Bhagwan Ramdas Patil on 14 June, 2024
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C/FA/2330/2023 ORDER DATED: 14/06/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2330 of 2023
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2023
In R/FIRST APPEAL NO. 2330 of 2023
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REGIONAL DIRECTOR
Versus
BHAGWAN RAMDAS PATIL & ANR.
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Appearance:
VIVAN T SHAH(7947) for the Appellant(s) No. 1
MR K R MISHRA(6312) for the Defendant(s) No. 1
NOTICE SERVED for the Defendant(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE DEVAN M. DESAI
Date : 14/06/2024
ORAL ORDER
1. This Appeal is filed under Section 82(2) of the
Employees' State Insurance Act, 1948 challenging the
judgment and order dated 16.02.2003 passed by the
Labour Court, Surat in E.S.I. Application No.7 of 2007.
2. Heard learned advocate Mr.Vivant Shah for the
appellant.
3. The brief facts leading to the present First
Appeal are as under:-
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3.1 The original applicant - present respondent
No.1, was serving as a welder with present respondent
No.2 - original opponent No.1. He was drawing salary of
Rs.4,500/- per month. No letter of appointment was issued
in favour of the original claimant.
3.2 It is the case of the original claimant that the
employer - respondent No.2 herein, was covered under
the Employees' State Insurance Act being E.S.I. Code
No.39/1972/09 SF and he has informed the Employer to
deduct contribution from his monthly salary, however the
same was not done. On 28.04.1999, while performing his
duties, he fell down from 20 ft. height and sustained
injuries on his left leg. Thereafter, he was taken to the
hospital and surgery was performed. Due to the said
incident, the employee has sustained permanent disability.
3.3 On 21.10.1999, Notice came to be issued to the
original opponents. Since the said notice was not complied
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with, the employee was constrained to file E.S.I.
Application No.7 of 2007 before the learned E.S.I. Court,
Surat under Section 75 of the E.S.I Act for compensation.
Though the employer served with the Notice, did not
remain present and did not file any Written Statement.
3.4 The appellant - original respondent No.2
appeared and filed Written Statement at Exh.8. Issues were
framed by the learned Labour Court and after considering
the evidence and the material placed before the learned
Labour Court, the learned Labour Court partly allowed the
application on 16.02.2023 and directed the original
opponents to pay compensation with 8% interest from the
date of application till realization to the original applicant
within a period of 30 days.
3.5 Being aggrieved and dissatisfied with the
impugned judgment and order, the present appellant is
before this Court.
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4. Learned advocate for the appellant has placed
on record the paper book of the ESI Application No.7 of
2007 which is taken on record.
5. Learned advocate for the appellant has proposed
the following substantial questions of law for
consideration.
(a) Whether the respondent-employee would be an
insured person as contemplated under section 2(14)
of the ESI Act when the employer has neither
registered him as an employee nor paid
contribution under the ESI Act?
(b) Whether the appellant corporation can be
fastened with the liability of payment to the
employee under the ESI Act, when the employer
has neither registered him nor paid contribution as
mandated under the Act?
(c) Whether mere registration of an employer with
the ESIC would give rise to liability of the
appellant for payment under the ESI Act?
6. Learned advocate for the appellant has submitted
that the learned Labour Court has committed an error in
granting the application. It is further submitted that the
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employer has neither registered the employee nor paid any
contribution as required under the Employees' State
Insurance Act, 1948. It is further submitted that the
prescribed declaration Form being Form No.1 was also not
filled-in and submitted by the employer. The employer has
committed breach of the provisions of law.
6.1 Learned advocate for the appellant has submitted
that the reliance placed upon decision of Bharagath
Engineering Vs. R. Ranganayaki & Anr. reported in (2003) 2
Supreme Court Cases 138 is misconceived as in that case name
of employee was shown in the register of employees.
6.2 It is further submitted that Section 44 of the Act
talks of filing of returns with Employees' State Insurance
Corporation 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
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returns made as per the register. A mere registration of an
employer under 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.
Mere registration of the employer with appellant would
not give rise to the liability of appellant under the Act.
6.3 The employer neither registered nor submitted
declaration Form or report of the accident as mandated
under Regulation 12(1) of the Employees' State Insurance
(General) Regulations, 1950. In absence of compliance of
mandatory provisions, employee is not an insured person
under Section 2(14) of the Act and therefore, the liability
saddled upon present appellant is against the settled
principles of law and the impugned judgment and order is
required to be quashed and set aside.
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6.4 Learned advocate for the appellant has placed
reliance upon the decision of the Hon'ble Delhi High Court
in the case of Sushil Goyal vs. Luckson Siddique & Ors.
reported in (2014)1 LLJ 709 and submitted that the
Hon'ble Delhi High Court has discussed the case of
Bharagath Engineering (supra). The Delhi High Court has
observed that a mere registration of an employer under
the Act cannot mean that such registration applies with
respect to non-specified number of employees.
7. This Court has considered the submissions and
grounds raised in the memo of appeal alongwith the paper
book submitted by the learned advocate for the appellant.
General denial have been taken by the appellant. The
appellant has pleaded the ignorance about the occurrence
of the accident. It is an undisputed fact that the employer
was registered under the Act. However employer neither
submitted the declaration Form nor paid contribution. The
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witness of appellant has admitted in cross-examination that
no actions have been taken against employer for no paying
contribution of Employees State Insurance. Before the filing
of present application, employee has approached before
Workman Compensation Commissioner under Workman
Compensation Act, 1923. However, upon statement made
by employer that factory is covered under the Employees'
State Insurance Act, 1948. Hence, employee withdrew
Workman Compensation Application and filed present
application under Employees' State Insurance Act.
8. In case of Bharagath Engineering (supra), in para
12, the Hon'ble Supreme Court has observed as under:-
"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
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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."
9. In the case of Sushil Goyal (supra), in para 6,
the Hon'ble Delhi High Court observed that the respondent
had filed an Affidavit stating that Form 16, with respect to
deceased employee was filed only after one year of the
accident and the appellant has neither submitted the
contract for employment and nor the name of the deceased
was shown in the register of the employees.
In the present case, the employer has chosen not
to contest an application. Even during the cross-
examination of the original claimant, the appellant could
not extract anything contrary from the original claimant.
As a matter of fact, only general denial questions were put
in the cross-examination.
10. Section 82(2) of the Employees' State Insurance
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Act is reproduced hereunder:-
"An appeal shall lie to the High Court from
an order of an Employees' Insurance Court if
it involves a substantial question of law".
11. The provisions contained under Sub-section 2 of
Section 82 envisages that only in the case where the case
involves a substantial question of law, appeal would lie.
Even, if the findings of the fact is based on
misappreciation of evidence, it could not be said that any
substantial question of law is involved in appeal from such
findings. Where the learned Labour Court on consideration
of the evidence on record arrived at the findings that the
claimant is entitled to certain amount as benefit from the
Corporation and such finding is based upon the
appreciation of evidence, such finding cannot be legally
challenged under Sub-section 2 of Section 82 of the Act as
it does not involve any question of law, much less,
substantial question of law. The question as to whether
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how many persons were being working with the employer,
is a pure question of fact and such dispute could not be
said to be a substantial question of law.
12. As discussed above, the appellants case is that,
the employer did not submit declaration Form till the date
of accident and resultantly the employer is guilty under
the provisions of the Act. The oral deposition of the
appellant which has come on record to the effect that no
actions were taken against the employer by the corporation
for non-compliance of the mandatory provisions and
regulations under the Act, is sufficient to hold the
appellant liable for the compensation. This Court is not
inclined to entertain the First Appeal. Resultantly, First
Appeal is devoid of merit. Hence, the same is rejected.
13. After completion of dictation, learned advocate
for the appellant has submitted that right to recovery an
amount of compensation from the employer may be
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reserved. The right to recover an amount of compensation
from the employer by the appellant is a right flowing
under the Law. If law permits, the appellant may initiate
the recovery proceedings against the employer, if so
advised.
Order in Civil Application
In view of the order passed in the main matter, the
present Civil Application does not survive and stands
disposed of accordingly.
(D. M. DESAI,J)
MANOJ
