Gujarat High Court
Regional Director vs Jyoti Agarbatti Works on 16 June, 2025
NEUTRAL CITATION
C/FA/4450/2006 JUDGMENT DATED: 16/06/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 4450 of 2006
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE HEMANT M. PRACHCHHAK
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Approved for Reporting Yes No
- No
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REGIONAL DIRECTOR
Versus
JYOTI AGARBATTI WORKS
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Appearance:
MR HEMANT S SHAH(756) for the Appellant(s) No. 1
RULE SERVED for the Defendant(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE HEMANT M.
PRACHCHHAK
Date : 16/06/2025
ORAL JUDGMENT
1. Present appeal is filed by the appellant under Section 82(2)
of the Employees' State Insurance Act ("ESI Act") challenging
the impugned order dated 12.08.2005 passed by the learned
Judge, Employees' State Insurance Court, Ahmedabad in EI
Application No. 27 of 2002 whereby the learned Judge has
allowed the application filed by the respondent.
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2. Short facts of the present case are that the applicant -
respondent herein is a proprietor firm engaged in the business of
incense sticks and has never employed more than five persons
and it does not use power to manufacture incense sticks. That
the inspector of the appellant - corporation visited the
respondent company in the absence of the proprietor and
decided to cover the company under the ESI Act scheme. The
inspector of the Corporation did not provide a copy of his visit
note, site report. The Company is registered under the Bombay
Stock and Establishment Act. However, the Corporation has
issued an order in Form C/11 by letter dated 20.02.2000 allotting
ESI code number to the company and has asked the company to
get coverage under the ESI scheme from 21.09.1994 and has
also asked to implement the ESI scheme from 21.091994.
Thereafter, the respondent has written a letter on 19.04.2002
objecting to the said order inter alia stating that the company
has never used power and has not employed more than five
persons, therefore, the company cannot be covered under the
ESI scheme. Considering the business of the company, persons
outside the company come to visit the company and take
incense sticks. They cannot be considered as employees of the
company and hence the laws of ESI cannot be applied to the
applicant company. The appellant herein has raised an objection
to get coverage the respondent under the ESI scheme and,
therefore, the respondent has filed the application before the ESI
Court, which came to be allowed.
3. Being aggrieved and dissatisfied with the impugned order
passed by the ESI Court, the appellant has preferred the present
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appeal.
4. Heard Mr.Hemant Shah, learned counsel appearing for the
appellant. Though served, the respondent has chosen not to
appear before the Court.
5. Mr.Shah, learned counsel appearing for the appellant has
submitted that the Court below has committed an error in
considering the fact that the establishment is not covered under
the Act contrary to evidence on record. He has submitted that
the unit of the respondent is a factory, which is covered under
Section 1(5) of the ESI Act. He has submitted that the ESI
Inspector has visited the place of the respondent where he found
that there were 30 workers were working in the establishment
and, therefore, the respondent is liable to make payment
towards deduction under the ESI Act and also liable to register
under the ESI Act and not paid the contribution towards its
liability and, therefore, the appellant issued notice under Section
77(1)(b) of the Act. He has submitted that the present appeal
deserves to be allowed and the impugned order deserves to be
quashed and set aside. Learned counsel appearing for the
appellant has submitted that the substantial questions of law has
arisen in the present appeal, which reads as under:-
A. Whether the unit is covered under the ESI Act?
B. Whether in view of the report of the insurance inspector
the unit is covered under the act or not?
C. Whether the finding given by the Lower Court is contrary
to evidence on record as well as in absence of any other
contrary evidence?
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6. Considering the facts of the case and materials place on
record, it appears that the First Appellate Court has not framed
any substantial questions of law. I have also perused the
impugned order passed by the Court below. It appears that the
substantial questions of law has not been framed before the ESI
Court, but the same has been framed in the present appeal,
which is not required to be considered.
7. On perusal of the impugned order, it appears that the ESI
Court has allowed the application in favour of the respondent on
the ground that implication of the Act itself was not proved by
the appellant and the fact that whether more than 30 workers
were working with the respondent was also not proved by the
appellant by leading any cogent and material evidence before
the Court below. Upon considering the relevant documentary
evidence and the submissions and the facts of the case, it
transpires that it is a disputed fact with regard to whether the
respondent employed more than 30 workers and, therefore, the
concerned Court has rightly decided the issue in negatived
against the appellant. Under Section 82 of the ESI Act, it is onus
on the part of the appellant to prove such fact before the ESI
Court and if it fails to prove said fact then under Section 82(2) of
the ESI Act, this Court can go into factual aspects of the matter.
Considering the decisions of this Court in the case of Employee
State Insurance Corp. Vs. Mahalaxi Taxtile Mills reported in
2025 AIJEL HC 250780 and in the case of E.S.I.C. Vs.
Vasantbhai Bhudarbhai Parmar reported in 2007 (1) GLR
879, in my opinion, the order passed by the ESI Court is in
consonance with the provisions of law and no any illegality or
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infirmity found in the order and, therefore, no interference is
required to be called for in the present appeal. The appeal being
meritless deserves to be dismissed.
8. In the result, the appeal is hereby dismissed. The
impugned order passed by the ESI Court is confirmed. Registry is
directed to transmit back the record proceedings of the case to
the concerned Court forthwith, if called for.
Pending civil application/s, if any, shall stand disposed of
accordingly. Interim relief, if any, granted earlier, stand vacated
forthwith.
(HEMANT M. PRACHCHHAK,J)
V.R. PANCHAL
