Madras High Court

Sri Paduka Distributors vs The Employees State Insurance ... on 22 February, 2021

                                                                               C.M.A.No.71 of 2017

                                   IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                Dated : 22.02.2021

                                                     CORAM:

                                    THE HON'BLE MRS.JUSTICE T.V.THAMILSELVI

                                               C.M.A.No.71 of 2017
                                             and C.M.P.No.573 of 2017

                   Sri Paduka Distributors,
                   Rep by its Partner R.Rajagopal,
                   No.44, Chakrapani Street,
                   Chennai – 600 033.

                                                                                   .. Appellant
                                                    Vs.
                   1.The Employees State Insurance Corporation,
                   Rep. By its Regional Director,
                   No.143, Sterling Road,
                   Chennai – 600 034.

                   2.The Recovery Officer,
                   Employees State Insurance Corporation,
                   143, Sterling Road,
                   Chennai – 600 034.                                           .. Respondents


                   PRAYER : Civil Miscellaneous Appeal is filed under Section 82(2) of E.S.I
                   Act, praying to set aside the order and decree of the Employees Insurance
                   Court (Principal) Labour Court, Chennai, dated 30.06.2015, in EIOP.No.57
                   of 2002, insofar as remanding the same back to the 1 st respondent for fresh
                   adjudication and allow the appeal.

                   1/10


https://www.mhc.tn.gov.in/judis/
                                                                                   C.M.A.No.71 of 2017



                                         For Appellant      : M/s.T.S.Gopalan and Company

                                         For Respondents : Mr.T.N.C.Kaushik for R1 and R2

                                                    JUDGMENT

The appellant herein is the petitioner, who filed EIOP.No.57 of

2002, challenging the impugned order dated 19.06.2002, determining the

amount of Rs.12,17,482/- as contribution for the period 6/1393 to 9/2001 and

the C.19 claim bearing No.TN/C-19/INS-IV/51-51449-101 dated 04.07.2002,

against the respondents herein. The ESI Corporation has also contested the

case. After full trial, the ESI Court remanding the matter back to the

respondent Corporation for considering the documents namely Ex.P8 to P12

filed by him and to complete the enquiry within three months. Aggrieved by

that order, the appellant himself preferred this appeal.

2. Point for consideration:

"Whether the ESI Court was justified in the facts of

the case in remanding the matter back to the ESI Corporation."

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3. The facts of the case reveals that the petitioner herein is the

establishment engaging in the distribution and sale of consumer products and

are the distributors and selling agents of products manufactured by

M/s.Aravind Laboratories and M/s.Handy Instant Foods. The distributors are

various centers in Andhra Pradesh and other states and their Head Quarters

at different places and all the distributors are away from their respective head

quarters for more than seven months in a year. While so, the appellant's

establishment received a notice in "Form-C-18" from the 1st respondent

dated 25.02.2002 proposing determination of contribution on adhoc basis for

the period 6/93 to 9/01. The petitioner was asked to show cause against the

proposed assessment and was asked to appear before the concerned authority.

Subsequently, he received an order under Section 45A levying an amount of

Rs.12,17,482/- as contribution in the said period in respect of 71 employees.

Aggrieved by that notice, they approached the Commissioner of Labour.

4. Contending that those 71 persons as sales representatives and

they were used to undertake extensive travelling and they remained away

from the headquarters for over seven months in a year. So the

https://www.mhc.tn.gov.in/judis/ C.M.A.No.71 of 2017

employer/petitioner is seeking exemption to pay the contribution as per the

Ex.P2 G.O issued by the Government of Tamil Nadu. But as per the

contention of the ESI Corporation that Ex.P2 G.O is applicable to the persons

employed in the Tamil Nadu and not for the other States. In such

circumstances, it is for the petitioner to establish that the head quarters of

those 71 employees are only at Chennai, Ex.P2 G.O is applicable to them.

For that the appellant relied the documents Ex.P8 and P12. On perusal, the

documents related to the petitioner establishment concerned with attendance

those employees. All these documents were already verified by the

Commissioner of Labour. The ESI Court, while discussing the entire

evidence almost conclude its order, expressing to remand the matter back to

the authorities concerned so as to verify the documents and to consider the

application of Ex.P2 G.O. As discussed above, already all these documents

are verified by the Court, so for that purpose, again the matter is remanded to

the concerned authority is un warranted one.

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5. The learned counsel appearing for the petitioner very much

relied the G.O, which is marked as Ex.P2 dated 29.08.1983, issued by

Government of Tamil Nadu and argued that his various distributors at a

different part of the country need not be covered under the provisions of ESI

Court by virtue of G.O issued by Government of Tamil Nadu.

6. The learned counsel for the respondent placed reliance on the

judgment of the Hon'ble Supreme Court reported in 132 (2006) DLT 128;

[2006 (111) FLR 867]; (2007) ILLJ 72 Del in the case of Lark Laboratories

(India) Ltd., Vs. Government of Nct of Delhi through its Secretary (labour)

and Employees State Insurance Company Corporation; held that:

"Dated:31st March, 83 Subject: Principles to be followed in recommending exemptions from the scope of the ESI Act, 1948 under Section 87 and 88.

2. The factories/establishments and class of employees, as the case may be, may be considered eligible for grant and renewal of exemption under Section 87 and 88 if the following conditions are satisfied:

(1) The employer has his own arrangement at least for outdoor medical care.

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(2) In case the employer is not having his own arrangement for specialist and indoor treatment, he should have arrangements with any Govt/Semi Govt./Private/ or other hospital or Nursing Home where the employees and their family members got specialist consultation/hospitalization without having to pay for the same.

(3) The exemption or renewal of exemption may not be recommended where there is no medical arrangement or the employer, and he employees are entitled only to the reimbursement of medical expenses.

(4) Medical treatment under the scheme of employer should be available to the workers as well as their family members irrespective of the fact whether the employees are permanent, temporary or casual worker.

(5) The employer should have the provision for supply of artificial limbs, aids, and appliances including dialysis, kidney transplant etc.

(6) The cash benefits/leave salary provided by the employer to the employees in case of sickness, maternity

https://www.mhc.tn.gov.in/judis/ C.M.A.No.71 of 2017

and employment injury should be substantially similar or superior to those applicable under the ESI Act.

However, for the purpose of comparison of sickness benefit, we may not insist on the provision of sick leave etc. 91 days duration. We may consider provision for grant of leave considering earned leave comparable to 56 days sickness benefit as Half-day as was the position prior to 1.3.77 for the purpose of comparison of this benefit of earned leave available to the employees may also be taken into account.

3. The exemption under Section 88 may be recommended to the employees or a class of employees who are in receipt of benefits substantially similar or superior to those available under the ESI Act, as detailed in para 2 above at items No.1 to 6. ......

7. The contention of the petitioner submits that 71 employees

were doing the distribution work in the other states. So he need not pay the

contribution as demanded by the ESI Corporation.

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8. As rightly pointed out by the learned counsel for the

respondent that the petitioner not produced any documents to show that the

employees were getting equal or better benefits in establishment concerned at

least, similar to those provided under ESI Act. But except relating the Ex.P2

G.O, the petitioner not produced any tangible material evidence to establish

this fact, even as per G.O.No.42, which applied to Tamil Nadu and not other

states. But ESI Court failed to appreciate this fact and erroneously remanded

the matter to the concerned authority for fresh enquiry. Therefore, the order