Employees State Insurance ... vs M/S. Brakes India Limited
2021 Latest Caselaw 6132 Mad

                                                                             C.M.A.No. 3332 of 2014


                                   IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                               DATED : 09.03.2021

                                                          CORAM

                                   THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM

                                              C.M.A.No. 3332 of 2014


                     Employees State Insurance Corporation,
                     By its Regional Director,
                     No.143, Sterling Road,
                     Nungambakkam,
                     Madras – 600 034.                                          ..Appellant

                                                           Vs

                     M/s. Brakes India Limited,
                     Padi, Madras,
                     Rep. By its Vice President (Personnel).                    ..Respondent

                             Appeal filed under Section 82 of the Employees State
                     Insurance Act, 1948 against the order of the Employees Insurance
                     Court (Principal Labour Court) Chennai in EI OP No. 355 of 2001
                     dated 21.08.2012.
                                 For Appellant   :     Mr.G.Bharadwaj
                                     For Respondent   :         Mr.N.Balasubramanian


                                                      JUDGMENT

The order dated 21.08.2012 passed in O.P.No.355 of 2001 is

under challenge in the present civil miscellaneous appeal.

2. The substantial questions of law raised in the appeal on

hand are that : (1) Whether the findings of the trial court in holding

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C.M.A.No. 3332 of 2014

that the labour charges incurred for maintenance and repair of

buildings situated outside the premises would not attract the

coverage of E.S.I. Act is legal? and (2) Whether it is legally correct

that the labour charges incurred for maintenance and repair of

buildings within the premises would attract application of E.S.I Act

but the same cannot be extended to the building outside the

premises when such buildings are also utilised for the promotion of

the business of the organization?

3. Learned counsel for the appellant made a submission that

the appeal itself is filed for restricted purposes regarding the

exemptions granted by the ESI Court in respect of Item Nos. 11 to

14. In this regard, it is contended that the guest house maintained

by the principal employer for the benefit of the officials are in the

factory and cannot be separated from establishing the guest house

maintained is also a part and parcel of the establishment and,

therefore, the repair and maintenance work done in the guest house

is also to be included for the purpose of assessment and fixing the

contribution. Secondly, the casual salary of the last-graded

employees at the Delhi office is also to be included in view of the

definition contained in Section 2(9) of the ESI Act.

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C.M.A.No. 3332 of 2014

4. Relying on Section 2(9) of the ESI Act, the learned counsel

for the appellant reiterated that 'employee' means any person

employed for wages in or in connection with the work of a factory or

establishment to which the Act applies. Sub-clause (ii) stipulates

that an employee who is employed by or through an immediate

employer, on the premises of the factory or establishment or under

the supervision of the principal employer or his agent on work which

is ordinarily part of the work of the factory or establishment or

which is preliminary to the work carried on in or incidental to the

purpose of factory or establishment.

5. This Court is of the considered opinion that Section 2(9)(ii)

provides wider scope for inclusion of casual employees engaged by

the principal employer for maintenance or for other works. The

guest house also to be considered as a part of establishment as it is

utilized for the welfare of the officials and other guests who were

attending the factory works. Thus, the guest house or the casual

labourers working in the Delhi office cannot be exempted as the

same will fall within the purview of Section 2(9) of the ESI Act.

When a proper meaning is provided so as to include of such act

incidental thereto and with reference to the maintenance of the

guest house or other officers suitable in various other places, this

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C.M.A.No. 3332 of 2014

Court is of the opinion that the ESI Court has committed an error in

considering the scope of Section 2(9) of the ESI Act.

6. When the scope of Section 2(9) of the ESI Act is wider so

as to cover the guest house and the casual employers employed in

other offices and in the present case at Delhi, there is no reason to

grant any exemption from the assessment already made with

reference to the contribution payable. This being the factum, this

Court is of the considered opinion that the exemption granted by

the ESI Court is perverse and is not in tune with Section 2(9) of the

Act.

7. Accordingly, the judgment dated 21.08.2012 passed in

E.I.O.P.No. 355 of 2001 is set aside and the order passed under

Section 45A of the Act stands confirmed and consequently the civil

miscellaneous appeal is allowed. No costs. Connected, M.P.No. 1 of

2014 closed.

09.03.2021

Index: Yes ssm

To The Presiding Officer, Principal Labour Court,Chennai.

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C.M.A.No. 3332 of 2014

S.M.SUBRAMANIAM, J.

(ssm)

C.M.A.No. 3332 of 2014

09.03.2021

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