Balaji Grand Bazar, Hyderabad vs The Deputy Director, Ap. ...
2021 Latest Caselaw 942 Tel

              THE HONOURABLE JUSTICE G. SRI DEVI

                       C.M.A. No. 17 of 2007

JUDGMENT:

This Civil Miscellaneous Appeal is filed under Section 82 (2)

of the Employees State Insurance Act, 1948 (for short "the Act"),

against the dismissal order, dated 19.06.2006, passed in E.I. Case

No.96 of 2002 on the file of the Employees Insurance Court and

Chairman, Industrial Tribunal-I, Hyderabad, which was filed under

Section 75 (1) (g) of the E.S.I. Act for setting aside the order, dated

29.10.2002.

Brief facts of the case are as under:

M/s. Balaji Grand Bazar at Hyderabad, a Factory/

Establishment covered under the E.S.I. Act, 1948 with Code No.52-

15219, was required to pay contribution and submit Return of

Contribution under Section 40/44 of the Act read with Regulations

26, 29 and 31 of the E.S.I.(General) Regulations. As the Principal

Employer failed to pay contribution and file Return, a show cause

notice in C.18 Form of even number, dated 25.07.2002, was issued to

the employer to show cause within 15 days why contribution as

proposed in the said notice be not recovered from him affording an

opportunity to represent his case in person with records on

22.08.2002. After receiving the said notice, the appellant neither

replied nor appeared before the respondent herein. It is found from

the Inspection Report that the factory/establishment was required

to submit Return of Contribution along with payment challans for

the period from 4/2000 to 9/2001. As the appellant failed to

comply with the statutory requirements, a show cause notice

invoking Section 45-A of the Act was issued proposing to

determine the contribution indicated in the said notice. As the

appellant failed to respond to the notice and failed to make any

personal appearance opposing the proposed determination, the

respondent having no other alternative, passed the order dated

29.10.2002, determining the contribution totalling to Rs.71,107/- for

the period from 4/2000 to 9/2001 and directed the appellant to pay

the said amount within a period of 15 days from the date of the said

order, failing which the same shall be recovered under Section 45-C

to 45-I of the Act. Aggrieved by the same, the petitioner filed

E.I.Case No.96 of 2002 before the Chairman, Industrial Tribunal-I,

Hyderabad, to set aside the order, dated 29.10.2002 passed by the

respondent.

During the course of hearing, on behalf of the appellant

P.Ws.1 to 3 were examined and got marked Exs.P1 to P18 and

Exs.X1 to X7. On behalf of the respondent, R.Ws.1 to 3 were

examined and got marked Exs.R1 to R8.

After considering the oral and documentary evidence, the

Chairman, Industrial Tribunal-I, Hyderabad, dismissed the petition

and permitted the respondent to withdraw the amount of

Rs.18,000/- deposited by the appellant under Section 75(2-B) of the

ESI Act towards part-payment of the impugned order after appeal

time is over. Challenging the same, the appellant has preferred the

present Civil Miscellaneous Appeal.

Heard learned Counsel appearing for the appellant, learned

Counsel appearing for the respondent and perused the record.

Learned Counsel for the appellant would submit that the

Tribunal did not properly appreciate various documents that were

filed on behalf of the appellant with regard to the fact that Balaji

Grand Bazar and Balaji House of Child Care are two separate and

distinct entities; that while Balaji Grand Bazar deals with general

items, Balaji House of Child Care deals with general and child

related items; that the respondent failed to see that the appellant

did not engage more than ten employees at any point of time since

both the entities are separate and distinct; that the Tribunal also

failed to look into the fact that the Proprietor of Balaji Grand Bazar

is Rameshchand Agarwal and the Proprietor of Balaji Child Care

Unit is Rajesh Kumar Agarwal and the same is clear from Exs.P13

to P18 and Exs.X4 to X.7; that without scrutinizing the documentary

evidence, the Tribunal has come to an erroneous conclusion that the

appellant did not mention about the claim statement of Balaji Child

Care Unit at all, which is contrary to Exs.X4 to X7 documents

pertaining to Balaji House of Child Care unit; that the Tribunal,

without proper appreciation of facts and circumstances of the case,

clubbed the two different and distinct entities together and has

come to the erroneous conclusion that there are 29 persons

employed in the appellant's firm i.e. 10 in Balaji Grand Bazar, 10 in

Balaji House of Child Care and 9 in godown purely relying on and

giving undue importance to the statements made by the

respondent's representative with regard to the fact that its officials

visited the firm of the appellant and found that there are 20

employees working in Balaji Grand Bazar and Balaji House of Child

Care and both the entities were located in the same premises. It is

also submitted that the appellant has not received any notice from

the respondent on 20.03.2002 as has been stated in the order, dated

29.10.2002. The findings of the Tribunal and the respondent that

the appellant has employed more than 20 persons, because of which

the appellant was brought under the purview of the E.S.I. Act is

contrary to the documentary evidence filed by the appellant. Both

the Tribunal and the respondent did not properly appreciate the

fact that the notice, dated 16.01.2001, was issued to the appellant

that the Inspector of the Respondent would verify the records on

08.02.2001. However, no such enquiry was ever conducted.

Without conducting any enquiry and without properly scrutinizing

the documents, the order has been passed, bringing the appellant

herein under the purview of the E.S.I. Act. In support of his

contentions, he relied on the judgments of the Madras High Court

in Fenner Garments v. Dy.Regional Director, E.S.I.C.1 and in

Manu/TN/0265/1993

E.S.I.C. v. Trichy Dist.Co-op. Milk Producer's Union Ltd.,

Tiruchirapalli2.

Learned Counsel for the respondent would submit that the

appellant/employer himself admitted that 20 or more persons

worked on a particular date. Therefore, there is no substantial

question of law involved and as such the appeal is liable to be

dismissed on this ground alone. It is also submitted that both Balaji

Grand Bazar and Balaji's House of Child Care are one unit and not

separate units as contended by the appellant and for both the said

units Ramesh Chand Agarwal is the Proprietor, but not P.W.3-

Rajesh Kumar Agarwal and that nowhere under Exs.X1 to X7,

Rajesh Kumar Agarwal was referred as Proprietor of Balaji Child

Care Unit. It is further submitted that P.W.2, in his cross-

examination, admitted that Balaji Grand Bazar and Balaji House of

Child Care are situated in one building and phone numbers of the

two units is one and the same. He further submits that in similar

circumstances the Apex Court in Sumangali v. The Regional

Director, Employees State Insurance Corporation3 upheld the

coverage of the establishment under E.S.I. Corporation. He also

relied on the judgment of Madras High Court in Regional Director,

Employees State Insurance Corporation v. Aruna Stores,

Proprietrix J.Shantha4.

Manu/TN/0421/1994

(2008) 9 SCC 106

(2005) 1 Mad.LJ 354

Now the main point that arises for consideration is "whether

the Balaji Grand Bazar and Balaji House of Child Care are one unit

or they are different and distinct"?

As seen from the material on record, P.W.1, who is the

Proprietor of Balaji Grand Bazar, in his cross-examination admitted

that Balaji Grand Bazar is situated in the ground floor, whereas

Balaji House of Child Care is situated in the first floor and the

entrance for both the units is one and the same. P.W.1 also

admitted that there is a godown to Balaji Grand Bazar and two

workers are working in the godown. P.W.2, who is the Accountant

of Balaji Grand Bazar, in his cross-examination, admitted that Balaji

Grand Bazar and Balaji House of Child Care Unit are situated in

one building and the entrance for both the units is one and the

same. He further admitted that the phone numbers of both the

units are also one and the same. He also admitted that there is a

godown to Balaji Grand Bazar and he does not know whether there

are ten workers in Balaji Grand Bazar, ten workers in Balaji House

of Child Care and nine workers in the godown of Balaji Grand

Bazar. He also admitted that there are no branches to the appellant

anywhere in Hyderabad City. P.W.3, who is the proprietor of Balaji

House of Child Care, in his cross-examination, admitted that he has

no document to show that he was the Proprietor of the said Balaji

House of Child Care and that he was using the phone of the down

stairs building. He also admitted that the names of the employees,

which were shown to him as part of the inspection report of the

Inspector, were written by him and in the said list, he has shown

Balaji Grand Bazar and Balaji House of Child Care separately with

twenty employees each in the said list.

The E.S.I. Act is enacted with a view to ensuring social

welfare and for providing safe insurance cover to Employees who

were likely to suffer from various physical illness during the course

of their employment. Such a beneficial piece of legislation has to be

construed in its correct perspective so as to fructify the legislative

intention underlying its enactment. I have carefully gone through

the impugned judgment and the order passed by the respondent

and also the oral and documentary evidence available on record.

The Tribunal has framed the issues on the basis of the pleadings of

the parties and has given cogent reasons while dismissing the

petition. It is evident from the Preliminary Inspection Report,

dated 10.01.1998 and 12.01.1998, submitted by the Inspectors of the

ESI Corporation, who have visited the appellant establishment, that

29 employees were working on the date of inspection. Accepting

Exs.P2 to P7, the Tribunal has rightly concluded that there was no

violation of the principles of natural justice as it was an admitted

fact in the evidence that opportunity of personal hearing was given

to the appellant. In view of the admissions made by P.Ws.1 to 3

and since both M/s. Balaji Grand Bazar and Balaji House of Child

Care are functioning in the same premises, there is common bill

counter, common entrance, the Tribunal has considered these

crucial facts and has accepted the version of the Corporation.

Therefore, the order under challenge does not suffer from any

illegality or infirmity warranting interference of this Court.

Hence, I do not find any merit in the appeal and the same is liable

to be dismissed.

Accordingly, the Civil Miscellaneous Appeal is dismissed.

There shall be no order as to costs.

Miscellaneous petitions, if any, pending shall stand closed.

___________________ JUSTICE G. SRIDEVI

24.03.2021 Gsn/gkv