The Employees State Insurance ... vs M/S. Bulchand Company, ...
2022 Latest Caselaw 1187 Tel

         HON'BLE SMT JUSTICE P.SREE SUDHA

                   C.M.A.No.326 of 2005

                         ORDER

1. This appeal is filed by the Employees State Insurance

Corporation aggrieved by the order dated 05.08.2004

passed in EIC No.38 of 2001 on the file of the Employees

Insurance Court and Chairman, Industrial Tribunal-I,

Hyderabad, whereby the petition filed by the petitioner

seeking that his shop is not coverable under the provisions

of the ESI Act is allowed.

2. Learned counsel for the appellant would contend that

M/s.Bulchand & Company and M/s.Bulchand Enterprises

are situated in the same address and the employer of both

the Units are one and the same, but the Tribunal erred in

concluding that they are different Units and does not cover

by ESI and Ex.R10 discloses the principal employer of both

the Units. The Statutory Inspector during his investigation

on verification of the records found that twenty five (25)

persons were employed for wages on 01.01.1995. He would

further submit that once the establishment was covered

under the Act, it is the statutory duty of the respondent

herein to pay the contribution towards premium under the

Act, and therefore, sought to set aside the order under

challenge.

3. Perusal of the order shows that one Detaram

Lalchand is a principal employer of M/s.Bulchand &

Company, Ramesh Govindram and Umesh Govindram are

nothing to do with it. M/s.Bulchand & Company,

M/s.Bulchand Enterprises and M/s.R.G.Bulchand &

Company were concluded as same establishment. The

Inspector of Corporation visited the petitioner

establishment on 22.07.1999 verified the records like

attendance and wage registers from January, 1995 to

June, 1999 and found that twenty five persons (25) were

employed for wages from 01.01.1995. It is the case of the

appellant herein that M/s.Bulchand & Company and

M/s.Bulchand Enterprises are inter-related and inter-

dependent and are owned by the same principal employer

and twenty five (25) persons were working in both the

Units. Fourteen (14) employees were working in

M/s.Bulchand & Company and eleven (11) employees were

working in M/s.Bulchand Enterprises and that it is only

one establishment and accordingly Code Number was

issued, but the Tribunal after verifying the evidence

available on record, both oral and documentary, allowed

the petition and hold that the petitioner therein is not

coverable under the provisions of the ESI Act. Aggrieved by

the said order, this appeal is preferred.

4. Heard the learned counsel for the appellant as well as

the learned counsel for the respondent. Perused the case

law cited by both the learned counsel.

5. The Chairman of the Tribunal held that Ex.P1-

Renewal of Registration Certificate issued by the Labour

Department, Government of Andhra Pradesh, Ex.P2 issued

by the Sales Tax Department, Ex.P3-Certificate of

Registration issued by the ACTO and Ex.P4-Certificate

issued by the Income Tax Department clearly establishes

that M/s.Bulchand & Company is doing business at Door

No.5-8-615 and 615/1, Abid Road, Hyderabad. Ex.R2

(corresponding to Ex.P1) discloses that Mr.Detaram

Lalchand is the owner of the petitioner shop but the names

of other establishments were not found in it. Even in

Ex.R3-electricity bill, the name of the other establishments

was not shown. As per Ex.R4-Form C-10 Notice-

preliminary inspections report of the appellant, the

respondent herein was doing business of textiles and sales

of readymade garments and it employed less than fourteen

(14) persons for the years 1995-99. It was mentioned that

Bulchand Enterprises was conducting business in the

adjacent building but the entrance is same in which it was

mentioned that both the establishments are one and the

same. Ex.R5-Form C-10 notice, in which the name of

Ramesh Govindram was shown as principal employer, but

the address of the firm is not noted. As per the comparison

between Exs.R4 and R5, the respondent herein was

established in the year 1933 and whereas M/s.Bulchand

Enterprises was established in the year 1979 and that the

nature of business is totally different from each other. As

per Ex.R6, Ramesh Govindram was the principal employer

of M/s.Bulchand Enterprises and Ex.R7 is their electricity

bill. As per Ex.R8, R.G.Bulchand and Company was

located at Tilak Road, Hyderabad, and Ex.R9 is its renewal

certificate from Labour Department and all the documents

produced by the appellant herein clearly establishes that it

is totally different from M/s.Bulchand & Company and

M/s.R.G.Bulchand and Company. Ex.R10 is the

advertisement issued in the name of Bulchand, but in

which it was not mentioned that the three establishments

are controlled by one employer and also it is not known

who issued the said publication. But, the authenticated

documents issued by the Labour Department, Sales Tax

Department, Income Tax Department and Electricity

Department clearly establishes that both the

establishments are different from each other and even from

a perusal of the Five Wage Registers under Exs.P7 to P11,

the respondent herein employed less than fourteen (14)

employees from 01.08.1994 to 31.03.1999 and they have

not employed more than fourteen employees at any point of

time. The said registers were verified by the officials of the

Labour Department, ESI Department and also Enforcement

Officials of EPF on various occasions in different years and

they have put their initials, their remarks at the time of

visit and inspection and the said registers were maintained

properly and inspected by the officials from time to time.

As per the wage registers, the respondent herein has not

employed more than fifteen employees at any point of time,

and thus, the establishment is not coverable under the

provisions of ESI Act, and accordingly, the petition filed by

M/s.Bulchand & Company was allowed.

6. Learned counsel for the appellant relied upon a case

law reported in SUMANGALI V/s. REGIONAL DIRECTOR,

EMPLOYEES' STATE INSURANCE CORPORATION1

holding to the effect that there was unity in management,

supervision and control, geographical proximity, financial

unity, general unity of purpose and functional integrity

between the different units and for the sake of ESI coverage,

the different units could be treated as 'one establishment'.

In EMPLOYEES' STATE INSURANCE CORPORATION

V/s. BHAKRA BEAS MANAGEMENT BOARD2 in which it

was held that neither workers concerned of Respondent 1

(2008) 9 SCC 106

(2009) 10 SCC 671

Board, nor any of them in their representative capacities

made parties in petition filed under Section 75 of the Act

before ESI Court or High Court challenging notice issued

by ESIC under Section 45-A for making employer's

contribution towards ESI, and thus, it is in violation of the

principles of natural justice.

7. Learned counsel for the appellant mainly contended

that labour statutes are meant for the benefit of the

workmen. In all these cases the workmen, or at least some

of them in a representative capacity, or the trade union

representing the workmen must be made as a party, but in

this case the workmen was never made as a party and on

that ground alone the judgment of the trial Court has to be

set aside. He also filed copy of the letter dated 05.12.2002

addressed to the Commissioner of Labour under the Letter

Head of 'Indian National Trade Union Congress' in which in

the third paragraph it is mentioned as follows:

'For example, the managements of Bulchand at Abids is having one common management and the Regional Director, ESI Corporation, Hyderabad has issued coverage intimation dated 22.03.2000 by allocating

code No.52-179220-102 on an average 75 workers are working with the management of Bulchand on each day, but the Labour Departments' Assistant Labour Officers have issued licenses indicating 13 employees only to Bulchand & Co. He issued license of 8 employees to Bulchand Enterprises, another license for 8 employees to R.G.Bulchand and Company. They have also issued a separate licence to their unit at Secunderabad. Thus, the Asst Labour Officers are colluding with the managements are depriving the benefits to the workers. In fact an advertisement issued by the said management on 12.10.02, Saturday in 'Eenadu' Telugu daily newspaper at page 8 clearly shows it is a common management for all the units.'

8. Learned counsel for the respondent would submit

that it had not filed the said letter before the Tribunal and

filed this after 16 years before this Court and cannot be

looked into. The Tribunal allowed the matter in the year

2004 and the letter pertains to the year 2002, but it failed

to file the same before the Tribunal and not explained any

reasons whatsoever for not presenting the same before the

Tribunal. Therefore, it cannot be looked into at this belated

stage.

9. Learned counsel for the respondent would contend in

this appeal that unless there is clear evidence to show that

there was any supervisory, financial or managerial control,

it cannot be said that one is the branch of the other. He

would further contend that no doubt it is a beneficial

legislation but the Court cannot travel beyond the scheme

and extend the scope of the statute on the pretext of

extending the statutory benefits to those who are not

covered by the scheme. He also contend that there is no

substantial question of law to maintain the appeal and the

number of persons working in the factory, the use of power

etc., are purely questions of facts and thus the appeal has

no merit.

10. The appellant mainly contended that the workmen

was not included as a party to the proceedings and he has

not raised the said issue before the Tribunal and

respondent counsel contended that in any event the

workman was not impleaded, and for the first time he

raised the issue at the appellate stage. The objection

regarding non impleadment of the workman has to be

raised at the earliest point of time before the Tribunal, but

the appellant failed to do so. It is for the appellant to prove

that both the establishments are inter-related and inter-

dependent to ascertain the functional integrity unity in

management. But, he filed only Ex.R.10 which is a paper

publication and the Tribunal gave cogent reasons for not

considering the same. Apart from that it was clearly held

that the other authenticated documents filed by the

petitioner and respondent clearly establishes that

M/s.Bulchand & Company M/s. Bulchand Enterprises and

M/s.R.G.Bulchand & Company are not same

establishments but they are different establishments

located at different places and the nature of business was

also different and they never engaged workers more than

fifteen (15) persons at any point of time as per the wage

registers and the names of the employees were not reflected

in the relevant documents and as such, M/s.Bulchand &

Company is not coverable under the provisions of the E.S.I.

Act and it needs no interference.

11. In the result, this appeal is dismissed confirming the

order dated 05.08.2004 passed in E.I.C.No.38 of 2001 on

the file of the Employees Insurance Court and Chairman,

Industrial Tribunal-I, Hyderabad. However, there shall be

no order as to costs.

12. Miscellaneous Petitions, if any, pending in this appeal

shall stand dismissed in the light of this final order.

_________________________ JUSTICE P.SREE SUDHA

16th MARCH, 2022.

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