Telangana High Court
The Employees State Insurance ... vs M/S. K.N.R. Associates, on 9 July, 2024
Author: P.Sam Koshy
Bench: P.Sam Koshy
THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE SAMBASIVARAO NAIDU
CIVIL MISCELLANEOUS APPEAL No.352 OF 2024
JUDGMENT:
(per Hon'ble Sri Justice P.SAM KOSHY)
The appeal is filed under Section 82(2) of the Employees
State Insurance Act, 1948 (for short 'Act of 1948') by the
Corporation assailing the order dated 12.04.2024 passed by the
Employee's Insurance Court and Chairman, Industrial Tribunal-I
at Hyderabad in E.I.C.No.26 of 2021.
2. Vide impugned order, the learned Tribunal has set aside
the order, dated 04.02.2020 passed under Section 45(a) of the
Act of 1948. In addition, the Tribunal has also set aside the
order passed under CP-2 dated 18.02.2021 and also set aside
the order, dated 15.02.2021 passed under Section 85(B) of the
Act of 1948. As a consequence, it was also ordered by the
Tribunal that the respondent establishment is not liable to pay
any amount to the Corporation and an amount of Rs.38,700/-
deposited by the establishment can be withdrawn by the
establishment. The Appeal under Section 82(2) of the Act of
1948 to the High Court would only be entertainable in the
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event if there is substantial question of law involved. The
learned counsel appearing for the Corporation has challenged
the impugned order raising the following three as the
substantial questions of law:
"i) Whether the respondent/petitioner is under obligation to produce
registers/records in proof of closure of the establishment as per
Section 1(6) of the ESI Act, 1948?
ii) Whether the respondent/petitioner was given opportunity
sufficiently before passing an order under Section 45-A of the ESI Act,
1948?
iii) Whether the E.I. Court is competent to allow the petition under
Section 75(1)(g) of the ESI Act, when the Recovery proceedings were
already initiated under Section 45-A of the ESI Act, 1948?"
3. However, on perusal of record, particularly, considering
the issues that were framed by the learned Tribunal would be
evident from paragraph 8 of the impugned order, it would
reveal that the substantial questions of law raised by the
learned counsel for the appellant are in fact the issues that were
framed by the E.I. Court and evidences were laid to
substantiate upon those issues. For ready reference, it would
be relevant at this juncture to putforth the findings of the
Tribunal which is reflected in paragraphs 14 and 18.
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"14. However, on 22.03.2019 the petitioner appeared before
authorized officer and submitted a letter enclosing the
cancellation of lease deed and the original lease deed of 2012
marked as Ex.R12. It can be seen from original lease deed
that the lease of the premises commenced on 16.05.2012.
Original lease filed by the petitioner is marked as Ex.P3 and
original cancellation lease deed is marked as Ex.P4. The term
of the lease is for 9 years but due to loss sustained by the
petitioner unit a cancellation of the lease deed was executed
on 28.02.2019 itself. In the cancellation of lease deed there is
a mention in clause No.3 that the lessee/petitioner had
vacated the premises and delivered the possession of the
property to the lesser on 01.03.2015 but no document was
executed on that day. When the petitioner has submitted so
specifically that he had vacated the premises and handed over
the possession to the lesser, once again it is in obligation on
part of the Corporation to cross-check whether the premises
was really handed over to the lesser and whether the
petitioner is continuing the business at the given address.
Inspite of receipt of such specific documentary evidence, no
such attempt was made by the Corporation.
18. In the light of the discussion made above, it is clear
that when the petitioner did not pay the contributions right
from 12.08.2012 the Corporation should have taken steps
immediately. In the month of October, 2018 the recovery
proceedings have been initiated by the Corporation. There is
no justified cause shown by the Corporation to sleep over for a
long period of 6 years in initiating the proceedings. There is
confusion in the proceedings taken up by the Corporation in
one way the Corporation demanded interest and even after
payment of interest, the damages proceedings have been
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taken up recovery of damages. While keeping those
proceedings pending again, the recovery proceedings have
been taken up by issuing C-19 and CP-2. Moreso, before
passing the 45-A order the petitioner has submitted various
documents to establish that the business was closed w.e.f.
01.03.2015 itself and he did not run the business. When such
is the case, the claim made by the Corporation for recovery of
the amount for the period from 01.03.2015 to 30.06.2018 is
not justified. Added to that, the Corporation is supposed to
consider the documents submitted by the petitioner while
passing the 45-A order but when we look at the 45-A orders it
can be seen that the said order is so bald and without
reference of the documents submitted by the petitioner.
Therefore, the 45-A order and consequential CP-2 deserves to
be set aside."
4. From the plain reading of the aforesaid two contentions, it
would reveal that the findings given by the Tribunal are in fact
finding of facts based upon whatever documents that the
establishment has produced before the Tribunal. Further, it also
gives an indication that the establishment had produced Ex.P4
which is a document relating to the cancellation of lease deed
dated 28.02.2019. There was also clear indication that upon
the lease deed having been cancelled, the establishment had
vacated the premises and delivered the possession of the
property back to the owners with effect from 01.03.2015
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onwards. Further, Ex.P7 is another document which would
further go to show that the establishment had given an
information to the Deputy Commissioner of Labour, Karimnagar,
indicating the aspect of closure of the establishment.
5. In the light of the aforesaid documents along with the
other documents which the establishment had produced, which
were marked as Exs.P1 to P9, there does not seem to be any
evidence laid by the appellant Corporation in rebuttal to the
evidence and documents produced by the establishment. The
Inspectors of the appellant-Corporation also have not cared to
visit the establishment to ascertain whether the establishment
is operational or not. If we read the provisions of Section 45 of
the Act of 1948 which deals with the powers and duties which
are vested upon the "Inspectors" now renamed as "Social
Security Officers", they have been given ample powers to
inspect the establishments and the records maintained by the
establishment. If only, the Inspectors would have exercised the
powers which they have been conferred with under Section 45
of the Act of 1948, it would have been easily ascertained
whether the contention of the establishment that it is non-
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operational from 01.03.2015 onwards to be correct or not. In
the absence of which the finding of the fact arrived at by the
Tribunal cannot be said to be either perverse or contrary to the
evidence on record. As has been mentioned earlier, the Appeal
to the High Court under Section 82(2) of the Act of 1948 can be
entertained only in the event of there being a substantial
question of law. In the absence of any evidence in rebuttal to
the documentary proof produced by the establishment, the
contentions which the learned counsel for the Corporation raises
would squarely fall within the purview of a finding of fact rather
than substantial question of law.
6. The Appeal of Corporation thus being devoid of substantial
question of law, the same fails and is hereby dismissed
accordingly. No costs.
Consequently, miscellaneous applications pending, if any,
shall stand closed.
_________________
P.SAM KOSHY, J
________________________
SAMBASIVARAO NAIDU, J
Date: 09.07.2024
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