Further in Christian Association For Radio and Audio Visual Services vs Employees

Mr. KK Pal, Advocate Mr. SM Chakraborty, Senior Advocate Ms. A. Pal, Advocate HON’BLE MR. JUSTICE ARINDAM LODH Order 24/01/2022 Heard Mr. KK Pal, learned counsel for the appellants as well as Mr. SM Chakraborty, learned senior counsel assisted by Ms. A. Pal, learned counsel for the respondents. In this appeal, with the consent of learned counsel appearing for the parties following substantial question of law has been formulated in terms of sub-section (2) of Section 82 of the Employees State Insurance Act:- “Whether the findings of the learned Insurance Court that the appellant has failed to establish the fact that the respondent- establishment was running with ten or more employees is perverse or not?” I have gone through the judgment passed by the learned Insurance Court which on examining the records and considering the evidences and materials on records held thus: “8) Issue no.1 and 2 :- Both the issues are taken up together for convenience of discussion and decision. As per notification bearing no. F.21(73)-LAB/ENF/ESI/ 2008/6952-56 dated 6.10.2009 the Court of District & Sessions Judge has been declared as District Employees Insurance Court for West Tripura District and as such any petition under Section 75 of ESI Act can be filed in this Court. However, as per Section 75 sub section 2B of the Act before approaching this Court in respect of any dispute between Principal Employer and the Corporation in respect of any contribution or any other dues, Employer is required to deposit 50% of the amount due from him as claimed by the Corporation, provided that the Court may, for reasons to be recorded in writing, waived or reduced the amount to be deposited under said sub section. Though the opposite parties did not raise any plea on maintainability of the proceeding on that ground but fact remains the petitioner did not deposit 50% of the said claimed amount nor has filed any petition before this Court for waiving such deposit. Thus, the Court cannot shut down its eyes the petitioner regarding non notwithstanding that the opposite parties did not raise any such plea in their statutory obligation by compliance of written statement. On asking by the Court Learned Senior Advocate Mr. Chakraborty submitted that no such deposit was made as his case is not related to any dispute concerning the quantum of the contribution, rather his case was filed under section 75(1)(g) of the Act and not under section 75(1)(b) or (c) of the Act. So, the petitioner is not required to deposit 50% of any such sum. He also referred one decision of Hon’ble Rajasthan High Court in All India ITDC Employees Union v. Employees State Insurance Corporation & ors., 2001 Legal Eagle 1550, wherein the followings were held: “9. ............. Under the scheme of the Act of 1948, Chapter VI specifically deals with the adjudication of the disputes and claims. Section 74 envisages establishment of Employees Insurance Courts for resolution of the disputes arising under the Act. Section 75 of the Act enlist the matters to be decided by the Employees Insurance Court. U/s 75, the question where any person is liable to pay the employee’s contribution is raised , it is a matter to be decided by the Employees Insurance Court u/s 75, which is like a residuary clause invest the Insurance Court to decide any dispute between the principal employer and the Corporation or between a principal employer and immediate employer, or between a person and the Corporation or between an employee and a principal or immediate employer in respect of any contribution or benefit or other dues payable or recoverable under this Act or any other matter required to be or which may be decided by the Employees Insurance Court under this Act. Sub-section 2B requires that if any dispute is raised by a principal employer against a Corporation in respect of any contribution or any other dues, he can raise such dispute only on depositing with the Court 50% of the amount as due from him as claimed by the Corporation.” However, in Sulabh International Social Service Organisation vs. Employees’ State Insurance Corporation and Anr. (17.01.2011 - PHHC) : MANU/PH/1263/2011, when the petitioner Sulabh International was asked by the ESI authority to deposit ESI contribution, they filed petition before ESI Court claiming that their organisation was a voluntary service organisation working on ‘no loss and no profit’ basis and as such ESI Act was not applicable upon them. Along with their said petition, they submitted another petitioner under section 75(2B) of the Act for waiving 50% deposit which was rejected by ESI Court, which thereafter ultimately went to the Hon’ble Punjab and Haryana High Court and Hon'ble High Court held as follows- “8. Before appreciating the argument raised by counsel for the parties, it is necessary to reproduce Section 75(2-B) of the ESI Act, which reads as under: No matter which is in dispute between a principal employer and the Corporation in respect of any contribution or any other dues shall be raised by the principal employer in the Employees’ Insurance Court unless he has deposited with the Court fifty per cent of the amount due from him as claimed by the Corporation: Provided that the Court may, for reasons to be recorded in writing waive or reduce the amount to be deposited under this Sub-section. A reading of the aforesaid Sections shows that dispute between the principal employer and Corporation in respect of any contribution or any other dues could be raised by the principal employer in the El Court only after depositing 50% of the amount due from him as claimed by the Corporation. Only relief as provided in the proviso is that the Court may, for reasons to be recorded in writing, waive or reduce the amount to be deposited.” State Insurance - MPHC) (23.03.2017 Further in Christian Association For Radio and Audio Visual Services vs. Employees : Corporation MANU/MP/1071/2017 also the matter of applicability of ESI Act upon them was challenged by the petitioner Christian Association and they filed a petition before ESI Court for stay of order of ESI authority regarding payment of contribution but same was rejected by ESI Court on the ground that 50% of the amount demanded was not deposited. Said order was challenged before Hon’ble Madhya Pradesh High Court and Hon’ble High Court held as follows- “10. It is clear that under the stay application filed before the Employees Insurance Court, no any prayer was made regarding waiver or reduce the amount to be deposited under this sub-section. It was clear that no amount was deposited before the Court, thus, it could not be held that the lower ESI Court has committed any illegality in dismissing the stay petition. According to clear provision of Section 82(2) of the ESI Act, an appeal shall lie to the High Court from an order of an Employee’s Insurance Court if it involves a substantial question of law. It is clear that this miscellaneous appeal does not involve any question of law rather than substantial question of law. Thus, this miscellaneous appeal is liable to be dismissed as being not maintainable. Consequently, it is dismissed at motion stage. ......” is filed challenging that ESI Act Thus, as per said decisions of Hon’ble Punjab and Haryana High Court and Hon’ble Madhya Pradesh High Court, even if the petition under Section 75 of the Act in any particular establishment, the employer is required either to deposit 50% of the sum due as claimed by the Corporation or to file a petition seeking waiving of such deposit or for reduction of amount of such deposit, and unless same is done the petitioner cannot approach this Court seeking any relief under ESI Act. Thus, it is held that the instant petition is not maintainable. Both the issues are therefore decided against the petitioner. is not applicable 9) Issue No.3 :- The opposite parties proved one preliminary survey report dated 16.2.2009 under Exbt.A along with one carbon copy of observation slip (Exbt.B) showing list of names of employees of Steel Well Industries as was found during inquiry by one Sri R. Datta on 16.02.2009. Said observation slip also contains original signature of one Mrinal Pal. Name of Mrinal Pal is also shown as one employee of said establishment. Saidpreliminary survey report was prepared by one Sri R. Datta mentioning that on physical verification 10 numbers of employees were found in the said factory and it was also informed to him that one Manager was employed in that establishment. Said Mr. R. Datta was not examined in this case. There is also nothing in the record that before such inquiry was done, any prior notice was served upon the employer. Signature of the Petitioner was also not taken in the observation slip. Said Mrinal Pal was also not examined either by Petitioner or by the opposite parties who signed in the observation slip. No signature of any independent witness was also taken in the said observation slip. Even the father’s name and address of the employees whose names are reflected in the observation slip are also given. Thus, there are some latches from the side of ESI Authority in conducting such inquiry, as it appears. Learned Counsel Mr. K.K. Paul referring to Section 44 of the Act submitted that some registers were required to be maintained by the petitioner and return was also required to be submitted by him before the ESI Authority but he did not comply such legal requirement and more so, when opportunities were given to him, he did not appear before the ESI Authority to deny such preliminary report and the observation slip, thus same are binding on him. However, this submission is not acceptable as there is no scope for drawing any statutory presumption for non compliance of Section 44 of the Act. As per Section 103 of Indian Evidence Act, burden lies on the ESI authority to prove that there were minimum 10 numbers of employees in the establishment of petitioner but they failed to prove the same satisfactorily. Thus, it is held that the ESI Authority could not prove satisfactorily that as on 16.2.2009 there were 11 numbers of employees in the establishment of the petitioner and as such the order of the opposite parties contained in letter dated 13.06.2014 and 17.06.2014 are liable to be set aside. Issue No.3 is decided accordingly in favour of the petitioner. However, this decision will not prohibit the ESI Authority from causing any enquiry in any future date in the establishment of the petitioner. 10) Issue No.4 :- In this issue the petitioner has prayed for declaring that his factory does not come under the purview of ESI Act as the number of employees are/were below 10. Section 2(12) of the ESI Act is very relevant in this regard which is therefore excerpted below :- (12) "factory" means any premises including the precincts thereof-- (a) whereon ten or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on, or (b) whereon twenty or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power or is ordinarily so carried on, but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952) or a railway running shed;]. As per said definition the words “on any day of the preceding twelve months” cast a deep significance in this context which means that on the date of inspection by ESI Authority, if on any day preceding 12 months, 10 numbers or more employees are found in any establishment, said establishment will come under the purview of ESI Act. The statute gives liberty to the ESI Authority to conduct enquiry in any factory on any occasion or even on several occasions. Now, if it is declared in perpetuity that ESI Act is not applicable in the establishment of the petitioner, it will not only debar the ESI Authority from conducting such inquiry in future but same will give an extra undue privilege to the petitioner to evade his responsibility under ESI Act even keeping 10 or more employees in his establishment in future. Thus, no such declaration that ESI Act is not applicable in the establishment of the petitioner can be granted. Thus, this issue is decided against the petitioner. 11) Issue No.5 :- In view of the discussion above, no further relief/reliefs can be granted to any of the party.” I do not find any flaw in the said findings which are based on proper reasoning. During the course of argument, it is found that the signature of Mrinal Paul, the alleged Manager of M/s Steelwell Industries in Exbt.-B whereby the alleged Manager Mrinal Paul had divulged the names of the employees has not been proved. The Insurance Corporation would have summoned said Mrinal Paul, but, they did not do so to prove his signature. The Insurance Court also would have called its Officer to identify the signature of the alleged Manager, but, the Corporation also did not do so. Since, signature of said Mrinal Paul, the Manager has not been proved in Exbt.-B, I am not inclined to interfere with the findings of the learned Insurance Court that the appellant has not been able to substantiate that the establishment, M/s Steelwell Industries was running with 11 (eleven) employees at the relevant point of time. The findings recorded by the learned Insurance Court cannot in any way be said to be perverse. So, the findings of the learned Insurance Court on facts does not call for interference. Accordingly, the appeal filed by the appellant-ESIC being devoid of merit stands dismissed. However, the Employees State Insurance is given liberty to inspect the establishments and make a fresh assessment after giving reasonable opportunity to the respondents. JUDGE Saikat