Madras High Court
Employees State Insurance Corporation vs M/S.Essargee Mills on 7 August, 2018
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 07.08.2018
CORAM
THE HONOURABLE MR.JUSTICE A.M.BASHEER AHAMED
C.M.A(MD)No.1462 of 2012
Employees State Insurance Corporation,
Sub Regional Office,
1-B, Old Post Office Street,
Tallakulam,
Madurai ? 625 002. : Appellant / Respondent
Vs.
M/s.ESSARGEE Mills,
Through its Personal Officer,
Pethanaickenpatti Road,
Chinnakalayamputhur,
A.Kalayamputhur Post,
Palani ? 624 615 : Respondent / Petitioner
PRAYER: Civil Miscellaneous Appeal is filed under Section 82 of ESI Act,
against the order dated 06.09.2012 of the Labour Court (Employee State
Insurance Court (ESI Court), Madurai in ESI.O.P.No.25 of 2001.
!For Appellant : Mr.P.Ganapathisamy
^For Respondent : Mr.G.Manivannan
:JUDGMENT
This Civil Miscellaneous Appeal has been filed against the order, dated 06.09.2012 of the Labour Court (Employee State Insurance Court), Madurai in E.S.I.O.P.No.25 of 2001.
2. The appellant herein is the Employees State Insurance Corporation, arrayed as respondent in E.S.I.O.P.No.25 of 2001, filed by the respondent / employer herein, on the file of the Labour Court, Madurai, designated as Employee State Insurance Court, which allowed the said petition in its order, dated 06.09.2012, setting aside Section 45-A of the order of Corporation, dated 27.08.2000 and also issuance of C-19 Recovery Notice, dated 31.10.2000. The present Civil Miscellaneous Appeal is filed by the ESI Corporation, seeking to set aside the order of the Labour Court (Employee State Insurance Court), Madurai, dated 06.09.2012, passed in ESI.O.P.No.25 of 2001.
3. The admitted case of both sides in ESI.O.P.No.25 of 2001 is as follows:-
(i) The employer / respondent is running a Textile Mill at Palani and covered under the Employees State Insurance Act by assigning Code No.57-
47047-11. Respondent Mill was inspected on 14.12.1995 and 21.12.1995, by the Inspector of ESI Corporation and by spot letter / Ex.P1, dated 21.12.1995 was issued by R.W.1 / ESI Inspector, demanding to pay contributions on 11 items, including contribution on stipend (item 10) and incentives (item 11) for the period from 1992 ? 1993 to 1994 ? 1995.
(ii) On receipt of the above letter / report, the employer conceded to pay the contribution for items 1 to 9 and disputed the claim of contribution on stipend to the apprentices (item 10) and attendance incentives (item 11) by its letter / Ex.P2. The employer has further stated in Ex.P2 that a case in ESI O.P.No.9 of 1995 is pending on the file of the Labour Court (ESI Court), Madurai, regarding the claim of contribution on 10th Item (stipend to apprentices) and it will be remitted only after the disposal of the said case.
(iii) The ESI Corporation sent C-18 Notice / Ex.P3, dated 08.01.1997, demanding to pay a contributions for the year from 1992-93, 1993 to 1994-1995, totally Rs.96,865/- towards stipend and incentives. Respondent sent a letter / Ex.P4, dated 03.02.1997, reiterating the same objections in respect of contribution on stipend and also incentives, on the basis of the inspection report / Ex.P5, dated 13.05.1997.
(iv) Respondent Mill was demanded to pay contribution on stipend and incentives, for the year 1995-96, by way of C-18 Notice / Ex.P7, dated 26.10.1998, after the letter dated 04.06.1997 / Ex.P6 of the respondent Mill in which also, the respondent is disputing the claim of contribution on stipend and incentives by referring the pendency of ESI O.P.No.9 of 1995 regarding the contribution on stipend and also stated that no contribution need be paid towards incentives, for the year 1995-96.
(v) Both notices, dated 08.01.1997 and 21.10.1998 respectively were taken up for deciding the claim of contribution on stipend and incentives, since no contribution has been paid on the payments. The authorized representative of the employer / respondent was heard on 10.02.1999 and 17.03.1999. On personal hearing, they raised objection regarding the contribution on stipend for earlier periods, since the ESI Court has granted interim injunction in ESI O.P.No.9 of 1995, claiming contribution on stipend.
(vi) On a request made by the employer to defer the question of contribution on apprentice stipend till the disposal of the case in ESI O.P.No.9 of 1995 and on disputing the attendance incentives, the appellant herein / Corporation decided the issue of contribution on incentives alone payable for the period from 04.04.1992 to 3/1996 and directed the respondent Mill to pay the contribution on incentives totally Rs.44,673/- with interest and passed the impugned order under Section 45A of the ESI Act, 1948, on 27.08.2000 / Ex.P8 since the contribution on incentives for the year from 04/1992 to 03/1996 as arrived at was not paid by the employer, recovery notice / Ex.P9, dated 31.10.2000 was issued to the respondent Mill.
4. The employer / respondent herein has filed ESI O.P.No.25 of 2001 disputing the claim of contribution in respect of attendance incentives for the period from 1992 - 1995, as per the order of the Corporation, passed on 27.08.2000, under Section 45A of the ESI Act., and also subsequent C-19 Notice, dated 31.10,2000 for recovery of the due amount with interest, under Section 75(1)(g) of ESI Act. The said impugned order, dated 24.08.2000 is produced and marked as Ex.P8 on the side of the employer and as Ex.R8 on the side of the Corporation and also the impugned C19 Notice, dated 31.10.2000, issued by the Corporation is produced and marked as Ex.P9 on the side of the employer and as Ex.R9 on the side of the Corporation before the Court below during trial. Employer did not adduce any oral evidence on his side. Exs.P1 to P9 were marked, as employer's side exhibits, without any objections by the Corporation during trial. R.W.1 was examined on the side of the Corporation and Exs.R1 to R9 were marked. R.W.1 does not raise any objections about the employees exhibits during his evidence. Both side exhibits are one and the same. Hence, the contention of the appellant / Corporation that the document on the side of the employees need not be looked into in the absence of oral evidence, cannot be accepted.
5. On perusal of the impugned order, dated 27.08.2000 of the Corporation / appellant, the issue of claiming contribution on apprentice stipend for the period from 4/1992 to 3/1996 was not decided and was deferred on the request of the employer till the disposal of the ESI O.P.No.9 of 1995 filed by the employer which was pending on the file of the Labour Court (ESI Court), Madurai, questioning the claim of contribution on apprentice stipend for earlier periods.
6. The ESI Corporation has decided the issue of claiming contribution and apprentice incentives for the notices period from 4/1992 to 3/1996, on the basis of Management order, dated 25.06.1997, produced by the employer, which authorizes the payment on incentives. The impugned 45A Order, dated 27.08.2000, directs the employer to make pay Rs.44,673/-, as contribution towards attendance incentives for the period from 4/1992 to 3/1996 with interest.
7. Hence, the decision rendered by the Court below in respect of the claim of contribution on apprentice stipend for the impugned Notices period is outside of the scope of the relief sought by the employer in ESI.O.P.No.25/2001. Further, the Corporation has produced the order dated 19.10.2010, passed by the Court below in ESI.O.P.No.9/1995, dismissing the plea of the employer in respect of claim of contribution by the Corporation on apprentice stipend. The above fact was not brought to the Notice of the Court below by either parties in this case.
8. The Corporation contends that, as per the Management Order, dated 25.06.1997, which authorizes the payment of incentives to the employees, who attended the Mill for 24 days or more in a month, are eligible for attendance incentives and it is followed during the Notice period from 04/1992 to 03/1996 and also revealed that the incentive is worked out based on the number of days worked as per the fixed rate and payment is also made in cash along with salary every month and the notice amount tally with the general ledger figures.
9. Though the claim of contribution on attendance incentives, as additional remuneration, as contended by the Corporation by referring the Judgment of the Apex Court, is disputed by the employer, either parties failed to produce the alleged Management letter, dated 25.06.1997 on which the disputed claim rests before the trial Court for its consideration. R.W.1 also has spoken about such letter and its contents, but failed to produce it before the Court below during his evidence. The alleged letter of the Management / employer produced before the Corporation in the personal hearing of the authorized representative of the employer is also admitted during the hearing of the appeal. It is also pertinent to note here that the impugned order, dated 24.08.2000, also reveals the fact that the payment is effected based on the Management order clearly specifying the rates of incentives made in cash every month along with monthly salary.
10. The Corporation has further contended that the Notice amount tallies with the general ledger figures. In such a situation, the general ledger for the specified period relating to the cash payment on attendance incentives was also not produced by the employer before the Court below for its consideration. The production of the alleged Management letter, dated 25.06.1997 and also the general ledger for the relevant notice period are the vital documents to decide the nature of the payment on incentives to the employees, by the employer. Further, both the show-cause notices dated 08.01.1997 and 21.10.1998 in respect of the claim of contribution on attendance incentives were taken together for deciding the issue by the Corporation in issuing the impugned order dated 45A, under the ESI Act.
11. In the above stated circumstances, this Court constrains to remit the matter to the Labour Court (ESI Court) Madurai, for considering the issue of claim of contribution of attendance incentives, as wages / additional remuneration under Section 2(22) of the ESI Act, on production of the alleged Management letter, dated 25.06.1997 and the relevant general ledger for the notices period maintained by the employer after giving sufficient opportunity to adduce further evidence by both sides in accordance with law.
12. In the result, this Civil Miscellaneous Appeal is allowed, by setting aside the order, dated 06.09.2012, passed by the Labour Court (ESI Court), Madurai in ESI.O.P.No.25 of 2001 and this Court remits the matter to the Labour Court (ESI Court), Madurai, for its fresh consideration regarding the issue of claim of contribution on attendance incentives for the period from 04/1992 to 03/1996, on merits and in accordance with law, after giving sufficient opportunities to both parties for adducing further evidence, if any, on production of the alleged Management letter, dated 25.06.1997 and the General Ledger for the notices period by either parties. This Court further directs the the Labour Court (ESI Court), Madurai, to dispose the said case within a period of one month from the date of receipt of a copy of this order and report the same to this Registry. No costs.
Note : Registry is directed to transit the case records to the trial Court without any delay.
To
1. The Labour Court, (Employee State Insurance Court), Madurai
2.The Record Clerk Vernacular Section, Madurai Bench of Madras High Court, Madurai.
.