Karnataka High Court
The Deputy Director Esi Corporation vs M/S Saket India Ltd on 2 August, 2010
Author: Aravind Kumar
Bench: Aravind Kumar
IN Tim HIGH COURT OF KARNATAKA. BANGALORE
THE HON'BLE MR. JUsT1cEmARAviNi§ O
MISCELLANEOUS FIRST APPEA1}-N0}5s03~oir_"2oo'é:L1é5e:I}
DATED THIS THE 22": DAY OF AUGUST
BEFORE
BETWEEN:
THE DEPUTY D1_REC'EOR.~
E.S.I. CORPORATION, * .'
REGIONAL OFFICE p{KAR1\{.,ATA1§A1s, *
PANCHADEEP BHAVAM' 2
No.1o,s:NNYFIEL19S. ' '
BINNYP133;}3AN=a3ALoRE-56{)O23.if O
...APPELLANT
[By sup:'v;'§1g1fas§_;:nifia adv. ,)
AND::F__
N:
NO.'i..13', 1S'P,MA1N...RoAD,
' " SHESHADRIPURA.
;BANGALORE:.5r3O 020.
"13'fr_1*Fs MANAGER
...RESPONDENT
V Kanikaraj , Adv. ,]
O .. MFA is filed under Section 82(2) of ESI Act
AA against the Order dated 8.2.2007 passed in 1381 Application
1\1'o,30/2004 on the file of the Judge, ESI Court. Bangalore,
"allowing the application fiied under Section 75 of {£81 Act
against the Order dated 1.3.2004 passed by the Authorized
Officer of E81 under Section 45~A of the 1381 Act.
This appeal coming on for Admission this day, the
Court delivered the following:
JUDGMENT
This appeal by the E81 Corporat_i_on,.a__ V ., against the order dated o8.o24.2oo7j'r Application No.30/2004 71_)y.__ :15? Insurance Court at listed for admission by consent _0f:--V:I3e{;1:r1ri'egjvvVZ,§>dVocates appeal is taken--up for the appeal.
;1_'he_ issued a show cause notice resp.on:oeri't..c,on 01.12.2003 calling upon the res[;{ond.ent contribution in respect of the » payrnents-.rn"atde by it to three security agencies namely is/ii./.'s; Security for the period 12/1995 to 1 / Guardweli Security Services for the period it it » to 3/ 1995 and M / s. Crown Security Services for Atheflperiod 4/ 1995 to 11/ 1995. '1' he respondent did not 5%' i covered under the E81 Act and they having been assigned separate code numbers and they havinghypaid the contribution question of payment by arise and it was contended on account of payinent of-«.. contributions by the said ag:encr;p'es.:' the herein need not pay the aniczgnt even was contended that on ac_co:u_ntV._y_vof itheddiunvit of the respondent having beenpt_aii_€Tif Indian Overseas Bank being t_ifie.__ ope1'atin'gV.'ag;ency .ap'p'ointed by the Board of diiestructure, it was contended' pay"the contribution.
4. in claim before E81 Court two witnesses were-» eggamined and Exs.A1 and A2 were got behalf of the respondent namely the 'appe}1an--t¥jCo=rporation one witness was examined as 1 two documents were got marked as Exs.R1 % ij" E N
5. Having heard the learned Counsel appearing for the parties, ESI Court by its order dated allowed the application. It is this order:---- . assailed in the present appeal by..ESI.
6. Heard Sri.V.Naras.in1ha lea.rried:
appearing for appellant learned Counsel appearing for_..r'esp::o'n;;:1er1t_._'alt.is the contention of Mr.Hoila that respondentllhaid discharge the burden documentary evidence.Vai*id:"th.e_ before ESI Court that the iDBI are not tenable since {DB1 as a party and even otlre1"Wis.e no "atte;r1pt was made by the respondent to ' Vislummon said records. He would also submit that not appearing before the statutory autiioriities and inspite of giving sufficient opportunities A same not having been made use of by the lgrespondent authorities were justified in passing the substantial question of law would arise for consideration in this appeal:
(0 Whether the order of the ESI Cou§'t:'-- 8.2.2007 is perverse, sir;ce»_the stirrLe:'_ts""not_ based on the a1:ceptLtble...iefviu£iertAc.e----.
suffers from incorrect a;:}prec.iation,."_of and law relevant to . ' _
(ii) Whether, the ;..ordersr.r.;,t€ jihe"E'SI Cou.rt cgtnnot be sustained"'--tn the Seefion 39, 40, 41 and 45A ::ES£:.'r§'¢Vt._'-'~'read with Reguiatto:1 31 gandr4..i'3'ii{1c)(a3' of the ESI as also various .. _ the Appellant under :hed'gtrp;c;,;}¢i:zs 'urged? ;
8. u'Per " Kanikaraj, learned Counsel app;ear_ing_ for"re,spondent would vehemently contend ' .tthatjAthe*ipro'viso to Section 45-A would get attracted to the'factsivotftthe case and contends that there is burden equa1iy«;_ on the corporation to discharge that "ii .cont.ribution have not been made by the respondent and it is Within its powers to summon such of those @/ documents which are in the custody of the security agencies to ascertain as to whether they contribution or not and accordingly . order assailed in the present appeal»-d.oes_' is it any infirmity. He would furtheAi'«V_c:ont'end'-- who was examined on of the '<_:res:p'orident--"'i Corporation has admitted iri"'ti'i.e:'yifitness "box that out of three security agencies-.'tu'fo 'l"'agenLc:ie's.vsiixzfqere separately registered that when there is witness himself it was iiorporation to summon the records from agencies to ascertain as to whether thcyhave inade any payment or not and thus .subin'its that in the absence of such exercise being done _bIy_ ESI Court was justified in setting aside..__'the«sdemand raised. He would also submit that is re_spo'ndent had been declared as a "Sick Industry" and 'Wsoperating agency had been appointed by the BIFR to manage the affairs of the respondent--Cornpany and no at records were available with the respondent and thus it was not liable to either answer the c1aim.j"»of«..S_Sthe Corporation or pay the amounts as demanded.
9. Having heard the learned the parties, this Court is of i't1<1__e considered,»\}'iew'_that two questions formulated would arise for consideration. ' trif.Op-Q1315!:t6..V__~éépfeciate H the rival contentions it wonld Section 45- A of the ESE tirrderiz contributions in _ Where in respect of a factory no returns, V_ _vparticuiars,'v._registers or records are submitted, ~ in accordance with the _V of Section 44 or any Inspector or of the Corporation referred to in {2} of Section 45 is (prevented in .. manner) by the principal or immediate 'employer or any other person, in exercising his functions or discharging his duties under Section 45, the Corporation may, on the basis @/ 10 of information available to it, by order determine the amount of contributions in respect of the employees of that establishment:
Provided that no such order: shall the Corporation unless the ..
immediate employer or -the person in the factory or establishntent has' reasonable 0PPOr':Pinii!ft'Of'l;'5.Z€'iri£§'t.flfiéard.-~.. (2) An order under subsection (1) :shali::=be-- _s:u__fi;i.ciertt1.p,p'roof of the claim of Section 75 or for recoiigerya V the cleternuned by such orcte-rt: arre_arl' 'of revenue under Section' ._recovery under Section 45 C to 'Section "
VUnlder:vc_1_'ia.pter 5 of the E81 Act, 1948 which ' :glo*.reyrn_s'~ithe"' contributions mandates that all emptoyed lareiiltol "o.ej'j_ilr;sured as required under Section 38 and contribution is payable under the Act in respect of a A Alyelfiiployee by the employer at the rates prescribed. lésection 40 mandates the duty on the principal employer 06 11 to pay contributions in the first instance whether directly employed by him or through employer and sub--Section 2 of Section the principal employer to recover froin the employees contribution by dediictionl h.i_s«. and not otherwise. Sectio:'1i.c:'l'-l=i1 also the' principal employer has" contributions in respect of employee' 'A ll.AA_';alI__t_iount of the eontributiorrv it the immediate employer. establishment has to Whether return is filed olf.rVV;fi(;;£,;,l the establishment has maintained.' theiiregisters, records in accordance with ~ ., 5Ve'Ction'lt44' of the is required to be determined under Section 45--A to arrive at a conclu.-§ion.5"'as to whether there is any amount payable by_.the~ "principal employer the proviso mandates for l issuance of notice by giving a reasonable opportunity of being heard before passing any such order. C§( 12
11. In this factual background of stattltory provisions, when the facts of the case are examine.{:t«..it'w--is noticed that on 01.12.2003 a show issued to the respondent~Compa.ny.»--- .No--'_"re3p'1y'.--V.TnaVs 1:)jee11., nu given, no documents were produ'ced._ 3' Persor1a,1 offered on 24.12.2003 Been".
utilized. Thus, authoritieson 'thedwdfbasis itcjfmhevirecords, inspection reports fgp"conc1usion that respondent that it has made working in its unit in se'c.tirity;'._'agencies above referred to emploved it U~r,p:deri~'dated 01.03.2004.
12. VPursuarit__t.o the said order of determination ' recovery. 'eeartificate has been issued on 30.05.2004 caliingy A the respondent to pay a sum of Rs.a62,12.23.x56/-. Aggrieved by order of determination 3r,{n'der Section 45~A recovery certificate issued thereunder, the respondent-Company has filed an 45/ 13 application under Section 75 of the E81 Act before the ES} Court at Bangalore in $381 Application Before the E81 Court except producing * of the BIFR at Ex.A2 and piettcr if 07.05.1997 at Ex.A1, demonstrated or discharged obligation l' ' the amount by itself or agencies whom it had engaged and been covered under E81 Act; 2 a__:alleged admission made by whereunder he has admitted that agencies, two agencies have been covfered Act respondent company wants. to shelter under such admission. Though contend before this Court that I vthe.VpESi,:lGorporation witness himself admits about these two. agencies being covered under the ES} Act and when duty is cast on the authorities under the proviso l ._to"Section 45~A to summon the records from these two if " "agencies and ascertain or find" out as to whether they $2 14 have made contributions for the relevant period question of payment by respondent did not arise"'a.n«dl'aVs such it is contended that order of ESI Courtis * proper. Same cannot be accepted 'p rea.'_s;oIi,_ nu burden is on the respondent'.4t(j.__ldemonstrate"
establish that amounts as.:'claimhed._ duet: infac't has reached the coffers of 1381 flIn"thel§absence of the said obligation the Company as required is a "Beneficial piece of for the benefit of the made by the Witness a shelter. In View of the provisionsluof"Act-narnely Sections 39, 40 and 41 the l principal Vexiiployermought to have made payment and 9' the employees or from the immediate en1ploye1',o'r T discharged its burden by demonstrating that agencies appointed by it had made contributions relevant period. P 2 15
13. In View of these provisions referred to above it cannot be said that burden cast on the employerhas remained discharged. in View of this this Court is of the considered View that 0 Court dated 08.02.2007 cannot rp-be? accordingly the same is hereby set-,_a's-ide the substantial questions in" of the appellant and against"'tlie. l =
14. Horweizer' or1:=._facts7it"«is"'foun_df'that a contention had been ::t.ake_n._.by"'the":r'es.por:dent%~Company that out of three security'lag-eAnc,ie's.,A two were covered under the E81 Act and they .are registered under the E381 Act V. the contribution. If it were to be ' -. would be entitled to demonstrate before to show that factually amounts are paid fora relevant period by the said agencies. The A "10.' llres}:Agorident«CorIipany is at liberty to tender such evidence as it may be advised to do so and demonstrate 16 that such contributions have been made by its immediate employer. In View of this, the remanded to the authorities and order ~ Section 45~A dated O1.03.2004:.als»o. we aside and matter is being remitted consideration afresh in Thee adjudicating authorities shaiian lopporitunity to the respondent--Complany: in respect of the employegs':§f_-3 aigen_cie's"V§ernpioyed by it for the perioéljpeerefferreii. by employer has been i'I1.'~id_€ ithas reeached the Corporation. Accoprdinglyee is allowed. The order paslsevd' by i3S--I:_C__3_ourt in ESE Application No.30/2004 ~ V:ydateds_V4E5'.2;fé"GQ7 and order dated 1.3.2004 passed by ES1 are hereby set aside. Matter is remitted to the .. app.ellant»«Corporation for disposal afresh after A ipaffoyrding opportunity to the respondent~Cornpany. The e';respondent--Company would be entitled to summon