Andhra HC (Pre-Telangana)
Nizam Club vs Employees State Insurance Corporation ... on 21 April, 2005
Equivalent citations: 2005(4)ALD834, 2005(5)ALT98, (2005)IIILLJ652AP
JUDGMENT A. Gopal Reddy, J.
1. The only point that arises for consideration in this appeal is whether an appeal lies under Section 82 of the Employees' State Insurance Act, 1948 (for short "the Act") against the order passed by the Employees Insurance Court and Chairman, Industrial Tribunal-I, dismissing the petition filed under Section 75(2-B) of the Act for waiving the condition of depositing 50% of the contribution amount as demanded by the ESI Corporation or not?
2. The facts, which are not in dispute, are that the Employees State Insurance Corporation issued proceedings dated 5-5-2003 to the appellant-club demanding a sum of Rs. 19, 51,950/-. Questioning the said demand notice, the appellant-club filed E.I.C. (Sr.) No. 2711 of 2003 under Section 75 of the Act before the Employees Insurance Court and Chairman, Industrial Tribunal, Hyderabad, raising a dispute with regard to the contribution of the amounts, so demanded, as due payable by it.
3. Sub-section 2-B of Section 75 of the Act mandates deposit of 50% of the amount for entertaining such dispute, 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 percent 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."
4. Further, the appellant-club filed I.A. No. 69 of 2004 in the said E.I. Case seeking indulgence of the ESI Court to waive the condition of depositing 50% of the contribution amount as claimed by the ESI Corporation to entertain the dispute contending that it is not covered under the provisions of the Act and when the respondent made an attempt earlier, it moved ESI Court in E.I. Case No. 11.6 of 1978 and E.I. Case No. 2 of 1981 and the same were ended in its favour holding that the provisions of the Act are not applicable to it and the same was confirmed in Appeal No. 684 of 1982, dated 2-12-1984, by this Court. The ESI Court has not recorded any finding with regard to the said contentions in the interlocutory order, which is impugned in this appeal and opined that the above said issue can only be gone into in the main appeal.
5. The ESI Court refused to exercise the discretion in favour of the appellant-club in view of the subsequent judgment of this Court in Country Club, Secunderabad v. R.D. ESI Corporation, (CMA Nos. 1105 and 1097 of 2000, dated 15-10-2000) holding that prima facie, it cannot operate as a res judicata. Even otherwise, the same can be gone into only in the main appeal and the appellant, prima facie, is not entitled to waive the condition of depositing 50% of the contribution amounts as demanded by the Corporation. Accordingly, the ESI Court dismissed the LA.
6. Learned Counsel for the appellant- club contends that as per Section 82 of the Act, an appeal not only lies against the final order but also against an interlocutory order if it involves a substantial question of law and it is wide enough to cover up an interlocutory order also. He placed reliance on the judgment of the Allahabad High Court reported in Modi Steels Unit-A v. Employees State Insurance Court, 1985 LAB.I.C. 28, wherein appeal was preferred against an order of ESI Court refusing to grant injunction restraining the ESI Corporation from realizing the amounts of damages imposed.
7. Learned Standing Counsel appearing for the ESI Corporation contends that in the absence of any substantial question of law that arises for consideration against an interlocutory order, the appeal itself is not maintainable. Therefore, he prays to dismiss the appeal.
8. Before I consider the above submission, it is appropriate to have an insight into the appeal provision under Section 82 of the Act, which reads as under:
Section 82 Appeal:-(1) Save as expressly provided in this section, no appeal shall lie from an order of an Emplovees' Insurance Court.
(2) An appeal shall lie to the High Court from an order of an Employees' Insurance Court if it involves a substantial question of law.
(3) The period of limitation for an appeal under this section shall be sixty days.
(4) The provisions of Sections 5 and 12 of the Limitation Act, 1963 (36 of 1963) shall apply to appeals under this section.
9. Sub-section (1) of Section 82 of the Act is explicit that no appeal shall lie from an order of an Employees' Insurance Court whereas Sub-section (2) of Section 82 of the Act postulates that an appeal shall lie to the High Court from an order of Employees' Insurance Court if it involves a substantial question of law.
10. It is not in dispute that the order impugned in the appeal is only an, interlocutory order, wherein, the ESI Court has not accepted the plea of the appellant- club to waive or reduce the amount to be deposited i.e. 50% of the amount due from the principal employer, to maintain the dispute.
11. It is well settled that the right of appeal is not a statutory right and it can be conferred by Statute on complying the conditions, if any, imposed. It is fairly well settled that imposing such condition, namely, deposit to maintain such appeal is not an onerous condition and it cannot be termed as arbitrary or illegal, particularly, in enforcing the welfare legislation. Legislature in its wisdom made it obligatory to deposit 50% of the demanded amount to raise a dispute to ESI Court (in the form of appeal). The question whether the Act is made applicable to the appellant-club or not can be gone into only in the main appeal. The submission made by the learned Counsel for the appellant-club that previous determination made by ESI Court was set aside holding that the appellant-club is not a factory and is not governed by the provisions of the Act will operate res judicata and demand made is unreasonable is a matter, which can be gone into in the main appeal. The Supreme Court in Employees State Insurance Corporation v. Hyderabad Race Club, 2004 (5) Supreme 674 : 2004 AILD 417 (SC), held that till the judgment of the Supreme Court in the case of M/s. Hindu Jea Band, Jaipur v. Regional Director, Employees' State Insurance Corporation, Jaipur, , the law in regard to the institutions like a Club coming within the purview of the definition of establishment for the purpose of the Act was nebulous. The Apex Court further held that in view of the judgment of the Supreme Court in Cochin Shipping Company v. ESI Corporation, the institution like Hyderabad Race Club comes within the purview of the Act.
12. In view of the law as such declared by the Supreme Court, the question whether earlier decision operates res judicata or not can be gone into in the main appeal. Suffice it to say, while dismissing IA, learned ESI Court has not decided the issue involved therein which give raises a substantial question of law to maintain the appeal. In view of the same, no infirmity is discernible in exercise of its discretion by the ESI Court in refusing to waive the condition of deposit of 50% of the demanded amount.
13. The civil miscellaneous appeal is accordingly dismissed. It is needless to observe that the ESI Court has to decide the matter uninfluenced by any of the observations made herein.