Delhi District Court
M/S. Punjab Metal Works Pvt. Ltd vs The Employees State Insurance ... on 13 October, 2011
THE COURT OF AJAY GOEL, SCJ CUM RC(CENTRAL)DELHI.
ESIC-41/85
In the Matter of:
M/s. Punjab Metal Works Pvt. Ltd.
Registered Office B-2/22,
Ashok Vihar, Phase-II, Delhi. ........Petitioner.
VERSUS
The Employees State Insurance Corporation,
E.M.C.A. House, 25/23-B, Ansari Road,
Daryaganj, Delhi through its
Regional Director. ........Respondent.
Date of Institution: 08.07.1985
Date of Remand Back: 22.09.2003
Date of Assignment to this court: 27.05.2009
Date of Arguments: 12.10.2011
Date of Decision: 13.10.2011
JUDGMENT
1.Vide this judgment, I shall dispose off the present petition filed by the petitioner against the ESIC on the averments that petitioner company was not covered under the provisions of ESIC Act as number of employees of the petitioner is less than prescribed number but ESIC issued the notice to pay sum of Rs. 30, 640.40/- for the period of 14.7.1977 to October 1979 and 07.03.1980 to January 1984 vide notice dated 14.06.1985. ESIC41/85 Page No. 1/7 It is averred that demand is against the law and facts and is not maintainable and even despite request, notice was not withdrawn and petitioner has sought to quash the same.
2.Written statement was filed by ESI and demand was justified by saying that requisite employees are working with petitioner and petitioner is liable to be covered. It was further averred that Inspector of respondent Corporation inspected the premises and code number was allocated and petitioner was asked to pay the contribution but to no effect, hence demand was raised.
3.Replication was filed on behalf of the petitioner to the WS of respondent wherein contents of petition were reiterated and reaffirmed and those of WS were denied and it was averred that no inspection was carried out nor coverage was ratified.
4.Vide order dated 30.07.1985, on the pleadings of parties, the following issues were framed:-
1) Whether the petition does not disclose the representative character of the petitioner, if so, to what effect?
2) Whether the petitioner is not covered under the ESI Act? ESIC41/85 Page No. 2/7
3) Whether the petition is defective for want of paragraph regarding the payment of court fees, if so, its effect?
4) Whether no notice or opportunity was given to the petitioner before the impugned demand was raised, if so, to what effect?
5) Relief.
5.In evidence, petitioner examined PW-1 namely Sh. Vinod Bhandari, in support of his case.
6.In defence, respondent examined one witness in support of his case namely DW-1 S. C. Talwar, Inspector of ESIC.
7.Thereafter, my Ld. Predecessor has decided the petition vide order dated 07.03.86 asking the petitioner to pay certain amount and it was held that unit was liable to be covered as petitioner was having employed 10 or more persons on September, 1989. The rest of the demand was quashed on the ground of limitation. The ESIC went in the appeal before Hon'ble High Court and case has been remanded back on the ground that limitation act does not apply for claiming the contribution from employer by ESI Act. Thus, I have to decide ESIC41/85 Page No. 3/7 the issues afresh. I have gone through the record and have heard the arguments of both counsels. My issue-wise findings is given below:-
8. Issue No. 1. Whether the petition does not disclose the representative character of the petitioner, if so, to what effect? and Issue No. 3. Whether the petition is defective for want of paragraph regarding the payment of court fees, if so, its effect?:- Both these issues are taken up together. These issues are not pressed before me. Even otherwise, the court fee is not required on the petition filed under ESI Act. PW-1 has stated that he is Director in the petitioner's company and can file and institute the petition to which there is no rebuttal. Accordingly, these issues are decided in favour of petitioner and against the respondent.
9. Issue No. 2. Whether the petitioner is not covered under the ESI Act? and Issue No. 4. Whether no notice or opportunity was given to the petitioner before the impugned demand was raised, if so, to what effect?:-
These issues are also taken up together. Admittedly, 11 ESIC41/85 Page No. 4/7 employees were found working and salary of 9 employees was shown in the register. There is no rebuttal to this evidence and plea of the petitioner to that fact is required to be discarded. Even the record produced by petitioner clearly shows that strength of employees in September, 1981 was 10 or 11. The report Ex. RW-1/1 is on the record which is signed by Mr. Vinod Bhandari. The survey report shows strength of employees as 10 firstly on 01.9.1981 and this document pertains to ESIC itself and ESIC cannot wriggle out of the same, thus before that petitioner is not liable to pay any amount but thereafter if the strength comes down still it is liable to be covered under ESI and shall require to pay amount. Ex-R-3 clearly shows the use of electricity and petitioner is manufacturing the ingots and alloys of lead and non-ferrous metal which requires electricity though petitioner has stated that manufacturing process is without the aid of power but three motors of 3 h.p. was found which was used for blower to give air to furnaces. Thus, case is crystal clear and the petitioner cannot be made liable to pay any amount form ESIC41/85 Page No. 5/7 14.7.1977 to October 1979 and thereafter from 07.03.1980 to 01.09.1981 as unit was not liable to be covered but thereafter, the petitioner was liable to pay amount. After remand back, the application U/o 18 Rule 17 CPC was allowed as the Hon'ble High Court has given observation that it was open for the employer of the petitioner/employer to take stand that he was not liable to make demand of contribution on account of in action of corporation in not claiming contribution within the reasonable time and prejudice have been caused to him. One witness Sh. Vinod Bhandari appeared and deposed that business of the company was closed and records have been destroyed and there are no workers in said period to which the benefits can be passed. There is no rebuttal in the evidence and it has come in the evidence that as ESI benefits are made to be passed on employees for their benefits but even if this contribution realised and petitioner is made to pay still the benefits cannot be passed to employees because they have left the services and ESI cannot be allowed to enrich their treasury and as the courts are not made to collecting the ESIC41/85 Page No. 6/7 amount on their behalf if benefit is not extended. The Hon'ble High Court vide order dated 31.10.2002 has made it clear and liberty was granted to the petitioner to prove the same which he has stated in his evidence. Thus, in these circumstances even though the petitioner was liable to be covered he cannot be made liable to may payment of contribution as per liberty granted by Hon'ble High Court.
Hence, in these circumstances, the petition stands allowed and the impugned demand is hereby quashed.
10.Relief:- In view of the finding on issues, petition stands allowed. It is held that petitioner's company is not liable to pay any amount and impugned demand is hereby quashed. File be consigned to record room.
Announced in the open court on (AJAY GOEL)
13.10.2011 SCJ CUM RC(Central)Delhi.
ESIC41/85 Page No. 7/7