Patna High Court
Employees State Insurance Corporation ... vs M/S Jaiswal Industries on 10 January, 2014
Author: Amaresh Kumar Lal
Bench: Amaresh Kumar Lal
IN THE HIGH COURT OF JUDICATURE AT PATNA
Miscellaneous Appeal No.217 of 2009
===========================================================
1. Employees State Insurance Corporation through its Regional Director,
Panchdeep Bhawan, J. L. Nehru Marg, Patna.
2. The Assistant Regional Director, Employees State Insurance Corporation,
Panchdeep Bhawan, J. L. Nehru Marg, Patna.
3. The Inspector, Employees State Insurance Corporation, Panchdeep Bhawan, J.
L. Nehru Marg, Patna.
.... ....Opposite Partries/ Appellant/s
Versus
M/S Jaiswal Industries, Muzaffarpur through its Manager Shri R. K. Jaiswal, son of
Sri H. L. Jaiswal, resident of Saket Bhawan, Club Road, Pani Tanki, Chowk, P. O.
& P.S. Muzaffarpur, District- Muzaffarpur.
.... .... Applicant- Respondent/s
===========================================================
Appearance :
For the Appellant/s : Mr. SUDHIR KUMAR BIJPURIA, Adv.
For the Respondent/s : ----
===========================================================
CORAM: HONOURABLE MR. JUSTICE AMARESH KUMAR LAL
ORAL JUDGMENT
Date: 10-01-2014
1. Heard learned counsel for the appellant. No one appears
one behalf of the applicant-respondent even after service of notice.
2. The Employees State Insurance Company (hereinafter
referred to as the Corporation) has filed this appeal against the order
dated 17.2.2009 passed by the Presiding Officer, Labour Court, Patna
in ESI Case No. 15 of 1997 by which the claim of the corporation has
been negatived.
3. M/S Jaiswal Industries, Muzaffarpur (hereinafter referred to
as the applicant) filed ESI Case No. 15 of 1997 under Section 75(1)(g)
of the Employees State Insurance Act, 1948 (hereinafter referred to as
the ESI Act ) for setting aside the entire proceeding and action taken
Patna High Court MA No.217 of 2009 dt.10-01-2014
2/8
by the Corporation. The case of the applicant is that the applicant
received a letter No. 42-5257/Ins Pro-II/1827 dated 20.11.1996 in
Form-C-18 claiming contribution for the period from 8/90 to 3/91
amounting to Rs.2,298.05. In reply thereto the applicant submitted
letter dated 9.12.1996 contending that the unit of the applicant is not
coverable under the ESI Act which remained unattended or without
any response. The claim of the corporation is barred by limitation, as
such the entire claim of the Corporation is fit to be rejected. The
Corporation should have cleared the dispute of coverage by filing a
case before the Employees Insurance Court (hereinafter referred to as
' E I Court') or any other means.
4. The written statement on behalf of the Corporation was
filed stating therein that the applicant was found coverable under the
ESI Act. The foreman of the applicant's factory had furnished a list
duly signed by him mentioning the name of 10 persons employed in
the factory and on that basis the factory is fully covered under the ESI
Act. The applicant has not deposited the dues pertaining to ESI Act
and the ESI Rules and the petition has been filed only to defeat the
recovery proceeding initiated against the applicant. The applicant was
advised to submit Form-01 which was enclosed later but the applicant
did not furnish any information in Form-01 deliberately. The factory
was surveyed by the authority of the Corporation and ten workers
Patna High Court MA No.217 of 2009 dt.10-01-2014
3/8
were found working in the factory and this fact was substantiated by
the foreman of the factory in writing. Therefore, the applicant factory
was covered on the basis of information furnished by local office
Manager who conducted surveys of the factory. The applicant was
also advised to get his record verified vide letter dated 10.10.1991 at
Regional Office, Patna but in response to those letters the applicant
wrote request Letter No. 20.11.1996. It is further mentioned that cause
of action arose in the year 1990 as such the applicant should have
moved E I Court, Patna within three years of the cause of action. The
notices of dues demand on the applicant's code no. P/42-5297 were
served but the applicant management did not clear the dues and filed
the aforesaid ESI Case No. 15 of 1997 which is barred by limitation
under Section 77(1-A) of the ESI Act.
5. On the basis of the pleadings of the parties the following
questions have been framed by the learned Labour Court:-
(i) Whether the factory is covered under the provision
of the ESI or not ?
(ii) Whether the case is barred by limitation or not ?
(iii) Whether the applicant has been able to make out his
case or not ?
6. In support of its case the applicant has examined A. W. 1
Patna High Court MA No.217 of 2009 dt.10-01-2014
4/8
Lala Kant Jaiswal, A. W.- 2 Mahendra Giri, and A. W. -3 Shailesh.
The Corporation has examined Jag Lal Choudhary as O. P. W. -1.
7. Both sides have proved a number of documents which have
been marked as follows:-
For the applicant:-
Ext. 1- Attedance Register
Ext. 2- Signature of ESI Inspector on the register on
31.8.1990.
Ext. (2/A to 2/B)- Signature of E.S.I. Inspector & P.F. Inspector on the register on the month of 31.3.1991 and 28.2.1991.
Ext. 3- Letter dt. 17.12.1991 written by Jaiswal Industries given to the E.S.I. Office.
Ext.- 3/A & 3/B Letter dated 9.7.1992, 4.9.1992, given to the E.S.I. Office.
Ext. 3/C Letter written by Jaiswal Industries given to the Regional Director of the E.S.I. Ext. 3/D to 3/E- Letter dt- 9.12.1996, 22.3.1997. Ext. 4 to 4/B Registry Receipt No. 5437, 2458, 3172. Patna High Court MA No.217 of 2009 dt.10-01-2014 5/8 Ext. 5 Letter written by Mahendra Giri foreman of the Jaiswal Industries, Bela, Muzaffarpur.
For the opposite parties:-
Ext. -A- Signature of Mahendra Giri on list of employees. Ext. A/1 - Recital of Ext.-A. Ext. B- Survey report dated 12.9.1990.
Ext.C- Form- C-18 dated 3.10.1991.
Ext. D- Show cause notice dated 25.10.1991.
8. After hearing both the parties E I Court has decided that the factory (Issue No. 1) does not come under ESI Act. With regard to Issue no. II it has been held that the claim of the Corporation is barred by limitation. Issue no. III has been decided in favour of the applicant.
9. Learned counsel for the Corporation has submitted that following substantial question of law is involved in this case;-
(i) Whether the order of the corporation declaring that applicant comes under the purview of ESI Act is barred by limitation ?
(ii) Whether the contribution amount determined and claimed by the Corporation are barred by Limitation Patna High Court MA No.217 of 2009 dt.10-01-2014 6/8 under Section 77(1)(A) of the Act ?
In pursuance to the list of employees of the applicant submitted by foreman Mahendra Giri (A.W. 2) and after submission of list (Ext. A-1) and the report of the Inspector (Ext. B) the applicant was declared that it comes under the purview of ESI Act and accordingly under Section 10 B in Form-01 it was declared that it comes under the purview of ESI Act and as such it has to deposit the contribution made by the employee as well as the employer and accordingly Code No. P/42-5297 was allotted and later on vide letter No. 1128 dated 3.10.1991 demand was made which is Ext. C and the contribution was demanded for the period 17.8.1990 to 31.3.1991, but the contribution was not made by the applicant as such show-cause notice was issued to the applicant/proprietor vide Letter Nos. 1129 , 1130, 1131 dated 25.10.1991 (Ext. D), but the applicant did not make any contribution.
10. Learned counsel for the Corporation has further submitted that it is admitted fact that it has been mentioned in the application before EI Court that applicant received letter in Form-C-2 under P/NF 2684/ Muzaffarpur/ dated 15.3.1990/11.4.1990 as mentioned in paragraph 3 of the petition. This declaration was never challenged before the EI Court within the limitation period of three years. as such Patna High Court MA No.217 of 2009 dt.10-01-2014 7/8 this order stating that the applicant comes under the purview of ESI Act is final but the EI Court has erroneously held that the claim of the Corporation is barred by Limitation as the Corporation did not file any application before the EI Court within five years.
11. Learned counsel for the Corporation has also submitted that the cause of action to the applicant arose in the year 1991 and the case was filed in the EI Court in the year 1997 which is hopelessly barred by limitation, but the learned EI Court has erroneously held that the claim of the Corporation is barred by limitation.
12. It has been held that Corporation should have approached EI Court for realization of the contribution amount but the law is otherwise. It is the employer who has to approach EI Court as it has been held in the case of Employees' State Insurance Corporation vs. F. Fibre Bangalore (P) Ltd., reported in (1997) 1 SCC 625 and the same view has been taken in the case of ESI Corpn. Vs. C.C. Santhakumar, reported in (2007) 1 SCC 584. It has been held in the latter decision that so far Corporation is concerned, Corporation has no obligation to seek a resolution of the dispute by EI Court under Section 75 or to have the order executed under Section 77. When the order is passed under Section 45-A of the Act, it is for the employer concerned to dispute the determination made under Section 45-A Patna High Court MA No.217 of 2009 dt.10-01-2014 8/8 before the EI Court, failing which the determination under Section 45(A) of the ESI Act would become final against the employer.
13. Considering the facts and circumstances stated above, I am of the view that both the issues are answered in favour of the Corporation.
14. In view of above, the impugned order is not fit to be sustained. It is set aside. This appeal is allowed.
15. There would be no order as to costs.
(Amaresh Kumar Lal, J) A.F.R. Kanchan/-