Gujarat High Court
Regional Director vs Bhagwan Ramdas Patil on 14 June, 2024
NEUTRAL CITATION
C/FA/2330/2023 ORDER DATED: 14/06/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 2330 of 2023
With
CIVIL APPLICATION (FOR STAY) NO. 1 of 2023
In R/FIRST APPEAL NO. 2330 of 2023
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REGIONAL DIRECTOR
Versus
BHAGWAN RAMDAS PATIL & ANR.
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Appearance:
VIVAN T SHAH(7947) for the Appellant(s) No. 1
MR K R MISHRA(6312) for the Defendant(s) No. 1
NOTICE SERVED for the Defendant(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE DEVAN M. DESAI
Date : 14/06/2024
ORAL ORDER
1. This Appeal is filed under Section 82(2) of the Employees' State Insurance Act, 1948 challenging the judgment and order dated 16.02.2003 passed by the Labour Court, Surat in E.S.I. Application No.7 of 2007.
2. Heard learned advocate Mr.Vivant Shah for the appellant.
3. The brief facts leading to the present First Appeal are as under:-
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NEUTRAL CITATION C/FA/2330/2023 ORDER DATED: 14/06/2024 undefined 3.1 The original applicant - present respondent No.1, was serving as a welder with present respondent No.2 - original opponent No.1. He was drawing salary of Rs.4,500/- per month. No letter of appointment was issued in favour of the original claimant.
3.2 It is the case of the original claimant that the employer - respondent No.2 herein, was covered under the Employees' State Insurance Act being E.S.I. Code No.39/1972/09 SF and he has informed the Employer to deduct contribution from his monthly salary, however the same was not done. On 28.04.1999, while performing his duties, he fell down from 20 ft. height and sustained injuries on his left leg. Thereafter, he was taken to the hospital and surgery was performed. Due to the said incident, the employee has sustained permanent disability.
3.3 On 21.10.1999, Notice came to be issued to the original opponents. Since the said notice was not complied Page 2 of 12 Downloaded on : Fri Jul 05 21:15:39 IST 2024 NEUTRAL CITATION C/FA/2330/2023 ORDER DATED: 14/06/2024 undefined with, the employee was constrained to file E.S.I. Application No.7 of 2007 before the learned E.S.I. Court, Surat under Section 75 of the E.S.I Act for compensation.
Though the employer served with the Notice, did not remain present and did not file any Written Statement. 3.4 The appellant - original respondent No.2 appeared and filed Written Statement at Exh.8. Issues were framed by the learned Labour Court and after considering the evidence and the material placed before the learned Labour Court, the learned Labour Court partly allowed the application on 16.02.2023 and directed the original opponents to pay compensation with 8% interest from the date of application till realization to the original applicant within a period of 30 days.
3.5 Being aggrieved and dissatisfied with the impugned judgment and order, the present appellant is before this Court.
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NEUTRAL CITATION C/FA/2330/2023 ORDER DATED: 14/06/2024 undefined
4. Learned advocate for the appellant has placed on record the paper book of the ESI Application No.7 of 2007 which is taken on record.
5. Learned advocate for the appellant has proposed the following substantial questions of law for consideration.
(a) Whether the respondent-employee would be an insured person as contemplated under section 2(14) of the ESI Act when the employer has neither registered him as an employee nor paid contribution under the ESI Act?
(b) Whether the appellant corporation can be fastened with the liability of payment to the employee under the ESI Act, when the employer has neither registered him nor paid contribution as mandated under the Act?
(c) Whether mere registration of an employer with the ESIC would give rise to liability of the appellant for payment under the ESI Act?
6. Learned advocate for the appellant has submitted that the learned Labour Court has committed an error in granting the application. It is further submitted that the Page 4 of 12 Downloaded on : Fri Jul 05 21:15:39 IST 2024 NEUTRAL CITATION C/FA/2330/2023 ORDER DATED: 14/06/2024 undefined employer has neither registered the employee nor paid any contribution as required under the Employees' State Insurance Act, 1948. It is further submitted that the prescribed declaration Form being Form No.1 was also not filled-in and submitted by the employer. The employer has committed breach of the provisions of law. 6.1 Learned advocate for the appellant has submitted that the reliance placed upon decision of Bharagath Engineering Vs. R. Ranganayaki & Anr. reported in (2003) 2 Supreme Court Cases 138 is misconceived as in that case name of employee was shown in the register of employees. 6.2 It is further submitted that Section 44 of the Act talks of filing of returns with Employees' State Insurance Corporation and maintenance of a register of employees by the employer. Contributions are to be made therefore with respect to specified employees existing on the employment register whose total number have to be specified in the Page 5 of 12 Downloaded on : Fri Jul 05 21:15:39 IST 2024 NEUTRAL CITATION C/FA/2330/2023 ORDER DATED: 14/06/2024 undefined returns made as per the register. A mere registration of an employer under Act cannot and does not mean that such registration applies with respect to un-specified number of employees inasmuch as registration is applicable only for specific employees and specified number of employees. Mere registration of the employer with appellant would not give rise to the liability of appellant under the Act. 6.3 The employer neither registered nor submitted declaration Form or report of the accident as mandated under Regulation 12(1) of the Employees' State Insurance (General) Regulations, 1950. In absence of compliance of mandatory provisions, employee is not an insured person under Section 2(14) of the Act and therefore, the liability saddled upon present appellant is against the settled principles of law and the impugned judgment and order is required to be quashed and set aside.
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NEUTRAL CITATION C/FA/2330/2023 ORDER DATED: 14/06/2024 undefined 6.4 Learned advocate for the appellant has placed reliance upon the decision of the Hon'ble Delhi High Court in the case of Sushil Goyal vs. Luckson Siddique & Ors. reported in (2014)1 LLJ 709 and submitted that the Hon'ble Delhi High Court has discussed the case of Bharagath Engineering (supra). The Delhi High Court has observed that a mere registration of an employer under the Act cannot mean that such registration applies with respect to non-specified number of employees.
7. This Court has considered the submissions and grounds raised in the memo of appeal alongwith the paper book submitted by the learned advocate for the appellant. General denial have been taken by the appellant. The appellant has pleaded the ignorance about the occurrence of the accident. It is an undisputed fact that the employer was registered under the Act. However employer neither submitted the declaration Form nor paid contribution. The Page 7 of 12 Downloaded on : Fri Jul 05 21:15:39 IST 2024 NEUTRAL CITATION C/FA/2330/2023 ORDER DATED: 14/06/2024 undefined witness of appellant has admitted in cross-examination that no actions have been taken against employer for no paying contribution of Employees State Insurance. Before the filing of present application, employee has approached before Workman Compensation Commissioner under Workman Compensation Act, 1923. However, upon statement made by employer that factory is covered under the Employees' State Insurance Act, 1948. Hence, employee withdrew Workman Compensation Application and filed present application under Employees' State Insurance Act.
8. In case of Bharagath Engineering (supra), in para 12, the Hon'ble Supreme Court has observed as under:-
"12. When considered in the background of statutory provisions, noted above, the payment or non-payment of contributions and action or non-action prior to or subsequent to the date of accident is really inconsequential. The deceased employee was clearly an "insured person" as defined in the Act. As the deceased employee has suffered an employment injury as defined under Section 2(8) of the Act and there is no dispute that he was in employment of the employer, by operation of Section 53 of the Act, proceedings under the Compensation Act were excluded statutorily. The Page 8 of 12 Downloaded on : Fri Jul 05 21:15:39 IST 2024 NEUTRAL CITATION C/FA/2330/2023 ORDER DATED: 14/06/2024 undefined High Court was not justified in holding otherwise. We find that the Corporation has filed an affidavit indicating that the benefits under the Act shall be extended to the persons entitled under the Act. The benefits shall be worked out by the Corporation and shall be extended to the eligible persons."
9. In the case of Sushil Goyal (supra), in para 6, the Hon'ble Delhi High Court observed that the respondent had filed an Affidavit stating that Form 16, with respect to deceased employee was filed only after one year of the accident and the appellant has neither submitted the contract for employment and nor the name of the deceased was shown in the register of the employees.
In the present case, the employer has chosen not to contest an application. Even during the cross- examination of the original claimant, the appellant could not extract anything contrary from the original claimant. As a matter of fact, only general denial questions were put in the cross-examination.
10. Section 82(2) of the Employees' State Insurance Page 9 of 12 Downloaded on : Fri Jul 05 21:15:39 IST 2024 NEUTRAL CITATION C/FA/2330/2023 ORDER DATED: 14/06/2024 undefined Act is reproduced hereunder:-
"An appeal shall lie to the High Court from an order of an Employees' Insurance Court if it involves a substantial question of law".
11. The provisions contained under Sub-section 2 of Section 82 envisages that only in the case where the case involves a substantial question of law, appeal would lie. Even, if the findings of the fact is based on misappreciation of evidence, it could not be said that any substantial question of law is involved in appeal from such findings. Where the learned Labour Court on consideration of the evidence on record arrived at the findings that the claimant is entitled to certain amount as benefit from the Corporation and such finding is based upon the appreciation of evidence, such finding cannot be legally challenged under Sub-section 2 of Section 82 of the Act as it does not involve any question of law, much less, substantial question of law. The question as to whether Page 10 of 12 Downloaded on : Fri Jul 05 21:15:39 IST 2024 NEUTRAL CITATION C/FA/2330/2023 ORDER DATED: 14/06/2024 undefined how many persons were being working with the employer, is a pure question of fact and such dispute could not be said to be a substantial question of law.
12. As discussed above, the appellants case is that, the employer did not submit declaration Form till the date of accident and resultantly the employer is guilty under the provisions of the Act. The oral deposition of the appellant which has come on record to the effect that no actions were taken against the employer by the corporation for non-compliance of the mandatory provisions and regulations under the Act, is sufficient to hold the appellant liable for the compensation. This Court is not inclined to entertain the First Appeal. Resultantly, First Appeal is devoid of merit. Hence, the same is rejected.
13. After completion of dictation, learned advocate for the appellant has submitted that right to recovery an amount of compensation from the employer may be Page 11 of 12 Downloaded on : Fri Jul 05 21:15:39 IST 2024 NEUTRAL CITATION C/FA/2330/2023 ORDER DATED: 14/06/2024 undefined reserved. The right to recover an amount of compensation from the employer by the appellant is a right flowing under the Law. If law permits, the appellant may initiate the recovery proceedings against the employer, if so advised.
Order in Civil Application In view of the order passed in the main matter, the present Civil Application does not survive and stands disposed of accordingly.
(D. M. DESAI,J) MANOJ Page 12 of 12 Downloaded on : Fri Jul 05 21:15:39 IST 2024