Delhi District Court
M/S Ahuja Sales Corporation vs Employee State Insurance Corporation on 1 April, 2025
IN THE COURT OF MS. NEHA PANDEY, JSCC/ASCJ/GJ (WEST),
TIS HAZARI COURTS, DELHI.
ESIC no.03/2020
CNR no.DLWT03-001862-2020
1. M/s Ahuja Sales Corporation
H-5, 1st Floor, DSIDC Industrial Area
Udhyog Nagar, New Delhi-110041.
2. Mrs. Alka Ahuja
W/o Mr. Balvider Ahuja
Proprietor of M/s Ahuja Sales Corporation
H.No. 126/127, Upper Ground Floor, Pocket-21,
Sector-24, Rohini,
Delhi-110085.
...Petitioner
Versus
1. Employees State Insurance Corporation
ESIC Regional Office Delhi, 3rd & 4th Floor,
Rajendra Bhawan, Rajendra Place,
New Delhi-1100081.
2. Raj Kishore
S/o Kamla Prasad
R/o L-169, Nangloi, Delhi-110041
...Respondents
Date of Institution : 06.10.2020
Date of final arguments : 13.01.2025
Date of decision : 01.04.2025
Decision : DISMISSED
JUDGMENT
PETITION U/S 75 OF THE EMPLOYEES STATE INSURANCE ACT, 1948 M/s Ahuja Sales Corporation & Anr Vs ESIC 1 /16 The present petition U/S 75 of the Employees State Insurance Act, 1948 has been filed by the petitioners against the respondents.
PETITION
1. In brief it is the case of the petitioner that the Petitioner no. 2 is proprietor of Petitioner no. 1. Petitioner was covered under the provision of The Employees State Insurance Act, 1948 and allotted code No. 22001293380000205 w.e.f 01/07/2020 by the respondent. Mr. Raj Kishor who was an employee of the Petitioner firm and working since 01.10.2020 on post of Skilled worker had suffered accident on 3rd July 2020 as result of which his left hand forearm got crushed. The injured/employee contribution was deducted and deposited along with the Petitioner/ employer contribution with the respondent. On 03.07.2020 around 4.05pm, the injured during the normal course of employment was working in the petitioner firm on Injection moulding machine and while taking off the die from the machine, he could not hold the balance and fell on the floor along with the die and resulting which his left hand forearm got crushed and was immediately taken to Hospital for his treatment. The Petitioner had reported the said incident to Respondent no. 1 on 10 July 2020. The Respondent no. 1 issued show cause notice no. D/B.O./Accident/2214665304/2020 dated 13.07.2020 to the Petitioner and the same was duly replied by the Petitioner. The Petitioner made compliance vide letter dated 21.07.2020 to respondent no. 1 and again requested to give benefits to the injured at the earliest. Petitioner from time to time requested the respondent no. 1 to give benefit to injured, but till date no action have taken or even respondent by the respondent no. 1. The respondent no. 1 vide letter M/s Ahuja Sales Corporation & Anr Vs ESIC 2 /16 no. 2214665304/20 dated 16.09.2020 rejected the claim. The Respondent arbitrarily and illegally rejected the claim and deprive the legal benefits to the injured. Late registration under the Act is not legal ground to deprive the benefits to the injured under the provision of the Act.
2. The injured employee was clearly an "insured person', as defined in the Act. As the Injured 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 Petitioner. Section 2 (14) of The Employee State Insurance Act, 1948 defines "insured person" which reads thus: "insured person" means a person who is or was an employee in respect of whom contributions are or were payable under the Act and who is by reason thereof, entitled to any of the benefits provided by the Act. Payment or nonpayment of contributions and action or non-action prior to or subsequent to the date of accident is really inconsequential in considering the entitlement of benefits by an injured employee in a covered establishment under the Act. The ESI Act being a beneficiary legislature cannot deprive a person of his benefits under the ESI Act on technical grounds. It is morale and legal responsibilities of the Petitioner to help the Injured employee to get the benefits under the Act. Thus, the present petition has been filed with the following prayers:
a) To quash the letter/ letter No. letter no.
2214665304/20 dated 16th September 2020 vide which the accident claim for benefit was rejected by the Respondent no. 1.
b) Directed the Respondent to release pay the benefit(s) to the Injured employee Mr. Raj Kishor as per the Rule/ Act.
M/s Ahuja Sales Corporation & Anr Vs ESIC 3 /16 WRITTEN STATEMENT OF RESPONDENT No. 1
3. Written statement was filed on behalf of petitioner and it is submitted that the present petition is not bonafide being, an abuse and misuse of the process of law besides the same being malicious and filed by the petitioners with malafide and dishonest intentions to shift/pass their own legal liability and responsibility to compensate their injured employee to the respondent corporation, wrongly and illegally and on the basis of false interpretation of legal provisions and twisted and concocted facts of the matter. It is denied that the petitioner firm was covered under the scheme of the ESIC w.e.f. 01.07.2020 rather as per the records of the respondent, petitioner no. 1 firm got coverage under the ESIC Act only w.e.f. 04.07.2020. Further, Sh. Raj Kishor, alleged injured employee of the petitioner got covered under the ESI scheme only w.e.f. 06.07.2020. Since the petitioner no. 1 firm acquired coverage only w.e.f. 04.07.2020, respondent is not at all legally liable and responsible to compensate any of the employees of the petitioner no. 1 firm for the injuries suffered by them in any accident which took place in its premises prior to 04.07.2020. As per the records of the respondent, Sh. Raj Kishor, alleged injured employee of the petitioner got covered under the ESI scheme only w.e.f. 06.07.2020 and petitioners had deposited contribution in respect of him only for 03 days in the month of July, 2020 and that too after 04.07.2020 i.e. after being covered under the ESIC scheme and therefore respondent is not liable to M/s Ahuja Sales Corporation & Anr Vs ESIC 4 /16 compensate said Sh. Raj Kishor in any manner. It is further submitted that in order to cover their misdeeds and wrongly shift the liability of compensation upon the respondent no. 1, petitioners submitted an online accident report to the respondent only on 10.07.2020 whereas alleged employment accident resulting into injuries occurred long back on 03.07.2020 Petitioners prior thereto kept a perfect mum and did not bother to inform the respondent about the happening of the accident in any of their communications with the respondent no. 1. No liability can be fastened upon the respondent for any accident which took place in premises of petition no. 1 resulting in to any injuries to any of its employees prior to its coverage with the respondent. It is submitted in the written reply that present petition should be dismissed with cost.
ISSUES
4. On completion of pleadings, the following issues were framed for trial on 16.09.2022:-
i) Whether the plaintiff has entitled to the relief of quashing the letter no. 2214665304/20 dated 16.09.2020 vide which the claim for the benefit was rejected by the respondent and for the release of the payment/benefit to the injured employee Raj Kishore as per the ESIC Act? OPP.
ii) Relief.
PETITIONER EVIDENCE
5. In order to prove her case, the petitioner has examined Shri Aatish as PW-1 and he has reiterated the M/s Ahuja Sales Corporation & Anr Vs ESIC 5 /16 averments of the petition by way of affidavit Ex.PW1/A who is accountant/Manager of the petitioner firm and relied upon following documents:-
1. Copy of C-11 coverage of petitioner establishment is Ex. PW1/1,
2. Copy of attendance register is hereby de-
exhibited and marked as Mark A.
3. Copy of E-Pehchan Card is Ex. PW1/3,
4. Accident Report is Ex. PW1/4 (page no. 1 to 5)
5. Compliance letter dated 13.07.20 is Ex. PW1/5
6. Letter dated 21.07.2020 by the petitioner is Ex.PW1/6
7.Letter dated 13.07.2020 issued by the respondent is Ex.PW1/7
8.Letter dated 21.07.2020 issued by the petitioner is Ex.PW1/8
9.Copy of correspondence/report relied by the respondent is 1 to 24) Ex. PW1/9 (Colly.) (page no. 1 to
24)
10. Letter dated 16.09.2020 issued by respondent is Ex.
PW1/10 (page no. 1 to 2)
6. PW-1 in his cross examination stated that the injured Raj Kishor was working with the petitioner no. 1 since 01.07.2020 and he admitted that the petitioner no.1 was not covered within the ESIC before 04.07.2020. He denied the suggestion that that when Raj Kishor got injured, the petitioner no. 1 applied for the coverage under ESIC to put the burden regarding the M/s Ahuja Sales Corporation & Anr Vs ESIC 6 /16 compensation upon the ESIC illegally. Vol. The petitioner no. 1 had started the process for coverage before Raj Kishore got injured.
7. Thereafter, PE was closed vide order dated 17.02.2023 on request of counsel for petitioner and matter was fixed for respondent evidence.
RESPONDENT EVIDENCE
8. Respondent examined Ms. Ashish Siwach, Assistant, ESIC, Rohini as RW-1 vide affidavit Ex.RW1/A wherein he reiterated the same facts as in written reply of respondent no. 1 and placed on record the following documents:-
(i) Copy of letter dt. 09.09.2020 issued by Asstt.
Director of respondent towards rejection of Compensation claim of petitioner no. 2 Ex.RW-1/1 (OSR),
(ii) Copy of letter dt. 16.09.2020 issued by Branch Manager of respondent to petitioner no. 1 with copy to petitioner no. 2 - Ex. RW-1/2 (OSR),
(iii) Copy of covering letter dt. 31.07.2020 issued by Branch Manager, Nangloi, ESIC to Asstt.
Director, Sub- Regional Office, ESIC, Rohini Delhi
for admission of declaration of accident case of Sh. Raj
Kishore - Ex. RW-1/3 (OSR).
(iv) Copy of Employment Injury Report - Ex.
RW-1/4 (OSR).
(v) Copy of Accident Report of respondent in Form-12 Regulation 68 - Ex. RW-1/5 (OST.), M/s Ahuja Sales Corporation & Anr Vs ESIC 7 /16
(vi) Copy of C-11 dt. 04.07.2020 - Ex. RW-1/6 (OSR).
(vii) Copies of two letters issued by respondent to petitioner no.1, both dt. 13.07.2020 and both bearing no. D/BO Nangloi/Accident/2214665304/2020 -
Ex. RW-1/7 (OSR) and Ex. RW-1/8 (OSR) two
replies of the petitioner no. 1 to the same dt.
21.07.2020-Ex. RW-1/9 (OSR) and Ex. RW- 1/10
(OSR).
9. RW-1 in his cross examination stated that as per the scheme of the ESIC Act any employee joining any factory/establishment and coverable under the scheme of ESIC Act has to be registered by the employer with ESIC within 10 days of the joining. The petitioner no. 2 was registered with the ESIC on 06.07.2020. The petitioner had got registered respondent no.2 with the ESIC as per Ex. PW1/3, his date of joining shown as 01.07.2020 by the petitioner no.1.
10. Thereafter, DE was closed vide order dated 11.08.2023 and matter was fixed for final arguments.
DECISION WITH REASONS
11. I have heard arguments advanced by Ld. Counsels for parties and carefully gone through the record.
Issue wise findings are as follows:-
12.
(a) Issue no.1 Whether the plaintiff has entitled to the relief of quashing the letter no. 2214665304/20 dated 16.09.2020 vide which the claim for the benefit was rejected by the respondent and for the release of the M/s Ahuja Sales Corporation & Anr Vs ESIC 8 /16 payment/benefit to the injured employee Raj Kishore as per the ESIC Act? OPP.
The onus to prove the said issue is upon the petitioner. The petitioner in order to prove its case has examined the PW1 Shri Aatish who is stated to be the Accountant/ manager of the petitioner firm but there is no document on record to show that he was the employee manager of the petitioner firm and also no document has been placed on record to show that he has been duly authorised to depose on behalf of the proprietor, Mrs Alka. The documents which has been filed along with the petition bears the signature of the proprietor Mrs Alka but the proprietor for the reasons best known has not been examined to depose in the present matter. All the correspondence with the respondent ESIC has been done by the proprietor. Mrs Alka, who is the petitioner number two in the present petition but she has not come forward to depose the real facts of the petition as stated in the present matter. The non-examination of the proprietor Mrs Alka creates doubt in the story of the petitioner and also the injured Raj Kishore against whom the benefit has been claimed by the petitioner has also not been examined by the petitioner to support the allegations in the petition. Interestingly, the injured Raj Kishore was not made party to the present petition by the petitioner at the time of original filing and it is only by way of an application under order 1 rule 10 that the injured Raj Kishore was added as party to the present petition, vide order dated M/s Ahuja Sales Corporation & Anr Vs ESIC 9 /16 3.6.22. The non-examination of the injured Raj Kishore has also created doubts in the story of the petitioner to the mind of this court. As had he been examined by the petitioner it would have given the opportunity to this court to negate the submissions of the respondent ESIC that the present petition has been filed by the petitioner to shift their liability Upon ESIC with respect to the compensation to the injured Raj Kishore.
The petitioner has also not examined the medical expert with respect to the injuries caused to the injured Raj Kishore. The copy of attendance register which has been filed by the petitioner is mark A which does not mention the name of injured Raj Kishore. The letter of appointment has not been filed in original by the petitioner nor the same has been exhibited, a photo copy showing the date of joining of injured Raj Kishore is shown as 1st July 2020, which bears the signature of Raj Kishore and the proprietor Alka. But as discussed above neither of the said persons have been examined in the present petition . Thus , the date of joining of the injured Raj Kishore has also not been proved by the petitioner even when the same was denied by ESIC as it was suggested by the counsel for the respondent ESIC to PW-1 that the injured Raj Kishore did not join the petitioner firm on 1st July 2020. It is the admitted case of the petitioner that the injured was registered with the respondent/ESIC only on 06.07.2020 where as the injury was of 03.07.2020. The petitioner informed about the incident i.e accident of injured Raj Kumar to the M/s Ahuja Sales Corporation & Anr Vs ESIC 10 /16 respondent/ESIC on 10.07.2020 vide document Ex.PW1/4 i.e after a week of incident. Thus information regarding the injury was given only after the registration of employee Raj Kumar and it appears that the same was deliberately done by the petitioner to avail benefit under ESIC Act and to shrug off his responsibilty of workmen compensation act.
13. The undersigned has carefully perused the letter dated 09.09.2020 whereby the claim of the petitioner with respect to the benefit injured Raj Kishore by the respondent ESIC on the ground that on the date of the injury i.e 03.07.2020 the injured employee was not registered with the respondent/ ESIC and also that the petitioner organization was registered with the ESIC only on 04.07.2020. The said order has not been challenged by the petitioner in the present petition rather the subsequent order dated 16.09.2020 which is Ex. PW1/10 has been challenged by the petitioner relying upon the judgment of Hon'ble Supreme Court of India in the case of Bharagath Engineering vs R Ranga Naiki & Ors. the undersigned has carefully perused the said judgment and the other judgments cited by Ld. Counsel for petitioner as well as the counsel for the respondent ESIC. The judgment which has been cited in support by Ld. Counsel for petitioner does not apply to the facts and circumstances of the present case. The case of the petitioner squarely falls under the case of Sushil Goyal vs Luckson Siddique & Ors. DOD 27 January, 2014 of Hon'ble High Court of Delhi . The said order of M/s Ahuja Sales Corporation & Anr Vs ESIC 11 /16 Hon'ble High Court of Delhi has been followed in the case of Mohinder Pal Singh vs Upender Paswan & Ors DOD 25 April, 2018 by Hon'ble High Court of Delhi wherein the judgment cited by Ld. Counsel for petitioner has also been discussed in detail and the relevant paragraphs of the said judgment are quoted below:-
8. The dispute is essentially between the appellant and ESIC. The learned Senior Advocate for the appellant submits, that in term of Bagarath Engineering (supra) the benefit of insurance coverage under the ESIC would be extended to the injured employee prior to the registration of the employer under the said Act. In the same vein, the High Court of Kerala in Employee's State Insurance Corporation vs. Maria Tiles decided on 02.01.2014, held as under:-
"5. Section 2(14)of the Act defines "insured person"
which reads thus: "insured person" means a person who is or was an employee in respect of whom contributions are or were INSA.80/2011 7 payable under the Act and who is by reason thereof, entitled to any of the benefits provided by the Act." The definition includes a person who is or was an employee in respect of whom contributions are or were payable under the Act and who is by reason thereof, entitled to any of the benefits provided by the Act. Scheme of the Act, Rules and Regulations thereunder, indicate that the insurance covered under the Act is distinct and different from the contract of insurance in general. Payment or nonpayment of contributions and action or non-action prior to or subsequent to the date of accident is really inconsequential in considering the entitlement of benefits by an injured employee in a covered establishment under the Act. Where the employee has suffered an employment injury as defined under section 2(8) of INSA.80/2011 8 the Act and there is no dispute that he was an employee of the employer and where there is a statutory interdiction under section 53 of the Act barring the employee or dependent from claiming compensation or damages under any other law, he has to be treated as an insured person under the Act even where no application had been moved to register him or contribution was paid in respect of him by the employer. Apex Court analysing section 2(14) of the Act in Bharaqgath Engineering v. Ranganayaki (2003(2) SCC138 has held that the employer has not paid contribution to Corporation is not a ground to hold that he was not an insured person and thus deny benefits under the Act or to his dependants. Application filed and contribution paid with respect to the M/s Ahuja Sales Corporation & Anr Vs ESIC 12 /16 employee, was much later to the accident cannot be considered decisive to hold that the employee was not an 'insured person.' Section 2(14) clearly takes within its ambit an employee in respect of whom contribution is or was payable under the Act. That clearly would INSA.80/2011 9 show that even when there was default or negligence on the part of employer to pay contribution with respect to an employee, but, it was required to be paid under the Act, that employee has to be treated as an insured person.
6. Section 68 of the Act enable the Corporation to initiate recovery proceedings against the opposite party after the Corporation providing benefits to the employee with respect to whom there was default or negligence on his part to pay contribution and even twice the amount of contribution can be recovered from the employer in such case, has been canvassed by the counsel to impeach the order of E.I. Court. In the Writ Petition W.P(c) 38153/2007 Corporation impleaded as additional respondent has not canvassed or raised such a contention. In the judgment rendered in the writ petition specific direction had been issued for deposit of compensation awarded by the Commissioner by the opposite party, providing him opportunity to claim reimbursement from INSA. 80/2011 10 Corporation proving that the employee was an „insured person‟ under the Act. In the light of such specific directions given under the judgment E.I. court was bound to order reimbursement of the amount deposited by opposite party to satisfy the claim of the employee when such employee was proved to be an insured person under the Act. If the Corporation is having statutory empowerment under section 68 of the Act to proceed against the opposite party for its failure or negligence to pay contribution under the Act with respect to the employee it can resort do so in accordance with law. Order of the E.I. Court does not reflect that Corporation has set forth its statutory entitlement to have recovery from the employer on a challenge referable to section 68 of the Act. Further more any recovery proceeding thereunder can arise only after providing benefits to employer by Corporation and that too for realisation of defaulted contribution, even to twice the sum due, from employer. There is no merit in the challenges INSA. 80/2011 11 raised to impeach the order of E.I. Court. Appeal is dismissed directing both partied to suffer their respective costs."
9. The learned counsel for the respondents submits that this Court in Sushil Goyal vs. Luckson Siddique & Ors. MANU/DE/0366/2014, has distinguished the applicability of Bharagath Engineering (supra) in the facts of that case and held that unless the unit stood registered with the ESIC and the name of the employee was registered with the latter, benefits would not flow to the injured employee, otherwise it would be deemed to be a fraud upon the statutory insurance scheme. It held, inter alia:
M/s Ahuja Sales Corporation & Anr Vs ESIC 13 /16 "6. In my opinion, in the facts of this case, the argument urged on behalf of the appellant placing reliance on the judgment of the Supreme Court in Bharagath Engineering (supra) case is misconceived because the judgment in the case of Bharagath Engineering proceeds in a factual basis where an employee is in fact an employee and his name is shown in the register of employees as duly registered with ESIC. It is not the law as per Bharagath Engineering(supra) case that even if a person is not shown in the register of employees and is not an employee on the date of the accident, even then ESIC still incurs liabilities for an employee who is not in the register and who is not registered with ESIC as per the returns filed by the employer. Section 44 of the ESIC Act talks of filing of returns with ESIC, 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 returns made as per the register. A mere registration of an employer under ESIC 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. There cannot be any other interpretation of the liability of ESIC Act under the provisions of the Act otherwise it will be very easy for an employer to give a lesser number of employees in the employment register, pay lesser contribution, and then after happening of an accident seek to include employees who have suffered as a result of the accident, by filing returns with ESIC thereafter, and thereby deny its/employers' liability by seeking to fasten the liability upon ESIC. If the employer is permitted in such a case to plead that it is not liable then it will be as if to permit a fraud to be played upon ESIC, and which interpretation of the provisions of the Act I cannot subscribe to. I cannot permit the argument as urged on behalf of the appellant to succeed because admittedly in the documents filed with ESIC by the employer of the previous year of the accident the deceased Sh. Aftab Alam was not shown as an employee and he was sought to be shown as an employee only by filing returns after one year. Registration with ESIC is valid only with respect to such employees who are employees as duly shown in the returns with ESIC and also in the employees' register maintained by the employer for being covered under the ESIC Act. If I permit the argument urged on behalf of the appellant to succeed then grave fraud can be played upon ESIC because a person would not be an employee covered under ESIC and yet, liability would be thrown on ESIC. The object of the observations of the Supreme Court in the case Bharagath Engineering (supra) is to ensure that once an employer with a particular number of specified employees with details is registered with ESIC, then, even when premiums are not paid by the employer, ESIC would still be liable to the dependents of the M/s Ahuja Sales Corporation & Anr Vs ESIC 14 /16 deceased, inasmuch as, it is the duty of ESIC to recover the premiums and other amounts recoverable under the ESIC Act from the employer. The argument, therefore, urged on behalf of the appellant/employer is rejected and the liability in the present case falls upon the appellant and not upon ESIC".
14. It is not in dispute that the ESIC's letter dated 27.06.2013 rejecting the appellant's claim has not been challenged either by the employee concerned or the appellant-employer. Should the appellants have had a grievance against the rejection, a statutory appeal could have been preferred before the appropriate forum, as specified under the statue, i.e., before the Employees' Insurance Court.
15. In view of the preceding discussion, it is evident that the employee could not have been awarded the benefit of compensation under the ESI Act, because of the denial of his coverage under the insurance scheme. This issue was between the employer and the ESIC because the denial of coverage to or rejection of the claim, would inexorably lead to a liability for compensation on the employer. The employee could not have been kept waiting to rehabilitate himself till the issue of his coverage and benefits under the said Act was determined in the appeal. The statutory appeal against the rejection of the claim because of non-coverage would lie only before the Employees Insurance Court. Hence, this appeal is not maintainable.
14. In view of the above discussion and taking guidance from the legal precedents cited by the counsel for the respondent ESIC, this court is of the opinion that the petitioner has not approached the court with clean hands and there is no justifiable reason for the late information to the respondent/ESIC with respect to the accident of injured Raj Kishore which took place on 03.07.2020 through the information was given to ESIC only on 10.07.2020 i.e. after getting the registration of petitioner firm and the injured Raj Kishore. This conduct of the petitioner makes the averments as not trustworthy and it M/s Ahuja Sales Corporation & Anr Vs ESIC 15 /16 appears that the same has been intentionally done by the petitioner to claim benefit under ESIC Act though the respondent injured was registered with ESIC only on 06.07.2020 i.e. after the date of accident. Accordingly, the present petition is hereby disposed off as dismissed being not maintainable.
RELIEF
15. The present petition of the plaintiff stands dismissed.
16. File be consigned to the Record Room as per rules. Digitally signed by NEHA NEHA PANDEY PANDEY Date:
2025.04.09 17:27:43 +0530 Announced in the open court (Neha Pandey) st on 1 April, 2025 JSCC/ASCJ/Guardian Judge West, Tis Hazari, Delhi M/s Ahuja Sales Corporation & Anr Vs ESIC 16 /16