Punjab-Haryana High Court
Sudershan Weaving Factory vs Employees' State Insurance ... on 24 November, 1989
Equivalent citations: II(1990)ACC210, (1999)IIILLJ112P&H, (1990)97PLR361
JUDGMENT G.R. Majithia, J.
1. This appeal under Section 82 of the Employees' State Insurance Act, 1948 (for short 'the Act'), is directed against the order of the Employees' Insurance Court, Amritsar (for short 'the Insurance Court1), dated November 25, 1988, whereby it rejected the application under Section 75 of the Act filed by the employer.
2. The Employees' State Insurance Corporation (for short, 'the Corporation') determined the contribution payable by the employer for the period November 20, 1976, to March 29, 1978, amounting to Rs. 6,336.75 under Section 45A of the Act. This order was served upon the employer which led to the filing of the application under Section 75 of the Act. The order was assailed principally on the ground that the employer had not employed twenty workers without power and ten workers with power during the relevant period. It was further pleaded that the employer does not fall within the ambit of the term "factory" as defined in Clause (12) of Section 2 of the Act. The Corporation controverted the pleas made in the petition and pleaded that the factory is partly working on powerlooms and partly on handlooms. If a factory is using power, in that case the factory is covered under the Act if ten or more workers are employed and in case where power is not used at all, in that case the factory is covered under the Act where twenty or more workers are employed.,
3. From the pleadings of the parties, the following issues were framed:
(1) Whether the respondent-Corporation is not entitled to recover the contribution on ad hoc basis.
(2) Whether the recovery certificate issued by Respondent No. 1 is illegal, invalid and without jurisdiction ?
(3) Relief.
4. Under issues Nos. 1 and 2, it was found by the Insurance Court that that Corporation was entitled to recover contribution amount on ad hoc basis and the recovery certificate issued by it was valid.
5. The expression "factory" 'is defined in Clause (12) of Section 2 of the Act and it means "any premises including the precincts thereof whereon twenty or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on but does not include a mine subject to the operation of the Mines Act, 1952 ......."The expressions "manufacturing process" and "power" shall have the meanings respectively assigned to them in the Factories Act, 1948. The provisions of the Act will be applicable to a factory if it falls within the ambit of Clause (12) of Section 2.
6. Shri R. K. Gill, Inspector of Factories (RW-1), deposed that in the year 1974, the employer-factory was found using 2 H. P. electric motor and was subsequently changed to power using factory during 1975. In his cross examination, he admitted that the number of workmen mentioned in the report of the Factory Inspector dated April 19, 1978, was less than twenty being 4/5. He was forced to admit that at the time of inspection on April 19, 1978, only four workers were found working in the factory premises, but in the register it was entered that five workers were working. He also admitted that he could not tell from the record as to how many workers were employed in the factory during the twelve months preceding the date of inspection on April 19, 1978.
7. RW-2 is Shri Mohinder Singh, Inspector, Employees' State Insurance, Amritsar. It was on the basis of his report, exhibit R-8, contribution payable by the employer under Section 45A of the Act was determined. Relevant portion of his statement reads as under:
" I visited the applicant factory on November 20, 1976. I noted seventeen persons working in the premises of the applicant factory."
In his cross-examination he stated as under:
"I did not count the handlooms and the power-looms installed therein. I had not seen the quantity of motor installed therein but some electric motor was there. I had not verified from any other Department regarding the installation of power but I had only seen working of the power-looms actually. I had not recorded the statement of anyone."
8. Smt. Baljit Kaur, clerk, Electricity Department, Municipal Corporation, Amritsar, appeared as RW-4 on August 14, 1987, and November 20, 1987. She deposed that the electric connection was issued in the name of Dewan Chand and it was installed in the premises of Sudershan Weaving at Chowk Baba Bhori Wala, Amritsar, with effect from April 27, 1949. In her statement dated November 20, 1987, she deposed that record of meter reading and of the bills of the electric power consumption of the summoned period, i.e., from 1976 to 1978, was not available in their office and that the electric connection has been installed in the name of Dewan Chand on January 22, 1949, and it was of commercial nature and even the current record which she had brought was also running under commercial head and was still running in the name of Dewan Chand.
9. This is the only evidence produced by the Corporation. The evidence led by the Corporation does not establish that the employer's factory falls within the ambit of Clause (12) of Section 2 of the Act RW-2 who is the star witness of the Corporation and on the basis of whose report the contribution was assessed under Section 45A of the Act, did not find on inspection of the factory premises that the manufacturing process was carried on the power exclusively. RW-4 could not produce the electric power consumption bills for the period 1976 to 1978. If the manufacturing process was carried on exclusively with power, then the electric power consumption bills for the relevant period could have been produced. RW-2 did not state that the manufacturing process was exclusively carried on with the aid of power. To the contrary, he has stated that the manufacturing process was carried on by both the types of looms and the evidence of RW-2 and RW-4 fails to establish that the premises where manufacturing process is carried on falls within the ambit of Clause (12) of Section 2 of the Act. Resultantly, the provisions of the Act were inapplicable to the appellant factory. The issuance of the notice determining the liability of the employer under Section 45A of the Act was without any legal sanction and on the basis of the same recovery could not be effected.
10. Before I part with this judgment, the submission of counsel for the Corporation has to be noted. Learned counsel submitted that appeal under Section 82 of the Act lay only if the order of the Insurance Court gives rise to a substantial question of law and since no question of law, much less a substantial question of law arises for determination, this Court cannot interfere with the order of the Insurance Court. I am unable to accept the submission of learned counsel. The question whether the appellant-factory will fall within the ambit of Clause (12) of Section 2 of the Act is a substantial question of law although it has to be answered on the basis of the evidence produced. Moreover, to my mind, once the appeal has been admitted to hearing, it is open to the appellant to attack the finding of the Insurance Court on merits. It will be useful to refer to the judgment reported as Upper Ganges Electric Employees' Union v. Upper Ganges Valley Electricity Supply Co. Ltd. AIR 1956 AT 491. The decision in the above case turned round the interpretation of Sub-section (1) of Section 7 of the Industrial Disputes (Appellate Tribunal) Act, 1950, the relevant portion whereof reads as under at page 492 :
"Subject to the provisions of this section, an appeal shall lie to the Appellate Tribunal from any award or decision of an Industrial Tribunal, if--
(a) the appeal involved any substantial question law........"
MOOTHAM, C,J., giving the judgment of the Division Bench, observed (at page 492):
"........ the requiremment in Section 7(1)(a) of the Act that the appeal must involve a substantial question of law was intended to enable the Labour Appellate Tribunal to dismiss summarily an appeal which involved only a question of law of minor importance."
11. It was further observed that once the requirement of appeal involving a substantial question of law was fulfilled, there appeared nothing to warrant any restriction on the scope of the appeal. This judgment was again followed by a Division Bench of the Allahabad High Court in Shyama Devi v. Employees' State Insurance Corporation,(1964-I-LLJ-725), wherein it was held thus at page 729:
"We are of the view that the decision of the Division Bench in the case of Upper Ganges Electric Employees' Union, AIR 1956 All 491, well supported as it is by the decision of the Federal Court in the case of Niharendu Dutt Majumdar, AIR 1942 FC 22, is binding on us with the result that, in our opinion, it is perfectly open to the appellant, at the hearing on this appeal, to challenge the finding recorded by the learned Judge."
12. There is, thus, no merit in the submission raised. The same is repelled.
For the reasons given supra, the appeal is allowed and the order of the Insurance Court is set aside. The order making the assessment under Section 45A of the Act is quashed. No costs.