AI Structured Summary
Not yet generated for this judgment
Judgment
S. Siri Jagan, J.—The applicant in I.C. No. 46 of 2001 before the Employees Insurance Court, Alappuzha, is the appellant herein. They are challenging the judgment of the Employees Insurance Court in that I.C. The respondent ESI Corporation sought to cover the shop of the appellant under the Employees State Insurance Act, on the ground that they are using power for the activities of the shop, employing more than ten employees and therefore, the shop is liable to be covered under the ESI Act. Consequently they demanded contributions under the Act for the period from 19.8.1999 onwards. On subsequent verification, it was found that the appellant was employing ten or more persons even from 1997 onwards. Accordingly, the appellant''s shop was retrospectively covered from 1.4.1997 onwards and contributions were demanded accordingly. The appellant filed the I.C. challenging the coverage and the demand for contributions. The contention raised was that the appellant employed only eight persons in that establishment and they are not using any power for the activities of the shop. Therefore, in so far as the appellant is not employing twenty or more persons in the shop and the appellant is not using power, the establishment is not liable to be covered under the Act was the grounds in the I.C.
The respondent took the stand that the appellant is using two watch cleaning machines in the shop, which are run by power and therefore the appellant is using power to run the shop consequent to which the minimum number of employees required for coverage under the Act. They also contended that on an inspection of the account books of the appellant, it was found that apart from payment of wages to eight employees, the appellant was paying other amounts as wages, which exceeds the wages paid to the regular employees, which would go to show that they are employing other workers as well. Going by the wages so paid, the appellant was actually employing twelve or more persons was the contention of the respondent.
The Employees Insurance Court found both questions of fact as to whether the appellant is using power to run the shop and whether the appellant is employing ten or more persons in the shop against the appellant and in favour of the respondent, thus confirming the coverage. But, in respect of the quantum of contribution payable, the appellant was given an opportunity to produce materials to prove actual contributions payable by the appellant. The appellant has filed this appeal challenging the judgment of the Employees Insurance Court raising the following questions of law:
Has not the Insurance Court exceeded its jurisdiction when it decided that the appellant''s establishment is covered under the ESI Act from 1.4.1997, although as per the notice dated 20.3.2001 issued by the respondent, the establishment was declared to be covered provisionally only for the period 1.4.1998 to 18.8.1999?
Is not the respondent bound to follow Audi Alteram Partem in a proceeding u/s 45A of the ESI Act?. If the answer is in the affirmative, is not the impugned notices as affirmed by the Court below is bad is view of the decision reported in AIR 78 SC 1478?
Whether insurance coverage can be insisted upon without any clear evidence as to the user of electrical power for the manufacturing activity as defined under the Act, despite the finding by the inspectors that the number of employees working in the shop were far less than twenty?
Whether the compliance of the applicant with the provisional assessment of the corporation for the period 19.8.1999 to 18.8.2000 amount to admission of liability as found by the Court below or in the alternative, can there be an estoppel against law?
Is it correct for the Court below to have brought the shop of the appellant within the purview of the Act for the period 1.4.1997 onwards despite the report of the inspector who conducted inspection 28.9.2000, that as per the attendance register only 8 employees were working in the shop during 97-98?
Is it correct for the Court below to have concluded, "substantial number of employees other than the employees shown in the wage register were also working for the appellant" in the absence of any clear evidence as to the exact number, of workers working in the appellant''s shop in order to fix coverage under the ESI Act?
Was it not incumbent on the learned Insurance Judge to have decided the question of coverage for the period 98-99 independent of the coverage already fixed for the period 99-2000 and that too provisionally? In other words, was not the insurance Court duty bound to decide the question of insurance coverage for the period 98-99 only on the basis of the concrete evidence as to the employment of atleast 10 employees, if it was proved to have been conducting any manufacturing activity with aid of power. Or in the alternative is it correct for the Insurance Court to have simply surmised "if it was coverable during 1999-2000, it would definitely coverable from in the previous year also....?
Is there any presumption under the ESI Act that once an establishment is provisionally brought within the purview of the ESI Act, it would be presumed to be covered for the previous years as well?
Whether mere signing of the report prepared by the Inspector of corporation by an employee of establishment amounts to admission of the content of the such report and whether the statements containing in the said report are binding on the employer?
Is not the burden of proof shifted to the respondent to establish that the number of workers employed during the relevant period were at least ten, when the available record/evidence shows that only less than ten employees were working and no power was being used to run the shop?
We have heard both parties.
The only question arising in this case is whether the appellant is using power for running the business and whether the appellant is employing ten or more persons in the shop. Both are pure questions of fact. On disputed questions of fact, no appeal would lie u/s 82 of the Employees State Insurance Act. On that ground alone, the appeal is liable to be dismissed.
Even otherwise, we are not satisfied with the contentions of the appellant on the questions of fact as well. The appellant''s contention is that the cleaning machines are not in use and the appellant is predominantly repairing quartz watches, for cleaning which the cleaning machine is not necessary, which is used only for cleaning winding watches. Therefore, according to the appellant, the finding that the appellant is using power to run the shop is perverse and unsustainable. Admittedly, two machines were available in the appellant''s shop. The appellant could not satisfactorily explain their presence in the shop-Therefore, the Insurance Court came to the conclusion that, those cleaning machines were actually being used by the appellant for running the shop. We do not find any perversity in such finding, without finding which we are unable to interfere with such finding.
Apart from that, it is common knowledge that even for repairing quartz watches, use of power at least in the nature of light and other electrical gadgets is absolutely necessary. Therefore, it cannot be said that the appellant is not using power to run the shop. On this ground also, we do not find any merit in the contention of the appellant.
As regards the number of employees employed, there were eight employees in the rolls of the appellant. They were being paid salary amounting to Rs. 1,28,640/- during the year 1997-98. At the same time, by way of wages for casual work, another amount of Rs. 1,83,280/- was also paid. Of course, the appellant would take the stand that, that represents sales commission. But, the appellant could not prove the same. The appellant also takes this stand that those amounts are wages paid to watch repairers who repair the watches at their home on piece rate basis. That is a fact which has to be proved by the appellant by examining those persons whom the appellant engaged for repairing of watches on piece rate basis. The appellant has not taken any steps in that regard. Therefore, that contention of the appellant also cannot be taken on face value. Hence, we do not find any perversity in the findings of fact entered by the Insurance Court that the appellant is actually employing ten or more workers in the establishment. The Employees State insurance Act is a beneficial legislation and the benefits of the same should be brought to as many employees as possible. In the above circumstances, we do not find any perversity or error in the judgment of the Insurance Court.
Accordingly this appeal is dismissed.