Allowed

Ms Man in Sales Corporation v. Employees State Insurance Cor

Jharkhand HC17 Nov 2022MA/160/2009

Case brief

AI extract

What is this about?

The Jharkhand High Court allowed the appeal against the Labour Court's dismissal of an ESI contribution proceeding on limitation grounds. The Court held the limitation bar inapplicable due to an ongoing appeal before the Judicial Commissioner and the establishment covered by the Act.

What did the court decide?

The impugned order setting the case as barred by limitation under section 77(1-a) was set aside; the substantial questions of law were answered in favor of the appellant, except for question no. 2.

Ms Man in Sales Corporation Vs Employees… — Pension and Retirement Benefits | Jharkhand HC (2022)

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IN THE HIGH COURT OF JHARKHAND AT RANCHI

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M. A. No. 160 of 2009

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M/s Man In Sales Corporation, Ranchi .... …. Appellant

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Versus

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Employees State Insurance Corporation through its Regional Director, Patna

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The Dy. Regional Director, ESIC Corporation, Patna

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The Recovery Officer, ESI Corporation, Patna

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.... Respondents

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CORAM: HON'BLE MR. JUSTICE GAUTAM KUMAR CHOUDHARY

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-----For the Appellant : Mr. Nipun Bakshi, Advocate For the Respondents : Mr. Ashutosh Anand, Advocate

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C.A.V. ON 05.05.2022 PRONOUNCED ON 17 /11/ 2022

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The instant appeal is preferred against the Judgment and order dated 28^th April 2009 passed by the learned Presiding Officer of the Labour Court –cum-Employee Insurance Court, Ranchi in ESI Case No.2 of 2004, whereby and whereunder the appellant’s case instituted under section 75 of the ESI Act has been dismissed.

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An application under section 75(1)(g) of the Employee’s State Insurance Act, 1948 (hereinafter called as ESI Act) to decide the dispute between the petitioner employer (appellant) and the opposite parties as ‘Corporation’ regarding coverage of the establishment under the name and style of M/s Man-in-Sales Corporation, Mahabir Tower, Main Road Ranchi and eventually leaving contributions not being forced against the applicant to the recovery proceeding under the ESI Act.

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A notice vide Letter No. P/42 – 6800 – 101 dated 18.1.96 was issued by the Deputy Director of the Corporation (Respondent no.2) by which no code was allotted to the petitioner’s establishment with effect from 23.5.95 under section 1 (5) of the Act, along with Form No.01. It means that without verification of the record of the petitioner the establishment was covered with a code number with a direction to the petitioner for making compliance with the ESI Act.

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After receipt of the letter dated 15.7.1997 the petitioner immediately represented before opposite party no.2 on 24.7.97 and

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submitted that the petitioners Corporation does not come under the purview of ESI Act as the number of employees is only five.

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Notice was served on the appellant/petitioner for inspection of records by the insurance inspector Sri K. Das for which the date was fixed on 22 .12.97. And on that date inspected all the records. During the course of inspection from the date of inception of the establishment till November, 1997 and the said report was submitted by the inspector. The Insurance Inspector never found more than five employees working on any working day during the said period which is far less than the requisite number of employees as required under the ESI Act. Therefore, the provisions of the ESI Act did not apply to the establishment of the petitioner.

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Without considering the inspection report of the records arbitrarily issued Form C–18 on ad hoc basis vide Letter No. P/42 – 6800/INS/478 dated 12.2.98/15.9.98 and calculated the amount on ad hoc basis amounting to Rs.1,00,218/- for the period beginning from 23.5.95 to 31.1.98.

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After receipt of the said letter the petitioner filed a protest petition dated 27.10.98 before the Deputy Director of the Corporation, including the registers which were verified by the above department from time to time. The representation was rejected and order was passed under section 45 A of the ESI Act on 8.4.19 99 and finally a contribution to the above stated amount with a further interest of Rs.25,949.78 and the demand notice was issued regarding it.

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The demand notice was challenged before the learned court below which has been rejected by the judgment and order. Hence this appeal.

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This appeal has been admitted to be heard on the following substantial questions of law:

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i. Whether dismissal of the case on the ground of Bar of Limitation on the plea that the case was filed in the year 2004 and by completely ignoring the preponderant documentary material on record, such as the limitation petition dated 28.06.2004, certified copy of the order dated 15.09.2001 passed by the Judicial Commissioner, Ranchi, certified copy of the

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order dated 13.11.2004 passed by the Judicial Commissioner, Ranchi, copy of notification dated 15.01.2002 issued by the Government of Jharkhand, is wholly illegal, arbitrary and contrary to law?

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ii. Whether the impugned order is wholly untenable because the ESI Act applies to factories and it has nowhere been held in the impugned order that the appellant’s establishment which was admittedly only a courier service, can be said to be a factory?

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iii. Whether in any view of the matter, the ESI Inspector himself having signed the attendance register showing five employees and the said attendance register being on record before the learned court below, the observations of conclusions of simply adopting the version of the ESI Inspector in saying that there were twenty one employees on a particular date, can be said to be perverse and illegal?

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iv. Whether the impugned order under section 45A being in clear violation of principles laid down in (1999) Vol. 79 FJR page 188, is illegal and without jurisdiction, thus liable to be set aside?

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It is argued on behalf of the appellant that in absence of any notification empowering the labour court to act as Employees Insurance Court in Ranchi, the appellant had already filed its miscellaneous appeal case before the learned judicial Commissioner, Ranchi which was registered as Miscellaneous Appeal No.33 of 2001 and was admitted for hearing. The period from the date of institution till disposal of this appeal on 13.01.2004 ought to have been excluded, by computing the period of limitation on the principle applicable in section 14 of the Limitation Act, 1963. The bar of limitation also not applies in the present facts as the appellant approached the correct forum in the absence of anyother Labour Court to hear the ESI matters. When Labour Court was formally notified for trial of ESI cases, then the case was filed in this Court. Moreover the computation of period of limitation under section 77(1–A) it is also erroneous as the main order under challenge is the order under section 45A which was passed by the Deputy Director on 8.4.1999 and, therefore, time would begin to run from the date of communication of this order. On

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the point of limitation reliance is placed on Consolidated Engg. Enterprises v. Principal Secy. Irrigation Deptt. , (2008) 7 SCC 169 wherein it has been held that mere fact that the question of jurisdiction is an arguable one would not negative good faith because the appellant believed bona fide that the court in which it had instituted the proceeding had jurisdiction in the matter. By filing the application in the courts which had no jurisdiction to entertain the same, the appellant did not achieve anything, more particularly when the lis was never given up.

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The inspection report mentions number of employees for the period 1994–95 and 1995–96 to be only five. However in the month of May 1995–96 the number of employees has been shown to be 21. The Inspector ESI was empowered to record the names of all employees found to be working in the establishment. The inspection report clearly establishes that there were only five employees.

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On perusal of the records, it appears that Misc. Appeal No. 33 of 2001 was admitted on 12.09.2001 which was preferred against the order of Deputy Director, Employees State Insurance Corporation which was issued on 08.04.1999 and this appeal was admitted on 12.09.2001 within the period of limitation prescribed under Section 77 (1-a) of the ESI Act. On 13.01.2004 after notification of the Labour Court as the Insurance Court, the Judicial Commissioner disposed of the appeal on 13.01.2004 and thereafter the Labour Court was moved in ESI Case No. 02 of 2004 which was filed in the same year and, therefore, the order of the learned Court below that the case was barred by limitation, is not sustainable.

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From perusal of the inspection report of the Labour Inspector dated 03.08.1995, it is evident that the list of employees has been mentioned from April, 1996 to November, 1997 which was five in number and the number has not been exceeded more than five although the number of persons engaged has been mentioned to be 21 but no more detail has been furnished. Reliance in this regard has been placed by the learned Counsel on behalf of the petitioner on (1999) 79 FJR 188, wherein it has been held by the High Court of Karnataka that in determining whether the establishment employs the number of persons required by the said Act to attract its provisions, the list of employees prepared by the

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Employees State Insurance Inspector in the course of his visit to the establishment must contain the name, father’s name, place from which the employee hails, the designation, the length of service, emoluments the signature or thumb impression of the employee is required to furnished. Neither the name nor any detail, but only the number of 21 employees has been stated on the basis of which the establishment of the appellant is sought to brought under the cover of ESI Act. Whereas the appellant has relied on the inspection report by the Labour Inspector for the month of November, 1997 wherein only five workmen have been listed in the report with their names. Therefore the inspection report showing 21 workers employed in the establishment of the appellant cannot be accepted.

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As far as the substantial question no. 2 is concerned, the establishment of the courier service will come under the definition of the factory in view of the definition of the establishment under Section 1(5) of the Act.

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Under the aforesaid facts and circumstance the substantial question of limitation is answered in favour of the appellant. Further, in view of the inconsistent and contradictory respect and reports there is bonafide dispute regarding the person employed, the benefit should naturally go to the appellant. The substantial questions of law is answered accordingly in favour of the appellant except substantial question of law no. 2.

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The impugned order set aside. Appeal is allowed.

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(Gautam Kumar Choudhary, J . )

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Jharkhand High Court, Ranchi Dated the 17^th November, 2022

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AFR / AKT

Ms Man in Sales Corporation v. Employees State Insurance Cor

Case brief

What is this about?

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Ms Man in Sales Corporation v. Employees State Insurance Cor

Case brief

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