Dismissed

M/S.Carborandum Universal v. Esi Corporation

Madras HC9 Mar 2021CMA/1597/2017

Case brief

AI extract

What is this about?

In an appeal against an order determining ESI contributions for omitted wages, the High Court upheld the ESI Court's findings. It held that Section 45A remained applicable, the claim was not time-barred, and incidental maintenance and repair works were liable for contribution under Section 2(9).

What did the court decide?

The order dated 06.07.2015 passed in EIOP.No.215/2001 is confirmed; the appellant's Civil Miscellaneous Appeal is dismissed.

M/S.Carborandum Universal Vs Esi Corporation — Pension and Retirement Benefits | Madras HC (2021)

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED : 09.03.2021

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CORAM

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THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM

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C.M.A.NO.1597 OF 2017 AND C.M.P.NO.8422 OF 2017

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M/s.Carborandum Universal Limited, Post Box No.2272, Thiruvottiyur, Chennai 600 019

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Represented by its Executive Vice President Human Resources – Mr.M.Muthiah (Cause title accepted vide order of Court dated 17.02.2017 made in C.M.P.No.2170/17 in C.M.A.SR.No.218/2016)

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Vs.

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ESI Corporation Represented by its Regional Director, No.143, Sterling Road, Chennai – 600 034 .. Respondent

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Prayer :

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Civil Miscellaneous Appeal filed under Section 82 of the Employee's State Insurance Act, against the order dated 06.07.2015 in EIOP.No.215/2001 on the file of the Employees Insurance Court (Principal Labour Court), Chennai.

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The order dated 06.07.2015 passed in EIOP.No.215/2001 is under challenge in the present Civil Miscellaneous Appeal.

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The substantial question of law raised by the appellant reads as under:

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https://hcservices.ecourts.gov.in/hcservices/

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“1. When the appellant had not defaulted in filing the returns in the form prescribed under Section 44 of the ESI Act, 1948 and had also been maintaining the particulars, registers and records whether the ESI Corporation will have jurisdiction to invoke Section 45A of the ESI Act, 1948 to determine the contribution payable by the appellant in respect of omitted wages?

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Whether in the absence of power to invoke section 45A of the ESI Act, the respondent ought to have initiated proceedings under Section 75 of the ESI Act, 1948 for determination and recovery of contribution in respect of the amounts allegedly due under the head of omitted wages from the appellant?

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Whether the claim made by the respondent for determining the contribution due in respect of omitted wages for the period from 1988 to 1992 is barred by limitation prescribed under the ESI Act, 1948?

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Whether the respondent is justified in demanding contribution in respect of various ledger entries like repairs and maintenance, when the records produced clearly shows the expenditure incurred was on accounts of materials and not on account of labour?

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Whether the respondent is entitled to claim contribution in respect of persons engaged as apprentices?”

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The question of law raised are relatable to the facts and circumstances, which were already adjudicated. However, the learned counsel for the appellant contended that the maintenance and repair works conducted and entries were made in various ledgers, were taken into consideration by the authorities, which is improper and the appellant is not liable to pay contribution for such repair and maintenance. Further, the point of limitation is also taken as the contribution was fixed from 1988 to 1992.

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As far as the order under Section 45-A of the Act is concerned, the contribution was calculated for the omitted items and with reference to the records. All these points were raised by the appellant before the ESI Court. The ESI Court elaborately considered the facts and circumstances and arrived a finding that there was no delay and more specifically, the point of limitation raised is answered in Paragraph 13 of the order

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https://hcservices.ecourts.gov.in/hcservices/

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passed by the ESI Court, which reads as under:

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“13. It is contended by the petitioner that the claim is made beyond the period of limitation and as such, the respondent's claim is to be set aside. However, PW1 has stated as follows:

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@3/11/87y; gotk; rp/18 mwptpg;g[ kDjhuh; fk;bgdpf;F rhh;g[ MfpaJ vd;W brhd;dhy; rhpna/ me;j gotk; rp/18 mwptpg;ig vjph;j;J kDjhuh; fk;bgdp ,af;Feh; ,/I/x/gp/28-88 tHf;fpy; 3/11/87 njjp md;W gpwg;gpf;fg;gl;l gotk; rp/18 ePf;fut[ bra;ag;gl;L kPz;Lk; tprhuizf;fhf vjph;kDjhuh; fHfj;jpw;F kPl;lUg;g[ bra;ag;gl;L cj;jut[ gpwg;gpf;fg;gl;lJ vd;W brhd;dhy; rhpna/ me;j cj;jutpd; mog;gilapy; jhd; k/rh/M/1 mog;gilapy; gotk; rp/18 rhh;g[ bra;ag;gl;lJ vd;W brhd;dhy; rhpna/ k/rh/M/1 gotk; rp/18 mwptpg;g[ kDjhuh; fk;bgdp 11/8/97 md;W neuo nfl;g[f;F tUk;go nfhug;gl;Ls;sJ vd;W brhd;dhy; rhpna/@

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It is therefore clear that the C18 notice marked as Ex.P1 was issued following the order of Remand passed in ESIOP No.29/88. The said order copy is produced by the respondent as Ex.R4. In such circumstances, the contention of the petitioner that the demand for contribution is made by the respondent beyond the prescribed period cannot be accepted and the same has to fail.”

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With reference to the repairs and maintenance of building account, Section 2(9) of the ESI Act is unambiguous. As per Section 2(9) of the Act, incidental works including maintenance and repairs are also to be taken into consideration for the purpose of assessing the contribution. It is stated that whether such work is done by the employee in the factory or establishment or elsewhere. Therefore, maintenance and repair works done in a guest house or in a building situated outside the premises of the factory, is also to be taken into account for the purpose of assessing the contribution as such establishment also falling part and parcel of the main establishment.

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This being the scope of Section 2(9) of the ESI Act, the authorities competent has rightly considered the omissions made already and accordingly, issued an order under Section 45A of the Act. The point of limitation was also considered by the ESI Court and therefore, this Court do not find any perversity or infirmity as such. Further, when the question of law raised is not an acceptable question of law, deserving no further adjudication.

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https://hcservices.ecourts.gov.in/hcservices/

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Accordingly, the order dated 06.07.2015 passed in EIOP.No.215/2001 stands confirmed and the Civil Miscellaneous Appeal in C.M.A.No.1597 of 2017 stands dismissed. No costs. Consequently, connected miscellaneous petition is closed.

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Sd/-
Assistant Registrar(CS VIII)
//True Copy//
Sub Assistant Registrar
kak
To
The Employees Insurance Court
(Principal Labour Court), Chennai.
+1cc to Mr.S.P.Srinivasan, Advocate, S.R.No.15104
+1cc to M/s.Gupta and Ravi, Advocate, S.R.No.15041
C.M.A.No.1597 of 2017
JP-II(CO)
CS/01/04/2021

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https://hcservices.ecourts.gov.in/hcservices/

M/S.Carborandum Universal v. Esi Corporation

Case brief

What is this about?

What did the court decide?

M/S.Carborandum Universal v. Esi Corporation

Case brief

What is this about?

What did the court decide?

What the court decided

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