Dismissed

The Employees State Insurance Corporation, Hyd. v. M/S. Bulchand and Company, Hyderabad.

Telangana HC16 Mar 2022CMA/326/2005

Case brief

AI extract

What is this about?

This judgment dismisses an appeal by the ESI Corporation challenging an order where the Industrial Tribunal held that two distinct units were not a single establishment and neither was covered under the ESI Act due to having fewer than twenty employees.

What did the court decide?

The appeal was dismissed, confirming the order dated 05.08.2004 passed in E.I.C. No. 38 of 2001.

The Employees State Insurance Corporation, Hyd. Vs M/S. Bulchand and Company, Hyderabad. — Telangana HC (2022) — LawSathi Research

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IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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WEDNESDAY, THE SIXTEENIH DAY OF MNRCH TWO THOUSAND AND TWENTY TWO

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P RES ENT

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THE HONOURAALE SMT JUSTICE P.SREE SUDHA

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C.M.A. NO: 326 OF 2005

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Appeal under Section 82 of Employees State lnsurance Act, against the Order in EIC No.38 of 2001 daled 05lO8l2OO4 on lhe lile of the Employees lnsurance Court and Chairman, lndustrial Tribunal-1, Hyderabad.

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Between

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The Employees Slate lnsurance Corporalion, Hill Fort Road, Hyderabad. rep. by its Regl. Director.

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...APPELLANTi RESPONDENT

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AND

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M/s. Bulchand & Company, 5-8-615, Abld Road, Hyderabad. rep. by its Managing Partner Srl. Dataram Lalchand.

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.. R E SP O N D ENT/P ETITION E R

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For the Appellant : SRI G.VENKATESWARLU, Advocate

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For the Respondents : SRI VIVEK JAIN, Advocate

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The Court dellvered the followingr JUDGMENT

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HON'BLE SMT JUSTICE P.SREE SUDHA

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C.M.A.No.326 of 2OOS

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ORDER

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l ll-,is rrpl;crri rs t'rlcrl,br tlrc i:-nrplor er:s Stalc I:rsLtriir.icc Cor'1;orr,tiu,rr irqgrlqrccl b,r the orclcr cliLtecl 05,08.200-1 passcrl in iilC \o.ll8 oi 20O I on the lile of tire Elnplovees Ir.rsLLrarncc Courl itncl Clt:rirm:rn. lndustri:'Ll Tribtrnal-1. Ilr,clcr..rl;iLcl. l'hclt'l;r' the petilion iilecl bl the^petitioner secl{ir.lq lhirt }ris sirop is not covcrarble Llltder the^provisions , I rlrL [.sl , l r> . li,r',',1

¶21

'.). Learrrr:d r-'oLrn scl lor tl'le appeli:Int \'oLLld conteltd that \1^{rs.lllrlcl'rancl} l\ Conrp:rnl and M/s.BLllchand Enterpriscs iLrc sitLuitccl in the sarme acldress and lhe emplol"er of both tl-rc Units are one ar.icl tl-rc same. but tire^'l'ribltttal erred in t onclLrcirnq ilriit tll(\ irrc^(lili('rcnt Uttits tLncl^(loes tloI colcr ir-,. llsl irrrcl E.11 1(.r drscloscs the llrincil)zt1 entplo.r'er ol botl-i iI.t L-^jjls. I'lr( Sr;rlLltor-\ i|tsprcloI ciiLrii.rg his itt|cstig.rtiurl on ( r'iliLilllorr ol llrc i(rct)rcls IiJUnal tllttt trrclrlr liie {25) l)('r'sons^{r,, i:rr: i:nrpiorcci1'or \'agcs on 01.0I.1995.Hc uonld}

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ftrrther submit that ol.lcc^{thc cstarlllishlllc'llt\;ls .rrtctc'cl} Lrnclcr tirc Act, it ts lhc statLllor<sup>dtttr-r,l 1llLrrL'sl)olld(lll'l hcreir.r Lo^pa-' the colltrjbutiolr^{tou'ards prcmtttmut.tcict-thc} Act, and therclore. sought to^{sct asidc tl.tcot-cler trrrcler} chailenge.

¶23

Perusal of the order^shou s^{thatol1c Dctal am} Lalchand is a^{principalemplo,r'erofM} /^{s, Bulcl.rar.rd &} Company, Ramesh Govindram^{audUrnesh Covindrzrmare} nothing to do rvith it.^{I\4/s.Bulchand &Companl'.} M/s.Bulchand Enterprises^{andiVI/s,R.G Bulchand &} Companl, r,i.'ere concluded as^{same cstablishrre:rt Tl.tt:} inspector oI Corporation vlsited the pcLiliorler establishment on 22.O7^. i999^{r'erificcl thclt:cot cis lii<tr} attendartce attd^{u'age registers lro:n,J;rtrtlan.1995 to} June. 1999 and lound tllal^{L\'ell1'live persot.ts i2ii) tt erc} emplol'ed for u ages from^{01.01.1995, It is the casc of tl'tc} appellant herein that M/s.Bu1char.rd^{&Conlpatlva:lci} M/s.Bulcha:td E:rterltrises^{zlrc il'll(rr rr'latcd atrrlirrtr:r} dependent and arc orlncd br^{thc s:trrc principal etrplor c:-} and tu cnn fivc⁽²⁵⁾ llersons^{rlt:rerlorl<it.lgirlboth thc}

¶24

Linits IioluLr'trr (11) crnplo,vces \:ere tvorking in \l^/ s.llr-:lt lruncl ti, Ct-rmpi nr ancl elcr en (1 1) er.nplovee s u c're \oiiilnq iir \l, r lf irichrLnci Enlerl;riscs tL:rcl that it rs onl,r' ()lrc ( stiil)lisllrrtt'rri arrrci irccorclir-rgh' Coclc Numbe: rlas issulri. lrut tlr<r^{'l'r-iirr-rn:rl} altcr r erifr ing tht- evidence :i.ailat:lc on rccorci. both oral ancl docLlmer-Itar-r. allor'"ecl thc petition ancl hold that the petiLioner therein is not cc,r'crtiblc r-rnder the provisions of the ESI Act. Aggrieved by the sard order. this appeal is prelerred.

¶25

-i Hcirrrl t]-rc lcali-icd coLrnsel for thc appellant as rvell as tlrt le irrn,-cl^,.:Lrunsc l i()r' tlre lcspa)r.)de nl, I)cruseci the cirse lrLrr t ittrl l;r lrotir tlte ir iLrnr it tor-rrscl

¶26

5 Thc Chairnrrrn ol tl-re Triburlal held that Ex.PlIlcnt'u arl of Registr:rtion Ccrtrlicate rssued b]' tl're Labour Depirrtrncnt.^{(lo</sup> err)ntcnt ol'Andl-rra Pradcsh, Ex.P2^jssucd lrl rhc Sirles^'l'iLr De1>:u'tment, Ex. P3 - Certillcate o1' llcqistriltron issr-rccl bY the ACTO ar.rcl trx.P4 Certificate rssr-rccl br ',lrc lrrcc,r.ne'fax L)epartment clcarh c'st:rblishes tirelt {/s.BLrichand & Companl is doing business at Door No.5-8 615 zrncl 615/1, Abrcl Road, Hyderabad. Ex.R2}

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(corresponding to Ex.P1) cliscloses^{tlT:rt {r.Dctaltlrn} Lalchancl is the ou'rler ol^{the pctitiolrcr sholl blll lhc: llalllr:s} of other establishments^{\'cre 1'Iot four-rd rn itEverlit.i} Ex.R3 eicctricity bi1l,^{the name of the ollrereslablislln.lel'lts} \':rs not shot t.t. As^pe r^{Ex.lil Forlll ( l0} \rrrrr^c prcliminan ittspt ct:otts^{l-t-l)(,r1ol tll,.,rrlllcllriri llr'} rcspor.rclent Ircreitt^{rlascjoillq bltsjlrcss ()i'l-ar\tli{slrllii s'tlts} of reacilmacle^{garrl.lcntsancl1r cmplolecl less tj.:allfoLtr'1cr:ll} (14) persons for the vears^{1995-99.It uiLs ttlctlLiotrc'l th:it} Bulchand Enterprises^{r.vasconductingbl-lsinessinthe} acljacent building but^{the entranceis same in rr'hich it rr as} mentioned that both the estabhshmel.lts^{arc onc ancl the} same. .Ex.R5-Form^{C- lO notice, in lI'rich t]'rc nanrcof} Ramesh Govindram^{rr'as shou'n as princil;alemplover,but} the address ol the lirm^{is not notcd.As} 1:er^{the cotnllarisott} betu'een Exs. R4 and^{R5, thercspollrielllhcreit.i rlas} established in the^{year 1933 and u'hereas'1ls.Bulchar.rcl} Enterprises^r,''as establishcd^{in thc} 1'ear^{1979 arl(lll.T:r1llle} r'rature of busincss is totallv^{cliilcl-ent1'l-otrr t'itcll olhe l '1\s} per Ex.R6, Ramesl-t Govindr:im^{l:ts tht} llr-irrcill:rJ^{r'lrt1l)tlri:t-} of N4/s.Bulcl.raud Etlterpris<:s^{ancl Ex l?7 is thcir r'lcclrtt ilr}

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¶30

irill. .\s 1;cr iJ.r.li8. I?.C.Blrlcl.rzurcj ancl Compan,r. u.as l,r( il'rc(l .rt^'l'iiali I{r;rci. lllcier.abacl. and Ex.R9 is irs rencu.al ( ( rtiilciitc 1l-orn l-irl:our Del)au.tment a:rri all thc clocuments pIoclr-rcccl b\ thc irl)pellrrnt lt(,rein clearh.estalllishes that tt js totr,ilh, cLillcrotr i'rom M/s.Bnlchar.rd & Companl and NI/s.R.(i.Bulchancl and Company. Ex.R10 is the .r d ,ertiscmet-l t issuecl ir-r the name of Bulchalci, but in \ Iri(h it \ irs not ntentior.]eci that tllc three establishments it|c' cr.rri,roli(il b,, rtrrc crnplo-ter trncl aiso it iS nOt knor,,.n t,, lr,, isslit.il l]ltr srrirl ltirbiirrrtic.rn.. But. rl-rc :LLrtltcntjcrLted cii.,r'Lrnrc.nis rss.L.rccl ltr titc Lirbcur. Depttrtmcr.rt, Sales^,l.a_r l).1)itrtntrnt. Irtr.orne'l'arx I)eparrtmerlt arncl Electricit-r Dr'1;ar-trlt-i-rr clr-:rr.l,r' establishes that both the estiLl;lisirmcr.tts arc cliffercnt ll"orr eeLch other and even from tr pcrLrsrrl ol rltc I.-iVe Wage Rcgisrers under E.rs.p7 to pl l. tlrc r-es1:onclerrt lt(,rci1t ernl;lo,ved Less than lourtc.en (1.1) em1;lorL:t s 1l'urn 0I.08,199+ to 31.03.1999 and they have noL cmplr.r-r'eci morc than fourteen emplovees at ar-ry point of iime.^'l'hc saici regislers ri ere verified b_v the officials of the Labour Department, ESI Department and also Enforcement Ofiicials of trPF on i,arious occasior.rs in differ-ent tears and

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' ,^.; r lll lhC\ha(pu't1r.,1irltrta]s.,]l'ttt'.,,''.,r.. visit^{and lnspeclionand thc saicl registol's \'ere maint'rine'1} properl'\r^{arrci inspectedb1' the olllcialsftoln tirre to tinrr''} As^{per the \'age regislers lhe respol-rdenlhelein,hasnot} emplol'ed^{lnore tha1l filleellemploJ'eesat alr\ 1)oin1of rirllll'} ancl^{rhl.ts tiri:csiablisl''me n'r is lo*' t'orcralllcLill'ltrrr'hc} provisiol-ls^{ol I-SI 'r'c':rnd :tcctltciLtrgl\ ' l11u i)ciilr''rriili:ci bl} '1 /s.Bulcl'ralrri^{& (-''o11''ilalr\unsalloiri:r:1'}

¶34

fi. Leatllecl^{coitl-tst'lior rhc all1li:li:rnL l r:ltc11r'11-llrll :l 'ns'} 1a*.reporrecl^{i. suMANGALI v/s. REctoNALDIRE.T.R'} EMPLOYEES'^{STATEINSURANCECORPORATIONl} 1-roldrng^{to r1-re effect l\1al there''1'615 rtrliill irt rrlrit''a'ir:trli:;''1'} -r.rpnr,''i't^{io"at:d'contrtl 'qeoctraphtcctlpro-ur71ifi/'fitirirlcioi} u.nit4'^{general unrt17o'r l'ulfor'(rntl i-rr '1t'1 Qi 1ni€qrii!} bettueert^{the dtfi'ererttr]trt is onri -lbr the 'sr'ilce oi llS/ i:ot''e race'} *,e different^{unlts cou|d'be trectted as 'one estoh/islrrrlerll''} IN EMPLOYEES,^{STATE INSURANCECORPORATION} V/s.^{BHAKRABEAS MANAGEMENT BOARD2 in l:hich tt} was held^{that neither workers concerned of Respor-rrient1}

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'^{(zoog)sscc roe}

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'izoog)^{ro sccozr}

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lJoar.cl. lor:tit_r ol. thcm in their represe]ltatiI"e capacities racic pr...t[,s i. retirron r'lncler section 75 of rhe Act Jr.rorc ESI colr-t or i {igi court cr.r:rllcnging notice issuecl b-r. Esri: lirrjcr. Scctiorr 1br mal<i.g ernplo-r'er's cor.rrr.irrurion t.r',r-crs DSi, thus it is in 'rolation of the ,r.i.cip,es ol.r.rarrrr.al .,,r",,."t

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,. I-c,rr t-t: t,cj (.uiit.t:jel li)r. t'" t'o''"t'ttrrI rnl''rr]r contcncre(l ihlrL iiLIr.rr sL.iL.*cs r,,-,., rnearr.t t lirr tite bc11.-flL ol. thc rr rtrlilrcn. ll :tll lhcse r.ast's tltc trorkrnc:t. or. at leasr sonte ol illatr il al tclll.cscltLati. ( ,-dr.,L.,. .1. rrI(, lr;,tlr. 1111..11 r-t_.itrc.seDt1rt11 titr. r|orj<mert rnLlst be macle as al pal-t., but in :1.t.. , ..sr tJ, . ,t,r .irnt,n tr'as never made as a partl, ancl on ihat grounci aione t1.re juogment of the triaj Court has to be scl asicle He .lso f,eci cop_r.of the rerter clated 05, 12.2oo2 aciclrcssecl lo thc Commisstoner of Labour Llnder the Letter llcad ol''lnclian Natronal Tracle Unron Congress,in u,hich in the rl-rrrd paraqraph it is ntcntioned as fbllou,s:

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'F-or e.xiLrnple, Lhe managements ol Br-:lchand at Abids is hiir ilq Lritc corimoli n.tanagetrlent ancl the Regional Di|Cctor ESI Corl;or.ation, H,r.clerabad has issr:ed covct';lgc intnrtrtion rlatecl 22.03.2000 by i,rllocatirrg

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cocle No.52- 179220^{I O2 ort arl} '1r<sup>('r'.LQC75 loikcr-s arc \'orliirrg sith thc^{n.l:lnaqelr(rll} 'rl^{I-]rtlrlrrrrrdotl} cach cl:rr'.^{lltll the l,allottr l)cp:rrtnr('nls/\srilstr'111t} Labour Olfrccrs have^{issur:ci licct.tscs irrclicating i 3} emplo-'ees onll'to^{Bulchancl& Co. He isslrecllicetrse} of 8 emplo.yees to^{Bulchatld Etrterprises, anothel:} license for 8 emplol'ees^{toR.G.Bulcl-randailcl} Company'. Thel'have^{also issued a separ.rte licenceto} their unit at Secunderallad.^{Thus.t1.tc ,\sst I-abortr} Olficers arc collucling^{u'itl-i tht'trzrl.'lage1rlellts:llc} depriving the bencfjts^{1o Lhc rrorlicts.lrllacLalr} acivertisemctrt issr-terl^{1lr tl.tc sitiri i.llall:llq(l.l.l('llt oll} 12.10.02, Saturda<sup>il.tEct.l:trlule:iuqitclajh ne\'spaper at l)age^{8 clt':irhsllossi1 is :t coltt:llrril} rranag( 1,"1c1lI^{[OI- ',,ll lrrc tllrl's.}

¶44

Learttecl coullscl for^{LIlc rcspoll(icrlti|oLll(l sLrl)n.lit} ttat il hacl not^{lileclthe sai(l lctler'l)cfol c llte l'rillutt:rlirrrrl} fiiecl this afli'r lf-)^{!cars bcforctllis (lrrr:t.i} 'irl(l ( iilrr'roi l)c lool<ed inlo. The^{Trillr-l1-ra]allo\fecl lhe nliltter it'l tilt'r'e:rt'} 2004 and lhe letter 1;ertait.ts^{to lhc lcar 2002 bLrr it lailc(l} to fiie the same^{before thc Tribtlnalallcl ttot cxpl:ritredatlr} rcasons u'hatsoever^{for not presentitlg thes::Lmebeforr: rhc} Tribunat. Therefore, il^{cannotbe lookedlnto at tirisbelated} stage.

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¶46

,. I-c:Lrned cor-Lnsel for the respondcl-tt \rould contend in LJris rrpltc:rl tllilt Llt.llcss thc're is clear evidence to slto\.titat l)rrr-c, ri irs lLn\ iJLlll(.f Yisot-r., Irrtancial ()r rranagcria) control. li cirrn()i ite siLirl LItiiL onc is t)re briLnch 01- tlre other. I-lc rrLrirlci lrr|llrt.r cL-rn,.c,1lcl tltitt r.to doUbt it is a benel'icial lcu.islatiotr i-tit tltc Corrrt cannot travel be,oncl the schemc ar)(i .xLcnrl lhc scope 01' thc stalute on the prete\t ol c\ten(iirlq thc slatutol-' benefits to those \,ho are not covered bl the scheme. Ilc alsc.r contend that there is no srlbstanti:ri qllestion ol larl to maintnit-r the appcal arl ci the rtumbcr ol l)ersons u.orking ir-r thc factor-r., the use of pou,er etc., are pLlieh qLtestions ol l'acts and thus rhe appeal has r.io merit.

¶47

10, The appellant mainlv contendecl that the u'orkmen \'as noL inclr-rdeci !1s a p.lrtl to the proceedings trnci he Itas nol r':risccl tlre saicl issrrc belore the Tribr-rnal irncl lt's1;oirtit nt coLltscl contan(lccl tltiit ir) arr-r' event tht: tt r.rrliintrn \:ls t)ol rrnplclrcleci. iLnrl lbr the f i:.st time l.tc r':riscrl tl-re issuL. ri,, ii'ic :rp1;el):Ltc stage. 'l'ire ob.;ection regiir-clirrq rro:t irnltlc,nrlrne nt L.rf the rlorl<mnn has to bc

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porr-rt ol^{Littlc llclirrcllrc-1'rillr-tirl1'b''tL} raisecl^{at thc earfiest} it is lor^{the aPPellantlo Pro\IC} tl-re aPPellant^{failed to doso} Ihat^{bolh thee stablishn.len lsal'e inicr rt:lalr:clatlcl intc'r} ascert:rin^{thelul.rcrio n:l\ il-ttcqrit"-illlll-11.1} dependent^to Tlrlr.^{1-rc ljlccl o:tl! Er R.lLl l lt:i:l:rs iL l-riirr':'} managemenl. publioaliolr^{at.rcl lhc 'l'riilt-ir:algavc cogelrl. te:rsol.tsiort'lo1} considertt-tg^{lhc sarne Apart fron that 1t \'as clcarlr helil} thal lhe^{other aulh'rntic:Ited docrlmclrts filed bvthr:} petitior-rer^{anclrcspolldet'rtclearlvestalllishes1l-rat} '1 '-l f^p1s- ]-t'^':^tti Nl, s.Bul,^{hatrcl d. ( nlnpell\ 1'1 *$rr1''} Coupan-r'^{are llot} san-l'l lr,l,/s.R,G.Bulchanrt^& e stabli.shtnenls^{bl-ll rhev areclifierr:l-tlcsrablisllllrct.l''s} 1oc:rtccl ;rr^{clifierenr placcsar-rcf ille natLl:c of bLtsint''ssrlas} :rlso clilicrellt^{alld Llrcr llevc; cnq:rqr:cl "'orlicisln'lllil:l'll} iiftcen^{(15) persolls211 Lll.l\llolr-11 ol lil't''c trs i)'r- thc \r;rg(l} registcrs^{:rllcl rlle tiarnresoi-the einpiolecs\'cr':r lloit-c1lr'Lrcl} in the^{rerler':rt'tl clocLll.'lle1.ltsat.lcl as st-Lcl.t\f i s 13r'ticharlclir} Compatlv^{js rlot coverallle ttnderlhc llrl)\ islollso1' Lhe Il S 1'} Act ancl^{it neecls no inlerferet-icc'}

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I L In ine rcsuli, thrs:r1.tpea1 is cli,sn.rissecl confirnting the olcltr-cliitccl 0S.Og.20O:l passc.d ir_r E.l.C.No.3g of 200 1 on :tle iile ol ti.tr: Entplo-r ees {nclr strial^,l.rll;uI :rl.^j, rrr.,::::;";r:::-^""":T; r-to o|c_le r aS Lo Ca)Sl S. 1l ]ult s. tl lr it\ . pcndlnir rn this appeal \rr ril sl.,nC drstrrisr.,,-1,,- .r,(De llgh, ol lhJs firtarl order.

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Sd/-B CHIRANJEEV I/TRUE CAPY/I GISTRAR To 1 2. il-,!rl[qr'lg";1^{"rance court and chairrn?n,,"r"", r,;::l',:)r::,:';;-} 3 jiie^{s{;J:1istScpal%,ap} u c, 4 5. Une # Spare Copy!i [j[ ,,""J, Kl ,-,',-_--, >.'

HIGH COURT

DATED:16i 03/2022

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0asi

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ORDER

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CM,A.No.32b of 2005

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