IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID THURSDAY, THE 30TH OCTOBER 2008 / 8TH KARTHIKA 1930 Ins.APP.No. 9 of 2004() ----------------------- IC.43/1999 of E.I.COURT, KOLLAM .................... APPELLANT/APPLICANT: ---------------------------------------- S.UNNIKRISHNAN NAIR, PROPRIETOR, PERKINS, THYCADU, TRIVANDRUM. BY ADV. SRI.RAJEEV V.KURUP RESPONDENT(S): OPPOSITE PARTIES, -------------------------------- 1. REGIONAL DIRECTOR, E.S.I.CORPORATION, THRISSUR. 2. THE AIRPORT DIRECTOR, AIRPORT AUTHORITY OF INDIA, TRIVANDRUM. ADV. SRI.K.L.NARASIMHAN FOR R2 SRI.V.SANTHARAM FOR R2 SRI.K.G.MOHANDAS PAI FOR R2 SRI.T.V.AJAYAKUMAR FOR R1 THIS INSURANCE APPEALS HAVING BEEN FINALLY HEARD ON 30/10/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & HARUN-UL-RASHID, JJ. .................................................................... INS. Appeal No.9 of 2004 .................................................................... Dated this the 30th day of October, 2008. JUDGMENT Ramachandran Nair, J. Appeal is filed challenging the order of the Employees Insurance Court holding that the appellant's establishment is covered by the Employees State Insurance Act. We have heard counsel appearing for the appellant, Standing Counsel appearing for the E.S.I. Corporation and counsel appearing for the Airport Authority. 2. On going through the order of the E.I. Court, we find that the appellant had taken two contracts from the Airport Authority, one for installation of generator and the other for maintenance of the power supply system during the year 1998-99. The total employees during the year were above 20 and therefore, the E.S.I. Corporation held that appellant's establishment was covered by Section 1(5) of the E.S.I. Act, 1948. When the demand was challenged before the E.I. Court, the Court confirmed it by the impugned order. It is against this order appeal is filed contending that liability, if at all, is on the Airport 2 Authority and since the Airport Authority is exempted by virtue of Section 1(4) of the Act, no contribution can be demanded from the appellant and from the Airport Authority. Counsel for the appellant has relied on decision of this court in REGIONAL DIRECTOR, E.S.I. CORPORATION V. COCHIN PORT WORKSHOP CANTEEN & ANOTHER (2003-II-LLJ 117) and contended that appellant is similarly situated like the Canteen Contractor appointed by the Cochin Port Trust and based on the judgment, appellant's establishment is not covered by the E.S.I. Act. Counsel for the E.S.I. Corporation pointed out that the facts are different in as much as appellant's employees never become employees of the Airport Authority and appellant's is an independent establishment covered by Section 1(5) of the Act. Counsel for the Airport Authority has supported the contention of the E.S.I. Corporation that coverage is not for the Airport Authority, but for the contractor. We are in agreement with the findings of the E.I. Court because appellant is not a contractor engaged by the Airport to 3 select or appoint employees for them. On the other hand, appellant is an independent contractor who has his own employees engaged by him for setting up of the generator and for maintenance of the power supply system. The Airport Authority has no control over the employees of the appellant and it is the appellant who alone has control in the appointment and supervision of the employees. We do not find any substance in the contention of the appellant that the principal employer is the Airport Authority and so much so, liability is on Airport Authority. In fact, as and when contractor changes, the employees also change and so much so, the Airport Authority never becomes the employer of the contractor's employees. However, if the contention of the appellant that some of the appellant's employees later got absorbed in the service of the Airport Authority is correct, then of course they will be excluded for the purpose of considering coverage of appellant's establishment for later years. So far as the year 1998-99 is concerned, appellant's establishment was rightly held to be covered under the Act 4 because it was having a strength above the required limit of 20. We, therefore, dismiss the appeal. If any amount is retained by the Airport Authority towards contribution payable to E.S.I. Corporation, the same should be released immediately for credit in the account of the appellant. C.N.RAMACHANDRAN NAIR Judge HARUN-UL-RASHID Judge pms