IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN TUESDAY, THE 17TH NOVEMBER 2009 / 26TH KARTHIKA 1931 Ins.APP.No. 80 of 2007(F) ------------------------ IC.34/2003 of EMPLOYEES INSURANCE COURT, ALAPPUZHA .................... APPELLANT/ APPLICANT ----------------------------- M/S.CEMENT BRICKS & ALLIED PRODUCTS INDUSTRIES, VILANGU P.O., VIA EDATHALA, REPRESENTED BY ITS PARTNER M.V.THOMAS. BY ADV. SRI.V.N.ACHUTHA KURUP, SENIOR ADVOCATE SRI.BINDU SREEKUMAR SRI.VIJU ABRAHAM SRI.JOY C. PAUL SRI.DOMINIC JOHNSON RESPONDENT(S)/RESPONDENTS: ----------------------------------------- THE REGIONAL DIRECTOR,E.S.I. CORPORATION PANCHADEEP BHAVAN,NORTH SWARAJ ROUND, TRICHUR-20. ADV. SRI.P.SANKARANKUTTY NAIR, SC, ESI CORPN FOR R1 THIS INSURANCE APPEALS HAVING BEEN FINALLY HEARD ON 17/11/2009, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: M.N. KRISHNAN, J. = = = = = = = = = = = = = = INS.APPEAL NO. 80 OF 2007 = = = = = = = = = = = = = = = Dated this the 17th day of November, 2009. J U D G M E N T This appeal is preferred against the order of the Employees Insurance Court, Alappuzha in I.C.34/03. By virtue of the said order the E.I.Court held that the establishment is liable to be covered under the provisions of the E.S.I.Act from 1989 and therefore directed the Corporation to initiate assessment proceedings. It is challenging that decision the present appeal is preferred. 2. The litigation has started in the year 1991 and after the first round of litigation before the trial court the matter reached this Court as MFA 311/95. The Division Bench of this Court held that it was incumbent for the officers of the respondent to find out whether sufficient number of employees as mentioned in S.2(12) had been employed in the crusher unit. It was held that the said subject matter has not been considered by the E.I.Court and therefore directed the E.I.Court to consider it and remanded INS.APPEAL NO. 80 OF 2007 -:2:- the matter. After remand much water has not flown and evidence of PWs.1 to 3 and DWs.1 and 2 were examined and Exts.P1 to P3 and D1 to D3 were analysed and the E.I.Court arrived at a decision regarding the coverage. Aggrieved by the decision of coverage the applicant moved this Court in appeal and the following substantial questions of law are formulated; “(i) Whether the Court below right it clubbing the workers in the quarry, which admittedly comes under the purview of Mines Act, 1952 for making the crushing unit coverable under the E.S.I.Act without complying with the direction of this Court in MFA 311/95. (ii) Whether the Court below right in holding that the appellant establishment comes within the definition of factory as defined in Section 2(12) (a) of the Employees State Insurance Act, 1948.” 3. The applicant establishment is a quarrying plus crushing unit dealing with granite. It is the contention of the establishment that crushing unit is only having six members INS.APPEAL NO. 80 OF 2007 -:3:- as workers and even though power is used since the number of workers is less than 10 the crushing unit will not come under the purview of coverage under the E.S.I.Act. On the contra E.S.I Corporation would contend that there is a total worker of 33 to start with and subsequently 24 + 6 and the number of persons working for crushing unit is more than 10 and therefore it is covered by the enactment. 4. The first document which one has to analyze is Ext.D1. It is the basis on which the action has been initiated. Ext.D1 is a report submitted by the Insurance Inspector, DW1. He had gone to the factory which is a quarrying cum crushing unit and he has stated that quarrying is operated with power and it is situated about 75 feet away from the quarry. It is also submitted therein that “the present total number of workers is 24 + 6(staffs) during 4/89. There is no indication in the attendance register, the total number of workers engaged for quarry unit and crushing unit separately. It is again observed that it is unofficially gathered that the total number of workers INS.APPEAL NO. 80 OF 2007 -:4:- required for the quarry unit will be comparatively less than the total number of workers required for the crushing unit and ultimately DW1 jumps to the conclusion by dividing the entire workers into two and to hold that the number of workers in the crushing unit is above 10 and therefore it is covered under the Act. So a reading of Ext.D1 itself will make it very clear that the officer who inspected the premises was not able to find out the number of employees engaged in the crushing unit as well as the quarrying unit separately and he had also come to understand that the number of workers required for the crushing unit is less than that is required for the quarrying unit. When examined as DW1 his evidence further indicate that he was only sitting in the office to understand things and he never proceeded to the work spot to ascertain the number of persons working in the crushing unit. So Ext.D1 report is only an illusory report it has to be found out whether it is acceptable or not. INS.APPEAL NO. 80 OF 2007 -:5:- 5. It is in this background we have to analyze the evidence of PW2 and PW3. PW2 was a manager of the quarrying unit. He had in categorical terms spoken that never before more than six workers were engaged in the crushing unit. Similarly, PW3 who was the supervisor of the crushing unit had also deposed about the fact that only six workers were utilized for the purpose of crushing unit. It is also stated that from 2006 onwards separate registers are maintained for the crushing unit as well as the quarrying unit. Learned E.I.Court quoted isolated sentences from the evidence to arrive at a decision on coverage. In one portion it is deposed that for the purpose of work in a quarrying unit, for operating Jackey hammers with four helpers, one blaster and a helper is sufficient. But it is only read in isolation. It was never stated that it was the number of employees that were used for running the quarrying unit. On the other hand the specific categoric assertion of PWs.2 and 3 are that the requirements or the crushing unit was only six and only six were engaged. INS.APPEAL NO. 80 OF 2007 -:6:- 6. Now a question may arise as on whom the burden lies. As held in very many decisions when both the sides have attempted to adduce evidence and adduced evidence really burden of proof falls into insignificance and it is the sum total of the evidence that has to be eschewed to find out the matter. As it can be seen that Ext.D1 which is the basic report itself is not acceptable for the reason that it is only on the basis of conjectures and surmises the departmental officer had arrived at the figure of more than 10. He was totally conscious of the fact that the persons required to do the work under the crushing unit is much less than what is required for the quarrying unit. When it was so and especially being on the spot at least he could have visited the quarrying unit as well as the crushing unit and to find out really how many members were working on the respective units. He did not bother to do it. But applied the theory of equity and divided it by 2. It cannot be accepted. Further the workers were available. I think they would have been questioned at that stage or at least they could have been INS.APPEAL NO. 80 OF 2007 -:7:- summoned to be examined to establish regarding the work they were doing at a particular place. That attempt is also not made. This Court while remanding the case had specifically asked the E.I.Court to consider the question that how many persons were working in the crushing unit so as to attract the provisions of the ESI Act. The direction was a positive one and the answer could not have been found out without positive evidence. What the E.I.Court has done is to negatively infer so many things and come to the conclusion that the number of employees should have been more than 10. It is only a hypothesis which is not supported by legal valid evidence. Therefore by these discussions I find that there is a grave injustice done to the applicant and the approach of the subject matter has been totally not on the legal basis which are all certainly substantial questions of law that had come up for consideration before me. Therefore I answer the points in favour of the establishment and hold that evidence is lacking to show that the crushing unit had 10 or more employees at the time of the alleged inspection INS.APPEAL NO. 80 OF 2007 -:8:- so as to attract coverage under the E.S.I.Act. Therefore the appeal is allowed and the finding of the E.I.Court is set aside and it is held that the establishment is not liable to be covered under the provisions of the E.S.I.Act. The Ins.Appeal is disposed of accordingly. M.N. KRISHNAN, JUDGE. ul/-