THE HON’BLE SRI JUSTICE GHULAM MOHAMMED & THE HON’BLE SRI JUSTICE P. SWAROOP REDDY CMA NO.497 OF 2008 Dated 20-10-2010 Between: The Asst. Director, ESI Corporation, Hill Fort Road, Hyderabad …..Appellant Vs. M/s.Alapati Stone Crushers …..Respondent THE HON’BLE SRI JUSTICE GHULAM MOHAMMED & THE HON’BLE SRI JUSTICE P. SWAROOP REDDY CMA NO.497 OF 2008 JUDGMENT: ( per Hon’ble Sri Justice Ghulam Mohammed ) This appeal is filed by the ESI Corporation represented by the Assistant Director against the order dated 5-2-2007 passed in ESI No.6 of 2000 by the Presiding Officer, Labour Court, Guntur. The respondent herein filed ESI No.6 of 2000 under Section 75 of the ESI Act seeking for a declaration that the letter dated 5-3-1998 issued by the 1st appellant herein and the letter of the 2nd appellant intimating coverage of the provisions of the ESI Act and demanding ESI contributions from the 1st respondent-unit with effect from 1-12-1997 being illegal, invalid and to set aside the same. 2. The brief facts of the case are:- The unit of the- respondent herein started functioning from the year 1985 and employed less than 9 workers having obtained factories licence. It is stated that as on the date of inspection only 4 workers were working in the respondent-unit. But the appellant issued notice on the ground that the respondent-unit employed more than 25 workers and pursuant to the inspection of the unit, intimated the respondent-unit that the provisions of ESI Act are applicable to the unit and it has to pay the ESI contributions. The case of the respondent is that the unit is not covered under the provisions of the Act as only less than 9 workers are employed. The respondent replied to the notice issued by the appellant stating that only 4 workers were working as on the date of the inspection and therefore the provisions of the ESI Act are inapplicable. 3. The Court below by the impugned order allowed the petition and set aside the letter dated 5-3-1998 issued by the appellant herein. Aggrieved by the same, the ESI Corporation filed this appeal. 4. Heard the learned counsel for the appellants and the learned counsel for the respondent. Peruse the impugned order passed by the Court below. 5. The substantial question of law that arise for consideration in this appeal is:- 1. Whether the respondent-unit employed only 4 workers and not 25 as alleged by the appellants ? 2.Whether the respondent-unit is liable to pay ESI contributions ? 6. To prove the case of the respondent-unit, one A.Mahanrao was examined as PW-1 and marked Exs.P-1 to P- 3. Ex.P-1 is copy of licence issued by factories Department to the unit. On behalf of the ESI Corporation RW-1 was examined and Exs.R-1 to R-4 were marked. 7. The witness examined by the unit, by way of affidavit in lieu of his chief examination stated that always the number of employees working in the unit are only 4 to 5. On the other hand, RW-1 examined by the ESI Corporation, on affidavit in lieu of his chief examination stated that the respondent employed 25 workers and therefore, the provisions of ESI Act are applicable. 8. In the instant case, the Insurance Inspector on his inspection of the unit found 25 workers working in the unit. It is borne out from the record that at the time of inspection, one G. Venkateswarlu was In-charge of the unit and Ex.R-2 Form-01 was signed by the said person as In-charge of the respondent- unit. Mere denial of employer and employee relationship between them by the respondent-unit is not sufficient to believe that the said person was an outsider. The respondent-unit failed to explain as to why the said person i.e. G. Venkateswarlu was present in the unit, if he has no relationship with the unit in any capacity. When a fact is asserted, the normal rule is that the burden is on the person who asserts that fact. In this case, except denying the relationship with the said person who was present when the Insurance Inspector inspected the unit, there is no other material to establish that the unit employed only five persons as alleged by it. 9. In the circumstances, the impugned order passed by the Court below is set aside and the appeal is allowed. No costs. _____________________ Ghulam Mohammed, J __________________ P. Swaroop Reddy, J Dated 20-10-2010 Nrg. THE HON’BLE SRI JUSTICE GHULAM MOHAMMED & THE HON’BLE SRI JUSTICE P. SWAROOP REDDY CMA NO.497 OF 2008 JUDGMENT: ( per Hon’ble Sri Justice Ghulam Mohammed ) 20-10-2010