THE HON'BLE SRI JUSTICE L.NARASIMHA REDDY CIVIL MISCELLANEOUS APPEAL NO.1366 of 2000 19th August 2009 Between: M/s.Ranga Mahal, Rep.by its Proprietor, K.Shakuntala, W/o.late K.P.Saradhi, R/o.1/1, Arundelpet, Guntur-522 001. …APPELLANT AND 1. Deputy Regional Director, Employees State Insurance Corporation, Regional Office, 5-9-93, Hill Fort Road, Hyderabad-500 463. And one other. …RESPONDENTS THE HON'BLE SRI JUSTICE L.NARASIMHA REDDY CIVIL MISCELLANEOUS APPEAL NO.1366 of 2000 JUDGMENT: The appellant is a Theatre, which was constructed by one Mr.K.P.Saradhi. After his death, his wife is brought on record. The authorities of the Employees State Insurance Corporation, i.e., the respondents herein, initiated proceedings against the appellant to bring it under the purview of the Employees State Insurance Act, 1948 {“the Act” for brevity}. In the process, they have treated the appellant as well as another by name Seesh Mahal Theatre as functionally one. Aggrieved by the notices issued in this regard, the appellant filed E.S.I. Application No.2 of 1993 before the Labour Court, Guntur. Through its order, dated 29.02.2000, the Labour Court dismissed the application. Hence, this appeal under Section 82 of the Act. Sri A.K.Jayaprakash Rao, learned counsel for the appellant, submits that the two Theatres mentioned above are independent entities. According to him, the appellant is a proprietory concern and the other is owned and managed by a partnership firm. Learned counsel submits that the respondents as well as the trial Court committed error in holding that there is functional unity between the two Theatres. Ms.Pushpinder Kaur, learned counsel for the respondents, on the other hand, submits that the trial Court has undertaken extensive discussion on various aspects including the manner in which the Theatres were managed and their location and arrived at a just and proper conclusion. She contends that the order under appeal does not warrant any interference. On receiving notice issued by the respondents, the appellant approached the trial Court by filing application. To prove their case, the appellant examined P.Ws.1 and 2 and filed Exs.P1 to P20. On behalf of the respondents, R.W.1 was examined and Exs.R1 to R6 were filed. The principal question before the trial Court as well as this Court is as to whether the appellant on the one hand, and the Seesh Mahal Theatre on the other hand can be treated as one unit, in the context of the coverage under the Act. It is not in dispute that if they are treated as independent establishments, they are not covered by the provisions of the Act since the number of employees engaged by each of them is less than twenty {20}. The record discloses that the appellant is a proprietory concern owned by one K.P.Saradhi. He died during the pendency of the appeal and his wife came on record as legal representative. It is not in dispute that the other Theatre is owned and managed by a partnership concern. The mere fact that K.P.Saradhi or any of his family members are also partners of the firm, hardly makes any difference. One fact, which appears to have weighed with the trial Court as well as the respondents, is that P.W.2 was said to be managing both the Theatres. Even if it is true, it cannot constitute the basis to treat both the units as functionally one. P.W.2 is only an employee and he discharges managerial functions. Law does not require that an individual must manage only one establishment, exclusively. It is not uncommon that the same individual is entrusted with the management of several organizations, in similar fashion as a Chartered Accountant, to audit the accounts of many establishments. The view taken by the respondents as well as the trial Court cannot be countenanced. Therefore, the Civil Miscellaneous Appeal is allowed. It is held that the appellant cannot be clubbed along with M/s. Seesh Mahal Theatre for the purpose of bringing it under the purview of the Act. It is, however, made clear that in case, the number of employees engaged by the appellant are sufficient to bring under the purview of the Act, it shall be open for the respondents to take necessary steps. If any amount was collected from the appellant, the same shall be refunded by the respondents within a period of sixty {60} days from today. There shall be no order as to costs. _____________________ (L.NARASIMHA REDDY, J) 19th August 2009 RRB