IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN & THE HONOURABLE MR. JUSTICE P.R.RAMACHANDRA MENON FRIDAY, THE 23RD OCTOBER 2009 / 1ST KARTHIKA 1931 Ins.APP.No. 57 of 2005() ------------------------ IC.85/2002 of EMPLOYEES INSURANCE COURT, ALAPPUZHA .................... APPELLANT/OPP.PARTY: ------------- THE DEPUTY DIRECTOR, E S I CORPORATION, NORTH SWARAJ ROUND, THRISSUR. BY ADV. SMT.T.D.RAJALAKSHMY, SC, ESI CORPN. RESPONDENT(S): APPLICANT: -------------------- M/S. DARSHAK LIMITED, CANNONSHED ROAD, ERNAKULAM, COCHIN-682 011, REPRESENTED BY ITS BRANCH IN CHARGE MR. G.T. PRABHU. BY SRI.A.M.SHAFFIQUE, SENIOR ADVOCATE SRI.E.K.NANDAKUMAR SRI.BENNY THOMAS THIS INSURANCE APPEALS HAVING BEEN FINALLY HEARD ON 23/10/2009, ALONG WITH INAP NO. 76 OF 2005, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: P.R.RAMAN & P.R.RAMACHANDRA MENON ------------------------------- Ins.Appeal. Nos.57 & 76 of 2005 ------------------------------- Dated this the 23rd October, 2009 J U D G M E N T Raman, J. Both these appeals arise out of the common judgment passed by the Employees Insurance Court, Alleppey, in I.C.No.85 of 2002. While Insurance Appeal No.57 of 2005 is preferred by the Deputy Director, ESI Corporation, Insurance Appeal No.76 of 2005 is preferred by the applicant. 2. The short question that arise for consideration is as to whether the employees who remain on tour for seven months or more in an year are exempted by virtue of the notification issued by the Government of Kerala dated 25.11.1996. 3. The applicant before the ESI court is the appellant in Ins.Appeal. No. 76 of 2005. It is an establishment Ins.Appeal Nos.57 & 76 of 2005 2 engaged in the distribution of allopathic medicines, covered under the ESI Act. It is stated that there are 36 Medical Representatives, who remained in tour for more than 7 months in a year. As a matter of fact, inspection was regularly conducted in the establishment and after verifying the records, the ESI Corporation itself was satisfied and held that the said 35 employees are liable to be exempted and intimation regarding the same was given to the applicant. But later on a review of the matter, the subsequent Inspector who inspected the establishment thought that the applicant is liable to cover all the 36 employees as well. Hence, proceedings were taken ultimately under Section 45A of the ESI Act and adverse assessment order was passed against the applicant. This was challenged before the Employees Insurance Court. The Employees Insurance Court found that when the opposite party, viz., the ESI Corporation, themselves have taken the view that these employees are exempted, they cannot be asked to cover the employees with retrospective effect. Therefore, it held that in the factual situation, the field staff, viz., sales representatives can be insisted to be covered only from 1.3.2001. Accordingly, Ins.Appeal Nos.57 & 76 of 2005 3 the demand order was set aside and the applicant was directed to take up the responsibility to cover the field staff from 1.3.2001 and to pay the contribution to the field staff who were coverable from the above said date. 4. The learned counsel appearing for the appellant in Ins.Appeal.No.76 of 2005 submits that restriction of the exemption upto 1.3.2001 is not justified. It is submitted that the employees are covered with effect from 1.6.2004. On other hand, ESI Corporation, the appellant in Ins.Appeal.No.57 of 2005, would contend that the court cannot bifurcate the period. Since the exemption is claimed by the applicant, they have to satisfy all the conditions. In so far as the registers are not maintained, which is a condition for availing the exemption, as per the notification, applicant establishment is not entitled for exemption for any period. 5. As per the notification, the employees who remain on tour for seven months or more in an year are exempted from the provisions of the ESI Act. But as per paragraph 2 of the notification, such exemption is subject to the Ins.Appeal Nos.57 & 76 of 2005 4 condition that the factory shall maintain a register showing the names and designation or the exempted employees and that the contribution is paid in respect of the said employees during the period before the exemption was granted under this notification. 6. Therefore, the question as to whether the applicant is entitled for exemption will depend upon as to whether the conditions are satisfied and in the light of the factual situation, where there is no dispute regarding the number of employees who remained on tour for seven months or more, can it be held that non-maintenance of Register can be to reject exemption claim and whether it is mandatory condition in like circumstances. No finding as such is rendered on the above issue. The question of law raised in this case can be answered after a finding on the above fact is reached. 7. In the above situation, we set aside the judgment passed by the Employees Insurance Court and remand the matter for fresh consideration, in accordance with law. The Employees Insurance Court will raise an issue as to whether paragraph No.2 of the notification, SRO.1236 dated 25.11.1996 Ins.Appeal Nos.57 & 76 of 2005 5 is complied with by the applicant in this case and in the absence of any register as such maintained and in the absence of any prescribed register under the notification, whether alternate proof regarding such employees who remained on tour for more than seven months, if established on fact, could avail the exemption, and thereafter proceed to decide the case. Once the conditions are satisfied, the establishment is exempted. Date of exemption cannot be postponed or curtailed and it does not depend on the demand or failure to raise demand on the part of the Corporation. Both the appeals are accordingly allowed by way of remand. The parties are directed to appear before the Industrial Tribunal (Employees Insurance Court, Allappuzha) Camp at Ernakulam, on 6.11.2009. P.R.RAMAN, JUDGE P.R.RAMACHANDRA MENON, JUDGE. nj.