* 1 * IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO. 3 OF 2010 The Regional Director, Employees State Insurance Corporation .........Appellant V/S. Gajanan Weaving Mills ........Respondent ---------------- Mr. H.V. Mehta, Advocate for the appellant. Mr. M.S. Topkar, Advocate for the respondent. Coram : Smt. R.P. SondurBaldota, J. Dated : 15th April, 2010. P.C. :- 1. The Employees State Insurance Company has preferred this Appeal to take exception to the judgment and order dated 11th November, 2009 passed by the Employees State Insurance Court, Sangli allowing application filed by the respondent under Section 77 read with Section 75 of the Employees State Insurance Act, 1948. The present Appeal is opposed by the respondent contending that it does not give rise to any substantial question of law for consideration of the court and that the application filed by the respondent has been decided solely on assessment of the factual position. * 2 * 2. By the order dated 5th October, 2000 the appellant informed the respondent that all the units situate in the compound of the respondent have been clubbed together for the purpose of coverage under the ESI Act and called upon the respondent to make compliance of the units together on Code No.33-3274 alloted to the respondent. This order was challenged by the respondent contending that it was passed without hearing it, thereby violating the principles of natural justice. It was also challenged on merits contending that the 28 units situate in the same compound were completely independent units and there was no functional or financial integrity between the respondent and those units. 3. The respondent is engaged in the business of sizing and warping and it is covered under the E.S.I. scheme. There are 28 units situate in the compound owned by the respondent. Those do the job work of the respondent and also pay rents for occupying the portions. Most of the units are owned by the relatives of the respondent. While challenging the order of clubbing the units together, it was contended on behalf of the respondent that each of the 28 units is maintained separately. They draw a separate Profit and Loss Accounts, have separate works, managers and workers. There is no general supervisory control of the respondent over any of the other units. All the units also have separate registration for the purpose of sales tax and small scale industries etc. They are assessed separately for income-tax purposes. There is no employer-employee relationship between the respondent and those units. * 3 * 4. The appellant had resisted the application contending that though all the units are ostensibly different there is strong common connection between them. The different activities of the respondent who is engaged in manufacture of dhotis i.e. the activities of yarn winding, doubling, folding, bleaching finishing, bundling, labelling, starching, cleaning are done by way of the job work by those units. It was pointed out that they have a common service center engaged for the accounting purposes and they have also a common security compound. 5. The E.S.I. court noted that the order dated 5th October, 2000 challenged before it was not a speaking order and it was also passed without hearing the respondent, thus violating the principles of natural justice. On merits, on the basis of the evidence produced before it, the court held that the units undisputedly carry different businesses from the same premises. All the units are tenants of the respondent industry. They have separate registrations and there was no evidence on record to prove that there is either functional or administrative unity between the respondent and other units. There was also no evidence to show that the employees of the respondent industry and the other units are transferred inter-se. There was also no evidence to prove financial relationship between the applicant and the other units. With these findings, it allowed the application of the respondent and set aside the order dated 5th October, 2000. 6. I have heard the counsel for both sides and perused the impugned * 4 * judgment. The judgment shows that the application of the respondent has been allowed on the ground that there is no evidence produced by the respondent to show functional unity between all the units and the respondent. The inference drawn by the E.S.I. court is based on the evidence produced before it. It also does not give rise to any substantial question of law for consideration of this court. In the result, the appeal which is in the nature of Second Appeal stands dismissed in limine. [SMT. R.P. SONDURBALDOTA, J]