HONOURABLE SRI JUSTICE K.C.BHANU CIVIL MISCELLANEOUS APPEAL No.1143 of 2004 Date of Order:07.03.2011 Between: Nanda Service Station, Rep. By its Prop. Smt.rajkumari Nanda … Appellant and The Employees Insurance Corporation and another ...Respondents The Court made the following Order: HONOURABLE SRI JUSTICE K.C.BHANU CIVIL MISCELLANEOUS APPEAL No.1143 of 2004 ORDER :- This Civil Miscellaneous Appeal is directed against the order, dated 31.12.2003, in E.I.C.No.106 of 2000 on the file of Employees’ Insurance Court-cum-Chairman, Industrial Tribunal-I, Hyderabad, whereunder and whereby the petition filed under Section 75(1)(g) of the Employees’ State Insurance Act, 1948 seeking declaration of the proceedings No.VIII/52-15418-42, dated 05.07.2000, issued by the 1st respondent as arbitrary and illegal, was dismissed. 2. The appellant filed Employees’ Insurance Case No.106 of 2000, stated that the Corporation has allotted employees code No. VIII/52-14518-42 to the appellant establishment and basing on the same, the appellant had been regularly paying the contributions upto July, 2000 and that the appellant also submitted returns showing contributions from March, 1999 to 31.03.2000 and as such there are no dues to be paid by the appellant to the Corporation. In the meanwhile, the appellant received the proceedings, dated 01.06.2000 from the respondent. The 1st respondent issued another proceedings, dated 05.07.2000, under different employees code number whereunder the appellant was directed to pay Rs.59,054/- towards the contribution payable from 15.01.1998. The appellant had made a representation, dated 14.08.2000, informing the respondent-Corporation about allotment of the code number, but without considering his representation the present impugned proceedings were issued and hence the petition. 3. Respondent-Corporation filed a detailed counter-affidavit stating that as per the inspection report, dated 15.01.1998, issued by the Inspector of the Corporation, the appellant engaged more than nine employees in the petrol bunk and in the maintenance of the service station. Therefore, by a letter, dated 27.03.1998, the factum of coverage of E.S.I.Act was informed to the appellant, which was acknowledged by it on 24.04.1998. As the appellant failed to comply with the provisions of the E.S.I.Act, the impugned notice is issued. 4. Basing on the above pleadings, the Court below framed the following issues for consideration: 1. Whether the appellant is not liable to be covered for the earlier period from 15.01.1998 to 31.03.1999 under different code No.52- 15418-42 as it never engaged more than nine employees? 2. Whether the appellant is not liable to pay any amount as demanded in the C-18 notices dated 07/2000 and 09.08.2000? 3. To what relief? 5. During enquiry, on behalf of the appellant/petitioner, P.W.1 was examined and Exs.P1 to P17 were got marked. On behalf of the respondent-Corporation, R.Ws.1 and 2 were examined and Exs.R1 to R10 were got marked. 6. The Tribunal after considering the evidence on record came to the conclusion that the appellant/petitioner was validly covered under E.S.I.Act with effect from 15.01.1998 and that the appellant establishment failed to produce any evidence to show that it paid the contribution as contemplated under the E.S.I.Act for the period from 15.01.1998 to 31.03.1999 and accordingly, dismissed the petition. Aggrieved thereby, this appeal is preferred. 7. Now the point for determination is whether the order of the trial Court is correct, legal and proper? 8. Learned counsel for the appellant contended that when the appellant-establishment was already covered by one code number, the question of issuing a second code does not arise. It is further contended that the respondent-Corporation has not conducted any enquiry to show that the establishment in question has engaged more than nine workers so as to cover the insurance liability of the employees under the E.S.I.Act and, therefore, the consequential proceedings determining the insurance coverage, are not valid, but the court below has not considered these aspects and hence, he prays to set aside the impugned order and allow the E.S.I.Case. 9. On the other hand, the learned counsel for the respondent- Corporation contended that at the time of first inspection by the concerned official, a code number was given, and at the time of inspection for the second time, the employer has not brought to the notice of the corporation officials about giving of code number on earlier occasion and, therefore, the second code number was given basing on the report of the 2nd inspection and that the Tribunal after elaborate consideration of evidence on record rightly directed the appellant/employer to pay the contribution under the E.S.I.Act as it failed to pay the same and hence, he prays to dismiss the appeal. 10. The period under dispute is with regard to the payment of E.S.I. contribution from 15.01.1998 to 31.03.1999. It is not the case of P.W.1 that the appellant paid the contribution for the period from 15.01.1998 to 31.03.1999. From the record it is clear that the appellant establishment engaged more than nine persons as on the date of inspection made by the officials of the respondent-Corporation. Ex.R1- Xerox copy of the office note of R.W.1. Though R.W.1 stated that he had not served Ex.R1 on the owner of the establishment, a perusal of Ex.R1 would clearly go to show that it was received by the daughter of the owner, who is managing the day to day transactions of the petrol bunk and service station. The question is whether, as on the date of the inspection, the appellant engaged more than nine workers or not. If the establishment engaged more than nine workers, then there cannot be any dispute that the establishment has to pay the insurance contributions. 11. Learned counsel for the appellant vehemently contended that in pursuance of Ex.R6-notice, a reply has been sent to the Corporation stating that it engaged only less than nine employees and, therefore, it is not covered by E.S.I.Act. In the trial court, the proceedings issued while allotting the code No. VIII/52-14518-42 in pursuance of the inspection made by one of the officials on 15.01.1998 has not been challenged. It is not in dispute that Ex.P7 order under Section 45A of the E.S.I.Act was passed on 05.07.2000 determining the contribution of Rs.59,054/- payable for the disputed period. At the time of second inspection made on 10.03.1999 by another Inspector, admittedly, P.W.1 did not disclose about the allotment of earlier code number to the Inspector who inspected the service centre. No doubt in pursuance of Ex.R3-letter, no enquiry was conducted, but it is clear that when a notice is under challenge it is for P.W.1 to explain as to how many persons the appellant corporation engaged as on the date of the first inspection i.e., on 15.01.1998. The visit of the Inspector on that day is not disputed. P.W.1 categorically stated in the cross-examination that she was looking after the day to day affairs and management of the appellant establishment both service station as well as petrol bunk which stand in the name of the mother of P.W.1. She was present at the time of inspection. She admitted that on 15.01.1998, 13 persons were employed for wages, but she added that two employees left the service station and three employees were on leave and as such she employed four more additional persons in lieu of the five persons to attend the washing of the vehicles. But she failed to establish by any documentary evidence to show that three persons out of nine were on leave on 15.01.1998. Further, she admitted that the relevant registers maintained by her does not show that the appellant establishment employed three more persons who were on leave on 15.01.1998. So, on the own admission of P.W.1, it is clear that as on the date of inspection made by the Inspector, 13 persons were employed in the establishment for wages. 11. The explanation submitted by P.W.1 that three persons were engaged additionally and two persons were further engaged because regular employee was on leave, cannot be accepted because the same is not evident from the register maintained by her. Therefore, if the appellant wants to disprove that she had not engaged more than nine persons, it is for her to establish the same. Since the preliminary report would clearly go to show that the appellant engaged more than 13 persons, the respondent Corporation has rightly allotted the code number. P.W.1 is a signatory to the preliminary report. If she had any grievance with regard to the allotment of the code, she ought to have challenged the same, but she had not done so. The only grievance of the appellant is that because the appellant establishment was already given a code number, the proceedings issued second time cannot be maintained. Since the appellant had not given the true picture i.e., allotment of the earlier code by the Corporation, the second code was given. Admittedly, the appellant establishment had not paid the E.S.I. contributions to the respondent-Corporation from 15.01.1998 to 31.03.1999. 12. The contention of the learned counsel for the appellant is that the order under challenge would clearly go to show that the appellant had not paid the contributions from 15.01.1998 to 31.03.1999. Learned counsel for the appellant contended that as per Exs.P3 and P4, appellant establishment paid the amounts towards the contributions from 31.03.1999. But these two documents do not disclose about payment of the contributions for the said period. These two documents would only go to show that some deductions have been made. But there is no evidence adduced by the appellant to show that the amount deducted from the salaries of the employees have been forwarded or deposited to the credit of the respondent Corporation. 12. Learned counsel for the appellant further contended that as admitted by R.W.2, when the appellant establishment is required to obtain form No.02, they have not obtained any declaration and not got the registration under Section 2(A) of the E.S.I.Act. The learned counsel for the appellant cannot be permitted to raise the said contention in the present appeal, because there is no factual foundation laid before the court below on that aspect. It is not the case of the appellant that it had not issued any notice in form No.1 and that it had not given any explanation for issuing a notice under form No.2. Therefore, in the absence of any factual foundation and in the absence of any evidence, the contention of the learned counsel for the appellant is untenable and devoid of merit. Therefore, I do not find any ground to interfere with the impugned order. However, it is made clear that this order shall not preclude the appellant establishment from showing the respondent Corporation about the payments, if any, made on or before 10.03.1999, so that that amount can be adjusted to any amount due in future. 13. The Civil Miscellaneous Appeal is, accordingly, dismissed. There shall be no order as to costs. ______________ K.C.BHANU, J March 7, 2011 lmv