IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN FRIDAY, THE 19TH NOVEMBER 2010 / 28TH KARTHIKA 1932 Ins.APP.No. 8 of 2010() ----------------------- (IC.14/2005 of EMPLOYEES' INSURANCE COURT, ALAPPUZHA. .................... APPELLANT/APPLICANT --------------------------------------- 1. M/S.NAINAS GARMETS & HANDLOOMS, (A PROPRIETARY CONCERN), GOPALA PRABHU ROAD, ERNAKULAM, KOCHI-35, REPRESENTED BY ITS PROPRIETOR, T.M.IQBAL. 2. T.M.IQUBAL, AGED 42, S/O.MARAKKAR, PROPRIETOR, M/S.NAINAS GARMENTS & HANDLOOMS, GOPALA PRABHU ROAD, ERNAKULAM, KOCHI-35. BY ADV. SRI.N.M.MOHAMMED AYUB RESPONDENT/OPPOSITE PARTY ----------------------------------------------- EMPLOYEES STATE INSURANCE CORPORATION, REPRESENTED BY ITS REGIONAL DIRECTOR, PANCHADHEEP BHAVAN, N.S.ROUND, TRICHUR-20. BY SRI. T .V .AJAYAKUMAR, SC. THIS INSURANCE APPEALS HAVING BEEN FINALLY HEARD ON 19.11.2010 , THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: VK M.N. KRISHNAN, J. ........................................... Ins.A.NO.8 OF 2010 ............................................. Dated this the 19th day of November, 2010. J U D G M E N T This is an appeal preferred against the judgment of the Employees' Insurance Court, Alappuzha in I.C.No.14/2005. Applicant before the court is an establishment by name M/s. Nainans Garments & Handlooms which is a proprietary concern. 2. It is the contention of the establishment that it has never employed more than 16 persons and therefore it is not liable to be covered under the Employees' State Insurance Act. On the contra, the Employees' State Insurance Corporation's definite stand is that there are 20 employees and therefore they are liable to be covered under the Act. 3. When the trial court wrote the order, it made a further observation by stating that the establishment had employed at least two more headload workers making the total number of employees as 22. Such a case was not pleaded by any of the parties at the time of contesting the case. To make it short, the dispute is with respect to : 2 : Ins.A.NO.8 OF 2010 employment of 4 persons namely Basheer, Yahiya, Ansar and a security person. Basheer and Yahiya are brothers of the proprietor and according to the establishment, Ansar was employed till 31.3.2002 and the security person was employed by the person who had supplied him and therefore all these persons are to be excluded. If all these persons are excluded, then definitely there cannot be any coverage. So far as Basheer is concerned, he is a brother of the proprietor. But it is seen that he has been paid salary of Rs.5,000/= per month. It has to be stated that he is receiving the remuneration. It is not a partnership concern. He is not holding the post of Managing Director or Director by virtue of the provisions of the partnership and gets remuneration for being so. Therefore in a proprietary concern when a person receives remuneration, it shall be only as an employee and not otherwise. Therefore, the decision cited by the learned counsel for the appellant reported in Cochin Cadalac Pvt. Ltd. v. E.S.I. Corporation (2001 (1) ILR Kerala 10) may not come to the rescue of the appellant. : 3 : Ins.A.NO.8 OF 2010 4. Next, I will consider about the security personal. It is the well settled principle now that security person's employment can be tacked on to the employment strength provided he is not covered by the establishment which supplies him. Here there is no case that he is already a covered employee under the Employees' State Insurance Corporation. Therefore the case of the security person also cannot be dealt with in favour of the appellant. 5. Now comes the question of Yahiya. Yahiya is also a brother of the proprietor. He was seen sitting in the Cashier's chair when the Inspector visited the premises on 9.4.2002. The establishment would contend that he was just sitting and helping and he has no sort of employment and that he is already running another concern. None of the documents produced in this case would reveal that Yahiya is working as an employee under the establishment or there is no document which pinpoints just like in the case of Basheer that he is paid wages or salary. So just because a person was found to be sitting on a particular day in a chair one cannot jump to the conclusion that he is an : 4 : Ins.A.NO.8 OF 2010 employee especially when we take into consideration the relationship between the parties as brothers. It is a matter which requires deeper consideration and for that purpose it can be sent to the E.S.I Corporation to decide after permitting the parties to adduce evidence. 6. Then comes the question of Ansar. The definite case of the establishment is that Ansar was in their roll from 1997 to 31.3.2002 and when the Inspector visited the premises on 9.4.2002, he was not available and that the muster roll maintained during that period does not indicate his name after 31.3.2002. The learned Employees Insurance Court held that since he was an employee for a quite long time and as there is nothing to show about his dismissal or retrenchment, it must be deemed that he is continuing and therefore his name has to be included. 7. I think these type of findings cannot be arrived on the basis of conjectures and surmises. There must be some positive materials to hold so. It is also a matter which can be considered by the Employees' State Insurance Corporation. : 5 : Ins.A.NO.8 OF 2010 8. Lastly regarding the two other persons said to be employed by the establishment by the court. I do not want to elaborate on that since the contention is seen answered or raised by the court itself. It is desirable if the Employees State Insurance Corporation is able to furnish details regarding the persons concerned, that also may be considered and orders be passed. It has also to be stated that fresh evidence may be permitted to be adduced on all these points and the Employees State Insurance Corporation is directed to consider the question of coverage afresh taking into consideration the fact that whether there is sufficient materials to show that Yahiya, Ansar and two other persons named in the order are the employees of the establishment. For that purpose the applicant should be permitted to adduce documentary as well as oral evidence and the concerned officer is directed to decide the matter untrammelled by the observations contained in any of the judgment including this judgment and dispose it of in accordance with law. The official of the Employees' State Insurance Corporation is directed to send a notice to the : 6 : Ins.A.NO.8 OF 2010 applicant establishment informing the date of hearing. I make it very clear that principles of natural justice has to be complied with. I also make it clear that if the Employees' State Insurance Corporation wants to furnish any materials, let that also be permitted to be furnished so that the entire matter can be worked out. The establishment is permitted to take back the records produced from the Employees' Insurance Court and then produce it before the E.S.I official for proper disposal of the matter. It is also stated that this Court has not considered anything on the question of clubbing. Disposed of accordingly. M.N. KRISHNAN, JUDGE. cl : 7 : Ins.A.NO.8 OF 2010 M.N. KRISHNAN, J. ........................................... A.S.NO.389 OF 2001 ............................................. 11th day of November, 2010. J U D G M E N T