IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN FRIDAY, THE 7TH NOVEMBER 2008 / 16TH KARTHIKA 1930 MFA.No. 1231 of 2002(E) ---------------------------------- IC.NO.57/2000 OF E.S.I COURT, PALAKKAD. .................... APPELLANT/ 1ST OPPOSITE PARTY: ---------------------------------------------------- THE REGIONAL DIRECTOR, E.S.I. CORPORATION, THRISSUR. BY ADV. SRI.P.SANKARANKUTTY NAIR. RESPONDENTS/ APPLICANT/ OPPOSITE PARTIES 2 TO 11: ------------------------------------------------------------------------------------ 1. THE POLY CLINIC PVT. LTD., THRISSUR-680 020. 2. T.L.MAGGIE, W/O. JOHNSON, PARAMBAN VEEDU, EAST FORT, THRISSUR-5. 3. M.V.ELIZABATH, W/O. JOHNSON, PALLISSERY VEEDU, MEMPIL VEEDU, KURIACHIRA, THRISSUR. 4. V.GIRIJA, D/O. KRISHNANKUTTY KURUP, SARAKA NIVAS, CHETTOOR POST, THRISSUR. 5. P.K.SULOCHANA, W/O. CHANDRAMOHAN, ACHUNILATHIL VEEDU, MADAYIKONAM, MAPRANAM. 6. C.J.AGNES, W/O. ABRAHAM, MARTHOMATHARA, THEDAPARAMBIL, MULAMKUNNATHUKAVU. 7. ELSY PAUL, W/O. PAUL P.O., PARANIKULANGARA VEEDU, PANAMPILLI NAGAR, CHETTOOR, THRISSUR. M.F.A. NO. 1231/2002-E: 8. P.K.SOJAN, S/O. P.K.KURIAN, PARAMBIL THARAKAN VEEDU, OLLUR, THRISSUR. 9. K.P.VIJAYAMMA, W/O. N.GOPALAKRISHNAN PILLA, PRANAVAM, KALVARY ROAD, POOTHOL, THRISSUR. 10. K.I.PAUL, S/O. ENASU K.P., KATTUKARAN VEEDU, PERINCHERRY P.O., THRISSUR. 11. C.DEVARAJ, S/O. M.D.BALAKRISHNAN, SREE GOWRI, OORAKAM P.O., THRISSUR. R1 BY ADV. SRI.C.CHANDRASEKHARAN. THIS MISC. FIRST APPEAL HAVING BEEN FINALLY HEARD ON 07/11/2008,THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: prv. M.N.KRISHNAN, J ===================== MFA No.1231 OF 2002 ===================== Dated this the 7th day of November 2008 JUDGMENT This appeal is preferred against the order of the Employees' Insurance Court, Palakkad in IC No.57 of 2000. The applicant before the said court approached the court disputing the direction of the opposite party to pay contribution under the E.S.I.Act with effect from 1.7.1997. It was contended that the demand was made only in the year 2000 by Ext.A4 letter dated 7.4.2000 and therefore the Corporation is not entitled to claim contribution with effect from 1.7.1997. This point was found in favour of the establishment by the E.I.Court and it is that decision that has been challenged by the Corporation before this Court. 2. The point that arises for determination is whether the contribution is due from the establishment only on the date of demand or otherwise. It is the case of the Corporation that the Inspector visited the premises of the establishment and found that there were employees sufficiently in number so as to attract coverage under the provisions of the E.S.I. Act. But, thereafter, it appears that the demand was made only on 7.4.2000. Under MFA 1231/2002 -:2:- Section 38 of the E.S.I.Act all employees in factories or establishment to which the Act applies shall be insured in the manner provided in the Act. Under Section 39 of the Act, the contribution payable under the Act in respect of employee shall be paid to the Corporation and the grace period is 21 days from the date when it become due. So when an establishment is covered under the Act, it is the statutory obligation of the establishment to pay contribution. Here is a case where there is no dispute that the establishment is not covered with effect from 1997. When it is so, the liability to pay contribution arises from 1997 and just because a demand notice was only issued in 2000 will not give any right to the establishment to contend for the position that it need not pay the contribution prior to the date of demand. The Legislature in its own wisdom had made this provision and being a labour welfare legislation it has to be given due meaning which is intended to cover the intention of the Legislature. In the decision reported in Employees' State Insurance Corporation v. Hotel Kalpaka International (AIR 1993 SC 1530) it has been held that there is a primary liability on the employer for paying contribution. Even in case of closed establishment it can be collected. Therefore it is a statutory obligation on the employer to pay the contribution. Since there is no dispute with respect to applicability of the Act and coverage the contention that when it became due only on MFA 1231/2002 -:3:- demand cannot be accepted. Fortunately for the establishment, the Corporation has only demanded from 1997 and therefore it has to be held that the finding of the E.I.court that it starts only from 7.4.2000 is without basis and it is liable to be set aside. I do so. Therefore I hold that the establishment is liable to pay the contribution with effect from 1.7.1997. For the purpose of ascertaining the number of employees and the amount of contribution, the matter may be adjudicated by the E.S.I.Corporation by sending a notice to the establishment, call for their objections and then decide the matter, fix the amount and thereafter proceed for the realisation of the amount. MFA is disposed of as above. M.N.KRISHNAN, JUDGE Cdp/-