IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE J.B.KOSHY & THE HONOURABLE MR. JUSTICE K.P.BALACHANDRAN MONDAY, THE 15TH SEPTEMBER 2008 / 24TH BHADRA 1930 Ins.APP.No. 14 of 2003() ------------------------ EIC.53/1994 of E.I.COURT, KOZHIKODE dated 30/10/2002 .................... APPELLANT/RESPONDENT: ----------------------------------------- THE REGIONAL DIRECTOR, E.S.I. CORPORATION, THRISSUR. BY ADV. SRI.T.V.AJAYAKUMAR RESPONDENT: APPLICANT: ------------------------------------------ M/S. JAYABHARATHI BAKERS, CONFECTIONERS, TELLICHERRY-4. ADV. SRI.T.M.SREEDHARAN SRI.V.P.NARAYANAN THIS INSURANCE APPEALS HAVING BEEN FINALLY HEARD ON 15/09/2008 ALONG WITH MFA NO. 202 OF 2003, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss J.B. Koshy & K.P. Balachandran, JJ. -------------------------------------- Ins.Appeal No.14 of 2003 and M.F.A.No.202 of 2003 --------------------------------------- Dated this the 15th day of September, 2008 Judgment Koshy,J. These two appeals are filed against the judgment in E.I.C.No.53 of 1994 by Jayabharathi Bakers and Confectioners as well as by the E.S.I. Corporation. M/s. Jayabharathi Bakers and Confectioners is a partnership firm constituted by partnership deed dated 18.3.1982. According to them they are manufacturing and selling biscuits, cakes etc. There are other three establishments, namely, M/s. Jayabharathi Sweets and Confectioners, M/s.Jayabharathi Sweets and M/s.Jayabharathi Sweets Stall. But, they are not by separate partnerships. All these establishments were run by the members of the same family. An inspection was conducted in the premises of M/s.Jayabharathi Bakers and Confectioners on 25.7.1994 by the E.S.I. Inspector and found that 32 employees are working in these establishments and notice was issued to cover the establishment treating all the four establishments are one and the same and demand was issued to Ins.A.No.14/2003 & MFA No.202/2003 2 M/s. Jayabharathi Bakers in respect of the employees employed in these establishments. According to the ESI Corporation, registered factory during the above period was only with M/s.Jayabharathi Bakers and Confectioners and the entire items are manufactured in that kitchen and 14 employees were employed in M/s. Jayabharathi Bakers and power is also used. It is the contention of M/s. Jayabharathi Bakers that the other three firms are independent establishments. It is true that M/s. Jayabharathi Bakers manufactures bakery items. The other firms, though run by relatives, purchase items from the appellant firm also and they purchase items from others also for conducting sales in shops in other parts of the town and it is not part of their establishment and they have got independent sales-tax registration, registration under the Shops and Commercial Establishments Act, etc. Inspection report shows that 14 persons were found working in M/s. Jayabharathi Bakers. Names of the persons with their addresses and signatures were annexed to the report. It was also attested by one of the partners of the establishment, namely, Smt. Jalaja. After considering the evidence adduced by both sides, it was found by the E.I.Court that the factory licence was only with M/s. Jayabharathi Bakers and they are manufacturing bakery products, but, other Ins.A.No.14/2003 & MFA No.202/2003 3 three partnership firms run by the relatives purchase items from these establishments in wholesale and also purchase items from various companies and establishments and independently doing sales business and they are not doing any manufacturing of bakery items as they are independent establishments. The E.I. Court also noticed that there are separate registrations even under the Sales- Tax Act and Shops and Commercial Establishments Act and the other three establishments have no factories licence and they are only doing sales business in confectionaries, sweets etc. independently. Merely because they purchase articles from M/s. Jayabharathi Bakers also and M/s. Jayabharathi Bakers are run by family relatives, it cannot be stated that the employees employed in the other three establishments are employees of the establishment, but, at the same time, it was found that since 14 persons working in the establishment of M/s. Jayabharathi Bakers, it is liable to be covered. According to M/s. Jayabharathi Bakers, it is not correct that 14 persons working and only six persons are working in their establishment. Other persons mentioned were attached to the other establishments, but, it is pertinent to note that other establishments had no registered kitchens during the relevant time and the bakery items etc. were manufactured in M/s. Jayabharathi Ins.A.No.14/2003 & MFA No.202/2003 4 Bakers. There is no averment in the appeal memorandum that M/s. Jayabharathi Bakers is not manufacturing mixture, chips etc. or they are not using firewood in their kitchen premises. It is also noticed that the signatures of the 14 persons actually working whose names and details were mentioned in the inspection report were not obtained by coercion and it is signed by one of the partner of the appellant firm and that partner also did not come to the box and depose that these 14 persons are not their workers. Therefore, on the basis of evidence adduced, the E.I. court found that the 14 employees are working in the appellant's firm and they are liable to be covered. We see no ground to interfere in the above finding of fact based on evidence and appeal will lie only if there is any substantial question of law. After verifying the records and evidence, it was found that the three other establishments are doing independent business and merely because they are purchasing articles from these places, the other establishments cannot be clubbed with this establishment. Those three establishments purchase items from other companies also and there is no obligation that they should purchase items from the appellant establishment. Merely because the name of M/s. Jayabharathi is allowed to be used to maintain the reputation and Ins.A.No.14/2003 & MFA No.202/2003 5 good will of the family as the name 'Jayabharathi' was selected by the father of the husbands of the partners in this firm. It is also noticed that M/s. Jayabharathi Bakers sells the items to these three firms and various other establishments by using a delivery van just like various companies selling items to many retailers by using van, but, those three establishments are separate establishments. This is also a finding of fact. The E.I. Court after considering the oral and documentary evidence meticulously found that these establishments cannot be clubbed with the establishment of M/s. Jayabharathi Bakers, but, M/s. Jayabharathi Bakers is a covered establishment and they are employing 14 persons at the time of inspection and they are using power in the kitchen. We see no ground to interfere in the order of the E.I. Court and, therefore, both the appeals are dismissed. J.B.Koshy Judge K.P. Balachandran Judge vaa Ins.A.No.14/2003 & MFA No.202/2003 6 J.B. KOSHY AND K.P.Balachandran,JJ. ------------------------------------- Ins.Appeal No.14/2003 and M.F.A.No.202/2003 ------------------------------------- Judgment Date:15th September,2008