THE HON'BLE MR JUSTICE GHULAM MOHAMMED and THE HON'BLE MR JUSTICE P. SWAROOP REDDY C.M.A.No.171 of 2008 Judgment: (Per Sri Justice Ghulam Mohammed) This civil miscellaneous appeal is directed against the order, dated 12.10.2007, passed in O.P.No.37 of 2006 by the learned Principal Senior Civil Judge, Rajahmundry. 2. The respondent-M/s.Srinivasa Automobiles, Rajahmundry, filed O.P.No.37 of 2006 against the appellants under Section 75 read with Section 77 of the Employees’ State Insurance Act, 1948 (for short ‘the Act’) seeking to declare that it is not governed by the provisions of the Act and the Show Cause Notice, dated 11.11.2005, Recovery Certificate, dated 21.10.2005 and Demand Notice, dated 14.12.2005, issued by the appellants, as illegal and arbitrary. The respondent states that the appellants without conducting inspection and without conducting any enquiry to determine whether it employed ten or more number of employees in its firm, have issued the above said notices and recovery certificate. By the order impugned, the Court below allowed the O.P., declaring that by the date of filing of the petition, the respondent firm is not governed by the provisions of the Act and the notices impugned therein as arbitrary, baseless and unenforceable, however, liberty was given to the appellants to initiate proceedings afresh against the respondent, if necessary, within the purview of the Act. Aggrieved by the same, the appellants filed the present appeal. 3. Heard the learned counsel for the appellants and the learned counsel for the respondent. 4. Learned counsel for the appellants contended that as the respondent firm is governed under the provisions of the Act with effect from 01.04.2004, the appellants have conducted inspection and noticed that it employed 15 number of employees for wages and power is being used for pumping petrol and diesel and that on the basis of the preliminary inspection report, dated 07.04.2004, they issued the said notices. He further contended that the Court below has no jurisdiction to declare that the respondent’s firm is not governed under the provisions of the Act and the same has to be decided by the Employees’ Insurance Court under Section 75 of the Act, which reads as under: “ Matters to be decided by Employees’ Insurance Court. (1) If any question or dispute arises as to- (a) whether any person is an employee within the meaning of this Act or whether he is liable to pay the employee’s contribution, or (b) the rate of wages or average daily wages of an employee for the purposes of this Act, or (c) the rate of contribution payable by a principal employer in respect of any employee, or (d) the person, who is or was the principal employer in respect of any employee, or (e) the right of any person to any benefit and as to the amount and duration thereof, or (ee) any direction issued by the Corporation under Section 55A on a review of any payment of dependant’s benefits, or (f) Any other matter which is in dispute between a principal employer and the Corporation, or between a principal employer and an immediate employer or between a person and the Corporation or between an employee and a principal or immediate employer, in respect of nay contribution or benefit or other dues payable or recoverable under this Act, (or any other matte required to be or which may be decided by the Employees’ Insurance Court under this Act) such question or dispute (subject to the provisions of sub- section (2A) shall be decided by the Employees’ Insurance Court in accordance with the provisions of this Act”. Learned counsel relied on the judgment of this Court in C.M.P.No.476 of 2005 in C.M.A.No.266 of 2005, dated 08.04.2005, and contended that the power to grant exemption from the operation of the Act is vested with the Government under Section 87 of the Act and that as the respondent firm is not exempted from the purview of the operation of the Act, it is governed by the provisions of the Act. 5. Learned counsel for the respondent contended that as the respondent is a partnership firm, but not a factory, it is not governed by the provisions of the Act and that at no point of time it employed ten or more persons in its firm. 6. We have perused the order impugned, which discloses that the respondent firm is a registered partnership firm running petrol bunk and service station of Bharat Petroleum Corporation Limited from 1978. The evidence of P.Ws.1 and 2, Exs.A9 to A15-wage and attendance registers for the employees employed by the respondent and Exs.A16 to A21-receipts for payment of renewal lincense discloses that right from the year 2004, the Assistant Labour Officer, Rajahmundry, collected fee for employment of below ten employees, whereas Ex.B2-preliminary inspection report, dated 07.04.2004 and Ex.B4-another inspection report, dated 10.01.2005 filed by the appellants do not contain the statements of the employees present at the time of inspection and no account books and other documents relating to the employment of persons and payment of wages were seized. Though the appellants enclosed xerox copies of wage and attendance registers to Exs.B2 and B4, the Court below disbelieved them holding that they are fabricated documents. 7. Since the respondent firm is running business since 1978 and the oral and documentary evidence adduced by it shows that number of its employees are less than nine and the documents filed by the appellants are disproved, this Court is of the view that the Court below has rightly declared that the respondent firm is not governed by the provisions of the Act. Therefore, the order impugned does not warrant any interference by this Court. 8. Accordingly, the Civil Miscellaneous Appeal is dismissed. No order as to costs. _____________________ GHULAM MOHAMMED, J _____________________ P. SWAROOP REDDY, J Date:19.10.2010. SJ