IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM WEDNESDAY, THE 30TH JUNE 2010 / 9TH ASHADHA 1932 Ins.APP.No. 38 of 2010() ------------------------ EIC.57/2005 of E.I.COURT, KOZHIKODE .................... APPELLANT(S): PETITIONER ------------------------------ M.RAMACHANDRAN, PROPRIETOR, HOTEL SUPER WAYANAD ROAD, KUNNAMANGALAM, CALICUT. BY ADV. SRI.K.V.PAVITHRAN SRI.JAYANANDAN MADAYI PUTHIYAVEETTIL RESPONDENT(S): RESPONDENTS -------------------------- 1. THE REGIONAL DIRECTOR, ESI CORPORATION, THRISSUR. 2. P.K.BABU, S/O.KANARAN P., PULLORAMAL HOUSE, VANIKKARA, P.O.KAKKAD, ENGAPUZHA, KOZHIKODE. 3. KRISHNANUNNI V.P., S/O.CHANDUKUTTY NAIR, NELLIKKODAN VEETTIL HOUSE, P.O.KIZHAKKEMURI, VIA KAKKODI, KOZHIKODE. 4. E.SURENDRAN, S/O.IMBICHI, ERANHIKKODI HOUSE, PAYAMBRA P.O., VIA KUNNAMANGALAM, KOZHIKODE. 5. C.P.NAZAR, S/O.MUHAMMED, SERUPPALLY, P.O.DEVASTALE, KUDALLUR, VIA TAMIL NADU. 6. P.SURESH, S/O.MADHAVAN, PATTATHIL HOUSE, KOLATHARA P.O., CHERUVANNUR. 7. K.ABDUL NAZAR, S/O.MUHAMMED KAKKAPARAMBIL, THRIPPANACHI P.O., MALAPPURAM. 8. KRISHNANKUTTY, S/O.APPA NAIR, RAROTH, P.O.PERINGALAM, KOZHIKODE. 9. SALAM P., S/O.AHAMMED, POOVALLUR HOUSE, P.O.VATTALLUR. THIS INSURANCE APPEALS HAVING COME UP FOR ADMISSION ON 30/06/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: PIUS C.KURIAKOSE & C.K.ABDUL REHIM, JJ. ------------------------ Ins.Appeal No. 38 OF 2010 ------------------------ Dated this the 30th day of June, 2010 JUDGMENT Abdul Rehim, J. This appeal is preferred against findings of the Employees' Insurance Court, Kozhikode to the extent that the establishment of the appellant is liable to be covered under provisions of the ESI Act and that the appellant is bound to comply with provisions of the said Act. 2. On 4/3/2005 the Insurance Inspector, who was examined as DW1, conducted an inspection at the establishment. 11 persons were found employed for wages. He has interviewed all the persons and obtained their address, salary, length of service and signature which was duly counter signed by one Surendran, who was in charge of the Hotel at the time of inspection in the absence of the appellant. The list of those employees were annexed to Ext.D1 report. When the inspector was examined, he deposed about these facts and inspite of lengthy cross examination, worthiness of the evidence could not be shaken. 3. The appellant had impleaded persons listed out in Ins.Appeal.No.38/2010 2 Ext.D1 report as additional respondents before the Court below. Notices sent to 4 of them were returned unserved with postal endorsement as “non known. ” With respect to another person, notice was returned with endorsement as “left India”. On the basis of the above facts, it was contended before the Insurance Court that the persons included in the list are only fictitious persons and that they were not actually employed by the appellant. Considering such contentions, the Insurance Court observed that the postal endorsement will indicate only that those persons are not available at present in the addresses shown in Ext.D1 and that it could not be construed that they are fictitious persons. Since it is found that appellant had employed 11 persons for wages on 4/3/2005, the appellant's establishment will constitute a factory as per the definition in Section 2(12) of the ESI Act and therefore enforcement of coverage from 4/3/2005 is legal and proper. However, it is found that there need not be employed 11 persons through out the year and that the respondents shall bear in mind this aspect while computing the contributions payable. The exact numbers of person employed from time to time need be ascertained while making Ins.Appeal.No.38/2010 3 assessment, after providing adequate and effective opportunity to the appellant to produce relevant documents to make out such contentions. 4. While considering merits of the attack against the findings that the establishment is covered under the ESI Act from 4/3/2005 onwards, we notice the contours of Section 82 of the Employees Insurance Act 1948. An appeal before this Court is maintainable only on substantial questions of law. Sri.K.V.Pavinthran, learned counsel for the appellant contended that Ext.D1 report prepared by the respondent is not in accordance with the mandates of Section 45 of the Employees State Insurance Act. Inviting our attention to Section 45(2)(c) it is argued that while conducting inspection DW1 should have recorded statement of each and every person found in the establishment, with respect to whom there is reasonable cause to believe that they are employees of the establishment. According to the counsel, non examination of such persons and the non recording of their statements will vitiate the inspection. Hence reliance placed by the Insurance Court on Ext.D1 report is highly erroneous is the contention. The above aspect is mooted as a Ins.Appeal.No.38/2010 4 substantial question of law for entertaining this appeal. Going by provisions contained in Section 45, we are convinced that those are provisions dealing with functions and duties of inspectors which says that the inspector or other officials of the Corporation may for the purpose of enquiring into the correctness of any return filed under Section 44, or for the purpose of ascertaining whether any provision of the Act has been complied with or not, can conduct an inspection and while conducting such inspection, may record statement of persons found in the premises. But such a provision cannot be considered as a mandatory provision insisting upon the inspectors to record statements of all the employees found in the premises. As stated above, in the evidence adduced before the Court below, DW1 has categorically deposed that he had obtained addresses, salary details, length of service etc. and signature of all the persons who found employed in the establishment. Under such circumstances, we do not find any material violation with respect to the procedure of inspection as contemplated under Section 45 of the Act. We in appeal cannot look into correctness of any other factual findings arrived by the Court below. Therefore, we find that no substantial Ins.Appeal.No.38/2010 5 question of law has been raised in this appeal, warranting interference in the order appealed under Section 82 of the Act. In the result, we find no merit in the appeal and the same is dismissed accordingly. PIUS C.KURIAKOSE,JUDGE C.K.ABDUL REHIM , JUDGE dpk