IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE K.M.JOSEPH & THE HONOURABLE MR. JUSTICE M.L.JOSEPH FRANCIS TUESDAY, THE 4TH AUGUST 2009 / 13TH SRAVANA 1931 Ins.APP.No. 24 of 2006() --------------------------------- (AGAINST THE ORDER DATED 27.3.2006 IN EIC No.19/2004 OF THE EMPLOYEES' INSURANCE COURT, KOZHIKODE ) .................... APPELLANT/APPLICANT: ------------------------------------ M/S. KERALA TRANSPORT CO., YMCA ROAD, KOZHIKODE-673 001, REPRESENTED BY ITS MANAGING PARTNER, P.V. CHANDRAN. BY ADV. SRI.U.K.RAMAKRISHNAN, SENIOR ADVOCATE SRI.P.V.LOHITHAKSHAN SMT.P.VIJAYAMMA SMT.UMA GOPINATH SRI.DEVIDAS.U.K RESPONDENT(S): RESPONDENTS: -------------------------------------------------- 1. THE REGIONAL DIRECTOR, E.S.I. CORPORATION, THRISSUR. 2. THE RECOVERY OFFICER, E.S.I. CORPORATION, THRISSUR. R1 & R2 BY STANDING COUNSEL SRI.P.SANKARANKUTTY NAIR. THIS INSURANCE APPEAL HAVING BEEN FINALLY HEARD ON 04/08/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: K.M.JOSEPH & M.L.JOSEPH FRANCIS, JJ. ------------------------------------------------------ Ins.App.No.24 of 2006 ---------------------------------------------- Dated, this the 4th day of August, 2009 J U D G M E N T K.M.Joseph, J. Appellant filed an application under Sec.75 read with Sec.77 of the Employees State Insurance Act (hereinafter called as the “Act”). Appellant is engaged in transporting and parcel services. On a visit to the establishment by the E.S.I. Inspector noting that the appellant had omitted to pay contributions for the years 1999-2000 and 2000-2001 in respect of head load workers an assessment was made demanding contribution in respect of the omitted wages. Being aggrieved by the demand notice the appellant filed application seeking to declare that the demand notices issued are null and void and seeking to avoid the liability to pay the said contribution. 2. The appellant has branches in the State of Kerala and State of Maharashtra. The case of the appellant as far as State of Kerala is concerned is that the appellant is not the employer and the committee is the principal employer. Ins.App.24/2006 -2- Appellant in this connection has relied on the decision of the learned Single Judge of this Court reported in E.S.I.Corporation Vs. Babu Rao (2003 (3) KLT 805). Therein the learned Single Judge of this Court took the view that under the Head load Workers' Scheme it is the committee which is the employer. As far as the payments made in respect of the head load work done for the branches in the State of Maharashtra is concerned the appellant set up a case that actually the matter in the State of Maharashtra is governed by the provisions of the Maharashtra Mathadi, Hamal and Other Manual Workers (Regulation of Employment and Welfare ) Act, 1969 (hereinafter referred to as the “Mathadi Act”). According to the appellant the principal employer is the Board constituted under the said Act. It is his further case that payments in respect of head load workers were made to the Board and in this regard the appellant has produced Ext.P4 series. The appellant also set up a case that the Government has issued a notification exempting the head load workers in question from the provisions of the Act in exercise of Sec.88 read with Sec.91A thereof provided they were manual workers engaged in connection with loading Ins.App.24/2006 -3- and unloading inter alia in respect of employments specified in the Schedule to the Mathadi Act. This notification was produced as Ext.P5. By virtue of this notification exemption is given retrospectively with effect from 7.5.1992 till 31.12.2002. The appellant has also produced Ext.P6 yet another notification by which the workers engaged in loading and unloading inter alia in the employment specified in the Schedule to the Mathadi Act were exempted from the operation of the Act from 1.1.2003. Therefore, it was the case of the appellant in short before the court that the appellant is not liable to pay the amount demanded. The court has proceeded to consider the matter and it took the view that the application is liable to be dismissed. It is against that order this appeal is filed under Sec.82 of the Act. 3. We heard learned senior counsel for the appellant and also the learned counsel appearing on behalf of the Corporation. 4. Learned senior counsel for the appellant would contend that as far as the branches in the State of Kerala is concerned in the wake of the decision of the Apex Court arising from the judgment of the learned Single Judge the Ins.App.24/2006 -4- matter may have to go back. The Apex Court in a similar matter has taken the view that the issue must be decided with junction of the committee as also the State Government. There is no dispute as far as this aspect is concerned from the learned counsel appearing on behalf of the respondent. Therefore, as far as the branches in the State of Kerala is concerned the matter must receive the attention of the court with the junction of the State Government as also the committee. 5. The further question which arises is whether the finding of the court in relation to the branches situated in the State of Maharashtra is liable to be interfered with. In the said regard the discussion of the court would show that the court has taken the view that as far as Ext.P5 notification is concerned the appellant has not produced any evidence to show that it is a scheduled employment. The court also noted that as per Ext.P7 certificate workers of the appellant establishment in the areas to which the Scheme of the Board applies and registered with the Board are exempted from the provisions of the Act with effect from 26.3.2003. It is further noted that the disputed period of assessment is 1999-2001 Ins.App.24/2006 -5- and Ext.P7 does not have any retrospective effect. It is further stated that applicant has not produced any other material to show that the employees working in the branches in Maharashtra are covered by the Schedule to the Mathadi Act. It is further stated that under Sec.40 of the Act appellant is the principal employer liable to pay contribution at first instance of the workers engaged by him either directly or through immediate employer. 6. Learned senior counsel for the appellant would bring to our notice the Mathadi Act. Section 2 (9) of the Act reads as follows: “Scheduled employment” means any employment specified in the Schedule hereto or any process or branch of work forming part of such employment” Entry 7 to the Schedule under Section 2 (9) reads as follows: “Employment in connection with loading of goods into public transport vehicle or unloading of goods therefrom and any other operation incidental and connected thereto” 7. Therefore we are of the view that the approach of the court to the issue may warrant interference in regard to the branches located in the State of Maharashtra in the following sense. Ins.App.24/2006 -6- 8. Going by the provisions of the Mathadi Act Entry 7 to the Schedule under Sec.2 (9) would appear to apply to loading and unloading workers in respect of a public transport vehicle. No doubt, Ext.P5 notification is issued subject to fulfillment of various conditions. But this aspect has not received the attention of the court as it proceeded on the basis that the appellant has not produced evidence to show that it is a scheduled employment. We also take note of the fact that the court has chosen to act on Ext.P6 where also reference is made to the scheduled industry. But, Ext.P6 relates to the subsequent period. In such circumstances certainly the finding on the basis that the appellant has not proved that it does fall within the Schedule is plainly and palpably unsustainable in so far as it relates to Ext.P5. In such circumstances it is a matter which we feel must receive the consideration of the court. Accordingly, the impugned order is set aside and the matter is remitted back with the following directions. 9. In so far as the branches in State of Kerala is concerned the matter will be decided with the junction of the Government of Kerala and also the committee constituted Ins.App.24/2006 -7- under the Head load Workers' Scheme. In this direction the court will issue notice to the State of Kerala, Labour Department and also to the committee constituted under the Head load Workers Scheme. As far as the branches in the State of Maharashtra is concerned the court will take a decision in accordance with law proceeding on the basis that the appellant's line of business falls within the scheduled industry within the meaning of Section 2 (9) of the Act. The court will also issue notice to the Board constituted under Section 6 of the Mathadi Act. The appeal is allowed as above. I.A.No.804 of 2006 is closed. (K.M.JOSEPH) JUDGE. (M.L.JOSEPH FRANCIS) JUDGE. MS