8. fa 1206-10.doc RMA IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO. 1206 OF 2011 WITH CIVIL APPLICATION NO. 2391 OF 2010 Manik Machinery Manufacturers Pvt Ltd .. Appellant Vs Employees State Insurance Corp & Anr .. Respondents Mr. Y.C. Naidu i/b M/s. C.R. Naidu & Co for the Appellant Mr. H.V. Mehta for Respondent No. 1 CORAM : A.S. OKA, J. DATE : 8th JULY, 2011. P.C.: 1. Heard learned counsel for the appellant. 2. By impugned judgment and order dated 26th February 2010, the application made by the applicant under Section 75 of the Employees' State Insurance Act 1948 has been rejected. The challenge in the application under Section 75 of the said Act is to an order dated 26th July 2002 under Section 45-A of the said Act. Show cause notice was given to the appellant on 5th February 1987. Calculation of the amount proposed to be recovered under Section 45-A was set out in the show cause notice. The first item was of incentive for the year 1974-75 in the sum of Rs. 1654.55. The second item was of labour 1 8. fa 1206-10.doc charges for the period from July 1974 to June 1978 in the sum of Rs. 311.95. The third item was of labour charges for the period between July 1979 to June 1982 in the sum 3,618.20 and the last item was of incentive from July 1979 to June 1982 in the sum of Rs. 10371.80. 3. Reply was filed to the show cause notice by the appellant on 2nd April 1987. There is another letter relied upon, which is dated 21st February 1989. In the said letters, the appellant came out with the case that a sum of Rs. 5025/- has been paid for the period between July 1979 to June 1982 and on account of incentive for 1974-75, a sum of Rs. 1654.55 was paid to the ESI Corporation. The contention raised by the appellant was that the payment made under the heads of labour charges and incentive cannot be included in the definition of wages within the meaning of Section 2(22) of the said Act. A contention was raised that when labour charges or incentive are paid to the persons who are not employees, they cannot form part of the wages. The finding of the learned trial Judge is that no documents were produced before the concerned authority of ESIC to show that labour charges are paid to third parties who were not employees. As regards the contribution of incentive, the learned trial Judge observed that the said amount was quantified at Rs. 10371.80 and out of which only a sum of Rs. 5025/- was paid by the appellant and rest of the amount was 2 8. fa 1206-10.doc payable. 4. Learned counsel appearing for the appellant submitted that the bills of labour charges for the period from July 1979 to June 1982 were already submitted by the appellant to the Regional Director along with letter dated 2nd April 1987. Inviting attention of the Court to the order passed under Section 45-A of the said Act, he submitted that an enquiry was belatedly made and after lapse of twenty years, the appellant was under no obligation to maintain the record containing documents relating to the payment of labour charges. He pointed out the affidavit in lieu of examination-in-chief of the Director of the appellant wherein he has stated that it was not possible to preserve the documents for a period of twenty years. He pointed out that all the documents were produced by the representative of the appellant before Mr. Saxena, Deputy Director in March 1979. He submitted that after verification of the documents, the Deputy Director confirmed that only a sum of Rs. 5025/- was payable which accordingly was paid. Thus, the submission is that the amount demanded on the basis of order under Section 45-A of the said Act is completely illegal. 5. I have considered the submissions and I have perused the compilation containing the documents on record of the trial Court. There is nothing on record to show that in the year 3 8. fa 1206-10.doc 1987, Mr. Saxena, the then Deputy Director passed any order under Section 45-A of the said Act fixing the liability at Rs.5025/-. In absence of any such order on record, the case made out by the appellant cannot be accepted that the said Mr. Saxena came to the conclusion that only a sum of Rs. 5025/- was payable. 6. The real dispute is about labour charges. Perusal of the letter dated 2nd April 1987 sent by the appellant to the Regional Director shows that only photo copies of the labour charges bills were produced and not the originals. The statement in affidavit in lieu of examination-in-chief of the Director of the appellant is that it was not possible to preserve the documents for twenty years. There is no specific statement made in the affidavit in lieu of examination-in-chief that the documents relating to payment of labour charges were destroyed. In the cross-examination, the Director admitted that he had no documentary evidence to show that the records were produced before the authorities. He stated that he was having no documentary evidence except one letter to Central Excise Authority relating loss of the record. He further stated that he can produce the said letter immediately. Admittedly, the said letter was not produced on record. 7. The finding of the Court is that there is nothing on record to 4 8. fa 1206-10.doc show that the bills of labour charges were produced before the authority for showing that payment of labour charges was made to the third parties. That is why a finding of the fact has been recorded that in absence of documentary evidence, it cannot be stated that the labour charges were paid to the third parties. Moreover, no attempt was made to adduce secondary evidence of bills of labour charges. Reliance was placed on a list containing the names of the parties to whom charges were made. That is no proof of the payment of labour charges to third parties. No attempt was made to examine any of the said parties before the Court. Hence, the finding of fact of the trial Court cannot be interfered with. No substantial question of law arises. First Appeal is dismissed. 8. Civil Application No. 2391 of 2010 does not survive and the same is disposed of accordingly. [ A.S. OKA, J ] 5 8. fa 1206-10.doc 6