IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN THURSDAY, THE 3RD DECEMBER 2009 / 12TH AGRAHAYANA 1931 Ins.APP.No. 29 of 2008() ----------------------------------- IC.42/2002 of EMPLOYEES INSURANCE COURT, ALAPPUZHA .................... APPELLANT (S) APPLICANT ----------------------------- M/S GEO FOUNDATIONS AND STRUCTURES PVT. LTD., UDAYA BHAVAN, NEAR PISHARI TEMPLE, EROOR, KOCHI-36 REPRESENTED BY ITS MANAGING DIRECTOR SRI. PRAPHULLA KUMAR. BY ADV. MR.ABRAHAM JOHN RESPONDENT(S): ------------------------ THE REGIONAL DIRECTOR, EMPLOYEES STATE INSURANCE CORPORATION PANCHADEEP BHAVAN, ROUND NORTH, THRISSUR-20. ADV. MR.P.SANKARANKUTTY NAIR, SC, ESI CORPN THIS INSURANCE APPEALS HAVING COME UP FOR ADMISSION ON 03/12/2009, ALONG WITH INAP NO. 30 OF 2008 THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ORDER ON IA. NO.1276/2008 IN INAP. NO.29/2009 CLOSED 03/12/2009 SD/- M.N.KRISHNAN, JUDGE TRUE COPY P.A. TO JUDGE tss M.N. KRISHNAN, J. ........................................... Ins.A.No.29 of 2008 & Ins.A.No.30 of 2008 ............................................. Dated this the 3rd day of December, 2009 J U D G M E N T These appeals are preferred against the order of the Employees Insurance Court, Alappuzha in I.C.Nos.42/2002 and 84/2003. I.C.No.42/2002 is filed for a declaration that the applicant's establishment is not liable to be covered under the ESI Act and as the demanded amount of Rs.31,299/- is not payable, it is to be set aside. I.C.No.84/2003 is also filed for the same relief but for a different period relating to from 6/2001 to 9/2001. 2. The learned E.I Court judge on a consideration of the materials disallowed the claim of the applicant on the points of resjudicata, limitation as well as on factual findings. It is against these decisions, the applicant has come up before this court with these appeals. 3. The questions of law formulated as 1 to 3 in the Memorandum of Appeal, which are extracted as follows: 1. “When the challenge on the part of the applicant before the Employees Insurance : 2 : Ins.A.No.29 of 2008 & Ins.A.No.30 of 2008 Court is coverage of the establishment, can the date of cause of action under Section 77 of the Employees State Insurance Act be taken as the date of the particular claim since in such cases the cause of action is continuous. 2.Whether the dismissal of an application exparte precludes the applicant to get a subsequent order on the principle of resjudicata if the coverage of establishment is the question to be decided in the earlier and subsequent application in as much as coverage is a matter to be agitated as long as the establishment exists. 3. The Employees Insurance Court being a civil court to which procedure established by the Civil Procedure Code is applicable is not specific pleading necessary to maintain a particular point and canvas an order on that basis”. 4. Let me first consider about the question of resjudicata. The learned insurance court judge held that it is barred by resjudicata on the following reasons: The establishment opted for a coverage and it was allowed. Subsequent to a notice to pay interest, damages etc basing upon a Circular dated 14.6.1999, I.C.No.20/2002 : 3 : Ins.A.No.29 of 2008 & Ins.A.No.30 of 2008 was filed challenging the coverage of the establishment. The said application was dismissed for default. The said matter relates to the period from 1/1999 to 3/2000. At the outset, the principle of resjudicata cannot be extended to this case for the reason that in order to have the principle of resjudicata applied, the point in issue should have been heard and decided finally and it must be with respect to the same subject matter, but subsequent proceedings also had arisen. Now I may like to state that there must be an issue framed on a particular point and the court has decided it in favour or against one person and when the very same question between the very same parties or a person litigating under the same title arises for determination, one could say that the principle of resjudicata will apply. In a case of an ex parte decree since there is a decision on a point in favour of a person when one party chooses to make it finally, the principle of resjudicate may apply. But, when the matter is dismissed for default, there is no adjudication of any point at all and therefore resjudicata will not apply. : 4 : Ins.A.No.29 of 2008 & Ins.A.No.30 of 2008 Even if Order 9 Rule 9 is made applicable to the ESI Court even then the bar is only with respect to a particular cause of action. So far as this case is concerned, cause of action is for different periods and therefore, Order 9 Rule 9 also will not apply. So, I find that the principle of resjudicata will not apply. 5. Let me consider about the question of limitation. The order was passed on 23.3.1999 covering the institution. I.C.No.42/2002 is filed on 1.8.2003. The learned counsel would contend that question of limitation is not applicable for the reason that what is envisaged under Section 77(1)(a) is within the period of 3 years from the date on which the cause action arises. The learned counsel would contend that he is relying upon the notification issued by the Corporation on 14.6.1999 which excludes the people working in the work site from the purview of the applicability of the ESI Act and therefore by virtue of the same, the establishment is not covered and so, cause of action for the same had arisen only from 14.6.1999 and since the petition is filed on : 5 : Ins.A.No.29 of 2008 & Ins.A.No.30 of 2008 12.4.2002, it is within the period of 3 years and so, the question of limitation will not apply. So far as I.C.No.84/2003 is concerned, it is clearly filed beyond the period of 3 years and so the question of limitation is there and it is applicable and it is barred. But so far as I.C.No.42/2002 is concerned, it is a question of fact and question of law has to be tacked on to the question of fact to arrive at a decision whether an action will arise only 14.6.1999. So, the factual consideration of the entire materials are also relevant for the purpose of determination of this case. 6. According to the applicant, number of employees was always less than 20 and therefore, provisions of the Act cannot be extended. According to him, there are people in the work site who are taken out of the purview of the act by virtue of the Circular dated 14..6.1999. The learned insurance company had extracted the whole circular in the order. The purport and purpose for which the said circular was issued is to avoid unnecessary delay for the : 6 : Ins.A.No.29 of 2008 & Ins.A.No.30 of 2008 establishment as well as for the Corporation in relation to the people who are working in the work site as migrating labourers or workers. The nature of work, the period of work everything depends upon the context in which they are working. Therefore the Corporation felt that since they belong to an unorganized sector and as they are migrants, it will not be possible to tackle them and therefore such type of workers including workers by contractors at their work site have to be taken out for the purpose of arriving at the figure of 20. But the first clause itself would make it clear that such construction agencies which are employing 20 or more persons in the offices are coverable under the scheme. They should be the persons covered under Section 2(9) of the Employees State Insurance Act. If one is able to establish that there were 20 or more persons, then there is coverage and if it is not so, it will not be covered. The court has considered meticulously the evidence tendered in this regard also. The court has referred to an affidavit filed in lieu of the chief examination and also the evidence : 7 : Ins.A.No.29 of 2008 & Ins.A.No.30 of 2008 of an employee- PW1 in that regard. The court below found that in both the affidavits it is clearly stated that the company has employed 22 staffs and only two out of them are on other work site. In the chief examination of Viswanathan also, the same is reiterated. The E.I. Court did not decide the matter on the basis of the statement in the affidavit alone. It has considered the evidence tendered by the two officers of the establishment who were examined as DWs1 and 2. DW1 is one Radhakrishnan who had filed a survey report as Ext.D6. At the time of inspection, as per the records, he found that 24 persons were employed for wages. He admitted that he visited the office at Cochin and not at Chennai, Another person who is also an Insurance Inspector who visited the establishment was examined as DW2. He had verified the ledger, cash book, attendance register etc which were produced and submitted a report along with its enclosures marked as Ext.D10 series. There were 13 persons employed in the head office and 9 persons were employed in the branch office and 22 persons : 8 : Ins.A.No.29 of 2008 & Ins.A.No.30 of 2008 employed in total. The documents revealed that there were 13 persons at Cochin and 9 persons at Chennai and the work which they are doing is shown against their names. These are the persons who were permanently attached to the office and for the discharge of their duty they may be directed to visit their work site. But they are basically permanent employees attached to the establishment and form part and parcel of the establishment in their business. Therefore there are more than 20 persons in this establishment as employees. So, on factual metrics as well even if the question of limitation is ignored, it can be seen that 20 or more persons are working. Since the circular on 14.6.1999 does not hold them in any way one cannot say that the cause of action had arisen only thereafter. Since I have discussed the matter elaborately, I am not limiting my finding on the question of limitation but also merits of the case which clearly indicates that there were more than 20 persons employed and it comes squarely under Section 2(9) of the Employees State Insurance Act. So, they will be : 9 : Ins.A.No.29 of 2008 & Ins.A.No.30 of 2008 covered under the Act. I do not find any illegality or irregularity committed by the court below and they have only demanded the amount due and therefore, the orders passed by the Employees Insurance Court in IC.No.42/2002 and IC.No.84/2003 do not call for interference and therefore, these appeals lack merit. The questions of law are answered against the appellant and these appeals are dismissed. M.N. KRISHNAN, JUDGE cl : 10 : Ins.A.No.29 of 2008 & Ins.A.No.30 of 2008