IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD DATE.25-03-2011. PRESENT THE HON'BLE SRI JUSTICE G. KRISHNA MOHAN REDDY CIVIL MISCELLANEOUS APPEAL No.379 OF 2006 Between: M/s. Shiv Kumar Mahaveer Kumar, Chillies Commission Agents, Rep. by its Proprietor, Siva Kumar Banka, G.T. Road, Near Tulasi Cold Storage, Guntur. --- Appellant/ Petitioner. AND 1. The Deputy Director, E.S.I. Corporation, Regional Office, Hyderabad. 2. The Insurance Inspector, E.S.I. Corporation, Kothapet, Near Sivalayam, Guntur. --- Respondents/ Respondents. The Court made the following: HONOURABLE SRI JUSTICE G. KRISHNA MOHAN REDDY CIVIL MISCELLANEOUS APPEAL No.379 OF 2006 JUDGMENT: This appeal is directed against the order of dismissal passed in E.S.I. No.2 of 1999 dated 05-10-2005 on the file of the Court of Labour Court, Guntur. 2. The Appellant herein is the petitioner and the respondents herein are the respondents in the matter before the lower Court. For the sake of convenience, I refer the parties as arrayed therein. 3. The petition was filed under Section 75 of the E.S.I. Act, 1948 questioning letter dated 27-05-1998 issued by the respondent No.1 directing the petitioner to cover the unit under insurance coverage. The lower Court dismissed the petition on the ground that the petitioner failed to take necessary measures producing relevant records to substantiate his claim whereas, the respondents placed sufficient records to uphold their claim. 4. It is the contention of learned counsel for the respondents that as per Ex.P-4 Inspection copy, more than 25 workers were working in the unit at the relevant point of time during the course of inspection by the Inspector of the E.S.I. Corporation, Guntur, and it was signed by the petitioner in form No.1 and therefore the inspector issued form C-11 at 27-08-1998 and therefore by virtue of Regulation 10-B of E.S.I. (General) Regulations, 1950 the petitioner should have made necessary representation with in 15 days of the receipt of it but he failed to do so and therefore he is estopped from taking a different plea and the lower Court properly considered the matter and arrived at correct conclusions and hence, there is no reason to interfere with the same. 5. It is the contention of learned counsel for the petitioner that the exhibits marked on behalf of the petitioner amply prove that there were only three workmen in the unit and even though Ex.P-4 inspection report and the corresponding C-II were signed by the petitioner at the time of inspection of its establishment, the same are not valid on the ground that the petitioner signed them without going through the contents therein at the instance of the Inspection Officer and in spite of that it is significant that no names of its workers were given therein by reason of which both of those documents are not valid and it is also his contention that the respondent should have given an opportunity to the petitioner to make necessary representations in the matter for the purpose of fixing the contributions to be made but the respondent failed to do so and as a result of which, the notice issued by the respondent is not valid and the lower Court failed to appreciate the matter properly and arrived at erroneous conclusions. 6. In support of his contentions he has relied upon the following decisions reported in Employees State Insurance Vs. Bhakra Beas Management Board[1] a n d Employees’ State Insurance Corporation V. M/s. U.P. Hotel and Restaurants Limited and another[2]. 7. In reply it is argued by learned counsel for the respondents that the petitioner as PW.1 clearly deposed in his cross-examination that his clerk filled up the contents of the relevant proforma and there after he signed in the proforma and he did not depose that the Inspection Officer obtained his signatures in the inspection report without appraising the contents therein to him (Petitioner) and therefore the petitioner is estopped from taking a contrary plea that he is not bound by the contents therein and it is further stated by him that when once the petitioner admitted the contents of the inspection report and C-11 which amply provide that there were 25 or more than 25 workers working in his unit, the question of giving any opportunity to him to make necessary representations before fixing the contributions to be made on the said subject would not arise at all and by virtue of the regulation 10-B under the Employees State Insurance (General) Regulations 1950, the petitioner should have furnished to the appropriate regional office not later than 15 days after the Act became applicable as the case may be to the unit a declaration of registration in writing in form-01 and the petitioner would be responsible for the correctness of all the particulars and the information required for and furnished on the Employees State Insurance Form and so on, but he failed to comply with the same and therefore in that view also the question of giving any opportunity to him with regards to the contributions to be made by him did not arise at all. 8. Learned counsel for the petitioner has relied upon the following decisions in support of his claim. I n Employees State Insurance Vs. Bhakra Beas Management Board a question arose as to whether a particular person happened to be an employee of the appellant therein but without giving any opportunity to those concerned of being heard a notice was issued by the respondent to the petitioner to make necessary contributions in respect of those employees also and hence it was hled by the Supreme Court that it was not tenable. I n Employees’ State Insurance Corporation V. M/s. U.P. Hotel and Restaurants Limited and another it is observed with reference to relevant circumstances of the case : “Para No.6: Sub-section (2) of Section 44, Employees’ State Insurance Act, contemplates a decision by the Corporation authorities on the question whether a factory or establishment is a factory or establishment to which the Act applies. In deciding this question the authorities are bound to give an opportunity of being heard to the employer. Where, without giving such an opportunity, the authorities decided that the Kitchen of a hotel was a factory or establishment to which the Act applied and demanded contribution towards the Employees State Insurance Fund, and threatened to recover fine, the action was in violation of the principles of natural justice and must be struck down”. Further, in Fenner Garments v. Deputy Regional Director, E.S.I.C., Madras, the facts of which are that a report was made by the Inspector concerned who had inspected the establishment of the petitioner therein and prepared report consequently including certain persons as the employees of the petitioner without knowing their names and addresses with regards to payment of necessary contributions by the petitioner for its employees and correspondingly a notice was issued directing the petitioner to pay the necessary contributions consequently it was observed : “(Para No.10) To the extent those persons whose particulars are not included in the return, it is not possible to hold that the return is filed in respect of those persons. If that be so, the case can not be taken out of the purview of Section 45-A and consequently, in such cases, no determination can be made by the Corporation on the basis of the report made by the Inspector, without issuing a show cause notice and affording an opportunity of hearing as required under Section 45 A (1) of the Act. In the instant case, there is determination made by the Corporation without affording an opportunity of hearing to the employer. (Para No.11) Admittedly the prescribed procedure under Section 45 of the Act had not been followed. The impugned notice has to be quashed”. 9. Regulation 10-B of the Employees’ State Insurance (General) Regulations, 1950 provides : “10-B. Registration of Factories or Establishments : (a) The employer in respect of a factory or an establishment to which the Act applies for the first time and to which an Employer’s Code Number is not yet allotted, and the employer in respect of a factory or an establishment to which the Act previously applied but has ceased to apply for the time being, shall furnish to the appropriate Regional Office not later than 15 days after the Act becomes applicable, as the case may be, to the factory or establishment, a declaration of registration in writing in Form 01 (hereinafter referred to as Employer’s Registration Form). (b) The employer shall be responsible for the correctness of all the particulars and information required for and furnished on the Employer’s Registration Form. (c) The appropriate Regional Office may direct the employer who fails to comply with the requirements of paragraph (a) of this regulation within the time stated therein, to furnish to that office Employer’s Registration Form duly completed within such further time as may be specified and such employer shall, thereupon, comply with the instructions, issued by that office in this behalf. (d) Upon receipt of the completed Employer’s Registration Form, the appropriate Regional Office shall, if satisfied that the factory or the establishment is one to which the Act applies, allot to it an Employer’s Code Number (unless the factory or the establishment has already been allotted an Employer’s Code Number) and shall inform the employer of that number. (e) The employer shall enter the Employer’s Code Number on all documents prepared or completed by him in connection with the Act, the rules and these regulations and in all correspondence with the appropriate office”. 10. Admittedly, the Inspector visited and inspected the premises of the petitioner on 24-02-1998 and prepared inspection report to the effect that there were more than 25 persons working in the unit and obtained signatures of the petitioner, whereas, it is also claimed by the Inspector that he obtained Form No.1 from the petitioner but signed it to the same effect and further admittedly Form No.C-11 was issued by the respondent with regards to the bringing the petitioner under the relevant provisions of the Act. 11. Nowhere, it is claimed by the petitioner that by force the Inspector obtained his signatures in the Inspection report/Form No.1 and if that is true, he would have taken necessary action consequently about which there is no evidence for which, adverse inference is to be drawn. Further, he admitted in his cross-examination that one of his employees filled up the contents of Form No.1 and that he signed it, if the contents of form No.1 are not true, there was no need to sign it after his clerk filled necessary contents therein. It also infers that he did so voluntarily and without any force of the respondent or anybody else. Therefore, he is estopped from taking a contrary plea. 12. In the decisions cited above, there is no reference to such admissions made by such employees, when there is admission it amounts to proof of a particular fact in issue and no additional evidence is required to prove it further. It is not proper to claim that even under such circumstances the Inspector/Respondent should have followed such formalities mentioned in those decisions. For the foregoing reasons, I do not find any merits in the Appeal and accordingly, the Civil Miscellaneous Appeal is dismissed. There shall be no order as to costs. __________________________ G. KRISHNA MOHAN REDDY, J Date.25-03-2011 B/o.Dsh. [1] 2009-AIR (SCW)-0-7037 [2] 1975 LAB I.C.1025