Case: Employees' State Insurance Corporation Vs. Harrisons Malayalam Limited

respondent- Company itself obviously pertaining to another contract work which might have been undertaken by it really clinches the issue against the respondent. There is another decision of this Court to which our attention was invited by learned counsel for the Corporation in the case of ESI Corpn. v. Hotel Kalpaka International S.C. It has been held by this Court, speaking through Mohan, J., that under Section 40 of the Act primary liability is of the employer to pay, not only the employers contribution but also the employees contribution. Therefore, he cannot be heard to contend that since he had not deducted the employees contribution on the wages of the employees, he could not be made liable for the same. It cannot be said that the demand could not be enforced against a closed business as such a finding would, instead of promoting the scheme and avoiding the mischief, perpetrate the mischief. It was further observed that it cannot also be said that because the employees had gone away there is no liability to contribute. The liability to contribute arose from the date of commencement of the establishment and is a continuing liability till the closure. The very object of establishing a common fund under Section 26 for the benefit of all the employees will again be thwarted if such a construction is put. 5. In view of the aforesaid decisions of this Court, especially the first decision which is rendered in the case of the respondent-Company itself, there is no escape from the conclusion that the claim of the appellant-Corporation could not have been successfully challenged by the respondent only on the specious plea that during the relevant period from 1971 to 1982 no data was available with the respondent about the exact number of employees employed by it and the payment made to them during the relevant period. Therefore, on that short ground the appeal will have to be allowed. However, before we do so, we must note two further contentions canvassed by the learned counsel for the respondent seeking a remand of these proceedings to the Insurance Court. Firstly, it was submitted that the workmen engaged by the respondent were of casual nature and the respondents own work was that of a casual contract and, therefore, no liability to contribute under the Act would arise in such a case. Secondly, it was submitted that the total claim of Rs. 2 lakhs and odd was on the basis that the sub-contractors were paid Rs. 33 lakhs and odd during the relevant time by the respondent but that included not only the payment of wages to the employees of the sub-contractors, but also it included transport charges and other miscellaneous items and such a contention was put forward in the application before the Insurance Court. It was, therefore, submitted that even if on the main contention the respondent fails on the aforesaid two grounds, for considering these two contentions the matter may be remanded for a fresh decision of the Insurance Court. 6. So far as the first ground seeking for remand is concerned, reliance was placed on para 4 of the judgment of this Court in the respondents own case in Harrison (supra). It has been observed therein that : (CLR page 16 para 4) "Shri Pai while not disputing the fact that the Act applies to casual workmen, contended that it cannot be made applicable to the workmen of casual contractors such as the plumbers, electricity repairers, air conditioner repairers, computer repairers, T.V. repairers etc. whom contractors engage for temporary repair works. There is indeed great force in this contention. However, in the present case there is nothing on record to show that the contractor engaged was such casual contractor and the work executed by him was of a casual nature. 7. We fail to appreciate how these observations made in the case of the respondent itself in that earlier case can be of any avail to the respondent in the present case. It is nor the case of the respondent nor was it proved on record even in the alternative that the work which the sub-contractors employees did was of such a nature that the main contract itself undertaken by the respondent could be treated to have resulted in the contract work being of casual nature. On the contrary, the evidence is that for 11 years from 1971 to 1982 the respondent did the construction work for McDowell Company. Thus it was almost of a perennial nature spread over 11 years and during that time the workmen were engaged, though according to the respondent through sub-contractors. Consequently, there would remain no occasion for remanding the proceedings for considering the first objection.8. Regarding the second objection it is necessary to note that though it was the contention of the respondent in application before the Insurance Court that it had engaged subcontractors who brought their own workmen during the relevant period for carrying out the work of the respondent, there was documentary evidence on record by way of letters dated 5.12.1986, 27.1.1986 and 18.11.1986 received from the so-called sub-contractors to show that they were in fact employees of the respondent and were not sub-contractors. When such evidence was led before the Insurance Court by the Corporation it was incumbent upon the respondent to join the issue and to seek a decision of the Insurance Court on this alternative aspect. That was not done presumably because it was not worthwhile doing so. Therefore it is now too late in the day for the respondent to claim a remand even on this ground especially-when we are told that the respondent is one of the well-known companies in Kerala and was carrying construction activities on a large scale for different clients at the relevant time and the claim involved is only Rs. 2 lakhs and odd. For all these reasons, therefore, we are not inclined to accept even the second objection of the respondent for seeking a remand of these proceedings.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]7. We fail to appreciate how these observations made in the case of the respondent itself in that earlier case can be of any avail to the respondent in the present case. It is nor the case of the respondent nor was it proved on record even in the alternative that the work which theemployees did was of such a nature that the main contract itself undertaken by the respondent could be treated to have resulted in the contract work being of casual nature. On the contrary, the evidence is that for 11 years from 1971 to 1982 the respondent did the construction work for McDowell Company. Thus it was almost of a perennial nature spread over 11 years and during that time the workmen were engaged, though according to the respondent throughConsequently, there would remain no occasion for remanding the proceedings for considering the first objection.8. Regarding the second objection it is necessary to note that though it was the contention of the respondent in application before the Insurance Court that it had engaged subcontractors who brought their own workmen during the relevant period for carrying out the work of the respondent, there was documentary evidence on record by way of letters dated 5.12.1986, 27.1.1986 and 18.11.1986 received from thes to show that they were in fact employees of the respondent and were notWhen such evidence was led before the Insurance Court by the Corporation it was incumbent upon the respondent to join the issue and to seek a decision of the Insurance Court on this alternative aspect. That was not done presumably because it was not worthwhile doing so. Therefore it is now too late in the day for the respondent to claim a remand even on this groundwe are told that the respondent is one of thecompanies in Kerala and was carrying construction activities on a large scale for different clients at the relevant time and the claim involved is only Rs. 2 lakhs and odd. For all these reasons, therefore, we are not inclined to accept even the second objection of the respondent for seeking a remand of these proceedings.