Case: ESI Corporation Vs. Harrison Malayalam Ltd

1. The Employees State Insurance Corporation has brought in challenge the order passed by the Employees Insurance Court, Alleppey and as confirmed by the High Court in appeal under the Employees Insurance Act, 1948.2. The respondent is a public limited construction company engaged in the business and the work of undertaking construction work at various places in the State of Kerala. During the period 1971 to 1982 it had undertaken construction work for building factory premises of M/s. McDowell Company at Chertallai. During the relevant time the Employees State Insurance Act, 1948 (hereinafter referred to as "the Act") was applicable in the State of Kerala. The appellant Corporation raised the demand against the respondent Company in connection with the contribution which should have been remitted to the Corporation both consisting of employees contribution as well as employers contribution amounting to Rs. 2 lakhs and odd for the period from 1971 to 1982. This demand by the Corporation resulted in an application by the respondent Company before the Employees Insurance Court, Alleppey being IA No. 62 of 1988. The Insurance Court after hearing the parties took the view that as the claim pertains to an earlier period ie. from 1971 to 1982 and there was no clear evidence to show whether the workmen concerned, who were said to be employed by the respondent company during the relevant time, were available on the payroll of the Company and as the appellant Corporation had not taken steps in time to activise the respondent in this connection, the claim put forward by the Corporation against the respondent for that period could not be effectively entertained. However, the Insurance Court noted that there was some evidence regarding continuity of employees at least from 1983 onwards till the coverage was effected in 1986. The appellant Corporation was held entitled to collect contribution in respect of those employees who are employed by the respondent during 1983 and who continued under employment thereafter till they are brought under coverage w.e.f. 1.12.1986. In the result the respondents application was allowed to the aforesaid extent. The appellant Corporation being aggrieved by the said decision of the Employees State Insurance Court, carried the matter in appeal before the High Court of Kerala under S.82 of the Act. The High Court by the impugned judgment agreed with the decision rendered by the Insurance Court and dismissed the appeal. The high Court observed that the Insurance Court was justified in arriving at the finding that the Corporation could not insist for payment of contribution from the respondent in respect of employees whose particulars were not available. Moreover, the request for contribution was made after several years and there was nothing on record to show that inspection had been conducted at any time prior to 1982. In the result, the High Court dismissed the appeal of the Corporation.

Court's reasoning:
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 not 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 through sub contractors. Consequently, there would remain no occasion for remanding the proceedings for considering the first objection.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 engagedwho 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 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 proceeding