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Judgment
Moksha Khajuria Kazmi, J
1 By this appeal, the appellants have assailed order dated 11.12.2006 passed by the learned District and Sessions Judge (Presiding Officer), Industrial Tribunal/Labour and Employees’ State Insurance Court, Jammu, whereby the recovery notices dated 20.03.1997 issued against the respondent herein (petitioner before the Court below) were held to be unfounded and were accordingly set aside.
2 The appellants have challenged the impugned order on the ground that, in terms of Section 40 of the Employees’ State Insurance Act, it is the responsibility of the Principal Employer to pay, in the first instance, the contributions in respect of every employee whether directly employed by him or through an immediate employer including both the employer’s and the employee’s share of the contribution. It is submitted that there is nothing on record to establish that the employer had made contributions in respect of contractor’s employees at the time of making compliance in respect of regular employees. According to the appellants, the onus lies on the Principal Employer to produce complete records pertaining to all employees, whether employed directly or through contractors. It is submitted that had the employer discharged his obligation in respect of contractor’s employees at the time of filing returns and making compliance for regular employees, the same would have been reflected in the challans shown to the Insurance Inspector. The fact that payment in respect of contractor’s employees was made only after the issuance of the discrepancy letter, for an amount of Rs. 97,555/-, clearly indicates that such payment was made subsequent to the inspection by the Insurance Inspector.
3 The appellants have further submitted that the observation of the Court below regarding the necessity of an independent witness at the time of inspection is impractical. They have submitted that it is impractical to expect the presence of independent witnesses during inspections, as such visits are usually carried out by a single inspector without any supporting staff, and the only individuals typically present are representatives of the employer, whose statements may not be reliable or impartial.
4 The learned Employees’ Insurance Court, upon a detailed appreciation of the pleadings, documentary evidence, and the rival submissions, has held that the recovery notices issued against the respondent were not based on legally sustainable grounds. The Court found that the contributions were indeed paid, although subsequent to the inspection, there was no evidence of wilful evasion of liability. The absence of corroborating material, particularly the lack of any independent verification of the inspection process, was found to be a significant infirmity in the case of the Corporation.
5 Heard learned counsel for the parties and perused the material on record.
6 Before proceeding to examine the appeal on merits, it is relevant to note that there is a delay of 92 days in filing the present appeal. However, considering the fact that the matter involves interpretation of the statutory responsibilities under a welfare legislation and in furtherance of the principle that matters should be adjudicated on merit rather than be defeated on technicalities, this Court deems it fit to condone the said delay by invoking Section 5 of the Limitation Act, 1963, which is expressly made applicable to appeals under Section 82(4) of the ESI Act.
7 The learned counsel for the respondent herein has raised a preliminary objection as to the maintainability of the present appeal, contending that no substantial question of law, as required under Section 82(2) of the Act, arises in the present case. Section 82 of the Employees' State Insurance Act (‘ESI Act’ for short) is reproduced for ready reference:
“Section 82. Appeal.
(1) Save as expressly provided in this section, no appeal shall lie from an order of an Employees' Insurance Court.
(2) An appeal shall lie to the High Court from an order of an Employees’ Insurance Court if it involves a substantial question of law.
(3) The period of limitation for an appeal under this section shall be sixty days.
(4) The provisions of Sections 5 and 12 of the Limitation Act, 1963 shall apply to appeals under this section”.
8 The above provision makes it abundantly clear that an appeal lies to the High Court from an order of the ESI Court only if the case involves a substantial question of law. The language employed in Section 82(2) is not akin to Section 100 of the Code of Civil Procedure, 1908, which explicitly requires that the High Court must formulate the substantial question of law at the time of admission of a second appeal. In contrast, under the Employees' State Insurance Act, the appeal must involve a substantial question of law. The Supreme Court in Regional Director, ESI Corporation v. Francis De Costa, (1996) 6 SCC 1, has held that the scope of appeal under Section 82(2) is limited, and unless a substantial question of law is involved, no appeal lies. The Court further reiterated that mere questions of fact, appreciation of evidence, or sufficiency of evidence do not constitute substantial questions of law.
9 Upon consideration of the pleadings and perusal of the material on record, the following issue arises for adjudication:
(i) Whether the present appeal involves a substantial question of law as envisaged under Section 82(2) of the ESI Act?
10 The expression “substantial question of law” has not been defined anywhere in the statute but it has acquired a definite connotation through various judicial pronouncements. In Sir Chunilal V Mehta & Sons Ltd. v. Century Spinning & Mfg Co. Ltd. (AIR 1962 SC 1314), the Apex Court has laid down the following tests to determine whether the substantial question of law is involved.
(i)whether directly or indirectly it affects substantial rights of the parties, or
(ii) the question is of general public importance, or
(iii) whether it is an open question in the sense that issue is not settled by pronouncement of the Supreme Court or Privy Counsel or by the Federal Court, or
(iv) the issue is not free from difficulty, and
(v) it calls for a discussion for alternative view
11 There is no scope for interference by the High Court on a finding recorded when such finding could be treated to be a finding of fact.
12 Upon perusal of the memorandum of appeal, this Court is of the considered view that the appellant has failed to formulate or demonstrate any substantial question of law warranting interference under Section 82 of the ESI Act. The grounds raised in the appeal pertain solely to alleged delays in payment, the timing of deposit challans, and the validity of the inspection all of which are purely factual matters.These issues have been comprehensively examined by the learned Employees’ State Insurance Court, which has rendered its findings after due appreciation of evidence. The observation of the Court about the absence of an independent witness during the inspection, even if it goes against the Corporation’s internal procedure, relates only to the strength of the evidence and does not amount to any legal error. It is well settled that a second appeal under Section 82 of the ESI Act lies only on a substantial question of law. This Court cannot re-appreciate the factual findings or sit in appeal over the evidence duly assessed by the trial Court, unless such findings are shown to be perverse or patently erroneous, which is not the case here.
13 In view of the discussion made hereinabove, the question framed is answered as under:
The present appeal does not raise any substantial question of law as contemplated under Section 82(2) of the Employees’ State Insurance Act, 1948.
14 It is thus apparent that the present appeal is merely an attempt to reopen issues of fact already adjudicated upon, and does not warrant interference within the limited appellate scope provided under Section 82(2) of the Act.
15 In light of the above findings, the appeal is found to be without merit and is accordingly dismissed. The judgment and order dated 11.12.2006 passed by the learned District and Sessions Judge (Presiding Officer), Industrial Tribunal/Labour and Employees’ State Insurance Court, Jammu is upheld.