Kallukkadan Rice Mill, Okkal P.O. Kalady vs Employees State Insurance Corporation and The Recovery Officer, E.S.I. Corporation

S. Siri Jagan, J.—This insurance appeal is filed by the applicant in I.C. No. 117/2001 before the Employees'' Insurance Court, Alappuzha. The appellant filed the I.C. challenging the orders of the Employees'' State Insurance Corporation ("the Corporation" for short) directing coverage of the appellant''s establishment under the Employees'' State Insurance Act ("the Act" for short) and demanding contributions with effect from 2.1.1997. The appellant''s contention before the E.I. Court was that the employment strength of the appellant''s establishment was always below 10 and, therefore, the provisions of the Act are not applicable to their establishment. But the E.I. Court, after consideration of the evidence, negatived the contention of the appellant and held that the appellant establishment is liable to be covered under the Act with effect from 2.1.1997. But the Corporation was directed to reassess the contributions payable by the appellant. That judgment of the E.I. Court is under challenge in this appeal. The contention raised by the appellant is that for deciding the number of employees working in the establishment, only those employees, who come within the definition of "employee" u/s 2(9) of the Act can be taken into account, meaning thereby, that the employees, who draw salary in excess of the ceiling limit prescribed u/s 2(9) for the purpose of bringing them within the purview of the definition of "employee" have to be excluded for the purpose of deciding the number of employees for coverage. In support of that contention, the appellant relies on the decision of the Supreme Court in Employees State Insurance Corporation Vs. M/s. M.M. Suri and Associates (P) Ltd., . The appellant''s contention is that the E.I. Court had, by interim order dated 6.1.2005, directed the Corporation to reverify the records of the appellant''s establishment and to determine the number of employees working in the establishment for the period in question. Pursuant thereto, an inspector of the Corporation verified the records of the establishment for the period from 1.9.97 to 30.9.98, as per which, there were no ten employees who were drawing salary below Rs. 6,500/-, which is the wage limit applicable at the relevant time for bringing the employee within the purview of the definition of "employee" u/s 2(9) of the Act. It is also submitted that DW1, who gave evidence in the case, categorically admitted in cross-examination that as per records, there were no ten or more employees drawing wages below the wage ceiling. In the above circumstances, the E.I. Court went wrong in holding that the appellant is liable to be covered under the Act is the contention raised.

We have considered the rival contentions in detail. We find that by Annexure A5 order dated 6.1.2005 produced along with the appeal, the then Judge of the E.I. Court had directed reverification of the records of the appellant''s establishment to decide the question of coverage. Annexure A6 is the reverification report, which would prima facie show that the number of employees drawing less than Rs. 6,500/- and working in the establishment during the relevant time was less than 10. The appellant has made available to us a copy of the evidence of DW1, the relevant portion of which reads thus:

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On a reading of the judgment of the E.I. Court we find that the E.I. Court has glossed over this evidence. The E.I. Court had referred to that verification report and had also disapproved off the stand of the Corporation that in the absence of income tax details and profession tax details in respect of the employees, the accounts of the applicant cannot be relied upon. Even then, no specific finding has been entered by the E.I. Court on this aspect, despite Annexure A6 verification report and DW1''s evidence in respect thereof. In the above circumstances, we are of opinion that the E.I. Court should reconsider the matter in the light of Annexure A6, the evidence of DW1 and the decision of the Supreme Court in M.M. Suri & Associates'' case (supra). For that purpose, we set aside the impugned judgment of the E.I. Court and remand the matter to the E.I. Court for reconsideration of the I.C. in the light of Annexure A6, the evidence of DW1 and the said judgment of the Supreme Court. Revised orders shall be passed by the E.I. Court, as expeditiously as possible, at any rate, within three months from the date of receipt of a certified copy of this judgment.

The appeal is disposed of as above.

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