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Judgment
Gautam Kumar Choudhary, J
This appeal is under Section 82(2) of the Employees State Insurance Act, 1948 against the judgment dated 31.1.2007 passed in ESI Case No. 2 of 2002 by the Presiding Officer, Labour Court, Ranchi, dismissing the Appellant’s case instituted under section 75 (1) (a) and (g) of ESI Act.
Appellant approached the Labour Court against the order under Section 45 A dated 14/18.12.2000 against determination of contribution liability of Rs 1,07,987/- for the period 28.05.1998 to 31.03.2000 which was rejected, hence this appeal.
The appellant has a registered restaurant in the name of new Jaljog and the name of another adjoining restaurant was Amar Hotel. The Amar Hotel was owned by the appellant’s cousin brother by the name of Hari Das Ghosh, whereas the restaurant New Jaljog was owned by the appellant himself.
It is argued by the learned counsel for the appellant that both these restaurants are two independent establishments with separate ownership and with separate business.
Inspector of ESI conducted an inspection on New Jaljog on 28.05.1998, on the basis of which, liability of Rs. 1,07,987/- was raised under Section 45-A of the ESI Act alleging that on the date of inspection, 21 named employees were working in the establishment.
It is argued by learned counsel with respect to the substantial questions of law No.1 that, the impugned order (Exhibit-G), just refers to the amount that has been levied and liability was fixed, but it does not state the reason and the basis for calculating the said amount. It makes reference to the notice dated 11/18.4.2000, but at the same time, it does not state the contents of the notice in the order. It is urged that the order being quasi-judicial in nature it was incumbent on the part of the authority to have mentioned the reasons for passing the said order. Reliance is placed on (2010) 9 SCC 496, wherein it has been held that quasi-judicial-authority must record its reasons for arriving at its conclusion.
On second substantial question of law, a reference is made to the survey report dated 28.5.1998 (Ext.-A) wherein 21 employees have been named without any further detail about their parentage or their address. It is submitted that the subsequent survey dated 17.8.2001 (exhibit-I), wherein the number of employees has been shown to be only 10. Most of the names in the first investigation report/ inspection report did not figure in the second inspection report. All the workers working in the establishment had filed their affidavits (Exts3 to3/G) confirming employment of only 08 employees. Attendance register has been adduced into evidence and marked as Ext4 showing eight employees in the month of January 1998 to June 2001, 8 employees were working in the establishment.
OPW-1 examined on behalf of the ESI admitted that copy of the survey report was not required to be given to the establishment surveyed by him. OPW-1, who has specifically deposed in para-57 that he had not asked for the of the parentage of the employees. In para-58 he further deposed that wages of the 21 persons employed in the establishment were not noted.
Reliance is placed on:
I. M.A.160 of 2009 of this Court
II. M.A. 215 of 2009 passed by the Coordinated Bench of this court
III. Misc. First Appeal No.1000 of 1991 of High Court of Karnataka.
It is further argued that in order to bring an employee within the coverage under the ESI Act in terms of Section 2(9)(b), it was incumbent on the part of the inspector, who has noted the wages of the employees, i.e., OPW No. 1, however, it has admitted in para 58 of the deposition that the issue of wages has not been mentioned. The mandate of law as set out in ESI Corpn. v. M.M. Suri & Associates (P) Ltd., (1999) LAB I.C. 956 that the Act would apply to an establishment only when the number of employees is 20 or more and all those employees answer the description of employee contained in Section 2(9) of the Act.
Argument on behalf of Respondent
It is argued by Mr. Ashutosh Anand, learned counsel on behalf of the ESIC, that in the present appeal, the order passed by the Labour Court under Section 75 of the ESIC Act is under challenge and, therefore, it will be germane to refer the pleadings that were presented before the ESIC Court. It is submitted that the pleas, that were not taken before the Labour Court, cannot be raised at this stage. For instance, the service of notice has not been denied by P.W.-1 who is the appellant and had examined himself and has specifically stated that ESIC notices were returned and not accepted in his deposition. Further, the identification of the employees has not been disputed in the pleadings as filed before the ESIC Court and the specific plea, was raised, was that all the employees were not engaged by Jaljog Restaurant, rather some of them were employed under Amar Hotel.
This appeal is admitted to be heard on the following substantial questions of law: -
I. Whether the order passed under Section 45A of the ESI Act by the Deputy Director, ESI is vitiated for being a non-speaking order whereby and whereunder contribution of Rs.1,07,987/- has been imposed on the appellant.
II. Whether Inspector while conducting inspection of the establishment committed gross error by not recording age and parentage of the workmen stated to be working in the establishment.
It has been rightly argued on behalf of the Respondent that in the absence of plea raised at any stage, on behalf of the Petitioner, that the employees were drawing wages higher than the ceiling limit so as to remove them from the insurance cover, the fact the wages of the employees have not been mentioned, will have no significance. If at all, any of the employees were drawing wages higher than the ceiling, it was for the employer to have stated the name of the employees who were drawing higher salary and were wrongly included in the list of employees engaged. Having failed to do so at the stage of Section 75 proceeding, this plea is not available in appeal.
Further, plea of having not received the notice on behalf of the appellant is also not sustainable, as in the Section 75 of the Act, in para-5&41of deposition of P.W.1, there is admission about the receipts of letters of the ESI.
In order to hold the establishment to be a factory within the meaning of Section 2 (12) of the ESI Act, it needs to be established that 10 or more persons were employed in the establishment. With regard to these details of the employees has been given in a most cryptic manner without their parentage or address. There is merit in the submission advanced on behalf of the appellant, that in the absence of any such detail, it was incumbent on the part of the Labour Court to have considered Ext-4 which is the attendance register adduced into evidence on behalf of the appellant, which shows only eight persons to be employed at the relevant time. If the details of employees who were engaged is not disclosed in Section 45 A, it becomes non-speaking order as it will give wide and unfettered power to pass such orders by just referring to some cryptic names without any further details.
The order passed by the competent authority further suffers, from being opaque and non-speaking as to how the ad-hoc compensation has been computed. A liability of Rs. 1,07,987/- has been saddled without any further details as to how that amount has been computed.
Under the circumstance, this Court is of the view that impugned order is not sustainable, and accordingly set aside.
Miscellaneous Appeal is allowed.
Pending I.A., if any, stands disposed of.