Seyadu Beedi Company vs The Regional Director, The Employees' State Insurance Corporation

Govardhan, J.—This appeal is against the order passed by the E.S.I. Judge, Tirunelveli dismissing the E.S.I.O.P. No. 3 of 1983 filed u/s 75

of the Employees'' State Insurance Act.

The appellant''s case is briefly as follows: There were never more than 20 persons employed in the applicant''s establishment. The applicant

cannot be stated as a ''factory'' under any law. The Employees'' State Insurance Act is not applicable to the applicant. As per the Beedi Workers''

Welfare Fund Act, 10 paise per 1,000 beedies is being paid to help the beedi workers. Therefore directing the applicant to pay contribution under

any other Act is not valid. While so, the Regional Director, Employees'' State Insurance Corporation has written several letters commencing from

23.7.1981 demanding contribution of Rs. 19,485.50 by the applicant. On the explanation given by the applicant, it was reduced to Rs. 9,725. The

application is for declaration that the said amount should not be collected from the applicant.

The respondent in their objections, have stated that there were more than 20 employees in the applicant factory and therefore contribution was

demanded after issuing necessary notice. After enquiry the learned District Judge (E.S.I. Judge) dismissed the application holding that the applicant

has employed more than 20 persons and is liable to pay contribution and they cannot claim any exemption under any other Act.

Aggrieved over the same, the applicant has come forward with this appeal.

The learned Counsel appearing for the appellant would argue that the order passed by the E.S.I. Judge is liable to be set aside on the ground

that there was no notice to produce records before passing an order u/s 45-A of the Employees'' State Insurance Act and that the applicant is

making payment for the welfare of the workers under him under the Beedi Workers Welfare Benefit Fund which is a Special Act and therefore no

contribution could be demanded under the Employees'' State Insurance Act which is the General Act since benefits contemplated under the

Employees'' State Insurance Act are already made available to the workers and the learned District Judge has committed an error in holding that

there are more than 20 workers employed by drawing an adverse inference and the error committed by him is drawing an adverse inference with

regard to the number of persons.

The learned Counsel appearing for the respondent would argue that there are more than 20 workers which is admitted even by P. W.I. Theonly

witness examined oh behalf of the applicant and therefore the contention of the appellant that the applicant does not come under the definition of

''factory'' is not tenable. P.W.I has stated, in chief, that there were never 20 employees employed under their institution. Duringcross-examination,

he would say that if the Salary Register of the applicant is perused, how many persons were working in the applicant-institution can be found out

and that the Salary Registers were periodically inspected by the Labour Inspectors. But, P.W.I admits that those Registers are hot produced by

him. It is also stated by P.W.I that there is an Attendance Register-in their institution and would claim that four persons by name Vaithilingam,

Muthaliff, Perumal and Joseph are not their employees. If it were so, there is no reason as to why the Attendance Register has not been produced

to show that these four persons were not their employees. Admittedly by P. W.I, when the Inspector from the Employees'' State Insurance

Corporation inspected their institution, he was there and the Inspector had perused the Ledger, vouchers for payment of salary which are

produced by him. But, he would say that he does not know whether the report has been made on the basis of these Registers produced by him.

The evidence of P.W.I itself thus shows that there should be more than 20 persons. P.W.I the Manager of the Employees'' State Insurance

Corporation who had inspected the applicant-institution, has stated that from the Registers perused by him, it was found out that more than 20

people were employed between January, 1978 and April, 1980 and on that basis, he has sent a report. It is ""stated by him that it is only as per the

Registers, it was found out that more-than 20 people were employed in the factory. When the applicant''s only witness says that the Inspecting

Officer has perused the Account Books and when the Inspecting Officer states that he has sent a report to the effect that there are more than 20

employees, the applicant could have very well proved that there are less than 20 persons in the institution by producing those Registers perused by

R.W.I. In view of their failure, the learned E.S.I. Judge has drawn an adverse inference and I am of opinion that there is nothing improper in

drawing such an inference.

The main contention of the appellant is that the applicant is paying contribution under the Beedi Workers Welfare Fund Act, and according to

the learned Counsel appearing for the appellant, if is a Special Act and from the contribution received under the said Act, benefits are conferred on

the workers which are contemplated under the Employees'' State Insurance Act which is a General Act and therefore, the Regional Director is not

entitled to demand contribution. The learned Counsel appearing for the appellant relies upon he decision reported in U.P. State Electricity Board,

v. H. S. Jain , wherein has been held as follows:

The Industrial Establishments (Standing Orders) Act is a Special Law in regard to matters enumerated in the schedule and the regulations made by

the Electricity Board with respect to any of those matters are of no effect unless such regulations are either notified by the Government u/s 13-B or

certified by the certifying officer u/s 5 of the Standing Orders Act.

The learned Counsel would argue that the above decision makes it clear that where there is a provision for the welfare of employees under the

Special Act and it is being followed there is no necessity for following a General Act for conferring the same benefits. The learned Counsel

appearing for the respondent would argue that Beedi Workers Welfare Fund Act is not a Special Act and it is a misnomer to call it as a Special

Act and it is only the Employees'' State Insurance Act a Special Act which is a comprehensive one and that benefits conferred under the two Acts

are different and the scope of the two Acts are also different will be seen from the fact that Section 4 of the Welfare Fund Act is not for individuals

but only provides a General Scheme for the welfare of the Beedi Workers and therefore the Beedi Workers Welfare Fund Act cannot override the

Employees'' State Insurance Act. The subject whether the Employees'' State Insurance Act is not applicable to Beedi Factories in and around

Madras has come up for consideration in a batch of writ Petitions in W.P. Nos. 9196 to 9199 of 1982, 9201, 9202, 10110 to 10113 of 1982

and eight other writ petitions before this Court. It has been held in the order passed by this Court, that a reading of Section 61 of the Employees''

State Insurance Act shows that the benefits due to the employees protected by that Act is a basic benefit which cannot be avoided if the Act could

be applicable and only in case a worker gets a benefit under the Employees'' State Insurance Act, then he can be denied a similar benefit under the

provisions of another enactment and therefore merely because under the Beedi Workers Welfare Fund Act and another Act, certain benefits are

given to the Beedi Workers, it would not deny or deprive the said workers if they are otherwise covered by the Employees'' State Insurance Act

from deriving benefit under the Employees'' State Insurance Act. On the basis of the above observations, the writ petitions were dismissed and it

was stated that it has become final. The same reasoning is applicable to the facts on hand also and therefore I am of opinion that the contention of

the learned Counsel appearing for the appellant that in view of the contributions made under the Beedi Workers Welfare Fund Act, Employees''

State Insurance Act cannot be made applicable to the applicant-institution is not a tenable one and it has to be rejected.

The last objection that has to be considered is whether there is no notice before the passing of the impugned order u/s 45-A of the Act by the

Regional Director. It is seen that a notice has been issued to furnish particulars in ''01 Form'' followed by notice demanding payment and another

notice demanding contribution within 15 days and a third notice requiring the applicant to comply with the provisions of the Employees'' State

Insurance Act before the respondent asks the applicant to keep the records ready for inspection. The notice requiring the applicant to keep the

records, has been followed by a notice directing the applicant to produce vouchers followed by a reminder and then only a notice asking the

applicant to pay contribution was issued. Therefore, it is not as if there was no notice. After considering the reply sent by the applicant only the

order u/s 45-A of the Employees'' State Insurance Act has been made by the Regional Director on 9.6.1982 and it is also conceded in the

application. Therefore, it cannot be stated that there was no notice before passing the impugned order u/s 45-A of the Act in which case, the

Employees'' State Insurance Judge, can interfere with the order passed by the Regional Director. The evidence has shown that notice has already

been issued and therefore, I am of opinion that none of the objections raised by the learned Counsel appearing for the appellant challenging the

order passed by the E.S.I. Judge are tenable and the appeal is liable to be dismissed as without merits and is accordingly dismissed.

In the result, the appeal is dismissed. No costs.