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Judgment
A.N. Venugopala Gowda
Application filed by the respondent under S. 75 and 76 of the ESI Act, 1948 (for short, the Act) in the ESI Court, Bangalore, assailing an order dated 31.5.88 passed by the respondent under S. 45-A of the Act levying contribution of Rs. 22,590,56 for the wage period 27.1.85 to 30.9.87 having been allowed in part and the impugned order having been modified, feeling aggrieved, the ESI Corporation has filed this appeal.
The ESI Court, by an order dated 4.9.96 had directed the applicant to pay Rs. 1,255,99 and interest on the said sum in accordance with Regulation 31-A of the Act and the claim of the Corporation regarding the remaining sum was rejected. The said order was assailed by the Establishment in MFA 807/97 and by the Corporation in MFA 4683/96. By a common Judgment dated 12.10.2000, MFA 807/97 filed by the employer / Establishment was dismissed and MFA 4683/97 filed by the ESI Corporation was allowed and the application filed by the Establishment in the ESI Court to declare the determination made under S. 45-A of the Act as bad in law, was rejected. Aggrieved, the employer / Establishment filled SLPs. Leave having been granted, cases were registered as Civil Appeal Nos.348 and 349 of 2004. Upon hearing and finding that there is confusion as to the number of employees employed by the Establishment, the impugned Judgment / order was set aside and the matter was remanded to the ESI Court to decide afresh.
After receiving the records, the matter having been taken up by the ESI Court, for the applicant, AW-2 deposed through whom Ex.A5 was marked. The ESI Corporation did not adduce any additional evidence. Considering the rival contentions and the record, issue No. 1 was answered partly in the affirmative. Issue No. 2 was answered in the negative and as a result, the application was allowed in part. Assailing the said order, the ESI Corporation has filed this appeal.
Sri N.S. Narasimha Swamy, learned counsel appearing for the appellant contended that, the Corporation having proved that the Establishment had engaged the services of more than 10 persons from 27.1.85 to 30.9.87, the inspection report having clearly revealed the said aspect of the matter, the ESI Court has failed to take into consideration the material circumstances appearing on record and has erroneously come to the conclusion that the Establishment is liable to pay contribution only for the period from January to March, 1985. Learned counsel submits that the ESI Court is not justified in modifying the order passed by the Corporation and that the finding recorded on issue No. 1 is perverse. Learned counsel submitted that, the ESI Court has not decided the case keeping in view the remand order passed by the Hon''ble Supreme Court wherein it was made clear that the burden of proof as to how many employees were working in the Establishment was on the employer. Learned counsel submitted that, the evidence of AW-2 and Ex.A5 brought on record, subsequent to the order of remand does not make out a clear case with regard to the number of employees employed in the Establishment for the period from April, 1985 to September, 1987 and hence, the impugned order is unsustainable.
Sri Prakash T. Hebbar, learned counsel appearing for the respondent on the other hand, would submit that the ESI Court which is a fact finding Court, has recorded the finding with regard to the number of employees employed by taking into consideration the wage registers at Exs.A3 and A4 and the report of the inspector at Ex.R1 and there being no need for paying contributions after 4/1985, the ESI Court is justified in passing the impugned order. Learned counsel submits that the impugned order has not given rise to any substantial question of law and hence, the appeal is not maintainable.
Considering the rival contentions and the record of the case which I perused, the substantial questions of law for determination are:
(a) Whether the ESI Court is justified in holding that the Establishment is liable to pay contribution only for the period from January to March, 1985?
(b) Whether the impugned order of the ESI Court is perverse?
For the Establishment, AW-1 deposed through whom Exs A1 to A4 were marked. For the Corporation, RW-1 deposed through whom Exs.R1 to R6 were marked. After the order of remand by the Hon''ble Supreme Court, the Establishment examined AW-2, through whom Ex.A5 was marked. A perusal of the evidence of AW-2 would indicate that he has no knowledge about the management of the Establishment. Ex.A5 is a copy of a letter dated 27.1.86 of the Establishment addressed to the Inspector of Factories with regard to the deletion of factory licence No. NYU 2093. It has been stated therein that the employer is employing 7 to 8 workers and hence, it was requested to delete the factory name in the records. The said document does not contain any acknowledgement for having been submitted to the addressee. Whether the prayer for deletion was considered or not ha: not been spoken to by AW-2. Ex.A5 is only a carbon copy. The author / signatory of the document has not deposed. AW-2 was not the person who signed and submitted the said document. Ex.A3 has not been proved.
There is no dispute that the respondent / Establishment has been closed with effect from 30.12.88. The demand made by the appellant for remittance of contribution is for the period 1/ 85 to 9/87. The ESI Court has held that the demand made for the period 1/85 to 3/85 is justified. ESI Court by taking notice of Exs.R1, A3 and A4 has held that the applicant - Establishment had indicated 10 or more persons only during the months of January and February, 1985 and the number was either 9 or less during the period 3/85 to 9/87.
Ex.R1 pertains to the period 1/55 to 3/86. Exs.A3 and A4 are the muster roll and the attendance register in respect of the permanent employees in the Establishment. Indisputedly, there were learners in the Establishment in respect of whom the Establishment has not produced the muster or any other register. While remanding the case, the Hon''ble Supreme Court has observed that the employer has the special knowledge as to how many workers were working under it and that the burden of proof was on the employer as held in the Judgment under appeal. Since there was confusion with regard to the number of employees, the ESI Court was directed to decide the matter afresh. The ESI Court, by only referring to Exs.R1, A3 and A4 has passed the impugned order and the inference drawn by it that the combined effect of the said documents would show that the number of employees was either 9 or less during the period from 3/85 to 9/87 is not based on appreciation of evidence placed on record by the parties. In the circumstances, the findings recorded being perverse, the impugned order is unsustainable.
Since the ESI Court has not decided the case with reference to the order of remand, the matter stands relegated back to the ESI Court for deciding the case keeping in view the specific direction issued by the Hon''ble Supreme Court while remanding the case for consideration.
In the result, the appeal is allowed and the impugned order is set aside.
The ESI Court is directed to decide the case as per the order of remand passed by the Hon''ble Supreme Court.
The parties are directed to appear before the ESI Court on 8.8.11 and receive further orders.
ESI Court to decide the case as early as practicable and at any event, within the period of 4 weeks from the date of first appearance of the parties.
Registry is directed to return the LCR to the ESI Court without delay.