The Doaba Industrial and Trading Company (Pvt.) Ltd. vs The Employees State Insurance Corporation

G.C Mital, J.—This order will dispose of F A.O. Nos. 153 and 154 of 1980 as similar points arise therein.

The Appellant has its head office at Yamuna Nagar and its branch offices at other places in the country The number of employees working in the head office is below 20, but if the number of employees working in the branch offices is taken into consideration then, the total number of employees exceed the limit of 20 as a result of which the Employees State Insurance Act, 1948 (hereinafter called the Act) becomes applicable- The Employees State Insurance Corporation (hereinafter called the Corporation) had levied contributions under the Act after taking into consideration the employees working in the branch offices The trading concern filed an application u/s 75 of the Act to challenge the levy of contributions before the Employees Insurance Court. One of the points raised was that since in the head office there were less than 20 employees, the Act was not applicable and that the employees in the branch offices were not to be included. The other point raised was that the trading concern was not a factory and, therefore, the Act could not be extended to it. The Court below by judgment dated 8 3-1980 rejected the point raised by the trading concern and it was held that by virtue of the notification issued by the State Government u/s 1(5) of the Act, the trading concerns employing 20 or more persons were such establishments to which the Act was extended. As regards the clubbing of the employees of the branch offices with the head office, reliance was placed on the Supreme Court decision in Hyderabad Asbestos Cement Products Ltd. Vs. Employees Insurance Court and Another, wherein it was held that all the employees working in the branch offices also were to be taken notice of in considering the number of the employees Accordingly, by the impugned order, the trial Court dismissed the petitions of the trading concerns. These arc appeals against the said orders.

After hearing the Learned Counsel for the parties, I am of the view that the trading concerns are establishments within the meaning of the notification issued by the State Government u/s 1(5) of the Act. In case there are 20 or more employees working with the trading concerns, then they will be covered by the Act The trading concern'' own case is that the number of employees working in the head office and branch offices, if taken separately, is less than 20, but if all of them are clubbed together, then they exceed the limit of 20 and the Act becomes applicable. In view of the Supreme Court decision in Hyderabad Asbestos Cement Products'' case (supra), no doubt is left that all the employees have to be included. It is not disputed that the same work is done in the head office and the branch offices and. therefore, the Court below was right in clubbing the number of employees working in the head office and in the branch offices.

For the reasons recorded above, both then appeals (F A.O. Not. 153 and 154 of 1980) are devoid of merit and the same are dismissed, but without any order as to costs.