JUDGMENT

S.B. Sinha, J.—Leave granted.

2. Applicability of the provisions of the Employees’ State Insurance Act, 1948 (for short “the Act”) to the rice mills situate in the State of Andhra Pradesh arises for question in these matters. Appellants are owners of various rice mills situate in the State of Andhra Pradesh. The operation in these rice mills is said to be seasonal. The Act admittedly was made applicable in relation to the rice mills with effect from 1.8.2000. Prior to coming into force of the Act, inspections were carried out and allegedly it was found that in the mills more than 10 employees were employed. They were allegedly asked to comply with the provisions of the Act. Without, however, giving an opportunity to explain as to why they have not made any contribution towards insurance, by a notice dated 20th October, 2000, they were asked to show cause stating:

“I therefore call upon to explain the reasons if any as to why you should not be prosecuted, within a week of receipt of this letter. If no reply is received within stipulated time it will be presumed that you have no valid reasons to explain and further action will be taken accordingly without any further notice.”