Kakinada Municipality, represented by its Commissioner, filed the present civil miscellaneous appeal under Section 82 (2) of the Employees State Insurance Act, 1948 (hereinafter in short referred to as "the Act" for the purpose of convenience) challenging the order made in E.I.C.No.10 of 2002, dated 02.12.2005, made by the Employees' Insurance Court and Chairman, Industrial Tribunal-I, Hyderabad.

2. On 10.3.2006 this Court made the following order:

Admit for the substantial question of law-

"Whether a statutory body, like a Municipality, under the A.P. Municipalities Act, is covered by the provisions of the E.S.I. Act, particularly, in view of the judgment of the Supreme Court in Municipal Committee, Abohar v. Regional Commissioner ((1996) 7 SCC 488)?"

This Court in C.M.P.No.394 of 2006 granted interim stay on the aforesaid date, 10.3.2006.

3. Sri S. Nageswara Reddy, learned counsel representing appellant had taken this Court through the grounds of the civil miscellaneous appeal and would maintain that the Employees' Insurance Court and Chairman, Industrial Tribunal- I, Hyderabad (hereinafter in short referred to as "the Court" for the purpose of convenience) totally erred in coming to the conclusion that the appellant-Municipality also is liable to pay contribution. The learned counsel also would maintain that the Court below ought to have appreciated the fact that the same is not applicable to the employees working in Water Works Department in the appellant-Municipality. The learned counsel also had taken this Court to Exs.P-1 to P-3 and would maintain that the Court ought to have appreciated the fact that the Water Works Department employees may not be entitled to the said benefits in the light of the fact that the Municipality is not a factory. The learned counsel also would maintain that the court below failed to see that the Municipality is maintaining three hospitals and has been providing medical reimbursement to the employees. The counsel also would maintain that the employees of this Municipality are drawing salaries much higher than the prescribed salary specified under the provisions of the Act. The learned counsel also had taken this Court through the contents of the order under challenge and would maintain that the very approach adopted by the court below being wrong and erroneous, the order under challenge is liable to be set aside.

The learned counsel placed strong reliance on certain provisions of the Act and also certain decisions to substantiate his submissions.

4. Per contra, Sri P. Rajasekhar, learned counsel representing first respondent would maintain that the decisions relied upon by the learned counsel representing appellant are distinguishable on facts and even otherwise acceptable evidence had been placed before the Court in those matters relating to the facilities and in the present matter no such evidence had been adduced. The counsel also would maintain that appellant-Municipality is covered by the provisions of the Act and the employees working in Water Works Department also would fall within the ambit of the Act and it is a factory within the definition of Section 2 (12) of the Act and the counsel also would maintain that contributions were paid by the appellant-Municipality up to 31.12.1996, but subsequent thereto stopped such payment and, hence, in a way the appellant is estopped from contending otherwise in this regard. The learned counsel also would maintain that appellant-Municipality had not applied for exemption under Sections 88 or 90 of the Act and no such exemption as such had been granted in favour of the appellant-Municipality. The counsel also had taken through the evidence of P.W.1 and R.W.1, Exs.P-1 to P-3, Exs.R-1 to R-13. The counsel also would maintain that the court below, on consideration of the facts of law, had arrived at the correct conclusion and inasmuch as no substantial question of law as such is involved in the present civil miscellaneous appeal, the same is