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IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI
RAVI NATH TILHARI AND NYAPATHY VIJAY, JJ.
Sai Raghavendra Cold Storage Pvt. Ltd. – Appellant
Versus
Dy. Regional Director, ESI Corporation and another – Respondent
CMA No.772 of 2007
Decided on : 18-10-2024
| Table of Content |
|---|
| 1. appellant challenged esi orders based on worker count (Para 2 , 3 , 4 , 5) |
| 2. dispute over claim of employee numbers and applicability (Para 6 , 9 , 10 , 11) |
| 3. arguments from both parties regarding employee count. (Para 12) |
| 4. definition of 'factory' under esi act debated (Para 19 , 20 , 25) |
| 5. definitions relevant to the classification of 'manufacturing process'. (Para 22 , 24) |
| 6. admissions as evidence in determining worker count (Para 27 , 28 , 30) |
| 7. appeal dismissed, no costs (Para 41 , 42 , 43) |
JUDGMENT :
RAVI NATH TILHARI, J.
1. Heard Sri Darsi Bala Raju, learned Counsel for the appellant and Sri V. Ch. Naidu, learned Counsel for the respondents.
2. This appeal under Section 82 (2) of the Employees State Insurance Act, 1948 (in short ESI Act) has been filed by M/s. Sai Raghavendra Cold Storage Pvt. Ltd., challenging the order dated 23.01.2007 passed in ESI.No.20 of 1999 by the Presiding Officer of the Labour Court, Guntur (in short 'PO').
3. By the order dated 23.01.2007 the petition of the appellant was dismissed and the notices issued by the respondents dated 28.06.1997 and 01.09.1997 were held legal and valid. The appellant was held liable to pay ESI Contribution for 11 workers.
4. The appellant filed ESI No.20 of 1999, under Section 75 of ESI Act, seeking declaration that the letters of intimation of coverage dated 28.06.1997 and 01.09.1997 were illegal and invalid and prayed to set aside those letters/notices.
5. The case of the appellant was that the appellant's unit started functioning from March, 1997. It was registered under the provisions of the FACTORIES ACT . The appellant was doing business in storage of chillies and other commodities in cold storage. He always employed less than 5 workers. Consequently the appellant's unit was not liable for coverage under the Provisions of ESI Act and the demand of contributions made under the notices was not valid in the eye of law.
6. The respondents filed counter-affidavit and inter-alia submitted that the appellant employed 14 persons since 01.03.1997. He was also using power, which was generated mechanically, running with electrical connection. The appellant was amenable for coverage under Section 2 (12) of ESI Act with effect from 01.03.1997. Consequently, after following the due process, coverage was intimated calling upon the appellant to pay ESI contribution.
7. The Labour Court framed the following issues :
2. Whether the petitioner is liable to pay ESI contributions?"
8. The Labour Court recorded the finding on Issue No.1 that the appellant employed 11 workers for wages observing that if 3 mutta coolies were excluded from the number 14 referred in Registration Form-01, the number of workers working for wages would come to 11. The unit was being run with the aid of power. On Issue No.2 the Labour Court held that the notices issued to the appellant were legal and valid. He was liable to pay contribution for 11 workers.
9. Learned Counsel for the appellant raised the following submissions :
(ii) The appellant's case was that he employed not more than 5 employees. Consequently, the ESI Act will not apply. The finding of Labour Court that there were 11 employees on wage is based on no evidence and is perverse. He submitted that the particulars i.e., the names, the amount of wages if any etc., of the workers was not mentioned in the report.
10. Learned Counsel for the appellant placed reliance in M/s. Natraj Cinema v. The Deputy Regional Director, Employees' State Insurance Corporation, 2017 LLR 854, in support of his contentions.
11. Learned Counsel for the respondents submitted that the appellant is covered under Section 2 (12) of ESI Act. He submitted that the finding that there were 11 workers on wages is based on evidence Ex.R2. He further s
Cold storage facilities are classified as 'factories' under the Employees State Insurance Act, as they involve a manufacturing process, necessitating ESI contributions regardless of the number of emp....
A factory is classified as seasonal under the ESI Act if its predominant activity is seasonal, and it is exempt from ESI applicability if it employs fewer than ten workers.
The functional integrality of the establishments justified their clubbing and coverage under the Employees State Insurance Act, 1948.
The court established that the presence of more than 10 employees, including Hamals, qualifies the establishment under the applicability of the Employees' State Insurance Act.
The applicability of the Employees’ State Insurance Act is contingent upon the establishment being classified as a 'factory' with at least 10 employees, as defined under Section 2(12).
The central legal point established in the judgment is the interpretation of the term 'seasonal factory' under Section 2 (19-A) of the ESI Act, particularly in relation to the manufacturing processes....
The applicability of the Employees’ State Insurance Act is contingent on the factory having the requisite number of employees, and Section 1(6) only applies to those already covered, not to new appli....
Cooperation with authorities and production of genuine documents are essential in disputing establishment coverage under the E.S.I. Act.
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