The court found the initial order erroneous due to misreading evidence, confirming the Appellant’s non-liability under the Employees State Insurance Act after business seizure.

JUDGMENT :

Nyapathy Vijay, J.

The present Appeal is filed under Section 82 of the Employees State Insurance Act, 1948 (for short ‘the Act’) against the Order in EIC.No.18 of 2005, dated 25.03.2011 passed by the Employees Insurance Court and Chairman, Industrial Tribunal-1 at Hyderabad.

2. The Appellant herein is the Petitioner in the EIC.No. 18 of 2005.

3. The facts leading to filing of the present Appeal are as follows:-

The Appellant/Petitioner is a proprietary concern, which was started in the year 1978 and is involved in the manufacture of wiring products. All through, it is pleaded that the Appellant/Petitioner had engaged nine persons. While so, the Appellant/Petitioner was stood as guarantor for the Companies viz., (a) M/s Padmalaya Wire Products Pvt. Ltd., (b) Sri Padma Priya Galvanizers Pvt. Ltd., (c) Sri Chakra Wire Products Pvt. Ltd., for the loan obtained from the Bank as well as the State Financial Corporation. As they had committed default in payment of debts, the said companies as well as the Appellant industry were seized by the Bank as well as the State Finance Corporation. On account of seizure, the Appellant/Petitioner industry sustained heavy losses and stopped doing business in the manufacture of wire products from the year 1996 onwards.

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4. While so, the Appellant/Petitioner industry entered into an agreement with M/s. Jagadamba Agencies and leased out the unit to the M/s. Jagadamba Agencies in the year 2001 for the period from 2001 to 2004. The E.S.I contribution was paid upto 2001. Since the Appellant industry was seized by the Bank on 17.04.1996, the books pertaining to the Provident Fund, Gratuity, E.S.I and other things were seized and some of the books were misplaced in the process. While so, on 10.02.2005, the proceedings were issued by the Respondent-Corporation effecting attachment of the amount lying in the account No.3751 of the Appellant. On being informed, the Appellant submits that no notice was served on them in respect of the E.S.I contribution due to the Respondent No.1-Corporation and the correspondence was made with M/s. Jagadamba Agencies, the lessee of the Appellant industry.

5. It is pleaded that the Appellant on enquiry was informed by the lessee that they had paid the entire amount due to the Respondent- Corporation and handed over the proceedings dated 25.08.2004 and another proceedings dated 17.12.2004 according to which the recovery Officer forwarded the D.D. for depositing in E.S.I. account. As the unit was leased from 25.05.2001 to 24.05.2004 to M/s. Jagadamba Agencies, the Respondent Corporation made correspondence to M/s. Jagadamba Agencies and the Appellant was unaware of the contributions payable to the Respondent- Corporation. On receipt of the notice dated 10.02.2005, a representation was made by the Appellant on 17.02.2005 narrating all the facts and issued a cheque for Rs.12,274/-, however, the representation was not considered. The Appellant submits that they are not liable to any contribution to the Respondent-Corporation and the proceedings dated 10.02.2005 demanding payment of Rs.73,985/- along with interest is illegal and unwarranted.

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6. In response, the Respondent No.1-Corporation filed Counter contending that the Appellant-Industry was registered under the Act with effect from 01.04.1990. As the Appellant-Industry had failed to comply with t