IMPORTANT POINT
The court established that employment status must be supported by concrete evidence, and inferences drawn without such evidence are insufficient to impose liability under the Employees’ State Insurance Act.

JUDGMENT :

1. By the present appeal, the appellant is challenging the judgment and dated 8th June 1999 whereby the ESI Court dismissed the application filed by the appellant under Section 75 of the Employees’ State Insurance Act, 1948 (for short “the ESI Act”) challenging the order dated 17th April 1990 passed by the Employees’ State Insurance Corporation, Pune (for short “the ESIC”) under Section 45-A of the ESI Act. By the impugned order under Section 45-A, the Corporation determined the ESI contributions of the appellant establishment amounting to Rs.23,886/- and the interests thereon to the tune of Rs.4.440/- for the period between November 1977 and December 1985.

2. The facts leading to the filing of the first appeal are briefly summarized as under :

The appellant-establishment carried on the business of the manufacturing of packing boxes, plywood reels, strip drum etcetera. The establishment engaged more than ten employees on wages in the month of February 1986 and thereafter complied with the provisions of ESI Act by paying the contributions. It is the case of the appellant-establishment that they never engaged ten or more persons prior to February 1986 and, as such, their establishment was not liable to be covered under the ESI Act prior to February 1986. In pursuance of inspection carried out by ESI authorities and subsequent exchange of correspondence in regard to the clarification of the factual position, the Corporation determined the contributions for the period between November 1977 and December 1985. A notice was issued to the appellant establishment on 8th August 1988 which was responded to by the appellant. By order dated 17th April 1990 under Section 45-A, the ESI authorities held that the appellant-establishment were employing more than ten employees during the notice period and directed coverage of the appellant-establishment for the notice period. The appeal filed by the appellant under Section 75 of the ESI Act is also dismissed by the ESI Court holding that the appellant-establishment employed more than 10 workers for the notice period. Hence, this appeal.

3. Undisputedly, the whole issue in the matter revolves around two employees viz. Mr. V.P. Sampat and Mr. M.V. Joshi, whether they were the employees of the appellant-establishment during the notice period. In the event this Court holds Mr. V.P. Sampat and Mr. M.V. Joshi as employees of the appellant-establishment, the number of employees in the establishment would be beyond ten and the establishment would be covered by the ESI Act. However, if this Court holds that the above two are not the employees of the establishment during the notice period, then, the establishment would not be covered under the ESI Act.

4. The ESI Court under Section 75 of the ESI Act, on the basis of evidence available before it, held that the aforesaid two persons were the employees of the establishment during the notice period. The ESI Court held that although their names did not reflect in the wage register but were reflected in cash book entries and the same was for the reason of avoiding ESI compliances, as such, the Corporation was entitled to consider them to be the employees of the establishment and accordingly upheld the order under Section 45-A passed by the ESIC covering the appellant-establishment under the ESI Act in the notice period.

5. Challenging the order passed by the ESI Court, the appellant contends that the aforesaid two persons - Mr. V.P. Sampat and Mr. M.V. Joshi, were professionals engaged for maintenance of the accounts and for statutory compliances of the establishment on part time basis and they did not in any way contribute to the affairs of the working of the establishment. The learned counsel for the appellant submits that the finding rendered by the ESI Court is perverse and as such the Question of Law which arises for the consideration of this Court is as under :

“Whether the findings rendered by the ESI Court as regards Mr. V.P. Sampat and Mr. M.V. Jo