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.

JUDGMENT :

PRAVIN S. PATIL , J.

Heard.

2. By way of present appeal, the challenge is to the judgment and order passed by the Employees Insurance Court (Industrial Court) Amravati dated 04.02.2011 passed in Employees State Insurance Case No.1/2000, whereby it is declared that the establishment of the respondent is not covered under the provisions of the Employees' State Insurance Act, 1948 (in short ‘The ESI Act”) and, therefore, they are not responsible and liable to pay any contribution required under the provisions of ESI Act.

3. The appellant Employees State Insurance Corporation has challenged the said judgment and order of the Insurance Court on the ground that learned Insurance Court failed to consider the specific material in terms of Visit Note dated 23.10.1997, which was proved by the appellant Corporation, whereby it is clear that the employees working in the respondent unit were more than 10 persons and, therefore, the unit run by the respondent comes under the definition of ‘Factory’. Hence, on this count, preferred the present appeal before this Court.

4. This Court after hearing the appellant, by order dated 28.06.2011, admitted the appeal by framing the following substantial questions of law:

“1. Whether the learned lower court is justified in rejecting the documentary evidence in the visit note dated 23.10.1997 at ex.49 which was counter signed by the partner of the Respondent where in the number of employees mentioned are more than 10(7+4) and they were found working on 23.10.1997 by the Inspector?

2. Whether the learned lower court is justified in not considering the Inspection Report dated 23.10.1997 Ex.50 where in also at number of employees are shown is 13 (7+4+2)?

3. Whether the learned lower Court is justified in holding that the establishment of the Respondent: is not covered under the provisions of the Act and they are not liable to pay the contributions when it is proved by documentary evidence that 10 or more employees were engaged for wages on 23.10.1997 (Ex.49 & 50)?”

5. In light of questions of law framed by this Court, it will be necessary to record certain facts of the present matter, which are not disputed. The respondent is a partnership firm, duly registered under the provisions of law in the name and style of “M/s Rani Sati Industries”. According to the respondents, since 1993, they were carrying out the business of the firm. According to them, the firm deals in manufacturing of spun pipes, cement allies and other cement products. According to them, since the business was started, there were never more than 10 employees engaged in the services of the firm. Hence, the respondent firm does not come under the definition of ‘Factory’ within the meaning of the Factories Act or any other Act in force.

6. In the background of this submission, the order of the appellant dated 25.11.1999 was challenged before the Insurance Court. In response to the notices issued by the Insurance Court, the appellant Insurance Company appeared in the matter and filed its specific reply. In there reply, it is specifically stated that the inspector of the Corporation namely Shri W.P. Vaidya visited the factory of the petitioner on 23.10.1997 and found 11 employees working on wages i.e. seven regular employees plus 4 Hamals for loading and unloading of pipes and trucks. The names and signatures of these seven employees were also noted down in the visit note and one Shri Ashish Agrawal partner on behalf of the respondent also countersigned the visit note in token and correctness of the contents therein. On the basis of this visit note, the preliminary inspection report was prepared, wherein it is recorded that seven persons wer