The main legal point established in the judgment is the coverage of the establishment under the Employees State Insurance Act and the justification for invoking Section 45A of the Act due to the appellant's failure to provide necessary particulars and the admission that the establishment employed more than 20 employees on a particular day.

MOOL CHAND GARG, J.

1. This appeal has been filed u/s 82 of the Employees State Insurance Act, 1948 (hereinafter referred to as "the Act") against the judgment dated 7.4.2001 passed by the ESI court, Delhi in ESI Case No. 15/90, whereby the learned ESI court has dismissed the petition filed by the appellant u/s 75 of the Act.

2. Briefly stating, the facts of this case are that the appellant, a Limited company, filed a petition before the ESI court through its Director and authorized representative Sh. K.J. Gandhi on the allegations that the appellant is registered as an establishment under the Delhi Shops and Establishment Act and is providing professional services as their Engineers visit their clients' factories and establishments to advise and guide them about the machine tools, inspection equipments and other engineering equipments which the clients should acquire for the use of manufacturing the goods in their factories/ establishments.

3. The respondents alleged that an Inspector of the respondent-corporation visited the appellant-company in the month of October, 1988 and collected some information about the appellant-company and then sent a letter dated 12.11.1988 informing the appellants that on the basis of the inspection conducted by the Inspector on 6.10.1988 the establishment of the appellant-company was covered under the Act by virtue of the Notification dated 30.09.1988 which gives effect to the coverage of the shops also. The appellants were called upon to furnish complete and correct particulars in Form-01 within 15 days from the date of issue of the impugned order.

4. It is the case of the appellants that their representative visited the office of the respondent and explained their case that the appellant was not a shop and as such, it was not covered by the said notification. Thereafter, the respondent called upon the appellants to show cause as to why the assessment of the establishment of the appellants should not be made u/s 45A of the Act for the period from 2.10.1988 to 30.9.1988. It was submitted that explanation was furnished by the appellants to the respondent stating that they were not covered under the Act and that invocation of Section 45A of the Act was unwarranted. It was also submitted that there were less than 20 employees and that the establishment of the appellant was not involved in any manufacturing activity.

5. However, the pleas taken by the appellants were not accepted by the respondent. They contested the matter.

6. The ESI court framed the following issues on the pleadings of the parties:

(i) Whether the demand raised by the respondent vide letter dated 8.3.90 is illegal and requires to be quashed as alleged by the petitioner in his petition. OPP

(ii) Relief.

7. The ESI court also framed the following additional issue on 30.4.1998:

Whether the factory in suit is coverable under the ESI Scheme and whether Section 45A of ESI Act could be invoked without the coverage of the factory.

8. Another additional issue was also framed on 03.01.2001 to the following effect:

Whether the employees getting salary beyond the limit of Rs. 1600/- per month have been counted for the purpose of coverage of the petitioner under the ESI Act.

9. Thereafter, the parties led their evidence. The appellants examined PW-1 Sh. Subhash Gupta, who is an account officer, and PW-2 Sh. R.K. Gupta, Manager (Finance). On the other hand, respondents have examined RW-1 Sh. Raj Kanwal, Deputy Director and one Inspector who conducted the inspection. The ESI Court however had not agreed with the appellant and dismissed their petition u/s 75 of the Act.

10. On the question as to whether the establishment of the appellant was not covered under the Act, relying upon the Notification dated 30.09.1988 the Court held that the establishment of the appellants was covered within the definition of the shop. With respect to the objections raised that the appellants was not doing manufacturing activities and the employees who were employed by