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2017 Supreme(Gau) 19
IN THE HIGH COURT OF GAUHATI, ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH
KALYAN RAI SURANA, J.
The Employees State Insurance Corporation and others – Appellant
Vs.
M/s Sahara India/Sahara India Financial Corporation Ltd. – Respondents
M.F.A. No. 36 of 2007
Decided On : 05-01-2017
For the Appellants : Mr. S. Roy, Ms. B. Sarkar, Mr. T. Roy, Mr. P. Sen
For the Respondent: Mr. SK Borkotody, Mr. SR Rajbongshi
Headnote:
Employees’ State Insurance Act, 1948 – Section 1 (5) , 2 , 82 and 75 - Factory Act, 1948 - 2 (k) - Mines Act, 1952 - Assam State Employees’ Insurance Rules, 1959 - Rule 13 – Employee Insurance - Demand of contribution - Inspection - Appellant has submitted that respondent herein was allotted Code No by appellant and appellant conducted a preliminary inspection where it was recorded that there are six branch offices of respondent within area covered by Municipal Corporation including zonal office wherein about 60-70 workers were found working with about 300-400 agents engaged in promoting/developing their non-banking business - Report was submitted before concerned authorities of Regional Office of appellant - It is stated that as per said inspection report, the respondent did not produce any record for examination when inspector of appellant has visited their premises for inspection - Thereafter, another inspection was carried out on and Calcutta regional office of M/s Sahara India Limited by appellant’s Calcutta office and on such inspection, respondent’s Calcutta office disclosed that 94 numbers of employees were working therein - Competent authority on by letter dated before imposition of adhoc assessment but respondent did not comply with said direction and accordingly recovery action had been initiated against the respondent – Held, Respondent is carrying out business as RNBC - There is an admission in application of respondent filed u/s 75 of said Act before ESI court that it is carrying on business at premises within the jurisdiction of Guwahati as an RNBC with its main function to mobilize deposit from public for purpose of investment under certain prescribed securities and then such deposits are returned to depositor with interest accrued thereon - Therefore, it is apparent that the products of respondent are sold to the depositor by providing service ancillary thereto and therefore establishment of respondent is covered within the definition of ‘shop - Apex Court in the cases referred to above this Court has no hesitation to hold that systematic commercial activities is taking place in the establishment of respondent herein and therefore it is held that the respondent herein falls within the meaning of word ‘shop’ as mentioned in the notification dated issued by Government of Assam under ESI Act - Therefore, it is held that the provisions of ESI Act would be extended to cover the respondent also - Substantial questions of law is answered in favour of the appellant and against the respondent by holding that respondent i.e. Sahara India Financial Corporation Limited with its office in city of though a non-banking financial institution (NBFC) and/or Residuary Non-banking Company (RNBC), it is covered by provisions - Appeal stands allowed.
Heard Mr. S. Dey, learned counsel for the appellant and Mr. SK Borkotoky, learned counsel for the respondent.
2. This appeal u/s 82 of the Employees’ State Insurance Act, 1948 (hereinafter referred to as ‘said Act’) is against the order dated 26.6.06 passed by the Employees Insurance Court, Guwahati in E.S.I. Case No. 1/03. By the said order, the application filed by the respondent herein u/s 75 of the said Act read with Rule 13 of the Assam State Employees’ Insurance Rules, 1959, was allowed.
3. This Court admitted the appeal for hearing by the order dated 19.11.07 on the following substantial question of law:
“Whether M/s Sahara India Limited is covered by the provisions of Employees State Insurance Act, 1948 though it is a non-banking financial institution?”
4. The learned counsel for the appellant has submitted that the respondent herein was allotted Code No.43-3457-101 by the appellant and on 23.3.2000, the appellant conducted a preliminary inspection where it was recorded that there are six branch offices of the respondent within the area covered by the Guwahati Municipal Corporation including the zonal office wherein about 60-70 workers were found working with about 300-400 agents engaged in promoting/developing their non-banking business. The said report was submitted before the concerned authorities of the Regional Office of the appellant. Thereafter, the appellant by the letter No. 43-3457 dated 11.6.01 made a demand of contribution from 23.3.2000 to September, 2000 for which Rs.97,598/- assuming the contribution of Rs.3,575/- per month for 60 numbers of employees @ 6.5%. It is stated that as per the said inspection report, the respondent did not produce any record for examination when the inspector of the appellant has visited their premises for inspection on 23.3.2000. Thereafter, another inspection was carried out on 17.5.01 and Calcutta regional office of M/s Sahara India Limited by the appellant’s Calcutta office and on such inspection, the respondent’s Calcutta office disclosed that 94 numbers of employees were working therein.
5. In the meantime, the respondent was directed to show cause and to appear before the competent authority on 18.6.01 by the letter dated 11.6.01 before imposition of adhoc assessment but the respondent did not comply with the said direction and accordingly recovery action had been initiated against the respondent. The appellant projected that another organization carrying similar business like the respondent herein, namely, Peerless General Insurance Company Limited, which was also a non-banking financial institution was held to be covered within the scope of the Act and, as such, the respondent was also covered by the provision by the provision of the said Act.
6. In this regard, the learned counsel for the appellant has produced a print out of copy of the order dated 13.6.96 passed by the Calcutta High Court obtained from the website, namely, indiakanoon.org, of the case of Regional Director….. -Vs.- Peerless General Finance and ….. reported in 1996 (74) FLR 2253, by which the appeal filed by the ESI was allowed by holding that the writ petitioner/company was also covered within the scope of Sub-Section (5) of Section 1 of the Act.
7. The learned counsel for the appellant relying on the LCR along with their written statement, the appellant had submitted a copy of the order dated 26.11.96 passed by the Hon’ble Supreme Court in SLP (Civil) No.21806/1996 which was from the judgment and order dated 13.6.96 in Appeal No. 1001/93 of the High Court of Calcutta whereby the said SLP was dismissed.
8. The appellant by filing an additional affidavit on 17.11.16 produced a copy of the notification dated 22.7.75 bearing No. GLR.385/74/56 dated 22.7.75 issued by the Department of Labour, Govt. of Assam, Guwahati and submits that the establishment of the respondent was clearly covered by the ESI Act as because under the said notification, the town of Guwahati in the district of Kamrup (und
