IMPORTANT POINT
Self-employed individuals cannot be registered as employees under the Employees' State Insurance Act, necessitating a genuine employer-employee relationship for eligibility.

JUDGMENT :

SYAM KUMAR V.M., J.

These two appeals challenge the same judgment dated 16.02.2023 in I.C. No. 35 of 2021 of the Employees Insurance Court (EI Court), Alappuzha. Since the parties and the issues to be considered are the same in the both appeals, they are heard and disposed of together. Parties are hereinafter referred to as per their status in the original proceedings before the EI Court.

2. Ins. App No. 12 of 2023 is filed by the Secretary of the Kerala Electrical Wiremen and Supervisors Association. He challenges the judgment of the EI Court to the extent that it declared the members of the said Association who had been shown as employees cannot be registered under the Employees' State Insurance Act ('ESI Act' for short) as they are self-employed persons. On the other hand, Ins. App No. 2 of 2024 has been filed by the ESI Corporation challenging the judgment to the extent that it revoked the Corporation's cancellation of the applicant Association's ESI Code number.

3. The contentions of the applicant in brief are as follows:

Applicant Association is registered as a charitable society under the Travancore-Cochin Literary and Charitable Societies Act, 1955. It undertakes various electrical works at the premises of its customers, which include Government organisations and private individuals. For this purpose, the applicant used to employ qualified electricians. Since the members of the applicant are themselves qualified electricians, some of them undertake works allotted to the applicant. Applicant has a PAN number and its membership exceeds the threshold required for registration as an establishment under the Employees State Insurance Act, 1948 (hereinafter referred to as 'the ESI Act'). Hence, the applicant preferred an online application through the ESIC portal for registration under the ESI Act. Upon the uploading of online application, the applicant was allotted an ESI code number. Another association with the same name as the applicant then approached the District Court Ernakulam filing O.S. No. 11 of 2021 seeking an injunction against the registration of the applicant under the ESI Act. While so, on 16.01.2019, a Social Security Officer (SSO) of the 1^st and 2^nd Opposite parties, visited the premises and conducted an inspection of the records. The applicant was instructed by the SSO to remit the arrears of contribution and the applicant complied with the same by submitting copies of the audited balance sheets and Profit and Loss Account duly certified by the Chartered Accountant. In the year 2018, the applicant noted that its ESIC portal had been temporarily blocked by the 1^st and 2^nd opposite parties. Since the applicant was informed that the blockage was due to non- production of the registration certificate as envisaged under the Kerala Shops and Commercial Establishments Act, the same was obtained and duly produced. The applicant had thus complied with all directions issued by respondents 1 and 2 from time to time and had remitted all contributions, interests and other demands. Hence the applicant requested the 1^st and 2^nd opposite parties to restore the status of the applicant’s portal, so as to enable them to comply with the requirements with respect to all its employees. The said request was not however acceded to and two more inspections by the SSO were carried out on the premises of the applicant on 01/02/2021 and 03/02/2021. The applicant had during the same, explained to the SSOs that it had employees of its own who undertake work on its behalf and the said works were executed under the direct supervision of the members of the applicant. The details of the work executed by each employee of the applicant and the respective amounts billed were being properly accounted. The respective receipts were shown to the SSOs. It is however admitted by the applicant that some of its employees also happened to be its members. This is only because the members of the applicant are primarily qualified licenced electricia