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2019 Supreme(Raj) 599
IN THE HIGH COURT OF RAJASTHAN AT JODHPUR
Pushpendra Singh Bhati, J.
Rajasthan Patrika Pvt. Ltd. - Appellants
Vs.
Regional Derector, Employees State Ins.c. - Respondent
S.B. Civil Misc. Appeal Nos. 184 of 1991, 292 of 1989 and 183 of 1991
Decided On : 16-09-2019
For the Appellant : Shlendra Kala and Anuj Kala
For the Respondents: R.K. Soni, Mridul Jain and Sanjay Mathur
The coverage of employees under the ESI Act depends on whether they are directly employed by the principal employer, employed by an immediate employer under the supervision of the principal employer, or whose services are temporarily lent or let on hire to the principal employer.
Headnote:
ESI ACT - COVERAGE OF EMPLOYEES - INTERPRETATION OF SECTION 2(9) - EMPLOYEES' STATE INSURANCE ACT, 1948 - WHETHER THE EMPLOYER IS REQUIRED TO COVER CERTAIN EMPLOYEES/SERVICES FOR THE PURPOSES OF THE ACT - KEY LEGAL PROVISIONS, INTERPRETATIONS, AND THEIR INFLUENCE ON THE COURT'S DECISION.
Fact of the Case:
The dispute arose from demands raised by the ESI on certain issues, including payments to employees of Goliat Detectives, labor charges for whitewashing, building repairs, fitting charges, composing and proofreading, maintenance of machinery, general repairs, carriage and forwarding, delivery charges, graining works, packing work, and composing and proofreading work on contract basis. The appellant, Rajasthan Patrika Private Limited, contested these demands, arguing that the employees in question were not covered under the ESI Act.
Finding of the Court:
The court analyzed the definition of 'employee' under Section 2(9) of the ESI Act and examined the nature of the work performed by the employees in each category. It considered relevant precedent laws and concluded that the coverage of employees under the Act depends on whether they are directly employed by the principal employer, employed by an immediate employer under the supervision of the principal employer, or whose services are temporarily lent or let on hire to the principal employer.
Issues: 1. Whether the security guards provided by Goliat Detectives are employees of the appellant and covered under the ESI Act. 2. Whether labor charges for whitewashing, building repairs, fitting charges, composing and proofreading, maintenance of machinery, general repairs, carriage and forwarding, delivery charges, graining works, packing work, and composing and proofreading work on contract basis are covered under the ESI Act.
Ratio Decidendi: The court held that the security guards provided by Goliat Detectives are employees of the appellant and covered under the ESI Act because they are directly employed by the appellant and their work is directly related to the administration of the establishment. The court also held that labor charges for whitewashing, building repairs, fitting charges, composing and proofreading, maintenance of machinery, carriage and forwarding, delivery charges, graining works, packing work, and composing and proofreading work on contract basis are covered under the ESI Act because they are incidental to the principal work of the appellant and are done under its direct supervision.
Final Decision: The court allowed the appeals in part and disposed of the stay petitions. It directed the appellant to pay ESI contributions for the employees covered under the Act, with a maximum interest of 6% per annum.
ORDER :
Pushpendra Singh Bhati, J.
1. The question arises in these three civil misc. appeals is whether the employer M/s. Rajasthan Patrika Private Limited is required to cover its certain employees/services for the purposes of the Employees' State Insurance Act, 1948. The demand raised by the ESI on certain issues has been refuted by the appellant. The demands raised in pursuance of the communications dated 05.10.1984 and 03.12.1985 reads as follows:-
"(i) & (ii): Rs. 7,317/- and Rs. 9,000/-: Payment to the Employees of Goliat Detectives.
The security guards who are already employees of Goliat detective, the company charge remuneration for providing guard for security of the office of the Patrika. They are employees of Goliat Detective and their salaries are paid by Goliat Detectives and not by the appellant.
(iii) Rs. 475/- : Labour charges paid for white washing etc.
This amount is paid to labour who are engaged for white washing in which costs of material like - kali, Chuna, colour and Brush etc. are included for doing white-washing in the building.
(iv) Rs. 8455/-: For building repairs.
This amount is spent on building extensio and repairs inclusive costs of material, like Chuna, Kali, Bazari, Cement, Stone etc. and also the labour charges. The labour provided are not the employees of company but they are engaged for construction purposes whose names are not even known because they are engaged by the Thekedar from the road side every now and then.
(v) Rs. 4304/- : Paid to Fitter.
This amount is paid for fitting of sanitary including the costs of sanitary articles which is got fitted which consists major amount of costs of articles and petty amount for labour.
(vi) Rs. 2901.25 P : Paid for composing and Proof reading.
Whenever necessity arises, some time proof reading and composing job had to be got done from the market and the amount is paid for this work.
(vii) Rs. 15,888.87 P : Maintenance of machinery and shifting etc.
For maintaining of machinery, this amount is spent for consumable articles for replacing of certain instruments in the machine. For such head of items ESI has wrongly levelled."
2. The demand raised in pursuance of the communication dated 06.07.1981 reads as follows:-
"(i) to (vii) were pointed out:-
(I) Rs. 2250/- paid to the persons employed for general repairs.
No regular labour is employed. It is the amount spent on routine repair contingently inclusive the price of material used in repairs.
(ii) Rs. 1300/- : Paid to the persons employed for carriage and forwarding:
This amount is spent for taking bundles to Railway station and Bus station and for loading it in rail and bus, paid to coolies engaged in the spot from time to time.
(iii) Rs. 6485.30 P paid to persons employed for building repairs.
This expenditure includes labour charges engaged or a day or two for petty repairs through the agency of Thekedars. It includes material-Kali, Chuna & cement etc.
(iv) Rs. 115/- paid to the persons employed for delivery. This pertains to Auto rickshaw charges for taking Newspapers and for taking dak charges etc.
(v) Rs. 1379.60 P. paid to persons employed for graining works.
The amount is spent for cutting and cleaning of Aluminium and Iron plates pertaining to the Blocks for printing.
(vi) Rs. 6712.50 P paid to persons employed for packing work.
This amount is paid for the packing of news-paper on the basis of bundles to the contractors.
(vii) Rs. 17767.32 P. paid to persons employed for composing proof reading work on contract basis.
Whenever it is needed this job work is arranged from the market shops."
3. Learned counsel for the appellant has drawn the attention of this Court to certain precedent law, a gist of which reads as follows:-
"C.E.S.C. Limited Etc. Vs. Subhash Chandra Bose reported in AIR 1992 Supreme Court 573;
Employee - Who is - Employment through immediate employer - Establishment of employer-employee relationship between principal employer and employees appointed by immediate employer - Determination - Criteria - Supervisi
