Back
2019 Supreme(Raj) 984
IN THE HIGH COURT OF RAJASTHAN
Pushpendra Singh Bhati, J.
Rajasthan Patrika Pvt Ltd Jodhpur - Appellant
Vs.
Regional Derector, Employees State Ins C. - Respondent
Civil Miscellaneous Appeal No. 184 of 1991, 292 of 1989, 183 of 1991
Decided On : 16-09-2019
Shlendra Kala, Adv., Anuj Kala, Adv., R.K. Soni, Adv., Mridul Jain, Adv., Sanjay Mathur, Adv.
The coverage of employees under the ESI Act depends on the nature of their work, whether it is directly connected to the establishment's operations and under the supervision of the principal employer.
Headnote:
ESI ACT - COVERAGE OF EMPLOYEES - INTERPRETATION OF SECTION 2(9) - EMPLOYEES' STATE INSURANCE ACT, 1948 - KEY LEGAL PRINCIPLE: The coverage of employees under the ESI Act depends on the nature of their work, whether it is directly connected to the establishment's operations and under the supervision of the principal employer.
Fact of the Case:
The appellant, a media house, challenged the demand raised by the ESI authorities for contributions on certain payments made to various individuals and entities. The disputed payments included amounts paid to security guards, whitewashing contractors, building repair contractors, fitters, composing and proofreading contractors, and maintenance and shifting contractors.
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 individuals and entities in question. It considered the extent of supervision exercised by the appellant over these individuals and entities and whether their work was directly connected to the appellant's operations.
Issues: 1. Whether the security guards, whitewashing contractors, building repair contractors, fitters, composing and proofreading contractors, and maintenance and shifting contractors were 'employees' within the meaning of Section 2(9) of the ESI Act? 2. Whether the appellant was liable to pay ESI contributions on the payments made to these individuals and entities?
Ratio Decidendi: The court held that the security guards and composing and proofreading contractors were 'employees' within the meaning of Section 2(9) of the ESI Act because their work was directly connected to the appellant's operations and was under the appellant's supervision. The court found that the whitewashing contractors, building repair contractors, fitters, and maintenance and shifting contractors were not 'employees' because their work was not directly connected to the appellant's operations or was not under the appellant's supervision.
Final Decision: The court allowed the appeals in part and set aside the ESI authorities' demand for contributions on the payments made to the whitewashing contractors, building repair contractors, fitters, and maintenance and shifting contractors. The court upheld the demand for contributions on the payments made to the security guards and composing and proofreading contractors.
JUDGMENT :
Pushpendra Singh Bhati, J.
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 reparis 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 whichis 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 reparis.
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 n 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 Rikshah 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, (1992) AIR SC 573; Employee - Who is - Employment through immediate employer - Establishment of employer-employee relationship between principal employer and employees appointed by immediate employer - Determination - Criteria - Supervision by principal employer or his
