The main legal point established in the judgment is the determination of establishment coverage under the ESI Act and the liability of the principal and immediate employers for payment of contribution.

1. This civil miscellaneous appeal has been preferred against Employees State Insurance Corporation against the order of the Principal Judge, City Civil Court dated 04.04.1997 made in ESIOP No.35/1991.

2. The facts leading to the filing of the civil miscellaneous appeal, in brief, are stated as under:-

a) The appellant, namely Western Transport Agency, is a firm of transport contractors engaged in undertaking transportation of bare chassis manufactured by M/s.Ashok Leyland Limited, Madras from their units at Ennore, Hozur, Poonamallee Yard and other places to different destinations as specified by Ashok Leyland Limited. In order to carry out its activities, the appellant engages its own staff, convoy drivers, parking drivers and casual drivers. As per the contention of the appellant, casual drivers are engaged on contract basis for each assignment of transportation and their accounts are settled at the completion of each assignment. Excepting transporting the chassis of Ashok Leyland Limited, the appellant does not have any other business activity. The branch office of the appellant functions at No.9C, Tiruvottiyur High Road, Chennai - 600 019 in which one branch manager, one yard supervisor, seven clerks, one office boy, five watchman and thirty six permanent drivers comprising convoy drivers and parking drivers are employed.

b) The appellant undertakes transportation of chassis only for Ashok Leyland Limited and it does not render any service to anyone else in its Madras branch office. While so, the Regional Director of ESI Corporation, by his letter dated 210. 1989, informed the appellant that the Madras branch office of the appellant was an establishment which would come under Section 1(5) of the ESI Act, 1948. Accordingly, Code No.51-55068-106 was allotted to the Madras branch office of the appellant firm, directing the appellant to submit the necessary returns in compliance with the provisions of the ESI Act, 1948 and regulations. A reply was sent to the Regional Director, ESI Corporation on 211. 1989 contending that the Madras branch office of the appellant firm would fall neither under the definition of motor transport undertakings nor under the definition of hotel, restaurant, shop, cinema and newspaper establishment. Thereafter, the Deputy Regional Director of ESI Corporation sent a communication dated 212. 1989 stating that the Madras branch office of the appellant concern would come under the definition of shops, pursuant to which the appellant sent a further representation dated 05.01.1990 contending that no commodity or service was being sold to the public for a price in the Madras branch office of the appellant concerned to bring it under the definition of shops. Thereafter, the Deputy Regional Director of ESI Corporation sent a communication on 24.02.1990 stating that the appellant concern in its branch office at Chennai was covered by Section 1(5) of the ESI Act, 1948 as it was an immediate employer attending to transportation of chassis manufactured by Ashok Leyland Limited, Chennai which was covered as a factory under ESI Act, 1948 and bound to pay contribution in respect of its direct employees and employees engaged through the appellant as their immediate employer. A reply was also sent by the appellant for the same, pursuant to which the Regional Director of ESI Corporation passed an order in his proceedings No.51/INS1/51-55068-106 dated 10.04.1900 assessing the contribution payable by the appellant for the period from 01.01.1986 to 312. 1989 at Rs.1,62,307/-and informed him that if the said amount was not paid and declaration forms were not submitted, appellant would be prosecuted for an offence punishable under Section 85 read with 85(A) and 85(C) of the Employees State Insurance Act which might result in a punishment with imprisonment for a term that may extend to 6 months subject to a mandatory punishment of 3 months of imprisonment and also fine.

c) The Deputy Regional Director, ESI Corpor