IN THE HIGH COURT OF JUDICATURE AT MADRAS
N. MALA, J.
M/s. Sri Paduka Distributors, Rep. by its partner R. Rajagopal, Chennai – Appellant
Versus
The Employees` State Insurance Corporation, Represented by the Regional Director, Chennai & Another – Respondents
C.M.A. No. 660 of 2023 & C.M.P. No. 5605 of 2023
Decided On : 07-07-2023
ESI Act - Jurisdictional Error - G.O.Ms.No.2082 - Section 45-A - Exemption of employees on tour for 7 months or more - [G.O.Ms.No.2082, Labour Department dated 29.08.1983, Section 45-A] - The court discussed the applicability of G.O.Ms.No.2082, Labour Department dated 29.08.1983, which exempts employees on tour for 7 months or more from the operation of the E.S.I. Act. The court found that the appellant was entitled to the benefit of the G.O. and set aside the order under appeal.
Fact of the Case:
The appellant, a Distributor, engaged employees across the country for its business. An inspection led to a show cause notice for E.S.I. Act contribution. The appellant challenged the order under Section 45-A of the E.S.I. Act, claiming exemption under G.O.Ms.No.2082, Labour Department dated 29.08.1983.
Finding of the Court:
The court found that the appellant was entitled to the benefit of G.O.Ms.No.2082, Labour Department dated 29.08.1983, and set aside the order under appeal.
Issues: The main issue was whether the benefit of G.O.Ms.No.2082, Labour Department dated 29.08.1983, could be availed by the appellant.
Ratio Decidendi: The court held that the appellant was entitled to the benefit of the G.O. exempting employees on tour for 7 months or more from the operation of the E.S.I. Act.
Final Decision: The appeal was allowed, and the order under appeal was set aside. No order as to costs.
JUDGMENT
(Prayer: Civil Miscellaneous Appeal is filed under Section 82 of the Employees'' State Insurance Act, praying to set aside the order and decree of the Employees Insurance Court (Principal Labour Court) Chennai dated 17.08.2021 in EIOP No.57 of 2002.)
1. This Civil Miscellaneous Appeal has been filed to set aside the order and decree of the Employees Insurance Court (Principal Labour Court), Chennai dated 17.08.2021 in EIOP No.57 of 2002.
2. The above appeal was admitted on the following questions of law.
"1. Has not the ESI Court erred in overlooking the plea of jurisdiction raised by the Petitioner, in respect of the employees whose Headquarters are at different regions.
2. Whether the ESI Court was justified in concluding that the demand of the Regional Office, ESI Corporation for employees engaged outside the State of Tamil Nadu was proper.
3. Whether ESI Court was justified in overlooking the evidence of RW-1, who has candidly admitted that the demand, in so far as employees employed outside the state of Tamil Nadu are concerned, cannot be made."
3. The appellant being a Distributor, was engaged in distribution and sale of consumers products. The appellant, for the purpose of their business, engaged persons across the Country to promote their products from their respective Regions. Though the employees were working across the Country, a consolidated account of entire business of the appellant, was maintained at Chennai. The head-quarters of the employees who were engaged in distribution of sales of consumers products, were in the respective States/Region to which they were appointed. The employees were not required to come to Chennai for a major part, i.e. for more than 7 months in a year, as they were away in the respective regions assigned to them.
4. While so, an inspection was conducted by the officials of the first respondent, based on which a show cause notice was issued in respect of contribution for the period of 6/1993 to 9/2001 under the E.S.I Act. The appellant/Distributor through their representatives, attended the hearing on 29.04.2002 and though the representative of the appellant was informed of the date of hearing, the appellant was surprised to receive order dated 19.06.2002 under Section 45-A of the E.S.I Act, claiming a contribution of Rs.12,17,482/- towards the wages calculated at Rs.1,650/- per month for 71 employees.
5. According to the appellant, 71 persons for whom contribution was claimed, were located in different parts of the Country and hence, the appellant was entitled to the benefit of the G.O. passed by the Government of Tamil Nadu in G.O.Ms.No.2082, Labour Department dated 29.08.1983. The appellant therefore filed E.I.O.P.No.57 of 2002 challenging the said order passed under Section 45-A of the E.S.I Act.
6. The respondents/Corporation contested the said E.I.O.P and the E.S.I. Court, on full trial, remanded the matter back to the respondents/ Corporation for fresh consideration of the documents filed by the appellant, and with further direction to complete the enquiry within a period of 3 months therefrom.
7. Aggrieved by the above said order of remand, the appellant preferred an appeal in C.M.A.No.71 of 2017 before this Court under Section 82(2) of E.S.I Act. This Court, vide judgment dated 22.02.2021, set aside the remand order passed by the E.S.I Court and directed the E.S.I. Court to dispose of the matter, on merits, within a period of two months from the date of receipt of a copy of the judgment.
8. On remand, the E.S.I. Court, passed the impugned order dated 17.08.2021, and questioning the said order passed by the E.S.I. Court on remand, the present appeal is filed by the appellant/Distributor.
Brief facts:
9. The appellant is a Distributor and its employees were engaged in its business across the Country, and were away from the factory/ establishment of the appellant for more than 7 months in a year. According to the appellant''s G.O.Ms.No.2082 dat
The central legal point established in the judgment is the entitlement of the appellant to the benefit of G.O.Ms.No.2082, Labour Department dated 29.08.1983, exempting employees on tour for 7 months ....
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Cooperation with authorities and production of genuine documents are essential in disputing establishment coverage under the E.S.I. Act.
The court established that employment status must be supported by concrete evidence, and inferences drawn without such evidence are insufficient to impose liability under the Employees’ State Insuran....
The functional integrality of the establishments justified their clubbing and coverage under the Employees State Insurance Act, 1948.
The main legal point established in the judgment is the requirement for approaching the ESI Court for adjudication of disputes under the Employees State Insurance Act, 1948.
The Act's implementation cannot be postponed due to the non-availability of a full-fledged hospital, and the rejection of representation seeking a full-fledged hospital did not violate the principles....
The voluntary contribution under the EPF Act does not automatically encompass an establishment under the ESI Act, and the Act cannot be extended to establishments without a notification from the appr....
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