The court affirmed that separate operational units can be deemed branches of a single entity based on financial and managerial integration, despite having distinct registrations.

JUDGMENT :

1. This Civil Miscellaneous Appeal has been filed by the appellant, challenging the judgment and decree passed by the ESI Court (Labour Court), Madurai, in E.S.I.O.P.No.26 of 2012 dated 22.01.2022.

2. For the sake of convenience, the parties are arrayed herein as per the ranking in E.S.I.O.P.No.26 of 2012.

3. The petitioner therein was the Adi Sankara Spinning Mills Private Limited, who is the respondent herein. The respondent therein is the appellant herein. The said E.S.I.O.P. was laid by Adisankara Spinning Mills Pvt. Ltd., challenging the order passed by the Sub Regional Office (Madurai), Employees' State Insurance Corporation, under Section 45A of the ESI Act, 1948, as against the petitioner.

4. The crux of the order was with respect to directing Adisankara Spinning Mills Pvt. Ltd., E.S.I. Code No.57-00-00-047751-000-0699, situated at Dindigul, covered under Employees's State Insurance Act, 1948, were required to pay the contribution in accordance with Section 40 of the said Act read with Regulations 29 and 31 of the Employees's State Insurance (General) Regulations, 1950, framed under the Act. Since the employer failed to pay contribution as required by law, notice was issued to the Principal employer by the ESI Office, vide letter No.57-00-00-047768-000-0106, dated 30.12.2009, to show cause notice within 15 days as to why contribution of Rs.6,54,277/- for the period from 04.02.2006 to 30.09.2007, be not recovered from the employer. ESI Code with respect to Adisankara Spinning Mills (Knitting Division) is 57-47768-106. The Deputy Director of the Sub Regional Office in the aforesaid order made it clear that Adisankara Spinning Mills Pvt. Ltd., and Adisankara Spinning Mills (Knitting Division) having availed separate ESI Codes and separate factory registration and licence number, i.e., Adisankara Spinning Mills (Knitting Division) not being a party in the case before this Court in W.P.No.24875 of 2007, dated 08.07.2008, cannot claim to extent the benefit of the said order to the Knitting Division as well. It was also mentioned that the registered office of Adisankara Spinning Mills Pvt. Ltd., is situated at Ottakanpatti, Vedachendur, whereas the registered office, Knitting Division is situated at Tiruppur. Likewise, the unit of Adisankara Spinning Mills Pvt. Ltd., was situated at Vedachendur and the unit of Adisankara Spinning Mills (Knitting Division) is at Kottaiyur, Agaram Village, Thadicombu, Dindigul District, which is 6 km away from Spinning Mills. On that basis, it was made clear in the aforesaid order under Section 47A of the ESI Act, the Court judgment dated 08.07.2008, was not applicable to the Knitting Division of the Adisankara Spinning Mills, which has a separate ESI Code number. Challenging the same, ESI OP was laid by the Adisankara Spinning Mills before the Labour Court, Madurai.

5. No witness was examined on either side. However, Ex.P1 to Ex.P11 were marked by the Labour Court. On the basis of the arguments on either parties and materials available on record, the Labour Court came to conclude that M/s. Adisankara Spinning Mills (Knitting Division) is not separate entity and the same is a branch unit. The impugned order under Section 45A dated 20.12.2012 is liable to be set aside. The petitioner is entitled to get the benefit of order passed by this Court dated 08.07.2008. Challenging the same, ESI is before me.

6. The learned counsel appearing for the appellant categorically submitted that since M/s.Adisankara Spinning Mills and M/s.Adisankara Spinning Mills (Knitting Division) possess separate ESI Code and separate factory licence and factum that the units of Adisankara Spinning Mills as well as Knitting Division are also separately situated in different destinations, the learned Labour Court ought not to have negated that the same are separate entities and as such, the Knitting Division not having preferred any Writ Petition before this Court, challenging the order under Section 45A of the Act, clai