JUDGMENT

This Civil Miscellaneous Appeal has been filed to set aside the order, dated 02.08.2021 of the Employees State Insurance Court (Labour Court)

Madurai.

2.The appellant herein, as petitioner, has filed a petition under Section

75(1) of the ESI Act, 1948 to set aside the impugned order under Section 68 of ESI Act in No.57-R/13/12(A)/Sec.68/2006-DB, dated 09.04.2007 directing the petitioner to pay Rs.2,07,245/- with future interest and to grant stay order against the said order.

3. (i) It is mentioned in the petition that the petitioner was running a fire works manufacturing unit manufacturing the crackers manually without the aid of power. The Inspector of respondent ESI Corporation of Sivakasi Taluk has visited the petitioner's unit on 14.07.2004 and found that there are 20 employees being employed from the month of April 2004. The petitioner is prompt in remitting the contribution from the date of coverage i.e., from 4/2004. While so, the petitioner's unit met with an accident and one employee namely V.Gurusamy died. In view of the coverage of the ESI Act, the respondent commenced the payment of the dependent benefits to the legal heirs of the deceased by its proceedings dated 10.01.2006 which was also issued to the petitioner. The respondent continued to pay the dependent benefits to the legal heirs of the deceased.

(ii) Meanwhile, the respondent has issued an order u/s.45(A) of the ESI Act, dated 10.10.2005 claiming contribution of Rs.74,360/- for the period from 12/2002 to 3/2004. The respondent has arrived the contribution on adhoc basis taking average wage of Rs.3,575/- per month per employee for the period from 12/2002 to 3/2004. As per the inspection report, the respondent has taken a new stand as if the area is covered with effect from 1.12.2002 itself, there is collusion between some of the ESI Corporation Officials. The petitioner's factory was functioning since 1988 and more than 23 employees are being employed as early as in the year 1993 and the petitioner failed to produce muster role and the wages register from 12/2002 to 3/2004, the documents relating to cancellation of the registration of the petitioner unit with effect from 10.03.2003 and opened only in the year 2004. More so, the respondent has determined the contribution for the closure period. Aggrieved by that, the petitioner has filed earlier ESIOP.No.79/2005 and obtained interim stay and the coverage of the ESI Act to the relevant period is in dispute.

(iii)In such situation, the respondent has issued an order under Section

68 of the ESI Act 1948 wherein he took the stand that since the factory was not registered under the ESI Act and the deceased worker is not covered under the ESI Act, the petitioner in collusion with some ESIC officials registered the factory thereafter under the Act after the occurrence of the accident and obtained the code number for the coverage of the Act with effect from 01.04.2004 and the records are created and produced and that the factory should have been covered under the ESI Act with effect from 01.12.2002. As it was a Factory, as per the Factories Act and for the intention to get the dependent benefits provided under the ESI Act in whatsoever manner and hence directed to remit the entire amount of compensation of Rs. 2,07,245/- payable to the dependent of the deceased employee from the petitioner. The respondent failed to consider the fact that it is the practise of the respondent to inspect the units under the areas covered under the Act and based on the inspection report of the Inspector of the ESIC and direct for the coverage of the Act by allotting the code number and it is the routine procedure adopted by the respondent and on the other hand only when liability for payment of dependent benefit arose, in order to collect the entire dependent benefits from the petitioner, the respondent come forward with the false information to pass order u/s.68 of the ESI Act. The said order is without any basis and illegal and hen