THE HON’BLE SHRI JUSTICE ANIL KUMAR JUKANTI CIVIL MISCELLANEOUS APPEAL No.206 OF 2014

JUDGMENT:

Aggrieved by order, dated 03.08.2010, in E.I.C.No.81 of 2002 passed by the Employees Insurance Court and Chairman, Industrial Tribunal-I at Hyderabad, the present Civil Miscellaneous Appeal is filed.

2. Inspite of notice being served on respondent, there is no appearance on behalf of respondent. This Court appointed Ms. B.Neharika Varma as amicus curiae to assist the Court.

3. Heard Mr. B.G.Ravindra Reddy, learned counsel for appellants, and Ms. B.Neharika Varma, learned amicus curiae appearing for respondent.

4. Tribunal by its order, dated 03.08.2010, in E.I.C.No.81 of 2002, held that “the proceedings directing the petitioner to pay contributions of Rs.66,182/- along with interest of Rs.9,195/- as legally not valid, and the petition filed by the petitioner is maintainable.”

5. The substantial questions of law for consideration are:

a) Whether any material evidence has been ignored by the Tribunal resulting in an erroneous conclusion.

b) Whether the Tribunal was right in arriving at the conclusion on the basis of evidence before it.

c) Whether Hamalies are employees within the meaning of Section 2(p) of the Employees’ State Insurance Act, 1948 (for short ‘ESI Act’) and whether the factory is covered under ESI Act.

6. Respondent is a cold storage unit situated at Enumamula (15 kms from Warangal). The unit stores agricultural products like chillies, tamarind etc., before the products are sold in the market. Unit commenced its operations in March, 1999. It is averred that it is a small unit employing not more than 6 to 7 employees. Further averred that only rent is charged from the farmers and unit is not responsible for loading and unloading the agricultural products. That they never engaged any labour and the labour brought for purpose of loading and unloading are not their employees and they are brought by the parties (farmers). [No proof/evidence is adduced by the respondent unit to demonstrate that labour was brought by farmers].

7. ESI Inspector visited the unit on 15.05.2000, at the time of visit, Inspector found that there were 27 persons engaged and noted their names, signatures and thumb impressions were taken on a paper (Ex.R1). Ex.R2 is the visit note. It is observed from the visit note that one B.Srinivas Reddy, Manager, and Gandham Sudhakar were present, ESI Inspector had taken their signatures also. Ex.R3 is the preliminary inspection report, dated 15.05.2000. Under column No.8 of Ex.R3, it is recorded as “No records were produced by the employer. I obtained names and signatures of 27 employees are enclosed”. Under column Nos.11 and 12, it is recorded that “No records produced by the employer”. Column No.13 reflects name of Shri B.Srinivas Reddy as manager. Under column No.15, it is reflected as follows “As it is a cold storage use power for the storage and engaged 27 persons for wagers as on the date of my visit which attracts the provisions of ESI Act under Sections 2(12) I recommend this coverage of the visit from 15.05.2000 provisionally. The R.O. is requested to allot a code number and advise the employer to comply under the Act”.

8. Ex.R4 is the annexure “A” dated 25.06.2001, seeking details of records to be produced i.e., all attendance registers, all wages and salary registers, accounts books, ledgers, cash books, day books, journals, subsidiary books of accounts along with vouchers, other documents and all registers to be maintained under ESI (General) Regulations, such as Form-7, Accident Register, Inspection Books and the said annexure is signed by B.Srinivas Reddy. Ex.R5 is an enquiry report. Ex.R6 is an opportunity provided for production of records addressed to one M.Ratna Reddy, Principal Employer, Kakatiya Cold Storage (annexure-B) dated 18.08.2001, refused to be acknowledged at the residence. Ex.R7 is addressed to unit informing the dues i.e., amount of contribution payable from 15.05.2000 to 31.03.2001, a sum o