THE HON’BLE SHRI JUSTICE ANIL KUMAR JUKANTI CIVIL MISCELLANEOUS APPEAL No.739 OF 2014

JUDGMENT:

This Civil Miscellaneous Appeal is filed aggrieved by the order dated 11.10.2013 in E.I.C.No.20 of 2008 on the file of the Employees Insurance Court and Chairman Industrial Tribunal-I (for short, ‘the Tribunal’), Hyderabad.

2. Heard Mr. V. Raghuveer, learned counsel representing Ms. K. Udaya Sri, learned counsel for appellant, and Mr. K. Hari Kishan, learned counsel representing Mr. P. Rajasekhar, learned counsel for respondent Nos.1 and

2.

3. Appellant herein is petitioner, respondents are respondents before the Industrial Tribunal. Appellant, a Hotel, started in January, 2005, claims that it employed 18 persons and at no point of time, number of employees were more than 18. That four (4) security personnel were deployed by M/s. United Security Limited, (it was issued a ISI Code No.52-23816-101). A small portion of the Hotel was given on lease to M/s. Pride of Hyderabad for running a restaurant, the case of appellant is, it is no way concerned with their business. The Inspector(s) of Employees State Insurance Corporation (for short, ‘the Corporation’) visited the premises on 13.02.2006 and found that the appellant employed 18 persons for wages and two out of 18 persons, were drawing a salary of Rs.7,500/- per month (they were not included in the list of 18 employees). That, Corporation considered four security personnel, as if they were also employed by the appellant and held that Hotel is covered under Section 1(5) of the Employees State Insurance Act, 1948 (for short, ‘the Act’) [total employees 18, two uncovered, four security personnel, in all (18-2=16, 16+4=20)]. The Inspector(s) recommended for coverage from 01.02.2006 to 30.09.2006. A show cause notice under Form C-18, dated 28.05.2007 was issued and 28.06.2007 was fixed as the date of personal hearing. Appellant neither attended nor submitted statement of contributions. Corporation passed order dated 19.12.2007 under Section 45-A of the Act for an amount of Rs.42,900/-. Tribunal by its order dated 11.10.2013 held that appellant-Hotel employed four employees i.e., security personnel and they are covered under the Act. The said order is under challenge in this Civil Miscellaneous Appeal.

4. Learned counsel for the appellant submitted that appellant started the business in January, 2005, engaging 18 employees and that at no point of time, the appellant engaged more than 18 employees. It is further submitted that M/s. United Security Services provided four security personnel and the employees of M/s. United Security Services were already covered under the Act with Code No.52-23816-101. It is also submitted that Corporation fell into error and mechanically passed the order without considering the fact that four security personnel of M/s. United Security Services were already covered under the Act and they could not have been considered as employees of appellant.

5. It is submitted that M/s. United Security Services addressed a letter to the appellant-Hotel clarifying the security coverage and charges (Ex.P10). It is further submitted that when the number of employees are 18, the appellant is not liable to pay contribution under the Act.

Learned counsel invited the attention of this Court to Section 2(12) of the Act and submitted that it is only when 20 or more persons are employed in preceding 12 months, the Unit would be covered under the Act. It is further submitted that in spite of specific plea, Tribunal did not consider the same in proper perspective and held that four security personnel are employees of the appellant and further held that contributions have to be paid.

6. Learned counsel invited the attention of this Court to letter dated 13.02.2006 (Ex.P1) addressed to the Inspector of Corporation. On the basis of letter, it is contended that the Hotel Management informed that the four security personnel deployed are covered under ESI Code No.52-23816-101. Learned counsel furt