C.M.A.(MD)No.982 of 2021

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

DATED : 06.12.2021

CORAM :

THE HONOURABLE MRS.JUSTICE S.ANANTHI

C.M.A.(MD)No.982 of 2021

and

C.M.P(MD)No.9266 of 2021

K.Arumugasamy

...Appellant/Petitioner

Vs.

The Assistant Regional Director,

Employees State Insurance Corporation,

Sub Regional Office, 4^th Main Road,

K.K.Nagar,

Madurai – 625 020.

...Respondent/Respondent

PRAYER: Civil Miscellaneous Appeal filed under Section 82(2) of the

Employees State Insurance Act, 1948, to set aside the order, dated

02.08.2021 of the Employees State Insurance Court (Labour Court)

Madurai passed in E.S.I.O.P.No.44 of 2007, allow the appeal.

For Appellant

:Mr.T.Ravichandran

For Respondent :Mr.C.Karthick

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

1/5

https://hcservices.ecourts.gov.in/hcservices/

C.M.A.(MD)No.982 of 2021

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 Fact