G. YETHIRAJULU, J. ( 1 ) THIS appeal is preferred by Udipi Sri anand Bhavan, Nizamabad against the orders of the Employees Insurance Court-cum- industrial Tribunal-I, Hyderabad in E. I. Case no. 25 of 1996. ( 2 ) THE appellant is a hotel situated at nizamabad. It was registered under A. P. Shops and Establishments Act. The appellant is engaging workers in the manufacture of tiffins, coffee etc. , by using grinder and bottle cooler operated with power. The authorities under the employees State Insurance Act brought the appellant hotel within the purview of the employees State Insurance (Amendment) Act, 1989 ( the Act for brevity) informing that it was provisionally brought within the purview of the Act with effect from 1/10/1990. The authorities demanded contribution from the appellant as per Sections 39 and 40 of the act. The appellant did not question the provisional assessment made by the authorities, therefore, they confirmed the order under section 45-A of the Act and requested the district Collector, Nizamabad to recover the contribution under the Revenue Recovery Act. ( 3 ) THE contention of the appellant is that the hotel was established in the year 1980 and has been engaging less than eight employees since then. The appellant is not a factory within the meaning of the Act. The respondents demanded Rs. 20,040 as its contribution which is illegal, therefore, requested to set aside the order by holding that the appellant hotel does not come within the purview of the Act. ( 4 ) ACCORDING to the respondents, the inspector of the Employees State Insurance corporation inspected the hotel on 8/10/1990 and noticed that on 1/10/1990 the appellant engaged more than ten persons in preparing tiffins, coffee etc. , and came to the conclusion that it comes within the purview of the Act. The appellant was informed that, it is covered under the Act provisionally from 1/10/1990 subject to the revision and the appellant to comply the provisions of the Act. The Inspector subsequently on 13/02/1992 visited the hotel and after verification of the record found that it comes within the purview of the Act from 20/10/1989, as per the amended provisions of the Act. The inspector further observed that since the appellant did not comply with the provisions of the Act, it is not entitled for the relief as prayed for. The inspector further observed that since the appellant did not comply with the provisions of the Act, it is not entitled for the relief as prayed for. ( 5 ) BOTH parties adduced evidence before the E. I. Court. On behalf of the appellant, one of the sons of the proprietor of the appellant hotel, was examined as P. W. 1 and Exhibit P. 1 to P. 11 were marked. The respondents examined R. Ws. 1 to 3 and marked Exhibits r. 1 to R. 8. ( 6 ) THE E. I. Court after considering the evidence adduced by both the parties came to a conclusion that the appellant is liable to pay the contribution as demanded by the respondents and accordingly dismissed the petition refusing to grant the relief to the appellant. ( 7 ) THE appellant being aggrieved by the order of the E. I. Court preferred this appeal challenging its validity and. legality. ( 8 ) THE crucial point for consideration in this appeal is whether the appellant engaged 10 or more workers on any day during the relevant period. If so, whether it comes within the purview of the Act. ( 9 ) IN order to find an answer to this point, it would be appropriate to refer to the evidence adduced by both the parties. ( 10 ) SECTION 2 (12) (a) of the Employees state Insurance Act, 1948, reads as follows:" Definitions.- (12) "factory" means any premises including the precincts thereof- (a) whereon ten or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on, or" ( 11 ) THE initial burden is on the respondents to prove that the appellant engaged 10 or more workers, therefore, I wish to refer the evidence adduced by the respondents at the first instance. ( 12 ) R. W. 1 deposed that he worked as inspector, Secunderabad Division from August 1990 to March 1991 Nizamabad was within the jurisdiction of his Division. He visited the appellant hotel on 8/10/1990 to report whether the hotel is to be covered under the e. S. I. Act. Sri Ramakrishna Rao, the managing Partner was present in the hotel. He visited the appellant hotel on 8/10/1990 to report whether the hotel is to be covered under the e. S. I. Act. Sri Ramakrishna Rao, the managing Partner was present in the hotel. He demanded the said Ramakrishna Rao to produce the attendance register, wages register, cash-book and the ledger. He produced the attendance and wages registers for the period from August 198 9/10/1990. He did not produce the cash-book and ledger stating that they were not available. The tiffins, coffee and meals are being served to the customers in the hotel. Sri Ramakrishna Rao gave Exhibit R. 1 employers registration form mentioning that the hotel was established in 1978, that he is using power in the establishment since the beginning and employed eleven (11) persons, on a monthly wage of Rs. 4750. He noticed a grinder and a bottle cooler operated with electric energy in the hotel. After completing the inspection he submitted a report to the Regional Office recommending coverage of the appellant from 1/10/1990. ( 13 ) IN the cross-examination he stated that he does not know the names and other particulars of the employees working in the hotel. He denied a suggestion that he obtained the signature of the Managing Partner on a blank form and later filled up the blanks. On the other hand, he stated that the Managing partner also attested a correction occurred in x. R. 1 form. He further stated that as per exhibit b-2 Register of permanent employees, the appellant engaged 8 to 9 persons, but the managing Partner maintained another register in which the names of the casual employees are noticed and he referred the said fact in his report. He denied a suggestion that the E. S. I. Act is not applicable to the appellant hotel. ( 14 ) R. W. 2 another officer who worked as inspector from July 199 1/11/1992 deposed that on 13/02/1992 he visited the appellant hotel in the presence of its managing Partner Sri P. Ramakrishna Rao. He demanded Ramakrishna Rao to produce the attendance register, wages register, cash book and other registers for the period from 1983 to january 1992 for ascertaining the final date from which the hotel has to be covered. He noted the details of the number of persons employed and the wages paid by the appellant from 1989. He demanded Ramakrishna Rao to produce the attendance register, wages register, cash book and other registers for the period from 1983 to january 1992 for ascertaining the final date from which the hotel has to be covered. He noted the details of the number of persons employed and the wages paid by the appellant from 1989. The appellant did not pay the contributions or submitted returns and declaration forms regarding the employees. He prepared an observation slip in duplicate and served the original upon Sri Ramakrishna Rao and took his acknowledgment on Ex. R. 2. He recommended for final coverage from 20/10/1989, as the appellant employed ten or more workers in a period of one year prior to his inspection. The appellant engaged eleven persons in November 1988. But, at that time the industry engaging twenty (20) persons or more and using power in manufacturing process was a factory within the meaning of Section 2 (12) of the Act. After the amendment of the Act w. e. f. 20/10/1989 the establishments engaging ten or more persons and using power in manufacturing process on any day within one year before the date of inspection come within the purview of the Act, therefore, he recommended for final coverage of the appellant hotel from 20/10/1989. He made Exhibit P. 8 endorsement in Exhibit P. 3 register. During the inspection he verified whether the appellant paid the contribution, and noticed that he did not pay the same. He also noticed that there are two employees who are paid monthly salaries and others are paid daily wages. The attendance registers produced by the appellant in the Court show that he employed nine (9) persons in June and July 1991. There is another register in which the names of two employees who are paid monthly salaries are shown. The total workers as on november 1988 are eleven in number. He verified Ex. R. 4 register and noticed the fact that the appellant was engaging more than eleven persons. He denied a suggestion that he prepared a false report with an oblique motive. The total workers as on november 1988 are eleven in number. He verified Ex. R. 4 register and noticed the fact that the appellant was engaging more than eleven persons. He denied a suggestion that he prepared a false report with an oblique motive. ( 15 ) R. W. 3, Inspector (Legal) working in the Regional Office of the Corporation deposed that on receipt of Exhibit R. 2 report from R. W. 1 they sent a notice covered by Exhibit R. 5 dated September 12, 1990 to the appellant informing the provisional coverage from 1/10/1990 instructing to comply with the provisions of the Act. The appellant did not pay the contribution, therefore, the regional office sent Exhibit R. 7 letter on 25/10/1993 to the Recovery Officer to recover an amount of rs. 10,166 for the period from 20/10/1990 to September 1992. Another similar letter covered by Exhibit R. 8 was also sent on 9/08/1996 to the Recovery Officer to recover Rs. 3,224 for the period from August 199 3/06/1994, but the appellant did not pay the same. ( 16 ) IN the cross-examination he stated that the Inspectors signed on the registers maintained by the appellant and denied a suggestion that the inspectors submitted reports without any basis and contrary to the records. ( 17 ) THE evidence of R. Ws. 1 to 4 coupled with the documentary evidence covered by exhibits P. 1 to P. 11 and R. 8 amply established that the appellant hotel was inspected by the inspectors on various dates and on verification of various registers they came to the conclusion that the appellant was engaging more than 10 persons for running the hotel. ( 18 ) AGAINST the above evidence adduced by the respondents, the appellant examined the son of the Managing Partner as P. W. 1. P. W. 1 deposed that his father is the proprietor of the appellant hotel. His younger brother and himself assist their father in the management. They employ 6 to 7 persons depending upon the work. He referred to Exhibits P. 1 to P. 5 attendance registers stating that they do not disclose that they employed 10 persons at any time. They employed a maximum number of eight workers in October 1990. His younger brother and himself assist their father in the management. They employ 6 to 7 persons depending upon the work. He referred to Exhibits P. 1 to P. 5 attendance registers stating that they do not disclose that they employed 10 persons at any time. They employed a maximum number of eight workers in October 1990. They were served with notices covered by Exhibits P. 10 and P. 11 dated 30/04/1996 and 30/08/1996, but they have not paid the contribution on the ground that they need not pay the same. R. W. 1 obtained the signature of his father on exhibit R. 1 Form on 8/10/1990 and the contents of Exhibit R. 1 were not filled up in their presence. In the cross-examination P. W. 1 stated that there are eight tables with four chairs for each table in the hotel for occupation of the customers. He denied a suggestion that there were ten tables in the hotel. He conceded that ten tables, twenty chairs, three grinders, one air-cooler and three show cases mentioned in exhibit P. 11 attachment proceedings were attached. He further stated that the grinders available in the hotel belong to the owner of the house who resides in the second floor and he uses the grinder for the use of his family. He did not produce any cash-book or ledger into court. He conceded that his father signed on exhibit R. 2 observation report of the Inspector on 13/02/1992. He denied a suggestion that they were engaging more workers and showing lesser number of workers in the attendance register. He also denied a suggestion that they engaged eleven workers on 13/02/1992. ( 19 ) THE Managing Partner of the establishment did not enter the witness box to speak about the number of persons he engaged during the relevant period and to accept or deny the contents of Exhibit R. 1 Form which contains his signature. P. W. 1 has no personal knowledge about the contents of Exhibit R. 1 since he did not say that he was present at the time of inspection. The E. I. Court after considering the evidence came to the conclusion that the appellant engaged more than ten workers during the relevant period. After carefully going through the evidence adduced by the parties, I am convinced that the appellant engaged more than ten workers during the relevant period. The E. I. Court after considering the evidence came to the conclusion that the appellant engaged more than ten workers during the relevant period. After carefully going through the evidence adduced by the parties, I am convinced that the appellant engaged more than ten workers during the relevant period. ( 20 ) WHEN once the establishment comes within the purview of the Act, the question of the appellant getting exempted does not arise. The appellant did not question the provisional order, so also the final order, but decided to come to the E. I. Court only after attachment of properties, therefore, the appellant is bound to pay the contribution as directed by the E. S. I, authorities. Except the oral assertion of the appellant that they were engaging only eight persons there is nothing on record to show that they did not engage ten or more persons as on the date of inspection. In the light of the above circumstances, I do not find any force in the grounds of appeal. ( 21 ) IN the result, the appeal is dismissed by confirming the order of the E. I. Court. No costs.