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2006 DIGILAW 803 (KAR)

REGIONAL DIRECTOR, EMPLOYEES STATE MSURANCE CORPORATION, BANGALORE v. FALCON TRADING ASSOCIATION, BANGALORE

2006-10-10

V.JAGANNATHAN

body2006
JUDGMENT Heard the learned Counsel for the parties and with the consent of both the parties, the appeal is disposed of by this order, at the stage of admission itself. 2. The short question that arises for consideration in this appeal is: whether security guards employed and working in the establishment of the first respondent are to be covered within the meaning of "employee" for the purpose of ESI contribution? 3. Briefly stated, following an inspection Counsel to the appellant's establishment, the Inspector found that there were 18 direct employees and two security guards working in the establishment of the appellant and as such, as the total number of persons was 20, a report was submitted and based on the said report, the respondent-Corporation issued the order dated 24-2-1989 and the said order passed by the second respondent was the subject-matter before the ESI Court in a proceedings under Section 75 of the Employees' State Insurance Act, 1948. The learned Presiding Officer of the ESI Court after examining the matter came to the conclusion that the Security Guards posted to work in the appellant establishment do not come within the purview of "employees" in terms of Section 2(9)(ii) and (iii) of the ESI Act ("Act" in brief) and therefore, the total strength of the employees was actually 18 and consequently, the question of coverage under the Act does not arise. Based on the aforesaid reasoning, the ESI Court allowed the application filed by the appellant herein and quashed the order dated 24-2-1989. 4. Aggrieved by the aforesaid order, Employees' State Insurance Corporation is in appeal and I have heard the submission made by learned Counsel Sri Narasimha Holla appearing for the appellant Corporation and the learned Counsel for the first respondent, Sri Nataraja Ballal. 5. Learned Counsel for the appellant submitted that insofar as the security guards being considered as employees within the meaning of Act is concerned, the question is no more res integra since the Hon'ble Supreme Court in the case of Saraswath Films v Regional Director, Employees' State Insurance Corporation, Trichur1, has laid down the provision of law that security guards in cinema hall, although employed through the agency are employees within the meaning of Section 2(9) of the Act. 6. 6. On the other hand, learned Counsel for the first respondent submitted that even assuming for a moment, the security guards come within the ambit of employees as per Section 2(9) of the Act, still it has been brought on record before the ESI Court that the Security Agency had paid the contribution in respect of the security guards as per Ex. A. 14. 7. Having considered the submissions made to the above effect, it becomes clear in the light of the aforesaid decision of the Apex Court and the facts before us are that on the date of inspection there were 20 employees in the establishment of the appellant and the coverage of security guards under Section 2(9) of the Act cannot be avoided. But in view of the observation of the ESI Court that in respect of the security guards' contribution has been paid as per Ex. A. 14, the only question which is required to be considered is, whether the first respondent can· avoid the entire liability in respect of the other 18 employees assuming for argument sake that contributions were paid in respect of the security guards. Therefore, as regards this aspect of the matter, the ESI Court will have to examine the evidence and if it is found on evidence that in respect of security guards' contributions have been made for the relevant period, then the contribution in respect of the security guards will not become payable by the first respondent. But nevertheless, as regards the other 18 employees are concerned, contribution cannot be avoided. 8. With the above observations, I deem it fit to remand the matter to the ESI Court to consider the contribution to be paid in respect of 18 employees who are found working as on the date of inspection and also to examine whether in respect of two security guards' contributions, in fact, were paid or not and thereafter, to dispose of the matter in accordance with law within a period of three months from the date of communication of this order. 9. The appeal, accordingly, stands disposed of.