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2009 DIGILAW 357 (KAR)

Joint Director, ESI Corporation v. Indian Oil Corporation, Rep by its Plant Manager

2009-06-03

D V SHYLENDRA KUMAR, K.N.KESHAVANARAYANA

body2009
Judgment :- 1. These two appeals under Section 82(2) of the Employees State Insurance Act are directed against the order passed in two pending ESI Application Nos.6 and 9 of 2002 by the respondent – M/s. Indian Oil Corporation (Marketing Division), LPG Plant, Shankaranand Nagar, Kanagala, Belgaum, questioning the legality of the recovery proceedings against the Corporation for non-remittance of contributions in respect of contract labourers pursuant to two demand notices for the period October, 1999 to December, 1999 and another prior to 2000. 2. Recovery proceedings had been challenged by the Indian Oil Corporation – employer on the premise that, while the Corporation had made arrangements for remittance of such contributions for the period subsequent to the year 2000, for the earlier period, efforts were being made by the Corporation to secure exemption under Section 88 of the Act. 3. Before the ESI Court, in the two applications filed by the employer on behalf of the ESI –Corporation, the Joint Director, ESI Corporation, S.R.O., Sarvodaya Circle, Keshavapur, Hubli and the Recovery Officer, ESI Corporation, Binny Fields, Binnypet, Bangalore, had been arrayed as respondent Nos. 1 and 2 respectively. 4. It appears, counsel had filed power on behalf of respondent No.1 – Joint Director, while respondent No.2 – Recovery Officer had been placed ex-parte. But the Court, on noticing the objections raised by the applicant to the effect that the vakalath in fact had not been signed by the Joint Director, but only by the Assistant Director and further, that the objection statement filed on behalf of respondent No.1 –Joint Director had been signed only by the local manager, found that neither the objections can be accepted to be valid objections on behalf of respondent No.1-Joint Director nor the counsel for the Corporation who had filed power purported to be on behalf of respondent No.1 –Joint Director signed by the Assistant Director, can be permitted to cross – examine the witnesses of the applicant-Indian Oil Corporation on behalf of respondent No.1 and while did not permit the counsel to do so, rejected the vakalath and objections, and having regard to the circumstances, gave an opportunity to the Joint Director to make amenda by filing vakalath afresh and to make good their stance before the Court. 5. 5. The Officers of the ESI Corporation, instead of making use of this opportunity and make good their defence before the ESI Court, have come up in these appeals, contending inter alia that an Officer of the rank of Joint Director is competent to represent the Corporation before Courts and tribunals either to institute proceedings or to defend proceedings before such forum and as per the resolution of the Corporation which has been published in the Gazette of India dated 17.8.1991, even a local manager of the Corporation could represent the Corporation for such purpose. 6. This, we find, is a resolution in terms of Regulation 3A of the Employees State Insurance Act, 1948. 7. We have heard the learned counsel appearing for the appellant-Corporation. 8. We find that the Corporation, while could have simply avoided the controversy by the Joint Director, who had been arrayed as respondent No.1, filing power and also authorizing other lower officers to appear on his behalf pursuant to the resolution, instead, for reasons, best known to it, has chosen to file these appeals. At the same time, we cannot overlook the Presiding Officers of the ESI Court, playing into the hands of the unwilling employers who are loath to make ESI contributions, challenging recover proceedings before the ESI, even without any merit or justification and raising petty and technical objections during the proceedings before the Court for delaying the proceedings and the Court upholding such technical objections having the effect of delaying the proceedings, which ultimately is only detriment to the interest of the employees and can defeat the object of the Act, a piece of social welfare legislation. 9. Any action taken by an officer or an official of the ESI Corporation is not for his own benefit, but on behalf of the Corporation and for the purposes of the Act. 10. We find that the objections raised on behalf of the applicant – employer was highly technical and the objections became possible only for the reason, the applicant – employer had not chosen to implead the ESI Corporation in a proper manner particularly, by not filing the applications directed against the Corporation and the Corporation being represented by any of the officials, but by naming the officials of the ESI Corporation as respondents. That is a basic mischief or mistake in the presentation of the applications and it is rather unfortunate that the learned Judge of the ESI Court played into the hands of the applicant by accepting the technical objection. 11. So long as the person who had signed the authorization in favour of the Advocate for appearance on behalf of the ESI Corporation before the ESI Court, was a person authorized to appear on behalf of the Corporation in terms of the resolution referred to above, there is no further requirement of power being filed by counsel on behalf of each and every official of the ESI Corporation arrayed as respondents though, technically speaking, a vakalath on behalf of the Joint Director of ESI Corporation cannot be signed by the Assistant Director unless it is so indicated that the person has authorized the Assistant Director to engage counsel on behalf of the Joint Director. 12. Be that as it may, we find the whole exercise is an exercise in futility and an exercise which has only benefited the applicant in avoiding remittance of amounts due for the period prior to 1999-2000 for all these years as the demand was initially stayed by the ESI Court and further proceedings came to be stayed by this Court in these two appeals, which has remained in this Court for so long. 13. For record purpose, these two appeals are allowed. The impugned orders are set aside. ESI Court is directed to proceed from the stage at which it had been stopped, accepting the authorization though signed by the Assistant Director to be on behalf of the corporation and to permit the counsel who is appearing on behalf of the Corporation to participate in the proceedings and cross-examine the witnesses etc., We further direct the ESI Court to accept the objections that has already been filed on behalf of the Corporation, though it is signed by the Assistant Director/local Manager. Registry is directed to return the records forthwith to the ESI Court.