K. Pakkirisamy v. Regional Director Employees' State Insurance Corporation, Chennai
2011-01-24
K.CHANDRU
body2011
DigiLaw.ai
Judgment :- 1. The petitioner who is a Labour Supply Contractor earlier had a registered office at No.75/1, First Avenue, Ashok Nagar, Chennai – 600 083. He supplies labourers to the various Bottling Plants run by the Indian Oil Corporation Limited. Even as per the admission of the respondent – ESI Corporation that the Bottling Plants in which the labour supply work has been undertaken by the petitioner relates to Atthipattu Village, Inamkulathur at Trichy and Kshethrabalapuram Malliyam Post at Mayiladuthurai. Admittedly, all the three villages are the areas not covered by the provisions of the Employees'' State Insurance Act, 1948 (shortly "the Act") and notwithstanding the supply of labourers to those Bottling Plants, the question of coverage under the Act will not arise unless it is found out that he also supplies labourers to other areas. The petitioner was issued notice dated 23.06.2003 under Section 45-A of the Act and the subsequent notice dated 07.02.2003 issued under Section 85(B) of the Act. Since there is no response from the petitioner, the respondent – ESI Corporation used their coercive machinery to claim the amount from the Indian Oil Corporation Limited alleging that they are the principal employer and they are bound to contribute in view of the default made by the contractor namely the petitioner. By the order dated 13.03.2008, the respondent – ESI Corporation demanded a sum of Rs.7,41,216/- from the Indian Oil Corporation Limited viz., the respondents 3 and 4 herein. Subsequently, the petitioner was issued with series of letters. The petitioner in his reply stated that though he is a Labour Supply Contractor, he is only supplying labourers to the three Bottling Plants, which are admittedly not notified areas. Therefore, he filed the present writ petition seeking to quash the notice dated 13.04.2009 wherein by which, the Indian Oil Corporation Limited informed the petitioner that since the respondent – ESI Corporation has threatened them to pay the dues immediately as otherwise their bank account will be attached, they have no other option, except to encash the petitioner's Bank Guarantee submitted for haulage and house keeping works at Trichy Bottling Plant and therefore, the petitioner was directed to pay 50% of the amount referred to above. 2. The writ petition was admitted on 16.04.2009.
2. The writ petition was admitted on 16.04.2009. Pending the writ petition, this Court granted interim injunction and interim stay subject to the condition that the petitioner deposits 25% of the amount demanded within a week. 3. On notice from this Court, the respondents 1&2 have filed a counter affidavit dated 22.04.2009. In the counter affidavit, a preliminary objection was raised stating that the petitioner has to avail the remedy under Section 75 of the Act and invoking this Court's jurisdiction under Article 226 is not maintainable. It is also claimed that since the petitioner's bank account was maintained with the Indian Bank, AshoK Nagar Branch, Chennai and he has given a residential area address, the notice issued calling upon him to pay the amount to cover his employees, is valid. It is also stated that despite the notice, the petitioner did not attend the hearing and there was no impediment for them to initiate coercive proceedings. But so far as the attachment proceeding is concerned, it is claimed that the Indian Oil Corporation Limited has paid 50% of the claimed amount. The petitioner also stated that subsequent to the direction issued by this Court, he has paid a sum of Rs.1,98,491/- as ordered by this Court and asked for the return of the amount of Rs.3,96,981/- paid by the Indian Oil Corporation Limited. 4. In order to verify whether the notices issued by the Indian Oil Corporation Limited had any factual backing, this Court directed the original file be produced. Accordingly, Mrs.S.Jayakumari, learned standing counsel for the respondent – ESI Corporation produced the original file relating to the correspondences between the ESI Corporation, the petitioner and the Indian Oil Corporation Limited. It is found that the inspection report which was reviewed by the Department on 19.01.2006 and subsequently on 11.02.2010 showed that the petitioner has supplied 133 workers to the three Bottling Plants at Atthipattu Village, Inamkulathur at Trichy and Kshethrabalapuram Malliyam Post at Mayiladuthurai. But admittedly those three villages are not notified areas and they are unable to find out whether the petitioner is supplying labourers to any other Plants which is in a covered area. In the absence of any credible materials which enable them to form an opinion, the respondent - ESI Corporation cannot send notices after notices and ask the petitioner to perform something which is impossible. 5.
In the absence of any credible materials which enable them to form an opinion, the respondent - ESI Corporation cannot send notices after notices and ask the petitioner to perform something which is impossible. 5. In the light of the above, the demand made by the respondent ESI Corporation is not legally valid and they cannot ask any employer to pay contribution in respect of employees, who are working in a factory in a not notified area. Accordingly, the demand made by the respondents Corporation asking the petitioner to pay the amount is hereby set aside and the writ petition is allowed. It is always open to the respondent – ESI Corporation to pursue their investigation to find out whether the petitioner supplied any labourers to other notified areas. They are at liberty to pursue their claim in the manner known to law. Since this Court has prevented the respondent – ESI Corporation to collect the amount, the amount deposited by the petitioner and the Indian Oil Corporation Limited shall be refunded to them. No costs. Consequently, connected miscellaneous petitions are closed.