JUDGMENT : K.B.K. Vasuki, J. 1. This Civil Miscellaneous Appeal is filed by the Petitioner in ESIOP. No. 42 of 2000 against the order of the Labour Court, Salem rejecting the ESIOP filed by the petitioners. For the sake of convenience, the parties are referred to as per their rank before the Labour Court. 2. The 20th petitioner M/s. Seshasayee paper and Board Limited who is the principal employer are manufacturing papers and board at Pallipalayam. There were during relevant point of time 1700 permanent workers covered under the Employees State Insurance Act subject to the salary unit. The principal employer used to engage independent contractors (immediate employer) for various activities and the contractors/immediate employers used to engage their own men to carry out the said jobs and the contractors are to be paid the amount according to the nature of the work done by them. The amount paid to the contractors comprises of charges of transport of materials, bonus, commission towards material purchased, profit of the contractors and labour charges also. The petitioners 1 to 19 are the regular contractors engaged by the 20th petitioner in non production related area and they are registered under the contract labour regulation and Abolition Act. 3. Admittedly, the principal employer used to effect contribution to the ESI on the quantum of labour employed by the contractors and the wages paid to them based on the information given by the contractors and the section officers of the principal employer. While so, the principal employer served with the notice dated 27.01.1998 by the respondent/Employees State Insurance Corporation as to why ESI contribution should not be recovered on Rs. 1,45,09,700/- representing feeding charges relating to the period from October 1986 to March 1992 paid by the principal employer at the rate of 7.25% which comes to Rs. 10,51,953/-. The principal employer by reply letter dated 11.02.1998 informed the respondent corporation that the respondent corporation has erred in taking into account the total amount paid to the contractors as representing wages on which ESI contribution is payable. The principal employer also attended the personal hearings before the respondent corporation and submitted the records. 10,51,953/-. The principal employer by reply letter dated 11.02.1998 informed the respondent corporation that the respondent corporation has erred in taking into account the total amount paid to the contractors as representing wages on which ESI contribution is payable. The principal employer also attended the personal hearings before the respondent corporation and submitted the records. However, the Deputy Director of ESI corporation passed an order under Section 45-A of Employees State Insurance Act (hereinafter referred to as ACT) stating that the contribution payable by the principal employer is on 90% of the amount paid to the Contractors, treating the balance 10% as margin for the contractors and incidental expenses and accordingly demanded contribution of Rs. 9,46,758/- less Rs. 4,96,268.15 together with interest along with the proof for payment of Rs. 4,96,268.15. The amount so demanded was on the ground that the calculation of the principal employer was based on theory of probable percentage of labour charges. Aggrieved against the same, the principal employer and the contractors jointly filed petition under Section 75 of ESI Act for setting aside the impugned order of the Deputy Director and for declaring that the principal employer is liable to pay total sum of Rs. 5,63,720.14. 4. The ESIOP was filed along with I.A. No. 162 of 1999 seeking waiver of deposit of 50% of the total amount demanded. The I.A. was after due contest allowed as prayed for. While allowing the IA for waiver of deposit of 50% of the total amount demanded, the learned Presiding Officer Labour Court has accepted the contention of the 20th petitioner herein, that the total amount demanded is Rs. 9,46,758/- and 50% of the same to the tune of Rs. 4,96,268.15 was already deposited and the deposit of remaining 50% is waived. Thereafter ESIOP was disposed of after due contest. The relief sought for in the ESIOP was subsequently amended for setting aside the impugned order dated 30.04.1999 demanding Rs. 9,46,758/- and for refund of the amount of contribution already paid in excess of 25% of the total bill amount and ordered for the refund of contribution paid in respect of Colony yard and Railway Yard. The relief sought for in the ESIOP was subsequently amended for setting aside the impugned order dated 30.04.1999 demanding Rs. 9,46,758/- and for refund of the amount of contribution already paid in excess of 25% of the total bill amount and ordered for the refund of contribution paid in respect of Colony yard and Railway Yard. The Presiding Officer, Labour Court after due contest found that the circular dated 26.06.1982 issued by the respondent was not applicable to the principal employer and the principal employer though has been maintaining separate records for the amount paid under different headings to the contractors, not produced the same before the respondent and the ESIOP was accordingly dismissed. Aggrieved against the same, the present civil Miscellaneous appeal is filed before this Court. 5. The substantial questions of law that arises for consideration in the civil miscellaneous appeal are as follows: (a) Is not the respondent ESI corporation bound by their own circulars and are they not bound to follow the judgments rendered by this Hon'ble Court in L.P.A. Nos. 159 and 160 of 2000 on 09.03.2004 and in C.M.A. No. 1606 of 1995 on 10.12.2003? (b) Has not the respondent ESI corporation acted arbitrarily and capriciously treating 90% of the contribution bill amount of Rs. 1,45,07,900/- as wages (labour charges) paid to the workmen of the contractor by the Contractor? (c) Is not the act of the ESI Corporation unjustified in invoking section 45-A of the Employees State Insurance Act, 1948 for making the arbitrary demand of Rs. 9,46,268.15, when the 20th appellant had forwarded all documents and books and accounts relating to Feeding charges. 6. Heard the rival submissions made on both sides and perused the records. 7. The learned counsel for the petitioners would seriously question the correctness of the impugned order on the following grounds. The contribution payable by the 20th petitioner/principal employer is only upon 25% of total amount paid by way of wages to the contractors as per the guidelines issued by ESI corporation on 26.06.1982 and as per the order passed in C.M.A. 77 and 78 of 1995 as confirmed in L.P.A. Nos. 159 and 160 of 2000 on the identical issue for different period in respect of the same M/s. Seshasyee Paper and Board private limited, Pallipalayam. 159 and 160 of 2000 on the identical issue for different period in respect of the same M/s. Seshasyee Paper and Board private limited, Pallipalayam. The learned counsel for the petitioners would solely rely on the guideline issued by the ESI corporation dated 26.06.1982 in support of their stand that the contribution charged may be on 25% of the amount of the bills and not more than that. 8. It is true that, the memorandum issued by ESI corporation dated 26.06.1982 and the order passed by this Court in CMAs as confirmed in LPAs would say that the contribution payable is on 25% of the amount of the bills, as such the question to be decided herein is as to whether the memorandum as well as the decision arrived at on the basis of the memorandum in the judgments above referred to are applicable to the facts to the present case. 9. In order to appreciate this aspect, it is but necessary to refer to the memorandum. The reading of the same would reveal that the memorandum is more in the nature of clarification of the office memo dated 16.11.1981, as per which, where the employer is unable to give the details separately for payment made towards labour charges, cost of material, share of profit etc, the Regional Director may assume 25% of such bills towards labour charges and recover contribution thereon. The clarification by way of memorandum dated 26.02.1982 was issued on receipt of references from some of the Regional Directors. While the earlier office memo dated 16.11.1981 was made applicable only in cases of payment relating to repair/maintenance etc., of the factory/establishment building, the memorandum dated 26.06.1982 would clarify that the bill includes apart from labour charges, cost of material, profit etc of the contractor or the person doing the job and this adoption of 25% of the total amount is applicable where the principal employer is not in a position to produce any relevant records in regard to wage elements in the bills. That means, the contributions may be charged on 25% of the amount of bills, only where the principal employer is not in a position to produce any relevant records in regard to wage elements in the bills and not otherwise. 10. That means, the contributions may be charged on 25% of the amount of bills, only where the principal employer is not in a position to produce any relevant records in regard to wage elements in the bills and not otherwise. 10. The learned standing counsel for the respondent/ESI corporation during the course of argument drew the attention of this court to the instruction contained in the same memorandum dated 26.06.1982 to the effect that while claiming contribution in accordance with these instructions, the employer may be specifically told that the assessment has been made as a special case and he should in future cover all such employees and pay contributions in accordance with the provisions of the ESI Act and regulations, otherwise the contributions will be charged on the full amount booked in the Accounts Books. It is further stated herein that it is necessary, so that the employer may not have the impression that he could discharge his liability by paying contribution on 25% of the amount of total payments and evade proper compliance. 11. The above clarification would, in my considered view give an indication that the applicability of this memorandum may be only for one time and not for every year. 12. Even otherwise, as rightly pointed out by the learned standing counsel for the respondent corporation, this memorandum is applicable only in cases where the principal employer is either unable to or not in a position to produce any relevant records with regard to wage elements in the bill. 13. Whereas, in the present case, it is throughout the case of the petitioners that the contribution is effected by the principal employer based on the information given by the section officer of the principal employer and the contractors and the respondent officials have after making full scale inspection audited the records and satisfied with the compliance of the provisions of ESI Act. It is categorically stated in para 26 of the petition that the finding of the Deputy Director to the effect the calculation of the principal employer was based on the probable percentage of the labour charges involving the amount and the amount paid to the contractors is based on the split up details of the amount paid to the contractors on workers engaged and certified by the principal employer's Section officer based on their personal knowledge. It is again stated in para 25 of the affidavit that the bills submitted by the contractors clearly specified the labour, transport charges and profit and the principal employer has submitted the records, documents and statements showing the charges paid to the contractors. 14. One of the grounds raised in the petition is questioning the conduct of the respondent in not accepting the competency of the Section Officer of the principal employer to confirm the quantum of labour involved in the work and certify the quantum of labour charges involved in the bill of contractors. The petitioners also in their petition have made a reference to the analysis of the expenses given on the reverse side of the bill produced by the contractors consisting of split up details such as transport, labour etc. and specific ground raised therein in this regard is that the respondent has not given any reason for not accepting the split up details given on the reverse side of the bills. It is also stated that the Deputy Regional Director erred in assuming that the principal employer had arrived at the contribution on the probability and not on the exact wages paid to the contractors for the labour work. It is also stated in para 28 that there are vouchers and receipts and details of the materials, labour and transport charges, return on investment and profit in the contract and audit details have been certified by the employer and every receipt was certified by the employer and the employer based his contribution on the calculation and the quantum of the wages and not on probable percentage theory and those vouchers and receipts were also verified by the respondent officials during 1986 to 1992. The petitioners in the petition found fault with the respondent/ESI corporation in arriving at 90% labour charges and 10% alone as contractors margin without considering the expenditure incurred towards cost of materials, transportation charges, bonus, profit and commission payable to the contractor. 15. The same stand is reiterated by the petitioner side witnesses and the relevant portion of the evidence of the witnesses is also extracted in the order impugned herein. 15. The same stand is reiterated by the petitioner side witnesses and the relevant portion of the evidence of the witnesses is also extracted in the order impugned herein. The Presiding Officer, Labour Court has after duly analyzing and appreciating the pleadings raised on both sides and the proof adduced by way of oral and documentary evidence, rightly arrived at the conclusion that the petitioners case is not one where the employer is unable to give the details about the payment made towards labour charges, material costs etc., so as to attract the circular dated 26.06.1982 and the petitioners case is not covered under the memorandum dated 26.06.1982. But it is the case wherein the principal employer have been maintaining separate records relating to the payments made and split up details but failed to produce the same before the respondent corporation during enquiry. Though the learned counsel for the petitioners would rely on the earlier orders made by this Court for adopting 25% theory for the same company, the same theory cannot be adopted for contribution payable for every year as clarified by the memorandum dated 26.06.1982. That being so, the adoption of 25% on the total bill amount for assessing the quantum of contribution payable is not applicable to the present case and it is a fit case wherein probable percentage theory is rightly applied. 16. Thus for the discussion held above, this Court finds no fault in probable percentage theory applied by the labour Court for want of particulars about the exact payments made and the impugned order hence calls for no interference. 17. However, it is made clear that the total amount payable by the 20th petitioner towards ESI contribution for the relevant period is Rs. 9,46,758/- as evident from the order made in I.A. No. 162 of 1999 dated 28.03.2000 and the sum of Rs. 4,96,268.15 has already been paid and the balance sum is only payable by the petitioners. The substantial questions of law are accordingly answered against the petitioners. With the above clarification, this civil miscellaneous appeal is dismissed. No costs.