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2016 DIGILAW 380 (KER)

M. RAMAKRISHNA PILLAI v. REGIONAL DIRECTOR, E. S. I. CORPORATION

2016-04-05

ANIL K.NARENDRAN, P.R.RAMACHANDRA MENON

body2016
JUDGMENT : Ramachandra Menon, J. Challenge is against the order passed by the Employees Insurance Court, Kollam; whereby the application filed by the appellant, against the proceedings of the respondent Corporation intending to extend coverage to the establishment of the appellant, was dismissed, repelling the contentions raised that it was not a factory under Section 2 (12) of the Employees' State Insurance Act, 1948 (hereinafter referred to as the 'Act') and that at no point of time in the preceding 12 months had the appellant engaged ten or more employees to have extended the coverage. 2. The appellant is a dealer of petroleum products marketed by the Bharath Petroleum Corporation Limited. Admittedly, the petrol pump run by the appellant is having three outlets for filling petrol/diesel in the vehicles, which is a commercial establishment within the meaning of the Kerala Shops and Establishment Act, 1960. 3. The Area Inspector of the respondent Corporation conducted an inspection in the appellant's establishment on 03.02.2000 and reported, after verification of the attendance and the registers, that 11 persons were engaged for wages in the petrol pump and recommended for extension of coverage under Section 2(12) of the Act w.e.f. 01.01.1999. Pursuant to this, Form - C 11 was forwarded by the Corporation on 04.04.2000. But since there was no response from the part of the appellant, the Corporation proceeded with steps under Section 45A of the Act and Form C-18 notice was issued on 04.02.2003, proposing the assessment of contribution as Rs.1,15,026/- in respect of 11 employees, for the period from January 1999 to September 2002, affording an opportunity of hearing scheduled on 05.03.2003. Considering the request made by the appellant, the date of hearing was adjourned to 10.04.2003, granting 30 days' time, as sought for, for production of records. But since nothing turned out in the positive, and there was total inaction/lapse on the part of the appellant, a show-cause notice dated 26.06.2003 was issued to the appellant, proposing prosecution proceedings for the non-payment of contribution and non-submission of returns for the relevant period, under Section 85 of the Act. This made the appellant to approach the Employees Insurance Court, Kollam, by filing an application under Section 75 of the Act, challenging the proceedings on different grounds, which included the plea of limitation as well. 4. This made the appellant to approach the Employees Insurance Court, Kollam, by filing an application under Section 75 of the Act, challenging the proceedings on different grounds, which included the plea of limitation as well. 4. In the course of further proceedings, evidence was let in from the part of the appellant by examining AW1 and AW2, besides marking Exts. A1 to A3. Evidence adduced from the part of the respondent consists of the oral testimony of RW1 and documents produced as Exts. B1, B2, B2(a), B2 (b) and B3 to B7. The points for consideration as dealt with by the Court below in paragraph 5 of the order under challenge were: "1. Whether the applicant's establishment is a factory under section 2 (12) of the Act to attract coverage under the provisions of the Acts and liable to pay contribution in respect of the employees engaged in the establishment ? 2. Whether the claim and demand made by the Corporation is barred by limitation or not under the proviso to Section 77 (1) (b) of the E.S.I. Act ?. 3. Whether the suit is barred by limitation or not ? (The learned counsel for the applicant and the Corporation, however, did not press the point at the time of argument)." As observed by the Tribunal in the very same paragraph, the question of limitation was not pressed by the learned counsel and hence the only question considered was whether the applicant's establishment would come under Section 2 (12) of the Act, to attract coverage under the ESI Act and whether it was liable to pay contribution for the employees engaged in the said establishment. After referring to the relevant provisions of law, it was held that there was manufacturing process in the establishment of the appellant, in so far as petrol/diesel was pumped from the tank kept in the premises, to the petrol/diesel tank of the concerned vehicle using the aid of power and as such, it very much involved a manufacturing process as defined under Section 2 (k) of the Factories Act. Thus, it was held that the 'petrol pump' of the appellant very much satisfied the definition of 2 (12) of the Act and proceeded to consider whether there were 'ten' or more employees employed for wages on any date preceding 12 months. 5. Thus, it was held that the 'petrol pump' of the appellant very much satisfied the definition of 2 (12) of the Act and proceeded to consider whether there were 'ten' or more employees employed for wages on any date preceding 12 months. 5. According to the appellant, only 'six' employees were there at the relevant time as shown in Ext. A1 wage register. But Ext. B2(a) and B2(b) wage registers (for the period from 01.01.99 to 31.09.99 and 01.01.2000 to 31.01.2000 respectively) were also the wage registers belonging to the very same establishment and 11 employees were shown as engaged in Ext.B2(a) wage register. However, in column No.8 of Ext. B2(a), a person by name N.S. Santhosh was found as marked attendance during the aforesaid period, who was paid wages as well. But marking attendance and payment of wages in respect of the said person was subsequently scored off, showing him as 'absent' over the figure 25'. This made the Court below to observe that the version of the Corporation that Ext. B2(a) attendance/wage register was manipulated by the appellant/applicant after the survey conducted on 03.02.2000 by the then Inspector RW1 appeared to be correct on scrutiny. The Court below also held that, even assuming that Mr. N.S. Santhosh was not engaged in the establishment for the period from 01.01.99 to 31.01.1999, there were still 10 persons engaged for wages as per Ext.B2(a) attendance register/wage register, to attract coverage in terms of Section 2 (12) of the Act. This factual aspect was supported by Ext. R2(b) wage register and the attendance register for the period from 01.01.2000 to 31.01.2000; wherein also 10 persons were shown as employed for wages in the establishment. Evidence was given by RW1, with reference to these vital aspects as contained in the documents and even though he was thoroughly cross examined at the instance of the appellant, nothing could be brought out to discredit his evidence, as observed in paragraph 12 of the order under challenge. The Court below also observed that there was no case for the appellant that Exts. B2 (a) and B2(b) (his own documents) were manipulated in any manner. The Court below also observed that there was no case for the appellant that Exts. B2 (a) and B2(b) (his own documents) were manipulated in any manner. It was accordingly, that a finding was rendered that the appellant/applicant had engaged 10 or more persons during the relevant period and that the appellant's establishment was a 'factory' in terms of Section 2 (12) of the Act and hence was liable for coverage and to effect contribution accordingly in respect of the employees who were paid wages by the appellant. This Court finds that the above finding is based on the evidence on record and well supported by the reasoning, which hence is not liable to be declared as perverse or arbitrary in any manner. 6. With regard to the question whether pumping petrol/diesel in a petrol pump is a 'manufacturing process ' or not, Section 2 (14AA) of the ESI Act states that the term 'manufacturing process' shall have the meaning assigned to it in the Factories Act. Section 2 (k) (ii) of the Factories Act clearly stipulates that pumping oil, water, sewage or any other substance is a manufacturing process. The question whether a 'petrol pump' will come within purview of the Section 2(12) of the ESI Act had come up for consideration of the Apex Court in Qazi Noorul H.H.H. Petrol Pump Vs. E.S.I. Corporation and as per the decision reported in 2009 (3) KLT 551 it has been held that 'petrol pump' is a factory, where there is manufacturing process with the aid of power, since power is used to pump petrol/diesel from the tank planted in the premises of the petrol pump to the petrol/diesel tank of the vehicles concerned. The Apex Court held in 2009 (3) KLT 551 (cited supra) that the provision of law was very clear by virtue of the simple language used in Section 2 (k) (ii) of the Factories Act. When the provision was clear and there was no obscurity in the Statute, Literal Rule of Interpretation would apply and accordingly, it was held that the petrol pump was very much coverable under the Statute. As such, the finding rendered by the Tribunal that the appellant's establishment/petrol pump will come within the purview of Section 2 (12) of the Act warrants no interference. 7. As such, the finding rendered by the Tribunal that the appellant's establishment/petrol pump will come within the purview of Section 2 (12) of the Act warrants no interference. 7. Yet another argument advanced by the learned counsel for the appellant during the course of hearing was that, among the 11 workers mentioned by the Corporation in their notice/proceedings in relation to the adhoc assessment, only six persons were engaged during the relevant time and that the persons by name P.M. Sunil Kumar, V. Madhusoodhanan Nair, K. Venu, N.S. Santhosh and B. Jayakumar were working much ago and had left the establishment. This aspect is nothing but a question of fact, which has been considered by the Court below with reference to the entries in the concerned attendance/wage register and has held against the appellant. The learned counsel for the appellant however pointed out that it was obligatory for the Court below to have impleaded the concerned workers and the version of the workers ought to have been ascertained, more so, by virtue of the law declared by the Apex Court in Fertilizers And Chemical Travancore Ltd. Vs. Regional Director, ESIC and others [2009 (3) KLT 946]. Reliance was also placed on the verdict of a Division Bench of this Court in Regional Director and Another Vs. M/s Bishop Moore Vidyapith [2012 (2) KHC 388] and the verdict passed by a Single Bench of this Court in E.S.I. Corporation Vs. Panickaveettil Sir Sebastian [ 2010 (4) KLT 976 ] 8. We have gone through the aforesaid decisions. The point considered by the Apex Court in Fertilizers And Chemical Travancore Ltd. (cited supra) and the purpose to be achieved, as contained in the aforesaid decision, are entirely different and not the same as it has been understood by the appellant. It was a case where the applicant/FACT had challenged the proceedings of the Corporation before the ESI Court pointing out that the concerned loading and unloading workers were not liable to be covered, as they were not the employees of the FACT, but deployed by the concerned Trade Unions and once the operation is over, they would proceed to work for some others at some other premises on the same day and further that such workers engaged on one occasion may not be the same workers available to be deployed for the next set of operation. The Insurance Court accepted the said proposition to some extent and directed the Corporation to identify the actual workers by conducting an enquiry and to give registration to such workers and thereafter to extend coverage to them. The challenge raised by the Insurance Corporation before the High Court was upheld and their appeal was allowed, whereas the appeal preferred by the FACT was dismissed. After extracting the relevant portion of the order passed by the Employees Insurance Court, the Apex Court observed that the course pursued by the Insurance Court was not proper and that the enquiry should have been conducted by the Insurance Court itself, that too, after impleading the workers, their Trade Union or anybody in a representative capacity. It was also observed that a labour legislation is meant for the benefit of workmen and as such, the workers or their Trade Union or representatives were to be made a party before any decision was rendered adversely affecting their rights and interests. The requirement in this regard with reference to the Rules of Natural Justice was made in paragraph 9 of the judgment. Again, in paragraph 10, it was reiterated that the determination by the Insurance Court is a quasi judicial function and that natural justice requires that any party who may be adversely affected or may suffer civil consequence by such determination must be heard before passing such order. In paragraph 11 of the very same verdict, it was observed that it is not the ESI Corporation, who will be affected, if a decision is rendered in favour of the employer, but the worker and it was accordingly observed in paragraph 12, that impleadment of a worker or a Trade Union or anybody in the representative capacity is essential. Since the order passed by the ESI Court would in effect eliminate some of the workers, if not identified by the Corporation to get registration and have the benefit of the Act, it would adversely affect the workers and it was in the said circumstances that the matter was remanded for causing the matter to be reconsidered by the Employees Insurance Court after impleading the workmen, their Trade Union or any representative. 10. 10. From the above, it is quite evident that the direction to implead the workers or their Trade Union or representative as given by the Apex Court is to ensure that the rights and interest of the workers under a welfare legislation shall never stand denied to them under any circumstances. 11. Coming to the case in hand, the appellant is none other than the applicant, who could have/should have impleaded workers/Trade Unions/representatives in the party array. But considering the question whether the workers' presence is necessary in the instant case, the contention was that some of the workers named in the adhoc assessment proceedings were not the workers of the appellant/applicant and there were only six workers on any given date within the preceding 12 months. So if at all any decision was to be rendered in favour of the appellant accepting his version, it would have gone against the employees and hence the non-impleadment of the workers/representative would have been fatal. But the order passed by the Tribunal amounts to dismissal of the contention of the employer/applicant; thus sustaining the proceedings taken by the Corporation to extend coverage and provide the benefits of the Scheme to all the workers. As such, the order passed by the Employees Insurance Court stands in no way detrimental to the rights and interests of the workers and on the contrary, it stands in favour of the workers. This being the position, no remand is necessary in the instant case to have the matter reconsidered after impleading the workers or their Trade Union or any other representative. The idea and understanding of the appellant to the contrary is thoroughly wrong and misconceived. 12. In Regional Director and Another Vs. M/s Bishop Moore Vidyapith [2012 (2) KHC 388] the employer / establishment situated in the Alappuzha District had approached the Employees Insurance Court Palakkad challenging the proceedings of the Corporation. The Employees Insurance Corporation raised an objection that the said Court at Palakkad had no jurisdiction, as the establishment was situated in Alappuzha and the workers concerned were employed in Alappuzha. The Employees Insurance Court, Palakkad passed a preliminary order, holding that it was having the jurisdiction since the head office of the Corporation was situated at Trichur, which place was within the purview and jurisdiction of the Court at Palakkad. This was challenged by the Corporation before this Court. The Employees Insurance Court, Palakkad passed a preliminary order, holding that it was having the jurisdiction since the head office of the Corporation was situated at Trichur, which place was within the purview and jurisdiction of the Court at Palakkad. This was challenged by the Corporation before this Court. After considering the rival contentions, this Court observed that the concerned employees were to be made parties, at least in a representative capacity, in view of the law declared by Supreme Court in 2009 (3) KLT 946 (cited supra) and if such workers were impleaded, Section 76 would apply and hence the matter was to be moved before the appropriate Court. It was thus held that the Insurance Court at Palakkad was having no jurisdiction and accordingly, the proceedings were directed to be transmitted to the appropriate Court, to be dealt and proceeded further, after impleading the workers. The said decision does not support the appellant in any manner. 13. This Court finds that, the legal position having been declared by the Apex Court, no question of law, much less any substantial question of law has been raised by the appellant. The challenge raised with reference to the actual number of employees during the relevant time is purely a question of fact. A finding has been arrived at by the Employees Insurance Court, with reference to the documentary evidence supported by the oral evidence, which stands in favour of the workmen/corporation. We find no tenable ground to call for interference with the verdict passed by the Employees Insurance Court. Appeal fails and it is dismissed accordingly.