JUDGMENT : Challenge in the present appeal is to the order, dated 11.04.2007 in ESI No.54 of 2004 on the file of Chairman, Employees Insurance Court and Chairman, Industrial Tribunal-I, Hyderabad, whereunder and whereby, the application filed by the appellant impugning the notice, dated 13.05.2004, demanding the appellant to pay an amount of Rs.6,77,797/- in pursuance to the inspection report as well as the order, dated 27.09.2004 passed under Section 45-G of the Employees State Insurance Act, 1948 (for short, ?the Act?) whereby claim for an amount of Rs.3,12,000/- with interest, was dismissed. 2. The present appeal is at the instance of the applicant-petitioner before the ESI Court. The 1st respondent and 2nd respondent herein are the respondents in the ESI Court. 3. For brevity, the ranks of the parties as were referred to before the Insurance Court is maintained. 4. The sum and substance of the case of the petitioner is that it is a Government Company and it is exempted from the operation of ESI Act. It is claimed that it has been paying the benefits more than the ESI Act. As such, the ESI Corporation has no jurisdiction over the petitioner company under the ESI Act to demand contributions from the company, even in respect of the temporary workers also. 5. The case of the respondents is that inspections were done on 15.12.2003 and 18.12.2003 and found the following deficiencies : ?Ex.R-5: Observations of Insurance Inspector reads as follows : Visited the unit under prior intimation and verified the pay rolls for the period from 01.04.1997 to 31.03.2000 and 01.01.2001 to 31.08.2001 and receipts and payments statement in Respect or Civil & Engineer contractors for the period from 04/2000 to 3/2003. On verification of the above records/statements, the following observations are made: You have not paid the contributions in respect of the temporary status workers for the period from 01.04.1997 to 31.03.2000 and from 01.01.2001 to 31.08.2001. Total salary paid to them works out to Rs.60,45,406/- on which contributions @ 6.5% works out to Rs.3,92,952/- which may be paid immediately. 2. Further the security contractor M/s. Gurbani Security Private Limited Code No.52-14016-101 has not paid the contributions on conveyance allowance paid to the guards employed at your place for the period from 1/2003 to 11/2003 amount to 170310/- on which contributions @ 6.5% works out to Rs.11071/- which may be arranged to pay through your Sec.contractor. 3. 2. Further the security contractor M/s. Gurbani Security Private Limited Code No.52-14016-101 has not paid the contributions on conveyance allowance paid to the guards employed at your place for the period from 1/2003 to 11/2003 amount to 170310/- on which contributions @ 6.5% works out to Rs.11071/- which may be arranged to pay through your Sec.contractor. 3. Further M/s. Kiran, Code No.52-14348-101 has not submitted the R.C. for the CPE 9/03 so far which may be submitted through your contractor immediately. 4. Further, you have engaged 94 work contractors on various jobs for repairs and maintenance of lab buildings, staff, etc during the period and paid a consolidated amount of Rs.3,01,58,473-50 which includes cost of material labour charges etc. No contributions have been paid on the labour engaged through contractors and no segregation of labour charges, material cost was made available to us on the plea that the contractors are the employees within the meaning of Section 2 (9)(ii) of the Act and being the principal employer you are liable to pay contributions. Please arrange to pay the contributions on the labour charges incurred through contributions and keep the records ready for our verification. A further communication from Regional Officer will follows: Please forward the HRD 325 directly to our Regional Office, after getting the approval/signature from the Director. A further communication as a result of this inspection will follow from Regional office.? 6. On the basis of said inspection, a demand was raised under Ex.P.2, dated 13.05.2004, demanding payment of contribution of Rs.6,77,797/- with interest. Basing on the said demand notice, the petitioner company has paid a sum of Rs.3,68,696/- before passing of the order, dated 27.09.2004, on account of attachment of bank accounts of the institution. Subsequently, the 1st respondent Corporation has passed an order, dated 27.09.2004 demanding rest of the amount along with interest. Aggrieved by the same, a petition was filed before the Insurance Court. 7. The case of the respondents is that as per the inspection made by the officials of the ESI Corporation, lapses have been pointed out under Ex.R5 and there was contravention of contributions from the petitioner company for temporary workers engaged for various works for the period covering 01.04.1997 to 31.03.2000 and 01.01.2001 to 31.08.2001 in respect of contract workers for the period from April, 2000 to March, 2001. Basing on such inspection and lapses, a demand was raised under Ex.P2-C-11 notice, dated 13.05.2004, and subsequently some amounts were paid and when balance amounts were not paid, an order under Section 45-G, dated 27.09.2004 was passed for the balance amount along with interest. Aggrieved by the same, an application was filed by the petitioner company before the Insurance Court. 8. In support of the case of the petitioner, the petitioner company has examined P.Ws.1 and 2 and Exs.P.1 to P.17 were marked. On behalf of the respondents, RWs.1 and 2 were examined and Exs.R.1 to R.10 were marked 9. The Insurance Court, after appreciating the evidence on record, found that there is infraction of statutory provision with regard to the contribution and thereby, the application was dismissed. Hence, the present appeal at the instance of the appellant-petitioner company. 10. The scope of interference of this Court is only on the following substantial question of law : Whether the authority acting under the ESI Act of 1994 assume the jurisdiction in respect of the Government Company in the light of provisions contained under Section 1 (4) of the ESI Act. 11. The contention of learned counsel for the petitioner is that as per Sub Section (4) of Section 90, the authorities under the ESI Act cannot assume jurisdiction over the companies maintained by the Central Government in the light of amendment to Sub Section (4) of Section 1 proviso by Act 29 of 1989, dated 16.05.1990, whereby the Government Company was exempted, unless it is shown that the benefits they were paying is less than what the ESI Corporation. In the present case, there is no allegation that the petitioner company has been paying the benefits less than what the ESI Act prescribed. The very inspection, according to him, would show that lapses found were only in respect of contributions from the temporary workers engaged for execution of works for the various periods. According to him, contribution is not required to be paid in the light of above provisions. 12. Learned counsel for the respondents has submitted that there is violation in payment of contributions by the petitioner-company and therefore, the authorities have rightly invoked the jurisdiction under the Act and rightly determined the amount, which requires no interference. 13. According to him, contribution is not required to be paid in the light of above provisions. 12. Learned counsel for the respondents has submitted that there is violation in payment of contributions by the petitioner-company and therefore, the authorities have rightly invoked the jurisdiction under the Act and rightly determined the amount, which requires no interference. 13. In the light of above submissions, it is apt to refer amendment to sub Section (4) of Section 1 of the ESI Act, which reads as follows : Sec.1: Short title, extent, commencement and application: 1? 2? 3? ?(4) It shall apply, in the first instance, to all factories (including factories belonging to the Government) other than seasonal factories. Provided that nothing contained in this subsection shall apply to a factory or establishment belonging to or under the control of the Government whose employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act. A reading of proviso to Sub Section (4) of Section 1 of the Act makes it clear that the operation of Act was exempted in respect of factory or establishment belonging to or under the control of the Government, whose employees are otherwise in receipt of benefits substantially similar or superior benefits under the Act. 14. There is no dispute that the petitioner company comes under the definition of ?Factory? and it is under the control and establishment of the Government of India. The lapses pointed out by the respondent authorities were indicated in Ex.R.5. All the infractions were relating to non-contributions of ESI requirements by the petitioner company in respect of temporary employees engaged by the contractor while executing the works for the period 01.04.1997 to 31.08.2001. The infraction is relating to subsequent to Amendment of Act 29 of 1989. Initially the Government Companies comes under the coverage of the ESI Act, but subsequently they were exempted. 15. A reading of the above provision would make it clear that the authorities cannot assume jurisdiction for non-payment of contribution and they can only assume jurisdiction, in case they found that the benefits which are paid by the petitioner company, were not substantially similar or superior to the benefits provided under the Act. 16. It is also apt to refer to the very object of the Act. 16. It is also apt to refer to the very object of the Act. The object is to confer benefits to employees, in case of sickness, maternity and employment injury and certain other matters in relation thereto. The object of the Act is to provide a statutory security to the workers working under the various factories in the event of any sufferance on account of various reasons, while discharging their duties in the factories de hors the ability or inability of the employer to pay such a claim. In the present case, it is the Government, which cannot be an insolvent and it cannot be said that it has inability to meet any claim in the event of any such claims made by the workman for their sufferance while working in the factory. 17. Admittedly, in the present case, inspections were not relating to any lapses on the part of the petitioner company in not paying the benefits substantially similar or superior to the benefits under the Act. Therefore, the very assumption of the jurisdiction for non payment of contributions is contrary to the very infringement of the Act. Therefore, the Insurance company has not properly appreciated under sub section (4) of Section 1 of the Act. Such findings are required to be set aside. 18. Accordingly, appeal is allowed setting aside the notice, dated 13.05.2004 and subsequent order, dated 27.09.2004 passed by the respondent authorities. The amount, if any, paid by the petitioner company shall be refunded by the respondent No.6 within a period of two (2) months from the date of receipt of a copy of this order. Failing which respondent No.6 is liable to pay interest @ 8% per annum from the said date till the date of payment. Miscellaneous petitions, if any, pending shall stand closed. There shall be no order as to costs.