Employees' State Insurance Corporation, Orissa Region Vs. Gujarat Co-operative Milk Marketing Federation Ltd. (06.01.2009 - ORiHC) - Court Judgment

Excerpt:
labour and industrial - employer's contribution - sections 2(9) and 45-a of employees' state insurance act, 1948 and rule-50 of the employees' state insurance (central) rules, 1950 - respondent was engaged in business of milk - appellant after inquiry found that there were more than 20 workers under respondent in branch of state - appellant imposed liability on respondent to employee contribution - respondent approached district judge - allowed on ground that at relevant year only five worker were working under respondent - hence, present appeals - held, under section 2(9) of act while defining word employee it is stipulated that the word employee shall not include any person employed for wages exceeding such wages as may be prescribed by central government - in instant case , inspector of appellant who was examined and clearly deposed that in respondent he found four employees including manager besides six laborers and two security guards - in cross-examination he had admitted that out of four employees three were paid not more than rs. 1,600/- per month - evidence adduced by respondent also reveals that branch in concerning state had engaged only four persons and one of them was paid wages more than wage limit prescribed under rule 50 - therefore, at relevant year only five workers were working under respondent and respondent is not liable to pay employee's contribution - motor vehicles act, 1988 [c.a. no. 59/1988]section 173(1) proviso; [d. biswas, amitava roy & i.a.ansari, jj] appeal without statutory deposit but within limitation/or extended period of limitation maintainability - held, if the provision of a statute speaks of entertainment of appeal, it denotes that the appeal cannot be admitted to consideration unless other requirements are complied with. the provision of sub-section (1) of section 173 permits filing of an appeal against an award within 90 days with a rider in the first proviso that such appeal filed cannot be entertained unless the statutory deposit is made. the period of limitation is applicable only to the filing of the appeal and not to the deposit to be made. it, therefore, appears that an appeal filed under section 173 cannot be entertained i.e. cannot be admitted for consideration unless the statutory deposit is made and for this purpose the court has the discretion either to grant time to make the deposit or not. no formal order condoning the delay is necessary, an order of adjournment would suffice. the provisions of limitation embodied in the substantive provision of the sub-section (1) of section 173 of the act does not extend to the provision relating to the deposit of statutory amount as embodies in the first proviso. therefore an appeal filed within the period of limitation or within the extended period of limitation, cannot be admitted for hearing on merit unless the statutory deposit is made either with the memo of appeal or on such date as may be permitted by the court. no specific order condoning any delay for the purpose of deposit under first proviso to sub-section (1) of section 173 is necessary. [new india assurance co. ltd. v md. makubur rahman, 1993 (2) glr 430 and new india assurance co. ltd. v smt rita devi, 1997(2) glt 406, approved. new india assurance co. ltd. v birendra mohan de, 1995 (2) gau lt 218 (db) and union of india v smt gita banik, 1996 (2) glt 246, are not good law]. - 5. law is well settled that an appeal before this court in consonance with section 82(2) of the act lies from an order of e. 1 clearly deposed that in the respondent-federation he found four employees including the manager besides six labourers and two security guards.a.s. naidu, j.1. as both the appeals involve same facts and points of law, the same were heard together with consent of learned counsel for the parties and this common judgment disposes of both the same.2. these appeals filed under section 82(2) of the employees' state insurance act, 1948 (here-in-after called 'the act') assail the order dated 13.12.1996 passed by the learned district judge-cum-e.s.i court, cuttack in e.s.i misc. case nos. 6/92 and 13/94. the gujarat co- operative milk marketing federation ltd. (here-in-after called 'the federation') being aggrieved by the contribution demanded by the employees' state insurance corporation, bhubaneswar (here-in-after called 'the corporation') had filed the aforesaid two misc. cases under sections 75(1)(g) of the act in the court of the learned district judge- cum-e.s.i court, cuttack.according to the federation it carried on business in marketing different milk products throughout the country and for the said purpose it has its sales office and depots at different places including cuttack. m/s lakshmi agency, cuttack was its clearing and forwarding contractor for loading, unloading, preserving the products received from the head office in gujarat and for despatching the same to different dealers in orissa. it was alleged that though the total number of employees engaged on wages by the federation for cuttack office was less than the statutory limit and the federation was not amenable to the act, notices were issued 'or contribution under section 45-a of the act that too without giving it any reasonable opportunity of hearing.3. the stand of the corporation, on the other hand, is that the federation is the principal employer and m/s lakshmi agency was the immediate employer. the federation has supervision and control over the persons employed by m/s lakshmi agency. the total number of employees of the federation at cuttack and that of m/s lakshmi agency in regard to products of the federation was more than twenty, the provisions of the act were applicable to the federation. it was therefore liable to pay the contribution.4. to establish its case the federation got three witnesses examined and the corporation two. a number of documents were exhibited by both sides. the e.s.i court after vivid discussion of the evidence, both oral and documentary, held that the act was applicable to the federation. however, it came to the conclusion that during the relevant period the total number of employees of the federation at cuttack and m/s lakshmi agency had not exceeded twenty but was only five. it was further held that since the 'employees' defined under section 2(9) of the act being less than ten, the federation was not covered under section 1(5) of the act. thus the demand of contribution was not tenable in law. being aggrieved by the said decision of the e.s.i court, the corporation has filed these misc. appeals invoking jurisdiction under section 82(2) of the act.5. law is well settled that an appeal before this court in consonance with section 82(2) of the act lies from an order of e.s.i court, only if it involves substantial question of law and not otherwise. the only substantial question of law on which this court admitted the appeals is that since the total number of persons employed for wages in the federation and its clearing and forwarding contractor m/s lakshmi agency at cuttack being more than ten, whether the federation was covered under the act and was liable to pay contribution in respect of the employees drawing the statutory claim.6. mr. ray, learned counsel for the corporation relying upon section 2(9) of the act submitted that the word 'employee' as defined in the act means any person employed for wages in or in connection with the work of a factory or establishment to which this act applies.7. for the sake of brevity sub-section (9) of section 2 of the act is quoted hereinbelow:(i) who is directly employed by the principal employer on any work of or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or(ii) who is employed by or through an immediate employer, on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or(iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service;(a) any member of the indian naval, military or air forces; or(b) any person so employed whose wages excluding remuneration for overtime work exceed such wages as may be prescribed by the central government.provided that an employee whose wages excluding remuneration for overtime work exceed such wages as may be prescribed by the central government at any time after and not before the beginning of the contribution period, shall continue to be an employee until the end of that period.8. relying upon a decision of the supreme court in the case of hyderabad asbestos cement products ltd. v. employees insurance court and anr. reported in : (1978)illj181sc mr. ray submitted that any person employed for wages by the principal employer can be included for the purpose of determining, whether the establishment is covered under the act or not. he also took the pain to convince this court that the respondent-federation was an establishment as defined under section 2(12) of the act and was amenable to the act. there is no quarrel with regard to the proposition advanced by mr. ray, but then the sine qua non for application of the act is employment of more than ten persons at the relevant time. thus the only question, which needs to be determined in these appeals, is as to whether counting the total number of persons on employment for wages is to be done differently where the manufacturing process is catered with or without aid of power in the said establishment.9. perusal of section 2(9) of the act gives an impression that the same does not include any person so employed whose wage excluding remuneration for overtime work exceed such wages as may be prescribed by the central government. rule-50 of the employees' state insurance (central) rules, 1950 prescribes the wages.10. after hearing learned counsel for the parties and perusing the materials available on record, this court finds that there is no dispute that under the act liability to pay contribution arises only when twenty or more persons are employed for wages. in the case at hand, the e.s.i court after discussing the materials arrived at a conclusion that the basic number of twenty had not reached, and thus no liability under the act had accrued. the term 'employee' has been defined under sub-section (9) of section 2 of the act to mean 'any person employed for wages in or in connection with the work of a factory or establishment to which the act applies and his employment may be covered by any of the alternatives of clauses (i), (ii) or (iii) of the said sub-section. the word 'wages' is defined in sub-section (22) of section 2 of the act as 'all remuneration paid or payable, in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled....'11. it is thus clear that in order that someone may be an employee within the meaning of the act, he has to be employed for wages. the concept of wages would bring in the contract of employment. in common parlance the, concept of employee would take with it the correlation of the employer. thus only those persons who are paid wages in consonance with section 2(9) of the act are to be considered as employees for the purpose of contribution. the argument advanced by mr. ray, on the other hand, is that if the total number of persons employed becomes more than twenty the establishment in question would come within the purview of the act. the act being a beneficial one contribution cannot be demanded only in respect of employees whose wages are less than the stipulated amount. mr. ray, emphasized that the statute being a beneficial one this court should not interpret a provision occurring therein in such a way that the benefit would be withheld from employees.12. these submissions are strongly repudiated by mr. udgata, learned counsel appearing for the federation. according to him the court should not travel beyond the scope of the scheme under the act and the interpretation of the provisions should be made in a harmonious manner.13. this court has no doubt that beneficial legislations should have liberal construction with a view to implementing the legislative intent but where such beneficial legislation has a scheme of its own, there is no reason for the court to travel beyond the scheme and extend the scope of the statute on the pretext of extending the statutory benefit to the organizations which are not covered by the scheme. the act applies to all factories or establishments with twenty or more persons and the benefit is intended to be given to organizations with more than such number of employees. it is not the contention of the counsel that because the legislation is beneficial it should not apply to the factories or establishments with less than twenty employees. if that be so, persons who do not satisfy the definition of 'employee' as per section 2(9) of the act cannot be taken into account for the purpose of fixing the statutory minimum (see : (1985)illj69sc (regional director, employees' state insurance corporation v. ramanuja match industries.)14. under section 2(9) of the act while defining the word 'employee' it is stipulated that the word 'employee' shall not include any person employed for wages exceeding such wages as may be prescribed by the central government. in the case at hand, the inspector of e.s.i who was examined as o.p.w.1 clearly deposed that in the respondent-federation he found four employees including the manager besides six labourers and two security guards. in cross-examination he had admitted that out of four employees three were paid not more than rs. 1,600/- per month. the evidence adduced by the federation also reveals that m/s lakshmi agency had engaged only four persons and one of them was paid wages more than the wage limit prescribed under rule-50 of the employees' state insurance (central) rules, 1950.15. after going through the said evidence the trial court has come to the conclusion that the number of employees engaged in the respondent-federation was less than ten. finding no error in the reasonings and conclusions arrived at by the trial court, this court feels not inclined to interfere with the impugned order and dismisses both the appeals. at the same time considering that in the meanwhile sixteen years have passed, this court grants liberty to the corporation to conduct a fresh inspection, if it is so advised, and proceed in accordance with law.16. both the appeals are disposed of.