LAWS(KAR)-2023-7-112

ZENER SYSTEMS PVT. LTD. Vs. REGIONAL DIRECTOR

Decided On July 07, 2023
Zener Systems Pvt. Ltd. Appellant
V/S
REGIONAL DIRECTOR Respondents

JUDGEMENT

(1.) This appeal is filed challenging the order dtd. 29/9/2018 passed by the Employees State Insurance Court at Bengaluru ('ESI Court' for short) rejecting the application filed by the appellant under Sec. 75 of the Employees State Insurance Act, 1948 (ESI Act' for short) to set aside the order dtd. 22/1/2016 passed under Sec. 45-A of the ESI Act.

(2.) The factual matrix of the case of the appellant herein is that it is engaged in power conditioning/enterprise Communication/IP-Video, Surveillance/Audio Video Conferencing and is covered under ESI Act and obtained the ESI Code number and the applicant is paying ESI contribution from time to time. It is stated that the applicant is carrying out its work at the sites, sub-contractors having individual ESI Code numbers are engaged by the applicant under Annual Maintenance Contract and all the labour charges done outside/sites, which are having individual Code number, there is no supervision by the applicant.

(3.) It is the case of the ESI Corporation that the appellant is running a company under the name and style M/s. Zener Systems Private Limited, a factory situated at Bengaluru covering under ESI Act and the employer is required to pay the contribution in accordance with Ss. 39 and 40(1) of the ESI Act at the rate prescribed under Rule 51 of the ESI (Central) Rules, 1950, in the manner prescribed under Regulation 29 of the ESI (General) Regulations, 1950 with the time limit prescribed under Regulations 31 of the said Regulations. It is contended that the Social Security Officer, who verified the records of the factory observed that the employer had not paid contribution on wages involved in the items of expenditure i.e., Service Direct Cost in a sum of Rs.58,63,360.00 for the period April 2010 to March 2011 and contribution is payable at the rate of interest at 6.5% i.e., Rs.3,81,118.00. Hence, the employer as instructed by the Social Security Officer vide his observation memo dtd. 3/7/2015 ordered to pay the contribution due on the above items of wages. However, the employer did not comply with the instructions and hence, notice was issued to the principal employer on 30/9/2015 directing him to show cause within 30 days as to why contribution on the prescribed rates on the wages above should not be recovered.