K ABDUL AZEEZ Vs. STATE OF KERALA

JUDGEMENT

(1.) PER K. Padmanabhan Nair, J. 1. The applicant in I.C. 37/96 on the file of the Employees Insurance Court, Palakkad is the appellant in this M.F.A. The appellant is the proprietor of a hotel under the name and style "Indian Hotel" at Nilambur. According to the appellant, he took the building on lease (in which the hotel is situated) from Kannanari Moideenkutty as per an agreement dated 30.6.1991 and started the business from 2.7.1991 after obtaining necessary licence from Nilambur Panchayat. It was averred that in that building Sri K. Muhammed Basheer was running a hotel. He closed the establishment on 15.3.1999 after terminating the services of the workers. The workers were given all the benefits admissible to them. It was averred that the business started by the appellant is neither a continuing one nor a transferred one. It was also averred that the appellant had not engaged more than the minimum number of employees so as to bring the same within the meaning of factory or establishment. It was averred that on 5.9.1991 and 6.7.1992 the Insurance Inspector, Ferroke had inspected the establishment and was satisfied that the establishment was not liable to be covered. It was alleged that after the lapse of 5 years, the appellant was served with a notice stating that his establishment was covered under the provisions of the Employees State Insurance Act, 1948 (for short, 'the Act ') and he was directed to comply with the provisions of the Act and to pay contribution from 2.7.1991. The appellant filed reply on 13.5.1996 denying his liability. The competent authority rejected the contention of the appellant and directed to pay the contribution. The appellant filed I.C. 37/96 before the Insurance Court challenging the order of the Regional Director. The Employees Insurance Court, Palghat, found that the establishment run by the petitioner is a continuation of another establishment which was already covered by the Act. It was held that in view of the provisions contained in S.1(6) of the Act, the appellant 's establishment is also liable to be covered. Challenging that decision, this M.F.A. is filed.

(2.) ADVOCATE Sri Ajayakumar appearing for the respondent raised a preliminary objection that the M.F.A. itself is not maintainable. It is argued that in view of the provisions contained in S.82 of the Employees State Insurance Act, an appeal can be admitted and heard only on a substantial question of law. It is argued that no substantial question of law arises in this M.F.A. and no such question was also framed in this M.F.A. It is argued that whether the present establishment is a continuation of the old establishment is essentially a question of fact and no question of law arises in such a case. The learned Counsel for the respondent relied on a decision in The Regional Provident Fund Commissioner v. C.K.M. Saw Mills LLR 1981 (1) Ker. 293. In C.K.M. Saw Mill s case, the decision was rendered under S.19 -A of the Employees Provident Fund Act, 1952. The question arose for consideration in that case was also whether the establishment was in fact the continuation of the old establishment. A Division Bench of this Court after considering the law on the point held that whether the old establishment was extinguished and a new establishment came into being is essentially a question of fact. In C.K.M. Saw Mill 's case the Division Bench followed the principles laid down by the Supreme Court in S.L.P. (Civil) No.4583 of 197(sic), in which it was held as follows:

(3.) NOW I shall consider the case of the appellant on its merits also. The building in which the hotel is housed belongs to the father of the appellant. The former employer is the brother of the appellant. The evidence on record show that the building was constructed for the purpose of conducting hotel. Prior to 1.7.1995, brother of the appellant was conducting a hotel in that building. According to the appellant, the brother stopped that business on 15.3.1991 and thereafter the building was lying vacant. His further case was that he took the building on rent from his father along with utensils, chairs, almirahs etc. for the purpose of starting a hotel. The stamp papers for writing the lease deed were purchased by the mother of the appellant and not by the landlord or the tenant. A reading of the document shows that such a document was executed only to make it appear that it is a new establishment. The competent authority passed an order by which it was held that the establishment of the brother of the appellant was liable to be covered is also admitted. Challenging that order, I.C.11/1994 was filed before the Insurance Court. Insurance Court confirmed the decision of the competent authority and that decision had become final and conclusive. The Employees ' Insurance Court, after taking into consideration of the fact that the building with furniture belonging to the father, and appellant 's brother was doing the very same business etc., found that the present establishment is only a continuation of the earlier establishment.