OPERATIVE STORES LIMITED Vs. SOUTH INDIA VISCOSE CO REGIONAL DIRECTOR EMPLOYEES STATE INSURANCE CORPORATION

JUDGEMENT

(1.) This appeal is directed against the decision of the Employee's State Insurance Court, Coimbatore, in E.S.I.C.P. No. 98 of 1984, holding that the appellant is liable to pay contribution under Central Act 34 of 1948 for the period from 12th February, 1978, to 1st October, 1982.

(2.) The appellant herein runs a co-operative store for the benefit of the employees of the South India Vicose Limited, Sirumagai. The employees of the company numbering about two thousand are members of the society. It is not in dispute that the society is running a co-operative store where more than 20 persons are employed. The Employees' State Insurance Act was extended to Coimbatore as per the Notification No. 39, dated 20th January, 1978. It has come into force from 12th February, 1978. However, the appellant did not pay contribution as provided under the Act. The Insurance Inspector, attached to Employees' State Insurance Corporation, inspected the society on 27th September, 1982. He found that more than 20 persons are employed by the appellant society during the relevant period, i.e. between 12th February, 1978, and 1st October, 1982. He sent a survey report, exhibit B-1, dated 27th September, 1982, in Form G-10 to the Regional Director. After the inspection, the appellant society submitted returns under the Act for the period from 1st October, 1982, and had paid the contribution. Thus there is no dispute about the appellant's liability for the period from 1st October, 1982, onwards. The dispute is as regards the appellant's liability to pay contribution for the period from 12th February, 1978, to 1st October, 1982. On the basis of the survey report, exhibit B-1, a notice was given to the appellant society calling upon it to pay the outstanding contributions for the period from 12th February, 1978 to 1st October, 1982, within 15 days from the receipt thereof and stating that if the contributions are not paid, the contribution payable by the appellant society will be determined under S.45A of the Employees' State Insurance Act, hereinafter referred to as the Act. The appellant did not pay the outstanding contributions as called upon in the said notice dated 18th February, 1984. Proceedings, had, therefore, been initiated for the determination of the quantum of contribution payable by the appellant for the relevant period at Rs. 29, 106.76. A demand for paying the said amount was served on the appellant society and the same was also sent to the Collector of Coimbatore.

(3.) Thereafter, the appellant filed the said E.S.I.C.P. No. 98 of 1984, before the Employees' State Insurance Court, Coimbatore. There the appellant took a plea that S.45A of the Act had no application to the facts of the case and that, in any event, a notice to the appellant should have been given before the determination of the quantum of contribution under S.45A of the Act. The plea that the appellant is entitled to a show-cause notice under S. 45A before the amount of contribution is quantified under S.45A of the Act was not argued at all before the Employees' State Insurance Court. As a matter of fact, a perusal of the affidavit field in support of the application for stay filed before the Employees' State Insurance Court indicates that the only point urged before the Court was that the Society has no resources or reserves to meet the liability arising out of the demands made by the Corporation and that, therefore, the appellant is not liable to pay the contribution for the period in question. The order of the Employees' State Insurance Court also indicates that the only point urged before it was that the society is not liable to pay the contribution for the disputed period as it has no resources. Even though one of the grounds set out in the appeal grounds before the Employees' State Insurance Court was the non-issue of show-cause notice before the quantification was undertaken under S.45A of the Act, the appellant does not say anywhere as to how the quantification was erroneous. If really the appellant is aggrieved against the quantum and if he satisfies the Court that the quantification has not been done properly, the Employees' State Insurance Court itself would have directed a quantification after giving notice to the appellant. But, where the appellant has not chosen to question the quantification on giving proper basis, the Employees' State Insurance Court has proceeded on the basis that the quantum of contribution determined by the authorities was not challenged by the appellant, and the challenge was only of the liability on the ground that the appellant has no resources and that its employees are not going to be benefited by payment of such contribution now.