PONDICHERRY CO-OPERATIVE HANDLOOM EXPORT DEVELOPMENT PROJECT LTD Vs. REGIONAL DIRECTOR EMPLOYEES STATE INSURANCE CORPORATION MADRAS

JUDGEMENT

(1.) THIS Civil Miscellaneous Appeal has been preferred against the Order, dated 10.06.1999 passed by the ESI Court, Pondicherry in E.S.I.O.P No.2/94.

(2.) IT is not in dispute that the appellant, Co-operative Handloom Export Development Project has been formed by the Government of Pondicherry, now renamed as Puducherry. According to the learned counsel appearing for the appellant, the said project has been formed by the Government with an intention of promoting export of the Handloom goods from Union Territory of Puducherry to foreign countries, as there were number of weavers, who were unemployed and do not have financial assistance to engage themselves in the weaving activity. As per the project, the appellant used to supply raw materials to the members of the society and the members use to weave it in their house at their convenience and deliver the finished goods to the society and therefore, there is no employer and employee relationship between the appellant and the members of the project and as such, the members are not employees, within the meaning of Section 2 (9) of the E.S.I Act and what was being paid to them is only "conversion charges" and not wages.

(3.) IT is not in dispute in this Civil Miscellaneous Appeal that as per the project, the appellant would purchase yarns and other raw materials required and advance the same to the weavers / members and they shall convert the same into finished goods and deliver them to the society and for which, they will be entitled to only for conversion charges. As per the notice, dated 12.01.1994 issued to the appellant, a sum of Rs.32,19,265/- has claimed as arrears of E.S.I contribution from 01.01.1981 to till the date of filing of E.S.I.O.P.