SAI MIRRA INNOPHARM PRIVATE LIMITED FORMERLY KNOWN AS SAI MIRA PHARMACEUTICALS (P) LTD. Vs. EMPLOYEES STATE INSURANCE CORPORATION

JUDGEMENT

(1.) This Civil Miscellaneous Appeal has been filed as against the order of Employees' State Insurance Court confirming the order passed by the respondent Corporation under section 45A of Employees' State Insurance Act, 1948 (hereinafter referred to as 'the Act') dated 02.12.2003 by which the respondent claimed contributions from the appellant for the period 1992-194 and 1996-1999 in respect of the business taken over by the appellant from one M/s. Softcaps Private Limited at No.155/41, Medavakkam Road, Keelkattalai, Chennai - 117.

(2.) M/s. Softcaps Private Limited which is a pharmaceutical company was taken over by the appellant on 14.04.2000 and it entered into an agreement of sale with the appellant on 30.06.2000 to sell land and building, plant and machinery and other fixed assets. The workers, who had been employed by the said pharmaceutical company were continued in employment by the appellant. On 02.09.2000, an inspection was conducted and the appellant was called upon to furnish records pertaining to the years 1992-1994 and 1996-1999. However, the appellant informed the ESI authorities that they had come into existence only with effect from 21.03.2000 and had purchased land, building, plant and machinery from M/s.Softcaps Private Limited vide agreement dated 30.06.2000 and hence, the question of retaining the documents does not arise and asked them to approach the erstwhile company. While so, the respondent passed the order dated 02.12.2003 under Section 45A of the said Act calling upon the appellant to pay a sum of Rs. 14,24,220/- followed by notice dated 11.03.2004 calling upon the appellant to pay a sum of Rs. 16,24,012/- being the contributions payable in respect of the employees engaged for the periods from 1992-1994 and 1996-1999.

(3.) The order dated 02.12.2003 was challenged before the ESI Court. On contest, the ESI Court found that, as per section 93A of ESI Act, in case of transfer of establishment and the person to whom the factory or establishment is so transferred is jointly and severally liable to pay the amount due in respect of any contribution or any of the amount payable under this Act in respect of the period upto the date of such transfer. Though the appellant contended that the employees of the erstwhile company were not taken over and that they had purchased only land and building, plant and machinery and other fixed assets, the appellant, after taking over, had applied to the Employees' State Insurance Corporation stating that they had taken over all the employees of M/s. Softcaps Private Limited and had requested for allotment of new ESI Registration Number for the very same employees as per Ex-P7 and by communication dated 29.06.2000, marked as Ex-P9, the Corporation advised the appellant to continue to pay the contribution under the very same code number namely (51-15726-34) allotted to M/s. Softcaps Private Limited as the same employees were employed by the appellant.