ESVEES Vs. REGIONAL DIRECTOR EMPLOYEES STATE INSURANCE

JUDGEMENT

(1.) AGGRIEVED by the proceedings of the first respondent dated February 22, 1989, the petitioner has approached this Court to issue a writ of certiorari and quash the same on various grounds.

(2.) ACCORDING to the petitioner, the factory premises at L-27, Ambattur Industrial Estate, Madras-58, has been assigned to him by SIDCO in the year 1972, After assignment, they commenced the business of Esvees vs. Regional Director, Employees' State Insurance Corporation and Ors. (19. 03. 19. . . Page 2 of 4 gional Director, Employees' State Insurance Corporation and Ors. (19. 03. 19. . . Page 2 of 4 fabrication and reconditioning of high-pressure valves from January, 1977, till November, 1980. He had employed for the business only 3 to 5 persons during the said period; hence the provisions of the Employees' State Insurance Act, 1948, will not be applicable to the business which he had carried on. In such a circumstance, he did not file any return under the Act, since the provisions of the Act are not applicable to him. It is further stated that he has closed -down his business in November, 1980. Thereafter, he had leased the said factory premises to his friends S. Jayakumar and V. Mahadevan, who had been carrying on business in partnership under the name and style of Sigma Welds in the factory premises belonging to him. They also did not employ more than five persons per day in the factory premises, which he leased to them, and they have been carrying on business in the said premises from April 15, 1981, to July 15, 1982. The provisions of the said Act will not applicable to them also. It is Stated that as per Section 44 of the said Act, the returns and necessary registers have to be maintained by every principal and immediate employer in his factory. He was not the principal nor the immediate employer, during the period when the factory was leased to the aforesaid partnership firm. It is further stated that in the show-cause notice dated January 21, 1987, the first respondent has mentioned that the petitioner has to pay a sum of Rs. 15,669. 40 as arrears of contribution under the Act and he was asked to furnish his reply within 15 days from the date of the said notice. It is also stated that the petitioner had leased out the factory premises from April 15, 1981, to July 15, 1982, to a partnership firm Sigma Welds and he was not the employer in the said premises during the relevant period, as instated in the calculations sheet. After Sigma Welds vacated the premises, the factory was closed till February 1, 1985. Thereafter, the petitioner has leased the factory premises again in favour of Hi-Q-Wire Processors, No. 44, Kutchery Road, Mylapore, Madras-4, from February 1, 1985, to March 31, 1988 which is a sole proprietary concern. Again the factory premises has been leased from July 1, 1988, to Adorite Insulations Private Limited, Madras-102. In such circumstances, according to the petitioner, they need not pay any amount, since they were not the principal employer at the relevant point of time. It is also stated that on July 11, 1988, they handed over a letter to the first respondent requesting a further time to present their case since they have to leave Madras. However, by an order dated February 22, 1989, the petitioner was directed to pay a sum of Rs. 15,669. 40 with a penal Esvees vs. Regional Director, Employees' State Insurance Corporation and Ors. (19. 03. 19. . . Page 3 of 4 gional Director, Employees' State Insurance Corporation and Ors. (19. 03. 19. . . Page 3 of 4 interest of Rs. 4,511. 90 as Employees' State Insurance contribution payable under the Act. Aggrieved by the said order of the first respondent, the petitioner has filed the present writ petition as stated above.

(3.) RESPONDENTS Nos. 1 and 2 filed a counter-affidavit denying the various averments made by the petitioner. It is stated that a statutory Inspector, who verified the records of the establishment, in the course of his inspection, on April 15, 1982, had found that the petitioner had employed for wages ten persons on September 11, 1981. On the basis of the report submitted by the Inspector, a communication dated September 23, 1982, in the Form C-II was sent to the petitioner intimating a Code No. 51-17289 was allotted to his establishment and requested the petitioner to comply with the provisions of the Act with effect from September 11, 1981. However, the petitioner did not comply in spite of the communication. Thereafter, a show-cause notice dated February 4, 1987, was issued enclosing a calculation sheet showing a sum of Rs. 15,669. 40 as contributions proposed to be assessed for the said period of default. A notice for personal hearing was also fixed to be held on March 11, 1987, and then to July 12, 1988. Since the petitioner failed to participate in the personal hearing, however, after giving an adequate opportunity, an order under Section 45-A of the said Act was passed by the authority concerned on February 22, 1989, determining the amount of contribution as Rs. 15,669. 40 for the period of default from September 11, 1981, to September, 1985. With these averments they prayed for the dismissal of the writ petition.