POONA INDUSTRIAL HOTEL LTD Vs. I C SARIN

JUDGEMENT

(1.) The petitioner in this petition, Poona Industrial Hotel Ltd., is a limited company having its registered office at Koregaon Road, Poona and is owning an establishment known by the name of Hotel Blue Diamond also situated at Koregaon Road at Poona. The petition seeks to challenge the view taken by the Employees' State Insurance Corporation, having its regional office at Bombay, that the provisions of the Employees' State Insurance Act, hereinafter referred to a "the E. S. I. Act", are applicable to the establishment known as Hotel Blue Diamond. In this petition the Regional Director of the Corporation has been added as the first respondent while the Corporation itself is the second respondent. The averments in the petition disclose that the hotel has 92 rooms for the residence of guests and it has been mentioned, partly proudly, that it is being groomed for five star classification. The primary object of the hotel is said to be provision of residential accommodation to the guests patronising the said hotel and in order to make the stay of the guests more comfortable, the hotel also provides food and beverages to its guests. The hotel employs 227 persons of whom 45 are working in the kitchen which prepares food as mentioned above for the guests of the hotel. In the kitchen itself there are 3 heaters, 1 griller, 2 toasters, 2 mixers, 2 water boilers, a bakery machine and an empresso (expresso) machine among others. All these implements are run on electricity. In other words, the use of the power for the preparation of the articles of food in the kitchen is an admitted fact. Besides the above-mentioned electrical appliances, there are also 7 gas ovens, 2 gas heaters and 3 gas burners all of which, as their names indicate, are run on gas. The petition also points out that the Municipal Corporation of Poona has given a certificate of registration under the Bombay Shops and Establishments Act, 1948, registering part at least of the hotel as a lodging house and part as a hotelling concern. The description of lodging house and hotelling is to be found against the column "kind of business" which is contained in the certificates of registration. The entire hotel itself is an establishment under the Bombay Shops and Establishments Act, hereinafter referred to as "Shops and Establishments Act".

(2.) By a letter dated 19th of August, 1970 the office of the Regional Director of Employees' State Insurance Corporation of Bombay informed the petitioner that the kitchen attached to the hotels and restaurants would be covered by the provisions of the Act with effect from 1st of July, 1970 if they satisfy the provisions laid down in Section 2 (12) of the Employees' State Insurance Act. With this information the petitioner was requested to furnish to the office of the Regional Director all information in respect of the hotel/restaurant in a form which was enclosed with the said letter dated 19th of August, 1970. Thereafter some correspondence ensued between the petitioner and the E. S. I. Corporation. Ultimately on 18th of April, 1972 three letters were addressed by the office of the Regional Director of the Corporation to the petitioner. First of them informed the petitioner that the principal employer of the factory covered under the Act was required to pay employees' contribution at the rates specified in the first, schedule to the Act It was noted in the said letter that the petitioner had not paid the employees' contribution for the period from 1st of July, 1970 to 29th of February, 1972. Certain other instructions for complying with the provisions of the Act were also given in the said letter. By another letter of the same date the petitioner was informed that an employer of a factory covered by the Act was required to pay under Section 73A of the Act Employer's Special Contribution at the rate mentioned in the said letter. By a third letter of the same date the petitioner was informed about the necessity of submitting declaration forms under the Employees' State Insurance (General) Regulations. The petitioner sent a reply to the above-mentioned letters and ultimately on 19th of August, 1972 the office of the Regional Director of the Corporation informed the petitioner that since the petitioner's hotel employees were more than 19 in number and preparation of food and eatables was done in the hotel with the aid of power, the hotel was a factory within the meaning of Section 2 (12) of the Act. The petitioner was therefore required to start compliance with the provisions of the Act. If such compliance was not made, the petitioner was told that legal proceedings would be taken against the petitioner and the contribution payable would be recovered through the Collector as an arrear of land revenue. At this stage it may be mentioned that in all these letters and the notices issued by the E. S. I. Corporation there is a reference to the employees of the hotel and not merely to the employees of the kitchen.

(3.) We have already referred to the letter dated 19th of August 1972 issued by the office of the Corporation. Prior to that a letter dated 16th of March, 1972 was sent by the petitioner wherein it was contended on behalf of the petitioner that the hotel owned by the petitioner was not covered by the provisions of the E. S. I, Act and there was in that letter a protest against the move of the Corporation to cover the hotel owned by the petitioner by the provisions of the E. S. I. Act, with effect from 1st of July 1970. In another letter dated 4th of May 1972, which was addressed on behalf of the petitioner to the Corporation, a contention was taken that the Corporation had not disclosed any reasons how the hotel owned by the petitioner could be treated as covered under the E. S. I. Act. In these two communications sent by the petitioner to the Corporation the petitioner protested against the move of the Corporation to enforce the provisions of the Act against the Hotel Diamond Blue as a whole and there is no attempt to narrow the applicability of the Act to the kitchen which forms a part of the hotel. Similarly, in the petition itself in ground (a) it is specifically mentioned that;