- (1.) THIS appeal under Section 82 (2) of the Employees' State Insurance Act, 1948 (hereinafter called "the Act" is directed against the order of the Employees' Insurance Court, Delhi, on a petition under Section 77 of the Act for a direction to the respondent and raises the question as to the construction of Section 45a of the Act, and as to the extent of the power of the Employees' State Insurance Corporation (hereinafter called "the Corporation", to make an ad hoc determination of liability of an employer under the Act.
(2.) BY a petition under Section 77 of the Act, the appellant, an employer within the meaning of the Act, challenged the legality, validity and the correctness of the demand of Rs. 6,950. 54 made by the Corporation by notice for the recovery of the amount under Section 73d of the Act which was issued by the Regional Director of the Corporation to the Collector of Delhi seeking its realisation as arrears of land revenue. The petition was grounded on the allegation that the assessment of the contribution made by the Corporation on an ad hoc basis under Section 45a of the Act was not permissible in law because the appellant had requested the Corporation on a number of occasions to inspect the records of the appellant but that the officials Masco Private Limited vs. Employees' State Insurance Corporation (12. 04. 1974 - DELHC) Page 2 of 31 ployees' State Insurance Corporation (12. 04. 1974 - DELHC) Page 2 of 31 of the Corporation declined to inspect the relevant records. It was further alleged that in determining the liability of the appellant under Section 45a of the Act, the Corporation had ignored the principle of natural justice inasmuch as no proper hearing had been given to the appellant before making the determination. It was further contended that the determination of the contribution was not based on the provisions of the Act and in making the determination, the Corporation had ignored the total wages paid during the period of the notice by the appellant to its employees. The basis on which the assessment was made was also challenged as being contrary to proper accounting. The petition was resisted on behalf of the Corporation and on the pleadings of the parties, the Employees' Insurance Court framed the following two issues: 1. What amount is payable by the petitioner as the employees' and employer's special contribution for the period in question ? 2. Relief. At the trial of the petition before the Court below, both oral and documentary evidence was led on behalf of the parties.
(3.) THE appellant examined M. L. Malhotra, managing director of the appellant, who stated that he had received the notice Ext. PI from the Corporation which was replied to by a letter, of which Ext. P2 was the copy, vide Ext. P3 which was the certificate of posting and no reply had been received by the appellant from the Corporation. He further stated that Shri Sehgul, Inspector of the Corporation, visited the factory on July, 11, 1968, and checked all the records and all the details with respect of the contribution to be made by the appellant had been mentioned to him in reply, copy of which was Ext. P2. He further stated that he had brought with him all the books of account for the period July, 1, 1967 to June 30, 1968 along with attendance register for the period April, 1967 to October, 1968. The attendance register was marked as Ext. P4. He further stated that this register was inspected by Mr. P. N. Malhotra, Inspector of the Corporation, who had signed register at place marked 'x" in the presence of the witness. He further stated that Mr. Sehgal, Inspector of the Corporation, had also signed the register at place marked "y" and that the appellant's Masco Private Limited vs. Employees' State Insurance Corporation (12. 04. 1974 - DELHC) Page 3 of 31 ployees' State Insurance Corporation (12. 04. 1974 - DELHC) Page 3 of 31 letter was admitted in the Corporation's letter which was masked as Ext. P5. He further stated that he had brought with him the wage register in Court and according to his calculation, the employees contribution payable by the appellant for the disputed period came to Rs. 627. 40 and a similar amount was payable as the employer's special contribution. In cross-examination, he stated that he had brought wage register but could not say as to how many employees were employed in the company in October, 1967. He added that there may be 24 or 25 at that time but that in the wage register only 11 were shown to be in employment in October, 1967. He further added that there was no other wage register for that period and that he had not brought the ledger or cash book of the company in respect of the period in dispute nor he had brought the inspection book of the Inspector for the year 1967-68. He added that he did not remember as to how many employees the petitioner-company had in any of the months in dispute but added that in the attendance register, a total of 14 employees were shown as in employment in the month of November, 1967, but in the wage register, only 7 were shown for the month and that in the month of October, 1967,23, employees were shown in the attendance register while the number in respect of December, 1967, was only 10 while the corresponding entries in the wages register showed only 4 employees. He admitted that the wages register had not been signed by any officer or the accountant of the company on the foot, although they may have had an accountant in the employment of the company in 1967. He further stated that in April, 1968, in the pay-bill and acquaintance roll only 3 persons were shown whereas in the attendance register S employees were shown. The register was produced in Court and was marked as "a". He was, however, unable to say on a reference to the register, as to how many persons signed and thumb-marked in token of receipt of their wages for the month of February 1968, He also produced the wages register which was marked as "b".;