E S I CORPORATION Vs. FERTILISERS AND CHEMICALS TRAVANCORE LTD
LAWS(KER)-2003-1-39
HIGH COURT OF KERALA
Decided on January 24,2003

E.S.I.CORPORATION Appellant
VERSUS
FERTILISERS AND CHEMICALS TRAVANCORE LTD. Respondents

JUDGEMENT

- (1.) The first opposite party filed this appeal against the judgment in I.C. No. 61/1992 on the file of the Insurance Court, Alappuzha. The respondent a covered establishment under the E.S.I. Act filed an application before the learned Insurance Court challenging the assessment and recovery proceedings initiated by the appellant for recovery of a sum of Rs.14,767/- towards contribution and Rs.1,416/- towards interest. The amount sought to be recovered is with respect to the E.S.I. contribution payable for an amount of Rs.2,03,681.99 paid as handling charges and sundry charges during the period from 1984 to 1987. The respondent contended that Pune Regional Office within the jurisdiction concerned works were done was closed in March 1986 and the distribution works were entrusted to Ware Housing Corporation of Maharashtra and the claim of the appellant is barred by limitation prescribed in S.77 of the E.S.I. Act. The court below accepted the contention of the respondent and found that recovery proceedings initiated by the appellant is unsustainable and substantial portion of the demand is clearly barred under S.77 of the E.S.I. Act. Against the said judgment, this appeal is filed by the opposite party.
(2.) The specific case of the respondent is that during the period of 1984 to 1987 the company had stocked and issued fertilisers in Pune region either by utilising the godowns of the Ware Housing Corporation or from the rail heads directly and all the employees of Pune regional office had been covered under the E.S.I. Act. So from the admission of the respondent itself it can be seen that the entire stock and distribution work were entrusted to the local Warehousing Corporation and the payments were made by them. The respondent was a covered establishment under the E.S.I. Act is not disputed. According to the respondent, Pune regional office was closed in March 1986 and the distribution works were entrusted to the Warehousing Corporation, Maharashtra. So it can be seen that they have not stopped the distribution works, but it was entrusted to the Warehousing Corporation. The wages were also paid by the respondent to the workers. It is clear from the evidence adduced in this case that the workers were engaged by the Warehousing Corporation of Maharashtra in connection with the work of the establishment of the respondent. The workers were doing loading and unloading works entrusted by the Warehousing Corporation. So they are employees of the respondent under the Employees State Insurance Act.
(3.) PW.1 is the Assistant Finance Manager of FACT now working at Hyderabad. He has deposed that during 1987-88 he was the Accounting Officer at Pune and that in respect of 10 employees of FACT at Pune depots, contributions were paid because they were already under coverage of the E.S.I. scheme. The depots were closed in the year 1986. After the closing of that depot stocks were entrusted to the Warehousing Corporation. Payment for the work done by the Warehousing Corporation were on the basis of bills submitted by them and payments were made only to the Warehousing Corporation and not to any of the employees under them. PW.2 is the Deputy Chief Agronomist of FACT. As per his evidence he was working in the Pune region during the period from 1977 to 1986. The Regional office at Pune was closed in the year 1986. Both Central depots under Pune Regional office were closed in the year 1986. Such closure was after the transfer of all the employees working there. Ext. P3 is the orders of transfer and Ext. P4 is the closure notice of Pune Regional office. It is clear from the evidence of PWs.1 and 2 that even if the Pune Regional office was closed, the stocks were entrusted to the Warehousing Corporation and it was kept in the premises of Warehousing Corporation. Ext.D1 is the report submitted by DW.1, the E.S.I. Inspector attached to local office, Kalamassery. He had verified the ledgers kept in the Head office, Udyogamandal regarding the Pune regional office. He has reported that during the year 1986-87 towards handling charges and sundry charges more than 2 lakhs rupees was paid by the applicant.;


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