EMPLOYEES STATE INSURANCE CORPORATION Vs. BALAJI WEAVING MILLS

JUDGEMENT

(1.) BOTH these appeals arising from a common judgment passed by the Court of the Employees' State Insurance, Salem (District Judge, Salem) in E. I. A. Nos. 3 of 1968 and 5 of 1968 have been preferred by the Employees' State Insurance Corporation (hereinafter referred to as the E. S. I. Corporation ).

(2.) MESSRS. Balaji Weaving Mills, Salem (hereinafter referred to as the Mills), the respondent in C. M. A. No. 459 of 1971, is a partnership concern having as its partners, five brothers who are respondents 1 to 5 in C. M. A. No. 457 of 1971. The partnership firm was engaged in the manufacture of cloth with the aid of power looms installed in the Mills. An Inspector of the E. S. I. Corporation inspected the Mills on 30-51966 and found on a scrutiny of the records, that nineteen persons had worked in the premises of the Mills on 9-4-1966. Besides the nineteen persons whose names had been entered in the registers, the Manager of the Mills had also to be taken into account and on such reckoning, the Inspector found that a total number of twenty persons had worked in the Mils on 8-4-1966. Consequently he sent a report to the Regional Director of the E. S. I. Corporation that the Mills was covered by the Employees' State Insurance Act (hereinafter referred to The Employees' State Insurance Corporation vs. Balaji Weaving Mills and Ors. (25. 01. 19. . . Page 2 of 6 ployees' State Insurance Corporation vs. Balaji Weaving Mills and Ors. (25. 01. 19. . . Page 2 of 6 as the Act) and was, therefore, liable to pay employees' contribution as well as the employer's special contribution. Demands by the Corporation to the Mills to pay both the contributions were ineffective and hence the E. S. I. Corporation filed E. I. A. No. 3/68 under Section 75 (2) of the Act for recovery of employees' contribution for the contribution periods ending with 24/9/1966, 26/11/1966, 28/1/1967, 25/3/1967, 27/5/ 1967, 29/7/1967 and 30/9/1967 at such rate as may be determined by the Court on scrutiny of the records, or in the alternative, for a decree for the sum of Rs 812 arrived at on an ad hoc basis, together with interest thereon at 6 per cent per annum. For its part, the Mills took up the stand that it was not a factory within the meaning of the Act and, therefore, filed E. I. A. No. 5 of 1968 under Section 75 (g) and Section 76 of the Act for a declaration that it is not a factory within the meaning of the Act and for cancellation of the demand of Rs. 663 made by the E. S. I. Corporation towards employer's special contribution.

(3.) THE lower Court heard both the petitions together and held that inasmuch as twenty persons had worked in the premises of the Mills on 9-4-1966, the Mills was a factory within the meaning of the Act and that, therefore, the Mills had to pay contributions to the E. S. I. Corporation. With respect to the period for which the Mills had to pay the contribution, the lower Court did not accept the contention of the E. S. I. Corporation that the Mills was liable to pay contributions for a period of one year. Therefore, it held that the Mills was liable to pay employees' contribution only for the period ending with 24-9-1966 and employer's special contribution only for the quarter ending with 30-61966. Consequently, it gave a decree in favour of the E. S. I. Corporation for a sum of Rs. 107 towards employees' contribution and Rs. 161 towards employer's special contribution. It is as against the disallowed part of the contributions that the E. S. I. Corporation has come forward with these two appeals.