IN THE HIGH COURT OF KERALA AT ERNAKULAM
Ins.APP.No. 49 of 2009()
1. THE REGIONAL DIRECTOR,
... Petitioner
2. THE INSURANCE INSPECTOR,
Vs
1. M/S.N.M.STORES, A PARTNERSHIP FIRM
... Respondent
For Petitioner :SMT.T.D.RAJALAKSHMY, SC, ESI CORPN.
For Respondent :SRI.JOSEPH FRANKLIN
The Hon'ble MR. Justice M.N.KRISHNAN
Dated :28/06/2010
O R D E R
M.N. KRISHNAN,J
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Ins.Appeal No.49 OF 2009
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Dated this the 28th day of June, 2010
J U D G M E N T
This is an appeal preferred against the order of Employees
Insurance Court, Alapuzha in IC.No.19/2006. The case before the
court was challenging the correctness of clubbing of two units and
the court below after consideration allowed the petitions and held
that two units cannot be clubbed together. It is against this the
Employees State Insurance Corporation has come up in appeal.
2. The learned counsel for the appellant vehemently and
persuasively had argued before me that the court below had
missed the principle to be followed and therefore wanted the
indulgence of this court to rectify the mistake committed by the
court below. The learned counsel had very strongly contended
before me that there are 25 employees working under the same
roof and they are the part and parcel of one unit and therefore
the Insurance Court should not have allowed the case. On the
other hand the learned counsel for the respondent would contend
that two units are independent and separate units having
separate existence and therefore it cannot be clubbed together.
INAP. No.49/09 2
3. The principles to be followed are succinctly laid down in
very many decisions and I may refer to one of the decisions
where the facts are almost similar. In Evans Food Corporation
Vs. Union of India and another reported in 1994 (2)
Labour Law Journal 646 the learned judge exhaustively
considered the materials. The first principle is whether there are
two establishments, branches or units, the true relationship
between them must be such that they constitute one integrated
whole. The question of unity of the two establishments must
therefore be decided on the touchstone of its total functional
unity. The broad tests are unity of ownership, management and
control, functional integrity, general unit and unit of employment.
4. Now to the facts of this case, NM Stores is a partnership
concern and NM Textiles is yet another partnership concern. In
NM Stores partners are brothers and in NM Textiles, partners are
wives of brothers. NM Stores is dealing with ready made
garments where as NM Textiles dealing with textile. So it has to
be stated that both of them are dealing with clothes. NM Stores
is having a separate account, separate wage register, separate
muster roll, separate financial control and separate management.
The unity of facts are that both the partnership concerns are
INAP. No.49/09 3
situated in one and the same building and there is a common stair
case. PW1 had deposed before this court that except these there
is absolutely no business connection between the two.
5. The learned counsel for the Corp[oration would contend
before me that when the officer inspected the business premises
he was able to see 25 persons doing the work. Learned trial
judge held that Insurance inspection team proceeded on the
assumption that two shops constitute a single establishment. He
did not ascertain the status of both the shops. The learned trial
judge also held that except the fact that both the units are
located in same building, and are engaged in textile items, no
other common factors could be collected by the inspection team.
The inspection team did not elicit any information. It has not
verified the employment records and whether there was any
supervision and control over the employees. It has also not
collected any information whether there was financial
interdependence between two units. So the materials collected
which is in favour of ESI Corporation is only some basic facts like
building and family relation. But the real aspect is with respect to
business. Absolutely no materials are collected to show that the
business is in any way interconnected. The learned counsel
INAP. No.49/09 4
submitted before me further opportunity may be given to
substantiate it. It was the fundamental duty of the Corporation
employees and later at the time of trial to produce the evidence
to establish the fact. Apex court has cautioned that remand
should be avoided to fill up the lacuna in the case which will
detrimentally affect the right of the other party. So I am not
inclined to grant the request of remand as well. From these
discussions I find that there are no materials in the appeal which
warrants consideration. Therefore it lacks merit and dismissed
but without costs.
M.N. KRISHNAN, JUDGE.
Sou.