IN THE HIGH COURT OF KERALA AT ERNAKULAM
MFA No. 17 of 2003()
1. THE REGIONAL DIRECTOR,
... Petitioner
Vs
1. ARUN GRANITES, GURUVAYOOR ROAD,
... Respondent
For Petitioner :SRI.T.V.AJAYAKUMAR
For Respondent :SRI.P.RAMAKRISHNAN
The Hon'ble MR. Justice K.PADMANABHAN NAIR
Dated :10/04/2007
O R D E R
K.Padmanabhan Nair,J.
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M.F.A.No.17 of 2003-A
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Dated, this the 10th day of April, 2007
JUDGMENT
The Regional Director of Employees’ State Insurance
Corporation is challenging an order passed by the Insurance
Court, Palakkad by which it had allowed an application filed by
the respondent.
2. The Inspector of the appellant conducted inspection
and reported that the establishment of the respondent was one
liable to be covered under the Employees State Insurance Act as
it was employing more than ten persons and it was using power.
A demand was made by the appellant for contribution.
Challenging that demand, the respondent filed I.C.No.66 of 2000
before the Employees’ Insurance Court. The evidence adduced
shows that though there are ten employees, one of them is none
other than a partner of employer firm. The Insurance Court held
that a partner of a partnership firm cannot be treated as an
employee of that firm and if he is excluded, there was only nine
employees and hence respondent was not liable to pay
contribution. Challenging that decision, this appeal is filed.
M.F.A.No.17 of 2003-A
– 2 –
3. In Regional Director, E.S.I.C. v. Ramanuja
Match Industries [(1985) 1 SCC 218], the Supreme Court has
held that a partner cannot be an employee of the firm. The
decision of this Court was also referred to and found that a
partner of a firm cannot be its employee. At this stage, the
learned counsel appearing for the appellant has raised a
contention that there was no pleading to that effect. It is true
that it was not specifically pleaded. But, the evidence on record
clearly proves that one of the ten employees was a partner of the
firm. I am of the view that it is not necessary to insist for strict
pleadings in a case of this nature. The learned counsel appearing
for the appellant has also relied on a later decision of the apex
Court reported in E.S.I.Corporation v. Apex Engineering (P)
Ltd. [1998 (1) KLT SN 40, Case No.36]. But, that was a case of a
Private Limited Company. The Supreme Court considered the
position of a Managing Director of an incorporated Company, who
is also a Director and held that there can be dual capacity. It was
held that one and the same person can be Director as well as
employee also. The principles laid down in that case is not
applicable to the facts of this case. Managing Director and the
Company are separate legal persons, but a partner and a
M.F.A.No.17 of 2003-A
– 3 –
partnership firm have no separate legal existence. So, I am of
the view that the finding of the Insurance Court that the
respondent is not liable to be covered under the Act is only to be
upheld.
There is no merit in this appeal and the same is
dismissed.
K.Padmanabhan Nair
Judge
vku/-