IN THE HIGH COURT OF KERALA AT ERNAKULAM
Ins APP No. 49 of 2005()
1. THE ASSISTANT DIRECTOR,
... Petitioner
Vs
1. KUNHIKANNAN JEWELLERY,
... Respondent
For Petitioner :SMT.T.D.RAJALAKSHMY, SC, ESI CORPN.
For Respondent :SRI.U.K.RAMAKRISHNAN
The Hon'ble MR. Justice J.B.KOSHY
The Hon'ble MR. Justice M.N.KRISHNAN
Dated :06/11/2006
O R D E R
J.B.KOSHY & M.N.KRISHNAN, JJ.
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Ins.Appeal NO.49 OF 2005
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Dated 6th November, 2006
JUDGMENT
Koshy,J
.
Respondent was running a Jewellery at Kannur. It
was covered under the Employees’ State Insurance Act with
effect from 1.6.1998 and respondent was paying regular
contributions. The Inspector of the Employees’ State
Insurance Corporation inspected the respondent establishment
at Kannur and found that there are three other units in
various other places, that these units have got unity of
ownership and functional unity and that they should be
covered. The Corporation issued notice and demanded
contribution from 1.11.1994 to 28.2.2001. The first
respondent approached the Employees’ Insurance Court. The
Insurance Court found that the establishment was covered with
effect from 1.6.1998 correctly and admittedly there was no
dispute between the appellant and the first respondent
regarding any contribution payable after 1.6.1998. The whole
question is whether clubbing is correct or not. According to
the Inspector, he did not visit any of the other three units,
but, only visited the unit at Kannur. He also stated that
the amount was calculated on the basis of Employees’
Provident Fund Records. But, persons who were covered under
the E.S.I Act due to the limitation of salary purpose during
the relevant time were also covered under E.P.F. Act. Those
Ins.A.49/2005 2
three units were covered under the E.P.F. Scheme as
separate units. The Insurance Court found that the
Inspector was not able to show that there was any
functional unity or ownership unity during the period in
question and amount calculated was also not after verifying
the entire records, but, only the E.P.F. Records. Hence,
the demand was set aside. The court also observed
incidentally that no social security of anybody is
accomplished by demanding retrospective contribution.
Without inspecting the books of accounts and without
visiting the other units Corporation decided to club the
other units and treated other units as parts of this
establishment. The other three units were independent
establishments, but, those units were not employing
required number of covered employees for the purpose of
coverage under the E.S.I. Act during the relevant time.
We agree with the Insurance Court. Hence, there is no need
to interfere with the order.
The appeal is dismissed.
J.B.KOSHY
JUDGE
M.N.KRISHNAN
JUDGE
tks
