{"id":188180,"date":"2006-03-14T00:00:00","date_gmt":"2006-03-13T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-joint-regional-director-vs-hotel-ashok-bhavan-on-14-march-2006"},"modified":"2014-05-21T00:49:00","modified_gmt":"2014-05-20T19:19:00","slug":"the-joint-regional-director-vs-hotel-ashok-bhavan-on-14-march-2006","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-joint-regional-director-vs-hotel-ashok-bhavan-on-14-march-2006","title":{"rendered":"The Joint Regional Director vs Hotel Ashok Bhavan on 14 March, 2006"},"content":{"rendered":"<div class=\"docsource_main\">Madras High Court<\/div>\n<div class=\"doc_title\">The Joint Regional Director vs Hotel Ashok Bhavan on 14 March, 2006<\/div>\n<pre>       \n\n  \n\n  \n\n \n \n BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT\n\n\nDATED : 14\/03\/2006\n\n\nCORAM:\nTHE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYAN\n\n\nC.M.A.(MD)No.1061 of 1998\n\n\nThe Joint Regional Director\nE.S.I.Corporation\nMadurai\t\t\t\t...\tAppellant\n\n\nVs\n\n\nHotel Ashok Bhavan\nProp: A.Ayubkhan\nS\/o Adam Raouther\n101, Thiruchendur Road\nPalayangkottai, Tirunelveli-2 \t...\tRespondent\n\n\n\nPrayer\n\n\nAppeal filed under Section 82 of the Employees State Insurance Act\nagainst the Judgment and decree passed by the learned Principal District Judge,\nThirunelveli(The Employees'State Insurance Judge,Tirunelveli) in E.S.I.O.P.No.16\nof 1992 dated 12.10.1995.\n\n\n!For Appellant   \t...\tM\/s J.S.Murali\n\n\n^For Respondent  \t...\tM\/s Abdul Samath\n\n\n\n:JUDGMENT\n<\/pre>\n<p>\tThis appeal has been preferred by the Joint Regional Director,<br \/>\nE.S.I.Corporation against the order passed in E.S.I.O.P.No.16 of 1992 on the<br \/>\nfile of the Principal District Judge, Tirunelveli dated 12.10.1995.\n<\/p>\n<p>\t2. The short facts of the case  are as follows:\n<\/p>\n<p>\tOn 10.7.l989 hotel Ashokbhavan was started by Thiru A.Ayubkhan in Door<br \/>\nNo.101, Trichendur Road, Palayamcottah.  Several eatables were prepared and sold<br \/>\nin the said hotel. There were nine employees in the hotel.  They are not<br \/>\npermanent employees. The owner of the hotel is residing on the rear portion of<br \/>\nthe hotel and there is a hospital is being run in the first floor of the hotel<br \/>\nbuilding and there are five tenants residing in the said building . With the<br \/>\nhelp of an electrical motor, water has been supplied to all the residents of the<br \/>\nbuilding. The hotel is also getting water through pipe line. The petitioner is<br \/>\nhaving  a grinder for his personal use. The electrical motor for the supply of<br \/>\nwater is outside the hotel.  The eatables are prepared in the hotel not with the<br \/>\nhelp of the gas but with the help of the fire wood.  The petitioner&#8217;s hotel is<br \/>\nnot a factory. Hence, the  Employees State Insurance Act will not be applicable<br \/>\nto the petitioner&#8217;s hotel and accordingly, the respondent is not entitled to<br \/>\nclaim any  E.S.I.contribution from the  petitioner. But the respondent had sent<br \/>\nletters dated 18.7.1991 and 9.10.1992 claiming E.S.I.Contribution from the<br \/>\npetitioner.  During October,1992, the   petitioner had sold  the hotel to the<br \/>\nthird party. The petitioner had already deposited 50% of the E.S.I.Contribution<br \/>\ndemanded by the respondent. Hence to set aside the order passed under  letters<br \/>\nof the respondent dated 18.7.1991 and 9.10.1992, the petitioner has filed a<br \/>\npetition E.S.I.O.P.No.16 of 1992 under Section 75 of the  Employees State<br \/>\nInsurance Act, 1948.\n<\/p>\n<p>\t3. The respondent in its counter has stated that on the date of the<br \/>\ninspection by the Inspector of the E.S.I.Corporation on 18.12.1990, there were<br \/>\n10 to 15 employees found working in the petitioner&#8217;s hotel. There are entries in<br \/>\nthe ledgers maintained by the petitioner to show that there were 10 to 15<br \/>\nemployees were working on the date of inspection by the Inspector of the<br \/>\nE.S.I.Corporation. On the date of inspection by the Inspector of the<br \/>\nE.S.I.Corporation, the petitioner himself had admitted that he was having a<br \/>\ngrinder with 1.5 horse power in the hotel and that the petitioner has also<br \/>\nsigned in his statement dated 18.12.1990 to the effect that there are more than<br \/>\nten employees working in the petitioner&#8217;s hotel and also there are electrical<br \/>\nmotors used for the purpose of bailing water and also a grinder. That is why the<br \/>\nrespondent had issued letters dated 18.7.1991 and 9.10.1992 demanded<br \/>\nE.S.I.Contribution from the petitioner. The respondent had demanded<br \/>\nE.S.I.Contribution from the petitioner  for the period  from 1.12.1989 to<br \/>\n30.4.1991. So the contention of the petitioner that he had sold the hotel in the<br \/>\nmonth of October 1992 itself will not have any bearing. The E.S.I.Contribution<br \/>\ndue from the petitioner has been calculated correctly and after going through<br \/>\nthe ledgers maintained by the petitioner in his hotel.\n<\/p>\n<p>\t4. Before the Principal District Judge, Tirunelveli, Ex P1 to P5 were<br \/>\nmarked on the side of the petitioner and Exs R1 to R6 were marked on the side of<br \/>\nthe respondent. Neither the petitioner nor the respondent had let in any oral<br \/>\nevidence.\n<\/p>\n<p>\t5. On the basis of the documentary evidence, the learned Principal<br \/>\nDistrict Judge, has come to a conclusion that the order passed under letters Ex<br \/>\nP1 dated 9.10.1992 and under Ex R3 dated 18.7.1991 respectively by the<br \/>\nrespondent is liable to be set aside and accordingly the learned Principal<br \/>\nDistrict Judge, Tirunelveli had allowed the petition with costs. Aggrieved by<br \/>\nthe order of the learned Principal District Judge, Tirunelveli, the respondent<br \/>\nin E.S.I.O.P.No.16 of 19992 has preferred this appeal.\n<\/p>\n<p>\t6. The substantial question of law that arose for consideration in this<br \/>\nappeal is whether an order under Section 45A of the Employees State Insurance<br \/>\nAct , the respondent is  competent to pass an order under letters Exs P1 dated<br \/>\n9.10.1992 and under Ex R3 dated 18.7.991 demanding E.S.I.Contribution from the<br \/>\npetitioner?.\n<\/p>\n<p>\t7. The point:\n<\/p>\n<p>Under Section 45A of the Employees State Insurance Act 1948, the<br \/>\nE.S.I.Contribution is to be determined only as follows:<br \/>\n\t&#8221; Where in respect of a factory or establishment no returns, particulars,<br \/>\nregisters or records are submitted, furnished or maintained in accordance with<br \/>\nthe provisions of Section 44 or any Inspector or other official of the<br \/>\nCorporation referred to in sub Section(2) of Section 45 is prevented in any<br \/>\nmanner by the principal or immediate employer or any other person, in exercising<br \/>\nhis functions or discharging his duties under Sectrion 45, the Corporation may,<br \/>\non the basis of information available to it, by order, determine the amount of<br \/>\ncontributions payable in respect of the employees of that factory or<br \/>\nestablishment<br \/>\nProvided that no such order shall be passed by the Corporation unless the<br \/>\nprincipal or immediate employer or the person in charge of the factory or<br \/>\nestablishment has been given a reasonable opportunity of being heard\n<\/p>\n<p>2) An order made by the Corporation under sub-section(1) shall be  sufficient<br \/>\nproof of  the claim of the Corporation under Section 75 or for recovery of the<br \/>\namount  determined by such order as an arrear of land revenue under Section 45B<br \/>\nor the recovery under Sections 45 C to 45-I&#8221;\n<\/p>\n<p>\t8. The learned counsel for the appellant would contend that there is no<br \/>\ndenial on the side of the respondent\/petitioner in producing the  records or<br \/>\nledgers and other particulars demanded by the appellant\/respondent  at the time<br \/>\nof inspection by the Inspector of the E.S.I.Corportion on 18.12.1990.  The<br \/>\ndemand for E.S.I.Contribution by the appellant\/respondent under Exs P1 and R3<br \/>\nwas defended by the respondent herein under two points. The first one being the<br \/>\ntwo electrical grinders were used by the petitioner for his personal use and the<br \/>\nsecond one is that he had already sold the hotel to the third party in the year<br \/>\n1992 itself.  The learned counsel appearing for the appellant would contend that<br \/>\neven in ExR4 letter written by the respondent herein\/petitioner in<br \/>\nE.S.I.O.P.No.16 of 1992 to the respondent itself had admitted that  in the hotel<br \/>\ngrinder an electrical motor  with 1.5 horse power was used  and electrical motor<br \/>\npump was used for bailing water from the well for the use of the hotel.The<br \/>\nlearned counsel for the appellant would further represent that the Inspection<br \/>\nReport dated 18.12.1990 of the Inspector of the E.S.I.Corporation itself, the<br \/>\nrespondent herein has admitted that an electrical grinder and an electrical<br \/>\nmotor pump were used in the hotel. Learned Principal District Judge, Tirunelveli<br \/>\nwithout considering Ex R4 and also the endorsement made by the respondent herein<br \/>\nin ExR1 has come to an erroneous conclusion that both the motors were used for<br \/>\nthe personal use of the petitioner and  not for the use of the hotel.\n<\/p>\n<p>\t9. The next point  raised by the respondent in the counter filed by him<br \/>\nbefore the Principal District Judge, Tirunelveli in E.S.I.O.P.No.16 of 1992 was<br \/>\nthat he had already sold the hotel in October 1992 to the third party and hence<br \/>\nhe is not liable to pay E.S.I.Contribution. The learned counsel appearing for<br \/>\nthe appellant meet this point by drawing the attention of this Court Section 93<br \/>\nA of the Employees State Insurance Act 1948 which runs as follows:\n<\/p>\n<p>&#8221; Liability in case of transfer of establishment<br \/>\n Where an employer, in relation  to a factory, or establishment, transfers that<br \/>\nfactory or establishment in whole or in part, by sale, gift, lease or licence or<br \/>\nin any other manner whatsoever, the employer and the person to whom the factory<br \/>\nor establishment is so transferred shall jointly and severally be liable to pay<br \/>\nthe amount due in respect of any contribution or any other amount payable under<br \/>\nthis Act in respect of the periods upto the date of such transfer<br \/>\n Provided that the liability of the transferee shall be limited to the value of<br \/>\nthe assets obtained by him by such transfer&#8221;.\n<\/p>\n<p>Admittedly, under Ex P1 and Ex R3, the respondent had demanded<br \/>\nE.S.I.Contribution from the petitioner for the period from 1.12.1989 to<br \/>\n30.4.1991 whereas even according to the respondent herein, the hotel was sold<br \/>\nonly in the month of October 1992. So as per Section 93A of the Employees<br \/>\nInsurance Act, the respondent herein is liable to pay E.S.I.Contribution for the<br \/>\nperiod from 1.12.1989 to 30.4.1991 . As per Section 2(12) of the E.S.I. Act<br \/>\n&#8220;Factory&#8221;  means any premises including the precincts thereof-\n<\/p>\n<p>a) Whereon ten or more persons are employed or were employed for wages on any<br \/>\nday of the preceding twelve months, and in any part of  which a manufacturing<br \/>\nprocess is being  carried on with the adie of power or is  ordinarily so carried<br \/>\non,or\n<\/p>\n<p>b)&#8230;&#8230;&#8230;&#8230;&#8230;..&#8221;\n<\/p>\n<p>Here, admittedly, the power has been used for two grinders which were used in<br \/>\nthe hotel as seen from Ex R1 Inspection Report and there were more than ten<br \/>\nemployees were working at the time of Inspection by the Inspector of<br \/>\nE.S.I.Corporation on 18.12.1990.  Under such circumstances, the<br \/>\nrespondent\/petitioner in E.S.I.O.P.No.16 of 1992 namely, Hotel Ashokbhavan<br \/>\nsquarely comes within the definition of Factory as defined under Section 2(12)<br \/>\nof the Employees State Insurance Act 1948,.  Hence,the respondent is liable to<br \/>\npay E.S.I.Contribution to the appellant as demanded under  Exs P1 and Ex R3<br \/>\nletters dated 9.10.1992 and 18.7.1991 respectively. Hence I hold on the point<br \/>\nthat the appellant\/respondent is competent to pass an order under Exs  P1 dated<br \/>\n9.10.1992 and R3 dated 18.7.1991 respectively as against the respondent<br \/>\nherein\/the petitioner in E.S.I.O.P.No.16 of 1992 claiming the E.S.I.Contribution<br \/>\nunder the E.S.I.Act 1948.The point is answered accordingly.\n<\/p>\n<p>\t10. In the result, this appeal is allowed and the order passed in<br \/>\nE.S.I.O.P.No.16 of 1992 on the file of the learned Principal District Judge,<br \/>\nTirunelveli dated 12.10.1995 is hereby set aside. Time for payment of<br \/>\nE.S.I.contribution in two months. No costs.\n<\/p>\n<p>sg<\/p>\n<p>To<br \/>\nThe Principal District Judge,<br \/>\nTirunelveli.\n<\/p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Madras High Court The Joint Regional Director vs Hotel Ashok Bhavan on 14 March, 2006 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 14\/03\/2006 CORAM: THE HONOURABLE MR.JUSTICE A.C.ARUMUGAPERUMAL ADITYAN C.M.A.(MD)No.1061 of 1998 The Joint Regional Director E.S.I.Corporation Madurai &#8230; Appellant Vs Hotel Ashok Bhavan Prop: A.Ayubkhan S\/o Adam Raouther 101, Thiruchendur Road [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,13],"tags":[],"class_list":["post-188180","post","type-post","status-publish","format-standard","hentry","category-high-court","category-madras-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Joint Regional Director vs Hotel Ashok Bhavan on 14 March, 2006 - Free Judgements of Supreme Court &amp; 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