{"id":24888,"date":"2008-08-26T00:00:00","date_gmt":"2008-08-25T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-regional-director-vs-ms-anandha-silks-paradise-on-26-august-2008"},"modified":"2018-12-04T06:47:11","modified_gmt":"2018-12-04T01:17:11","slug":"the-regional-director-vs-ms-anandha-silks-paradise-on-26-august-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-regional-director-vs-ms-anandha-silks-paradise-on-26-august-2008","title":{"rendered":"The Regional Director vs M\/S.Anandha Silks Paradise on 26 August, 2008"},"content":{"rendered":"
Madras High Court<\/div>\n
The Regional Director vs M\/S.Anandha Silks Paradise on 26 August, 2008<\/div>\n
       \n\n  \n\n  \n\n \n \n BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT\n\nDATED:  26\/08\/2008\n\nCORAM\nTHE HONOURABLE MR.JUSTICE A.SELVAM\n\nCivil Miscellaneous Appeal No.384 of 2002\nand\nCivil Miscellaneous Appeal No.385 of 2002\n\nThe Regional Director,\nEmployees State Insurance\n Corporation,\n143, Sterling Road,\nChennai- 600 034.\t\t\t...\tAppellant in\n\t\t\t\t\t\t  both the appeals\/\n\t\t\t\t\t\t     Respondent<\/pre>\n
Vs.\n<\/p>\n
M\/s.Anandha Silks Paradise,
\n NSB Road, Trichy -12.\n<\/p>\n
 represented by its partner
\n A.K.K.Chandrasekaran.\t\t\t…\tRespondent in
\n\t\t\t\t\t\t  both the appeals\/
\n\t\t\t  \t\t\t\tPetitioner<\/p>\n
\t\tCivil miscellaneous appeals have been filed under Section 82 of the
\nESI Act, 1948, against the common order dated 28.06.2001 passed in ESIOP.No.12 &
\n20 of 2001 by the Employees State Insurance Court, Tiruchirapalli.\n<\/p>\n
!For appellant in
\nboth the appeals  \t…\tMr.J.S.Murali<\/p>\n
^For respondent in
\nboth the appeals\t…\tMr.R.Vijayakumar<\/p>\n
:COMMON JUDGMENT<\/p>\n
\t\tChallenge in these civil miscellaneous appeals is to the common
\norder passed in ESIOP Nos.12 of 2001 & 20 of 2001 by the Employees State
\nInsurance Court, Tiruchirapalli.\n<\/p>\n
\t\t2.The respondent herein has filed ESIOP Nos.12 of 2001 and 20 of
\n2001 on the file of the Employees State Insurance Court, Tiruchirapalli, wherein
\nthe present appellant has been shown as respondent.\n<\/p>\n
\t\t3.It is stated in the petitions that the petitioner is a partnership
\nfirm and the petitioner has been doing cloth business.  At any point of time,
\nunder the petitioner more than 18 employees have not been served.  Therefore,
\nthe petitioner has not come within the purview of Employees’ State Insurance Act
\n(34 of 1948).  The Inspector of the respondent has inspected the petitioner on
\nseveral occasions and subsequently a notice has been issued, wherein it has been
\nstated that from 01.04.1987 to 30.06.1990 the petitioner has to pay Rs.7,488.75
\npaise towards premium and further it has been directed that the petitioner
\nshould make personal appearance on 24.12.1990.  The petitioner has given a reply
\nnotice dated 19.12.1990. The persons namely Periyannan, Somasundaram & Shanmugam
\nhave served as partners of the petitioner and therefore, the petitioner is not
\nliable to pay the amount demanded by the respondent.  Further it is stated in
\nthe petitions that as per notice dated 27.07.1990 the petitioner is not liable
\nto pay the amount of Rs.26,085.70 paise to the respondent.  Under the said
\ncircumstances, with regard to the amount of Rs.7,488.75 paise, ESIOP No.12 of
\n2001 has been filed and likewise, with regard to the amount of Rs.26,085.70
\npaise, ESIOP No.20 of 2001 has been filed.\n<\/p>\n
\t\t4.On the side of the respondent in both the petitions detailed
\ncounter has been filed, wherein it has been stated that the Inspector of the
\nrespondent has inspected the petitioner on 07.04.1988 and ultimately found that
\nfrom 01.04.1987 to 30.06.1990 the petitioner is bound to pay Rs.7,488.75 paise
\ntowards premium and likewise, as per notice dated 27.07.1990 the petitioner is
\nliable to pay Rs.26,085.70 paise towards premium.  Under the said circumstances,
\nthe petitioner has been given the concerned notices and therefore, the present
\npetitions deserve dismissal.\n<\/p>\n
\t\t5.The Court below, after considering the divergent contentions
\nraised on either side, has allowed both the petitions and ultimately set aside
\nthe notices issued by the respondent to the petitioner.  Against the common
\norder passed by the Court below, the present civil miscellaneous appeals have
\nbeen filed.\n<\/p>\n
\t\t6.Since common questions of law and facts are involved in both the
\ncivil miscellaneous appeals, common judgment is pronounced.\n<\/p>\n
\t\t7.The sum and substance of the contention urged on the side of the
\npetitioner is that the petitioner is a partnership firm and at any point of
\ntime, the petitioner has not employed more than 18 employees and therefore, the
\npetitioner would not come within the purview of Employees’ State Insurance Act
\n(34 of 1948) and the respondent has unnecessarily issued the notices in question
\nand thereby directed the petitioner to pay the amounts mentioned therein and in
\norder to set aside the same, the present petitions have been filed.\n<\/p>\n
\t\t8.In order to remonstrate the contention urged on the side of the
\npetitioner, it is stated on the side of the respondent that the petitioner has
\nbeen inspected on various occasions and no acceptable answers have been given
\nand under the said circumstances, the notices in question have been issued to
\nthe petitioner and thereby directed the petitioner to pay the amounts mentioned
\ntherein towards premium and therefore, the petitioner is not entitled to get the
\nreliefs sought for in the petitions.\n<\/p>\n
\t\t9.The only point that has now winched to the fore is;\n<\/p>\n
\t“Whether the petitioner would come within the contour of Employees’ State
\nInsurance Act (34 of 1948)?”\n<\/p>\n
\t\t10.The learned counsel appearing for the appellant\/respondent has
\nrepeatedly contended that during the relevant period, under the petitioner more
\nthan twenty employees have served and under the said circumstances, the
\nrespondent has issued the order dated 16.01.1992 and thereby directed the
\npetitioner to pay Rs.7,488.75 paise and likewise, the respondent has issued
\nanother order dated 25.01.1991 and 18.06.1991 and thereby directed the
\npetitioner to pay Rs.26,085.70 paise and it is false to contend that the persons
\nnamely Periyannan, Somasundaram & Shanmugam are the partners of the petitioner
\nand they are the employees of the petitioner and the Court below, without
\nconsidering the contentions urged on the side of the appellant\/respondent, has
\nerroneously allowed ESIOP Nos.12 of 2001 & 20 of 2001, and therefore, the common
\norder passed by the Court below is liable to be set aside.\n<\/p>\n
\t\t11.Per contra, the learned counsel appearing for the
\nrespondent\/petitioner has also equally contended that the petitioner is a
\npartnership firm and at any point of time, the petitioner has not employed more
\nthan 18 employees and the persons namely Periyannan, Somasundaram & Shanmugam
\nhave been appointed only to look after the business of the petitioner and they
\nhave not been given wages and for the service to be done by them, only
\nrenumeration would be given out of profits and they are not the employees of the
\npetitioner and the Court below, after considering the rival contentions raised
\non either side, has rightly allowed the petitions and therefore, the argument
\nadvanced by the learned counsel appearing for the appellant\/respondent is liable
\nto be rejected and altogether the present civil miscellaneous appeals deserve
\ndismissal.\n<\/p>\n
\t\t12.As adverted to earlier, the specific contention of the
\nrespondent\/petitioner is that the persons namely Periyannan, Somasundaram &
\nShanmugam are not the employees of the petitioner and they have been directed to
\nlook after the business of the petitioner and for their service remuneration
\nwould be paid out of  profits.\n<\/p>\n
\t\t13.The entire case of the respondent\/petitioner hinges upon Ex.A22.
\nEx.A22 is an agreement which has come into existence between A.K.K.Karuppiah and
\nthe persons namely Periyannan, Somasundaram & Shanmugam.  In Ex.A22, it has been
\nclearly stated that the persons namely Periyannan, Somasundaram & Shanmugam have
\nto look after the business of the petitioner and they would be paid renumeration
\nto the extent of 20% from net profits.  From the close reading of Ex.A22, the
\nCourt can unflinchingly come to a conclusion that the persons namely Periyannan,
\nSomasundaram & Shanmugam are not the employees of the petitioner.  Under Ex.A22
\na power has been given to them so as to administer the petitioner. Since the
\nsaid persons have not been appointed as employees of the petitioner and since
\nthey agreed to receive 20% out of net profits by way of renumeration, the Court
\ncannot come to a conclusion that they are the employees of the petitioner.\n<\/p>\n
\t\t14.At this juncture, it would be more useful to look into the
\nfollowing decisions;\n<\/p>\n
\t a)In AIR 1985 Supreme Court Cases 278 (Regional Director, Employees’
\nState Insurance Corporation, Trichur  Vs. Ramanuja Match Industries), the
\nHonourable Apex Court has held as follows;\n<\/p>\n
\t“A partner who belongs to the class of employer cannot rank as employee
\nbecause he also works for wages for the partnership. Undoubtedly the term
\nemployee is the correlative of employer.  In common parlance the status of a
\npartner qua the firm is different from employees working under the firm, it may
\nbe that a partner is being paid some remuneration for any special attention
\nwhich he devotes but that would not involve any change of status and bring him
\nwithin the definition of employee.  The contention that on the basis of the
\nstatute being beneficial, a partner should also count as an employee is
\nunsustainable.”\n<\/p>\n
\t\tb)In AIR 1963 Supreme Court 1737 (Champaran Cane Concern  Vs. State
\nof Bihar) the Honourable Apex Court has held that in a partnership each partner
\nacts as an agent of the other.  The position of a partner qua the firm is thus
\nnot that of a master and a servant or employer and employee which concept
\ninvolves an element of subordination but that of equality. The partnership
\nbusiness belongs to the partners and each one of them is an owner thereof.  In
\ncommon parlance the status of a partner qua the firm is thus different from
\nemployees working under the firm, it may be that a partner is being paid some
\nremuneration for any special attention which he devotes but that would not
\ninvolve any change of status and bring him within the definition of employee.\n<\/p>\n
\t\t15.From the close reading of the decisions referred to earlier, it
\nis pellucid that the person who is being paid some renumeration for any special
\nattention, would not come within the contour of Employees’ State Insurance Act
\n(34 of 1948).\n<\/p>\n
\t\t16.In the present civil miscellaneous appeals the main contention of
\nthe appellant\/respondent is that the said three persons are also employees of
\nthe respondent\/petitioner. It has already been pointed out that as per Ex.A22,
\nthe said three persons have been appointed only to look after the administration
\nof the petitioner and they have not been paid monthly salary and for the service
\nto be done by them, they would get only renumeration at the rate of 20% out of
\nnet profits.  At the most they can be called as power of attorney agents of the
\npetitioner.  As per the dictum rendered by the Honourable Apex Court, the
\npersons who have been appointed under Ex.A22, cannot be treated as employees of
\nthe respondent\/petitioner.  Since the persons who have been appointed under
\nEx.A22 cannot be treated as employees, it is needless to say that the provision
\nof Employees’ State Insurance Act (34 of 1948) would not apply to the
\npetitioner.\n<\/p>\n
\t\t17.In the light of the discussion made earlier, it is very clear
\nthat the argument advanced by the learned counsel appearing for the appellant\/
\nrespondent does not hold good and whereas the argument advanced by the learned
\ncounsel appearing for the respondent\/petitioner is really having subsisting
\nforce.\n<\/p>\n
\t\t18.The next contention urged by the learned counsel appearing for
\nthe appellant\/respondent is that the petition has filed only a xerox copy of the
\npartnership deed and the same is inadmissible in evidence and the Court below
\nwithout considering the admissibility of the same, has erroneously relied upon
\nthe same and therefore, common order passed by the Court below is liable to be
\nset aside.\n<\/p>\n
\t\t19.Of-course, it is true that Ex.A21 is a xerox copy of partnership
\ndeed dated 01.04.1984.  At the time of marking Ex.A21, no objection has been
\nraised on the side of the appellant\/respondent.  Even assuming without conceding
\nthat Ex.A21 is inadmissible in evidence, as per Ex.A22 the Court cannot come to
\na conclusion that the provision of Employees’ State Insurance Act (34 of 1948),
\nwould cover the petitioner.\n<\/p>\n
\t\t20.In order to analyse the aforesaid legal position, it would be
\nmore useful to look into the decision reported in 2003(8) Supreme Court Cases
\n752 (R.V.E.Venkatachala Gounder Vs. Arulmigu Viswesaraswami  & V.P. Temple and
\nanother), wherein the Honourable Apex Court has culled out the stage at which
\nobjection can be raised with regard to secondary evidence;\n<\/p>\n
\t\tA)Objection that the document sought to be proved is itself
\ninadmissible; and
\n\t\tB)Objection directed not against the admissibility of the document
\nbut against the mode of proof thereof on the ground of irregularity or
\ninsufficiency.\n<\/p>\n
\t\tThe objection under category ‘A’ can be raised even after the
\ndocument has been marked as an exhibit or even an appeal or revision.  But, the
\nobjection under category ‘B’ can be raised when the evidence is tendered but not
\nafter the document has been admitted in evidence and marked as an exhibit.\n<\/p>\n
\t\t21.In the instant case, as animadverted to earlier, no valid
\nobjection has been raised at the time of marking Ex.A21 either with regard to
\nthe admissibility  of the same or with regard to the mode of proof thereof.
\nTherefore, the second contention raised on the side of the appellant\/respondent
\nis also sans merit.\n<\/p>\n
\t\t22.The Court below, after considering all the contentions raised on
\neither side, has rightly allowed the petitions.  In view of the foregoing
\nnarration of both the factual and legal aspects, this Court has not found any
\nillegality nor infirmity in the common order passed by the Court below and
\ntherefore, the present civil miscellaneous appeals deserve dismissal.\n<\/p>\n
\t\t23.In fine, Civil Miscellaneous Appeal Nos.384 of 2002 and 385 of
\n2002 deserve dismissal and accordingly are dismissed without costs.  The common
\norder passed in ESIOP No.12 of 2001 & 20 of 2001 by the Employees State
\nInsurance Court, Tiruchirapalli is confirmed.\n<\/p>\n
gcg<\/p>\n
To\n<\/p>\n
1.The Employees State Insurance Court,
\n  Tiruchirapalli.<\/p>\n","protected":false},"excerpt":{"rendered":"
Madras High Court The Regional Director vs M\/S.Anandha Silks Paradise on 26 August, 2008 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 26\/08\/2008 CORAM THE HONOURABLE MR.JUSTICE A.SELVAM Civil Miscellaneous Appeal No.384 of 2002 and Civil Miscellaneous Appeal No.385 of 2002 The Regional Director, Employees State Insurance Corporation, 143, Sterling Road, Chennai- 600 034. […]<\/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-24888","post","type-post","status-publish","format-standard","hentry","category-high-court","category-madras-high-court"],"yoast_head":"\nThe Regional Director vs M\/S.Anandha Silks Paradise on 26 August, 2008 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/the-regional-director-vs-ms-anandha-silks-paradise-on-26-august-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Regional Director vs M\/S.Anandha Silks Paradise on 26 August, 2008 - 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