{"id":52366,"date":"1990-06-22T00:00:00","date_gmt":"1990-06-21T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/regional-director-e-s-i-vs-fashion-fabrics-on-22-june-1990"},"modified":"2018-10-11T23:18:28","modified_gmt":"2018-10-11T17:48:28","slug":"regional-director-e-s-i-vs-fashion-fabrics-on-22-june-1990","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/regional-director-e-s-i-vs-fashion-fabrics-on-22-june-1990","title":{"rendered":"Regional Director, E.S.I. &#8230; vs Fashion Fabrics on 22 June, 1990"},"content":{"rendered":"<div class=\"docsource_main\">Kerala High Court<\/div>\n<div class=\"doc_title\">Regional Director, E.S.I. &#8230; vs Fashion Fabrics on 22 June, 1990<\/div>\n<div class=\"doc_citations\">Equivalent citations: (1993) IIILLJ 801 Ker<\/div>\n<div class=\"doc_author\">Author: V Kalliath<\/div>\n<div class=\"doc_bench\">Bench: V Kalliath, Ramakrishnan<\/div>\n<\/p>\n<pre><\/pre>\n<p>JUDGMENT<\/p>\n<p> Varghese Kalliath, J. <\/p>\n<p> 1. Regional Director, E.S.I. Corporation is<br \/>\nthe appellant. The respondent is an establi<br \/>\nshment covered under the provisions of the<br \/>\nEmployees&#8217; State Insurance Scheme and State<br \/>\nInsuranceAct, shortly called &#8216;theAct.&#8217;\t <\/p>\n<p> 2. Regional Director of the Corporation co<br \/>\nnducted a test inspection on 1 3.12.1980. The<br \/>\ntest inspection reveals that certain amounts paid<br \/>\nas wages by the applicant had escaped from<br \/>\npayment of contribution. A demand was made<br \/>\nfor payment of the same by the appellant herein.\n<\/p>\n<p>The respondent denied the liability and challenged the demand under Insurance Case No. 183<br \/>\nof 1982 before the Employees&#8217; Insurance<br \/>\nCourt, Alleppey.\n<\/p>\n<p> 3. The Court, after considering the various circumstances and after examining the records produced before it, found omission in the matter of contribution and directed payment of the same. In regard to omission of payment of contribution of temporary employees, the Court observed thus :-\n<\/p>\n<p>  &#8220;&#8230;..It is the look out of the ESI Corporation to see that all the temporary employees who are engaged by the applicant for doing the &#8216; identical work as is done by covered employees shall be registered under the ESI Scheme. From the evidence it is seen that all the temporary employees are doing the works which are regular in nature in the applicant&#8217;s establishment. They are not at all doing any causal work. Although they are treated as temporary employees, since they are doing the works of regular nature, they should be brought under the coverage of ESI Scheme. Therefore, there will be a direction to the applicant to cover all the temporary employees who are doing works having regular nature in the ESI Scheme from the current contribution period onwards.&#8221;<\/p>\n<p> 4. From the above quoted, it is clear that the Employees&#8217; Insurance Court has held that the temporary employees are the employees who will come under the insurable employment. Being the employees coming within the meanes, ing of insurable employment under the Act, there can be no dispute that these employees have to be insured under the Act. The question whether these employees are entitled to the benefits, since no contribution has been paid and they were not insured as mandated by the Act is not very relevant as far as this appeal is concerned. From the facts, it is clear that what was demanded by the appellant is contribution for the period the temporary employees were engaged by the respondent. As soon as an employee who will come under the insurable employment, it is the obligation of the employer, here the respondent, to comply with the provisions of the Act.\n<\/p>\n<p> 5. Section 38 of the Act provides that all employees should be insured. It read thus :-\n<\/p>\n<p>  &#8220;All employees to be insured &#8211; Subject to the provisions of the Act, all the employees in factories or establishment to which this Act applies shall be insured in the manner provided by this Act.&#8221;\n<\/p>\n<p> There is no dispute that the respondent is an establishment to which the Act applies and so all the employees of the establishment shall be insured. In this case, the respondent has omitted  to do that. Whether this omission to insure at the appropriate time as per the provisions of the Act will enable the employer-respondent to escape from the liability to pay contribution from the date of employment is the crucial question that has to be considered in this appeal. We say that this is a crucial question, since the Court itself found that the wages paid to the employees will attract the contribution under Section 39 of the Act. The liability to pay the entire contribution under Section 39 is with the employer. There can be no dispute that the respondent herein has not discharged its liability. The fact that the temporary employees in this case arc not covered solely on the ground that the contributions have not been paid may not be a relevant factor to deny the right of the Corporation to demand the contribution under Section 39 of the Act; on the ground that the respondent has engaged the said temporary employees. This is because of the mandatory obligation fastened by the Act under Section  39 read with Section  40. Section  (40)(1) of the Act says that, the principal employer shall pay in respect of&#8217; every employee, whether directly employed by him or by or through an immediate employer, both  the  employer&#8217;s   contribution   and  the employees&#8217; contribution. Of course, Section  40(2) provides that the employer has an entitlement to recover from the employee the employee&#8217;s contribution by deduction from his wages. So the primary liability to pay contribution envisaged under Section  39 is that of the employer-respondent. The case of the appellant is that the employer-respondent has failed in discharging its obligation and thus it becomes arrears of contribution to be paid under Section  39 of the Act due from the Respondent to the Appellant. The circumstances that it was not detected at the appropriate time by the appellant will not absolve the employer from its liability to pay the contribution. In this view, we feel that the direction that the respondent is liable to pay contribution only from a future date, viz. &#8216;from the current contribution period onwards&#8217; is not legal. The question has to be decided from what date the respondent has to pay contribution and that must depend upon the date on which the temporary employees in this case have been employed by the respondent. The amount has to be calculated on the basis of the date of engagement of the temporary employees and the wages paid to them, certainly also on the number of employees employed by the respondent.\n<\/p>\n<p> 7. Counsel appearing for the respondent submitted that there was no proper investigation as regards the abovesaid matters and this Court may give an opportunity to the respondent to adduce evidence as regards those matters. We feel that this is a reasonable request. Hence while confirming the judgment challenged in this appeal, we make it clear that the direction that contribution can be demanded only &#8216;from the current contribution period onwards&#8217; is incorrect. Of course, the Court can examine whether the demand made by the Corporation is in accordance with the finding we have now recorded in this judgment. To that extent, the matter has to be reinvestigated and so while confirming the judgment we set aside the finding regarding the date from which the contribution has to be paid by the employer and remit the case for investigation of matters relating to the date of engagement of the temporary i employees, the wages paid to them and the number of employees engaged by the respondent. The case is remitted for the said purpose.\n<\/p>\n<p> Appeal is disposed of as above.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kerala High Court Regional Director, E.S.I. &#8230; vs Fashion Fabrics on 22 June, 1990 Equivalent citations: (1993) IIILLJ 801 Ker Author: V Kalliath Bench: V Kalliath, Ramakrishnan JUDGMENT Varghese Kalliath, J. 1. Regional Director, E.S.I. Corporation is the appellant. The respondent is an establi shment covered under the provisions of the Employees&#8217; State Insurance Scheme [&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":[8,21],"tags":[],"class_list":["post-52366","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Regional Director, E.S.I. ... vs Fashion Fabrics on 22 June, 1990 - Free Judgements of Supreme Court &amp; 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\/regional-director-e-s-i-vs-fashion-fabrics-on-22-june-1990\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Regional Director, E.S.I. ... vs Fashion Fabrics on 22 June, 1990 - Free Judgements of Supreme Court &amp; 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