{"id":55329,"date":"2005-02-11T00:00:00","date_gmt":"2005-02-10T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-regional-director-vs-k-v-b-rajeswaran-on-11-february-2005"},"modified":"2014-11-27T13:27:45","modified_gmt":"2014-11-27T07:57:45","slug":"the-regional-director-vs-k-v-b-rajeswaran-on-11-february-2005","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-regional-director-vs-k-v-b-rajeswaran-on-11-february-2005","title":{"rendered":"The Regional Director vs K.V.B. Rajeswaran on 11 February, 2005"},"content":{"rendered":"<div class=\"docsource_main\">Madras High Court<\/div>\n<div class=\"doc_title\">The Regional Director vs K.V.B. Rajeswaran on 11 February, 2005<\/div>\n<pre>       \n\n  \n\n  \n\n \n \n BEFORE THE MADURAI BENCH OF THE MADRAS HIGH COURT         (JUDICATURE)               \n\nDATED: 11\/02\/2005  \n\nCORAM   \n\nTHE HON'BLE MR.MARKANDEY KATJU, CHIEF JUSTICE            \nand \nTHE HON'BLE MRS.JUSTICE PRABHA SRIDEVAN           \n\nC.M.A. No.890 of 1997 \n\n\nThe Regional Director,\nESI Corporation,\n143, Sterling Road,\nMadras  34.                                     ..Appellant.\n\n-Vs-\n\nK.V.B. Rajeswaran, \nProp: Ezhil Achagam, \n8, Kakkathope Street,\nMadurai.                                        ..Respondent.\n\n\n\n\n        PRAYER:  This Civil Miscellaneous Appeal is directed against the\norder of the learned II Additional District  Judge,  Madurai  (The  Employees\nState  Insurance  Judge,  Madurai)  dated  31.05.1993  and  made  in ESIOP No.\n32\/1989.\n\n!For Appellant  ::  Mr.J.S.Murali\n\n^For Respondent ::  No appearance \n\n\n:J U D G M E N T \n<\/pre>\n<p>        (The Judgment of the Court was delivered  by  The  Honble  The  Chief<br \/>\nJustice)<\/p>\n<p>        This Civil Miscellaneous Appeal has been filed under Section 82 of the<br \/>\nESI  Act,  against  the order of the Employees State Insurance Court, Madurai<br \/>\ndated 31.05.1993.\n<\/p>\n<p>        2.  We have  heard  the  learned  counsel  for  the  appellant.    The<br \/>\nrespondent  has  been  served  and  the  name  of the respondent has also been<br \/>\nprinted in the cause  list,  but  neither  the  respondent  appeared  nor  any<br \/>\nrepresentation is made on behalf of the respondent.\n<\/p>\n<p>        3.   The  case  of  the  respondent herein in this Civil Miscellaneous<br \/>\nAppeal is that he was running a Printing Press in the name and style of Ezhil<br \/>\nAchagam, in which, the respondent has employed 5 or 6 persons only and  never<br \/>\nemployed  10 or more persons, at any time and hence, the provisions of the ESI<br \/>\nAct are not attracted.  The respondent received a notice dated 08.04.1988 from<br \/>\nthe ESI Corporation, fixing  the  date  of  personal  hearing  as  14.06.1988.<br \/>\nSubsequently,  the respondent received an order dated 24.04.1989, passed under<br \/>\nSection 45A of the ESI Act, determining the employees contribution amount for<br \/>\nthe period from 27.5.1984 to 30.8.1986.  It is alleged that this order is  not<br \/>\nvalid  and  that  the  respondent never refused to furnish any particulars nor<br \/>\nobstructed any officials of the Corporation and there was no justification for<br \/>\ninvoking Section 45A of the ESI Act.  It is also alleged that  the  principles<br \/>\nof  natural  justice have been violated and the calculation of contribution is<br \/>\nnot correct.\n<\/p>\n<p>        4.  The Corporation filed a written statement before  the  ESI  Court,<br \/>\nalleging  that  the  respondent  was running a Printing Press at Madurai using<br \/>\nPower (4 U.P.) and employing about 18 persons (13 persons for composing and  5<br \/>\npersons for printing).   The respondent seems to have his Press from 1979.  On<br \/>\ninspection of their accounts and  other  documents,  it  was  found  that  the<br \/>\nrespondent is  covered  by  the  Act  from 27.5.19 84.  The respondent did not<br \/>\nproduce the ledgers, when called to do so.  The Corporation issued show  cause<br \/>\nnotices,   dated  14.10.1986  and  13.3  .1987,  proposing  to  determine  the<br \/>\ncontribution.  It was served on him on 21.04.1987 and the respondent was given<br \/>\na reasonable opportunity to represent his case.  It is denied  that  there  is<br \/>\nany violation of the principles of natural justice.\n<\/p>\n<p>        5.  The ESI Court, after discussing all the material placed before it,<br \/>\nhas  held  that the Corporation had wrongly clubbed the two establishments and<br \/>\nhad wrongly arrived at the conclusion that the establishment of the respondent<br \/>\nis attracted by the provisions of the ESI Act, and the ESI Court  allowed  the<br \/>\npetition filed by the respondent.\n<\/p>\n<p>        6.  The short question, that is to be decided in this appeal is:-<br \/>\nWhether there was one establishment or there were two establishments? <\/p>\n<p>        7.   The  respondent  in  this  appeal had contended before the E.S.I.<br \/>\nCourt that there were two separate establishments, one for printing  work  and<br \/>\nthe other for  composing work.  We do not agree with this submission.  As held<br \/>\nin the decision of the Division Bench of this Court in The Regional  Director,<br \/>\nESI Corporation,  Madras  and Another Vs.  Aruna Stores, Proprietrix J.Shantha<br \/>\nand Another, 2005 (1) MLJ 354, the concept of functional integrality is a well<br \/>\nknown concept in industrial law, and two units can be treated as one unit  for<br \/>\nthe purpose of industrial law although it may be that for the purpose of sales<br \/>\ntax,  etc., or under the general principles of law, they may be treated as two<br \/>\nseparate units.  As observed in the aforesaid decision, if ostensibly they are<br \/>\ntwo units, but, there is functional integrality  in  the  two,  then  for  the<br \/>\npurpose of industrial law, they should be treated really as one unit.\n<\/p>\n<p>        8.  In the above said decision, it was further held that<br \/>\n        the concept of functional integrality has been referred to in several<br \/>\ndecisions  of  the  Supreme Court, where it was considering, whether two units<br \/>\nwere really one establishment, e.g.,<br \/>\n(1)Indian Cable Company Limited Vs.  Its Workmen, 1962 (1) LLJ 409<br \/>\n(2)Associated Cement Companies Limited Vs.  Their Workmen, 1960 (1) LLJ 1<br \/>\n(3)South India Mill  Owners  Association  Limited  Vs.    Coimbatore  District<br \/>\nTextile Workers Union, 1962 (1) LLJ 223 (SC)<br \/>\n(4)Western India  Match  Company  Limited Vs.  Their Workmen, 1963 (2) LLJ 459<br \/>\n(SC)<br \/>\n(5)National Iron and Steel Company Limited Vs.  State of West Bengal, 1967 (2)<br \/>\nLLJ 23 (SC)<br \/>\n(6)Pratap Press Vs.  Their Workmen, 1960 (1) LLJ 388 (SC)<br \/>\n(7)Wenger &amp; Company Vs.  Their Workmen, 1963 (2) LLJ 403 (SC)<br \/>\n(8)Workmen of Straw Board Manufacturing Company Limited Vs.  Company, 1974 (1)<br \/>\nLLJ 499 (SC)<br \/>\n(9)Fine Knitting Company Limited Vs.  Industrial Court,  1962  (1)  LLJ  2  75<br \/>\n(SC)<\/p>\n<p>        9.  Thus,  in  Associated  Cement  Companies Ltd., Vs.  Their Workmen,<br \/>\n1960 (1) LLJ 1, the Supreme Court observed:-\n<\/p>\n<p>                It is, perhaps, impossible to lay down  any  one  test  as  an<br \/>\nabsolute and  invariable  test for all cases.  The real purpose of these tests<br \/>\nis to find out the true relation between the parts, branches, units, etc.  If,<br \/>\nin their true relation, they constitute one integrated whole, we say that  the<br \/>\nestablishment  is  one;  if,  on  the  contrary,  they  do  not constitute one<br \/>\nintegrated whole, each unit is then  a  separate  unit.    How,  the  relation<br \/>\nbetween  the  units  will  be  judged  must depend on the facts proved, having<br \/>\nregard to the scheme and object of  the  statute  which  gives  the  right  of<br \/>\nunemployment  compensation  and  also  prescribes a disqualification therefor.<br \/>\nThus, in one case, the unity of ownership, management and control may  be  the<br \/>\nimportant test; in another case functional integrality or general unity may be<br \/>\nthe  important  test; and in still another case, the important test may be the<br \/>\nunity of employment.  Indeed, in a large number of  cases  several  tests  may<br \/>\nfall for  consideration  at  the  same time.  The difficulty of applying these<br \/>\ntests arises because of the complexities of  modern  industrial  organization;<br \/>\nmany  enterprises may have functional integrality between factories, which are<br \/>\nseparately owned; some may be integrated  in  part  with  units  or  factories<br \/>\nhaving  the  same  ownership  and  in  part with factories or plants which are<br \/>\nindependently owned.  In the midst of all complexities, it may be difficult to<br \/>\ndiscover the real thread of unity.\n<\/p>\n<p>        10.  In Pratap Press Vs.  Their Workmen, 1960 (1) LLJ 388, the Supreme<br \/>\nCourt has observed:-\n<\/p>\n<p>        &#8220;The question, whether the two activities, in which the  single  owner<br \/>\nis  engaged,  are  one industrial unit or two distinct industrial units is not<br \/>\nalways easy of solution.  No hard-and-fast rule  can  be  laid  down  for  the<br \/>\ndecision  of  the question and each case has to be decided on its own peculiar<br \/>\nfacts.  In some cases, the two activities each of which by itself comes within<br \/>\nthe definition of industry are so closely linked together that no reasonable<br \/>\nman would consider them as independent industries.  There may be  other  cases<br \/>\nwhere the connection between the two activities is not by itself sufficient to<br \/>\njustify  an  answer  one  way  or the other, but the employers own conduct in<br \/>\nmixing up or not mixing up the capital, staff and management may often provide<br \/>\na certain answer&#8221;.\n<\/p>\n<p>        11.  Applying the aforesaid principles, in the present case, we are of<br \/>\nthe clear opinion that there is functional integrality between  the  composing<br \/>\nunit and  the  printing  unit.    The  composing work is being done in the 1st<br \/>\nfloor, whereas the printing is being done on the ground  floor.    This  is  a<br \/>\ncommon  practice  in  many  printing press establishments, and hence we cannot<br \/>\nsay, by any stretch of imagination, that the composing work must be treated as<br \/>\na separate unit and an independent  establishment,  apart  from  the  printing<br \/>\nwork.   In our opinion, there is clear functional integrality between the two.<br \/>\nIt may be that for the  purpose  of  reducing  sales  tax  liability  and  for<br \/>\navoiding  being  covered  by various labour statutes, the respondent sought to<br \/>\ncreate an impression that there were two units.    However,  in  view  of  the<br \/>\nconcept  of  functional integrality, we are not inclined to accept the version<br \/>\nof the employer.  In view of the above, we are of the opinion that  there  was<br \/>\nonly one  unit  and  not two units.  Hence, the respondent is attracted by the<br \/>\nprovisions of the ESI Act.\n<\/p>\n<p>        12.  In the result, this Civil Miscellaneous Appeal is allowed and the<br \/>\nimpugned order is set aside.  No costs.\n<\/p>\n<p>Index:  Yes<\/p>\n<p>Website:  Yes <\/p>\n<p>srcm\/sm  <\/p>\n<p>Copy to:\n<\/p>\n<p>1.The II Additional District Judge, Madurai (The Employees State Insurance<br \/>\nJudge, Madurai).\n<\/p>\n<p>2.  The Record Keeper, VR Section, Madurai Bench of the Madras High Court  <\/p>\n","protected":false},"excerpt":{"rendered":"<p>Madras High Court The Regional Director vs K.V.B. Rajeswaran on 11 February, 2005 BEFORE THE MADURAI BENCH OF THE MADRAS HIGH COURT (JUDICATURE) DATED: 11\/02\/2005 CORAM THE HON&#8217;BLE MR.MARKANDEY KATJU, CHIEF JUSTICE and THE HON&#8217;BLE MRS.JUSTICE PRABHA SRIDEVAN C.M.A. No.890 of 1997 The Regional Director, ESI Corporation, 143, Sterling Road, Madras 34. ..Appellant. -Vs- K.V.B. [&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-55329","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 Regional Director vs K.V.B. 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