2009(5) ALL MR 136


Employees State Insurance Corporation Vs. Vishnu Saw Mills Factory

First Appeal No.189 of 2009

22nd June, 2009

Petitioner Counsel: Shri. M.P.M. PILLAI
Respondent Counsel: Shri. P. P. KOTWAL

Civil P.C. (1908), O.14, R.1 - Employees' State Insurance Act (1948), S.75(1)(B) - Limitation Act (1963), Ss.5, 12 - Limitation - Framing of issue - Objection regarding limitation raised - In absence of framing the issue relating to limitation, held, the judgment suffers from the defect of improper exercise of jurisdiction. (Para 17)


JUDGMENT :- Heard learned Advocate Mr. Pillai for the appellant and learned Advocate Mr. P. P. Kotwal for the respondent. Perused the judgment and pleadings tendered for perusal by learned Advocate for the appellant.

2. Parties did not dispute that document annexed to Civil Application No.813 of 2009 can be considered as it was already on record. C.A. No.813 of 2009 is therefore allowed.

3. The appeal is preferred on the following substantial questions of law :

"(1) Whether the learned Lower Court is justified in not framing the issue regarding limitation and deciding it, when it is specifically raised by the appellant in its written statement that the dispute raised by the respondent-appellant after 25 years is hopelessly barred by limitation.

(2) Whether the learned Lower Court is justified in holding that the respondent is not liable to pay contributions as per Exh. 65 without deciding the first appeal that : does the applicant proves that it is not amenable to Employees' State Insurance Act, 1948.

(3) Whether the learned lower Court is justified in holding that the endorsement in the survey report dated 9/7/1981 (Exh.51) regarding employment of ten workers on 4/4/1981, is suspicious in view of the fact that in Exh.51 it is clearly mentioned that apart from 7 employees in the muster roll, as per rough cash book daily rated employees are employed and on 4/4/1981 there were 10 employees."

(Quoted from page Nos.1 & 2 of the appeal memo)

4. Heard the learned Advocates for the parties on the question as to whether the substantial questions of law arise.

5. Learned Advocate Mr. Pillai has pointed out to this Court the substance of averments found in the written statement as referred to and narrated in the body of impugned judgment in paragraph No.4. Those are quoted below :

"Exh.11 is the reply of the non applicant. It is contended that the E.S.I. Act is made applicable to Hinganghat area from 24.12.1981. As such, cause of action arose on 24.12.1981 and as such the application is barred by limitation. Objection regarding non compliance of Sec.75(2)(B) of the Act was also made. It is contended that the applicant unit is registered under Factories Act and power is being used in its since 1992. It is further contended that as per survey conducted on 9.7.1981, the applicant engaged 10 employees on 4.4.1981, and hence factory was covered under E.S.I. Act, 8.11.1981. It is contended that power of electricity was being used for sawing the wood and hence the applicant was covered under the E.S.I. Act. It is contended that the Inspector of the Respondent had visited the unit on 4.3.1983, 19.11.1984, 7.5.1986, 25.5.1988, 23.6.1988, 2.3.1989, 3.3.1989, 14.3.1989, 16.3.1989 and 3.4.1989 for verification of actual wages paid to its employees. The applicant has not availed the chance of personal hearing on 19.10.205 nor he submitted any statement to verify actual wages asked for by para Nos.4 and 5 of the Notice Dt.23.9.2005. Thus he cannot blame the non-applicant for his own mis-doing. On these grounds they have prayed for rejection of the application."

(Quoted from para No.4 of trial Court's judgment dated 05/01/2009)

6. Based on the pleadings quoted in the foregoing para Mr. Pillai argued that facts leading to coverage and point of limitation were spaciously and amply averred yet specific issue relating to the date of coverage and as to limitation, based thereon have not been framed by learned trial Court.

7. Perused the issues framed by trial Court which read as follows :

(1) Does the applicant proved that it is not amenable to the Employees' State Insurance Act, 1948 ?

(2) Does the applicant proves that the communication Dt.23rd September, 2005 and 12th December, 2005 is illegal?

(3) To what relief the applicant is entitled ?

8. It is clear that the issue relating to:

(a) Limitation;

(b) Date when coverage was done;

were not framed.

9. It may be viewed and argued that the issue No.1 is wider and would cover the question as to date of coverage, yet exact date of coverage ought to have been a part distinct issue to lead the parties to exact path of trial.

10. In the result, this Court is satisfied that the adjudication done by the first appellate Court suffers from the defect of failing to frame the issues aptly and correctly and consequently in failing to address and adjudicate all issues involved in the dispute.

11. This Court, therefore, holds that the substantial questions of law presented by the appellant do arise in the case.

This Court therefore frames questions posed by appellant as substantial questions of law. By consent, proceeds to the appeal is taken up for final disposal on merits.

12. It is seen that based on the Exh.51 i.e. the inspection notice-cum-order of coverage, the point of limitation was distinctly raised. The respondent has not shown that the contents of Exh.51 were controverted or by filing an application for modification or for review and/or an appeal against the order of coverage was filed at any point of time. It is not shown as to how the order of coverage is erroneous.

13. Perusal of the judgment impugned reveals that the learned trial Court has proceeded on the belief that, the fact as to the number of workers who were working in the establishment of respondent which fact was the foundation of the order of coverage was ordered was required to be proved before him by the Corporation.

14. In fact, when the coverage was ordered in 1981 and it was not challenged and hence had attained finality, if at all present respondent wanted to prove that the coverage was done erroneously, it was to be so shown by him by bringing positive proof thereof by him and not by the Corporation.

15. In absence of the coverage being brought into issue by raising a specific issue with reference to its date, and as to finality thereto, and specifying its burden on the respondent herein, probably the respondent too was incorrectly led in the trial.

16. In these premises this Court is satisfied that the judgment of the trial Court suffers from the defect of failing to frame issues correctly.

17. This Court is, therefore, satisfied that substantial questions of law framed in this appeal are liable to be answered in favour of the appellant namely that in absence of framing the issue relating to limitation, the judgment suffers from the defect of improper exercise of jurisdiction. Substantial question of law point Nos.2 and 3 need not be discussed and answered, as the answer may leave impressions and impact on the trial. It shall suffice to hold at this stage that the trial Court was not justified in holding that the respondent is not liable to pay the contribution based on Exh.65 in absence of proper trial.

18. In the result, appeal succeeds and impugned judgment and order is set aside. The case is remanded for fresh hearing and disposal according to law after framing issues afresh. The parties would be free to lead evidence if they choose.

19. Parties are directed to appear before the trial Court on 10/8/2009 and proceed with the hearing.

20. In the circumstances parties shall bear own costs.

Appeal allowed.