- (1.)This Civil Miscellaneous Appeal is directed against the order dated 10/01/2001 passed in E.I. Case No.37 of 1999 on the file of Employees' Insurance Court and Chairman, Industrial Tribunal-I, Hyderabad whereby the learned Chairman dismissed the application of the appellant filed under Section 75(1 )(g) of Employees' State Insurance Act, 1948.
(2.)Facts of the case in brief giving rise to filing of this Civil Miscellaneous Appeal by the appellant-Vijaya Spinning Mills Ltd. are: The appellant is a spinning mill having its factory at Ganguru, Penamaluru Mandal, Krishna District. A canteen in the company premises is run by a co-operative Society registered under A. P. Co-operative Societies Act. The said society is known as Vijaya Spinning Mills Employees' Co-operative Canteen Limited. It has its own bye-laws and it is run on no profit and no loss basis. The Managing Committee of the canteen looks after the canteen and maintains the books and registers of the canteen. The appellant has no control whatsoever over the affairs of the canteen. The respondent-Corporation demanded the appellant for payment of ESI contributions on the wages paid to the canteen employees. The appellant sent explanation stating that the canteen employees are not the employees of the appellant company and hence there is no obligation on its part to pay the ESI contributions. The respondent-Corporation passed orders under Section 45-A of the ESI Act, 1948 (as amended) and directed the appellant to pay Rs. 21,785.00 towards ESI Contributions in respect of the employees working in the canteen run in the company premises for the purpose of serving essential food items to the workmen. The appellant filed the appeal petition under Section 75 of the ESI Act before the Employees Insurance Court-cum-Industrial Tribunal, Hyderabad. The respondent-Corporation filed written statement contending that the appellant is the principal employer of the employees working in the canteen run in the company premises and therefore it is liable to pay ESI contributions in respect of the employees working in the canteen. On behalf of the appellant/petitioner, P.W. 1 and 2 were examined and Exhibits P-l to P-10 were marked and on behalf of the respondent-Corporation, RW. I and RW.2 were examined and Exhibits R-l to R-7 were marked. On considering the evidence and on hearing counsel for both the parties, the learned chairman confirmed the order dated 20/04/1999 and thereby dismissed the application, Aggrieved by the order passed in E.I. Case No.3.37 of 1999 on the file of Employees Insurance Court and Chairman, Industrial Triibunal-I, Hyderabad, the petitioner-Vijaya Spinning Mills Limited has filed this Civil Miscellaneous Appeal.
(3.)Learned counsel for the appellant contends that the canteen is run by the Co-operative Society registered under A. P. Co-operative Societies Act, 1964 and therefore employees working in the canteen are not the workmen of the company and so there is no obligation on the part of the company to pay ESI contributions as demanded by the respondent-Corporation. He placed reliance on the following decisions in support of his contention. (1) CESCLimitedv. S.CBose, AIR 1992SC 573 : 1992 (1) SCC 441 : 1992-I-LLJ-475 (2) Hari Shankar Sharma v. Artificial Limbs Mfg. Corporation 2002-I-LLJ-237 (SC) (3) Regional Director, ESIC v. Capital Co-operative Industries Society Ltd. 2001-I-LLJ-1597 (Del). (4) Ferro Alloys Corporation Limited and others v. Government of Andhra Pradesh 2002-III-LLJ-392 (AP-DB). (5) Employees' State Insurance Corporation, Hyderabad v. Laxmi Power Loom Weavers Co-operative and Sales Society Ltd., Warangal and others, 1986(1) LLN 584. (6) Hindustan Machine Tools Employees Union v. Hindustan Machine Tools Ltd. and others 1997-III-LLJ (Suppl)-611 (Raj). In the first cited decision the Supreme Court held that the employees of contractors to whom certain contract works were entrusted by the Corporation did not fall within the scope of Section 2(9) of Employees' State Insurance Act, 1948. It is further held that checking of works after completion and supervision of the works is not the same and they have different perspectives. Checking of works on its completion is an activity, the purpose of which is to finally accept or reject the work, on the touchstone of job specifications. In the cited decision the works engaged by the contractor were not working on the premises of the establishment and they were carrying on the works allotted to them at site outside the establishment. In the second cited decision the Supreme Court held that whenever in discharging of a statutory mandate a canteen is set up by an establishment, the employees of such canteen not necessarily become the employees of that establishment and that it depends on how the obligation is discharged by such establishment. It is further held that merely because a canteen has been set up in compliance with the rules by providing the equipment and for the rate at which the foodstuffs would be sold at the canteen by the contractor would not necessarily mean that the employer was running the canteen through the agency of the contractor. The dispute in the above- referred decision was on claiming status of regular workmen by the employees working in the canteens maintained by the contractors. The provisions of Employees' State Insurance Act, 1948 are not referred in the cited decision. In the third cited decision, Delhi High Court held that the members of the Co-operative Society are not employees within the meaning of Section 2(9) of the Employees' State Insurance Act merely because the society was engaged in any organised business or because the bye- laws of the society require them to be on probation to be on formal enrolment as members. In the fourth cited decision, our High Court held that simply because the industrial unit is a specified industry within the meaning of Section 46 of the Factories Act it is not obligatory on the factory to get the canteen work done by its own workers without entrusting it to a contractor. The provisions of Employees' State Insurance Act, 1948 are not referred in the cited decision. In the fifth cited decision, our High Court held that members of Co-operative Society working in society though for remuneration are not employees within the meaning of Section 2(9) of the Employees' State Insurance Act. In the sixth cited decision, Jaipur Bench of Rajasthan High Court held that simply because the employees of the company who were also the executive members of the committee of co-operative canteen, it cannot be considered that there was a direct link to manage or supervise the canteen by the company.