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M/S. Tulip Diagnostics Pvt. Ltd. Represented by Its Managing Director, Dr. Vinayak K. Naik Vs. Regional Director Employees State Insurance Corporation - Court Judgment

LegalCrystal Citation
CourtMumbai Goa High Court
Decided On
Case NumberAPPEAL UNDER E.S.I. ACT NO.6 OF 2008 WITH MISC. CIVIL APPLICATION NO.801 OF 2008
Judge
AppellantM/S. Tulip Diagnostics Pvt. Ltd. Represented by Its Managing Director, Dr. Vinayak K. Naik
RespondentRegional Director Employees State Insurance Corporation
Excerpt:
.....heard shri v. palekar, the learned counsel appearing for the appellants and mrs. a. agni, the learned counsel appearing for the respondent. 2. the above appeal has been admitted by this court on 22/10/2008 on the following substantial question of law: “whether the directors drawing remuneration in excess of the statutory maximum could be counted for the purpose of arriving at the statutory minimum number of employees for deciding coverage?” 3. shri v. palekar, the learned counsel appearing for the appellants also filed the above miscellaneous civil application no.801/2008 to produce additional documents under the provisions of order 41 rule 27 of the civil procedure code. 4. this court by order dated 5/03/2010 directed that the said application be decided at the time of.....
Judgment:

Oral Judgment:

Heard Shri V. Palekar, the learned Counsel appearing for the appellants and Mrs. A. Agni, the learned Counsel appearing for the respondent.

2. The above appeal has been admitted by this Court on 22/10/2008 on the following substantial question of law:

“Whether the Directors drawing remuneration in excess of the statutory maximum could be counted for the purpose of arriving at the statutory minimum number of employees for deciding coverage?”

3. Shri V. Palekar, the learned Counsel appearing for the appellants also filed the above Miscellaneous Civil Application No.801/2008 to produce additional documents under the provisions of Order 41 Rule 27 of the Civil Procedure Code.

4. This Court by order dated 5/03/2010 directed that the said application be decided at the time of the disposal of the appeal. Hence, the learned Counsel addressed submissions in support of their rival contentions on the above appeal as well as the said application.

5. Shri V. Palekar, the learned Counsel appearing for the appellant in support of his appeal has pointed out that the learned E.S.I. Court at Panaji whilst passing the impugned judgment dated 17/11/2007 has failed to appreciate the evidence of AW1 Shri V.K. Naik who was apparently the Director at the relevant time to come to the conclusion that the Directors are to be included to arrive at the minimum number of employees for the purpose of considering whether the appellants would come within the coverage from the period 1991 to 1996. The learned Counsel further pointed out that the appellants have accepted that they come within the coverage from April 1996 onwards and that necessary contribution is being paid by the appellants from time to time. The learned Counsel has taken me through the impugned judgment and pointed out that the learned Judge has made sweeping observation that merely because no documentary evidence has been adduced by the appellants to substantiate their contention that the remuneration of the Directors at the relevant time was Rs.5,000/- per month which came to be increased to Rs.7,500/- per month thereafter the Directors are to be included for the purpose of computing the number of employees in the establishment. The learned Counsel further pointed out that in the affidavit of evidence of AW1 there is a categorical statement made by the appellants to the effect that at the relevant time the remuneration of the Directors in the year 1991 to 1992 was Rs.5,000/- per month and that subsequently the said remuneration came to be increased to Rs.7,500/-. The learned Counsel has further taken me through the cross-examination of AW1 and pointed out that there is no suggestion to the contrary of the respondent disputing the said fact. The learned Counsel further pointed out that during the pendency of the above appeal, the records which had been misplaced by the appellants at the time when the proceedings were going on before the learned E.S.I. Court were located and as such the appellants have filed an application under Order 41 Rule 27 of the Civil Procedure Code for leave to produce the auditor's report, bank pay slip and copy of the income tax returns of the concerned Director. The learned Counsel has taken me through the income tax returns of AW1 Shri V.K. Naik and pointed out that the salary shown to have been received by the said Director is Rs.54,000/- for the assessment year 1992 to 1993. The learned Counsel has also taken me through some of the paying slips of the bank and pointed out that the same discloses that thereafter a sum of Rs.7,500/- was deposited by the appellants in the account of such Directors. The learned Counsel has thereafter taken me through the auditor's report and pointed out that the report shows that the salary of Rs.60,000/- per year was paid to the Directors. The learned Counsel, as such, submits that the cumulative effect of such evidence corroborates the statement of AW1 to establish that the remuneration paid to the Directors was more than the statutory limits and as such according to him the Directors could not be included for the purpose of computing the minimum number of employees to extend the coverage to the appellants. The learned Counsel has taken me through the impugned judgment and pointed out that the learned Judge has not at all considered the evidence of AW1 and other material adduced by the appellants on that count. The learned Counsel, as such, submits that the impugned judgment cannot be sustained and deserves to be quashed and set aside.

6. On the other hand, Mrs. A. Agni, the learned Counsel appearing for the respondent has supported the impugned judgment and pointed out that there is no justification shown by the appellants as to why such documents were not produced before the E.S.I. Court. The learned Counsel has taken me through the application filed by the appellants and pointed out that there is no sufficient reason given by the appellants to substantiate their contention that the documents were misplaced at the relevant time and the same could not be produced despite due diligence. The learned Counsel further pointed out that as the appellants were claiming an exemption to include the Directors for computing the number of employees in the establishment the burden was on the appellants to establish that the remuneration of such Directors was more than the statutory limits. The learned Counsel does not dispute the fact that in the year 1991 the statutory limit of the salary was of Rs.1,500/- per month and thereafter from the year 1992, the same was increased to Rs.3,000/- per month. The learned Counsel further points out that as the appellants have failed to adduce any evidence to establish their contention that the remuneration of the Directors was more than the statutory limit the question of excluding the Directors for the purpose of computing the minimum number of employees in the establishment to consider the coverage would not arise. The learned Counsel further points out that there is sufficient evidence to establish that even otherwise irrespective as to whether the Directors are included to compute the number of employees the appellants come within the coverage at the relevant time. The learned Counsel pointed out that as the appellants have not adduced sufficient evidence there is no question of interfering in the impugned judgment and as such the appeal deserves to be rejected.

7. I have carefully considered the submissions of the learned Counsel as well as the relevant record and the impugned judgment. The only point which has been canvassed before this Court by the learned Counsel appearing for the appellants is as to whether the learned Judge was justified to include the Directors for the purpose of computing the minimum number of employees in the establishment of the appellants at the relevant time to ascertain the coverage. Besides the said contention another submission sought to be advanced by the learned Counsel appearing for the appellants is whether the claim of the respondents for the contribution is barred by latches and delay. No other submissions have been canvassed by the learned Counsel appearing for the appellants. Hence, the only point for determination would be to consider the matter in the light of the above two submissions of the learned Counsel appearing for the appellants.

8. On perusal of the impugned judgment passed by the learned E.S.I. Court the only consideration on that aspect is at para 9 of the impugned judgment. The learned Judge has accepted that the statement was made by AW1 to the effect that the remuneration of the Directors at the relevant time was Rs.5,000/- per month, but however, the learned Judge has discarded the said evidence on the specious ground that no documentary evidence was produced by AW1 to support such claim. When a question of fact is to be proved, such facts can be established by documentary evidence and/or by oral evidence. In the present case, in the light of the contentions of the appellants that at the relevant time the records were not available with the appellants it will not preclude the learned Judge to rely on the oral evidence to consider the question of fact. In the present case, AW1 has categorically made a statement about the remuneration received by him from the appellants. The learned Judge ought to have tested the statement of AW1 in the affidavit in the light of the cross-examination by the respondents to consider the veracity of such statement. As no such exercise has been done by the learned Judge, I find that the appreciation of evidence on that count by the learned Judge cannot be sustained and is perverse. As such, to that extent the impugned judgment deserves to be quashed and set aside. It is incumbent upon the learned Judge to appreciate the evidence on record and the statement made in the affidavit and in the cross-examination and the rebuttal evidence if any adduced by the respondents and come to some concrete conclusion. As no such exercise has been done, I find it appropriate in the interest of justice that the learned Judge be directed to decide the said aspect afresh after hearing the parties in accordance with law. The finding on the said aspect is relevant so as to consider as to whether the Directors were drawing a salary more than the statutory limit at the relevant time to extend the coverage on the appellants.

9. Considering the view taken by me whilst deciding the above appeal preferred by the appellants, I find it appropriate that the application filed by the appellants under Order 41 Rule 27 of the Civil Procedure Code need not be considered by this Court at this stage. The appellants are given liberty to file an application for leave to produce such additional documents before the learned E.S.I. Court and in case such application is filed the learned Judge shall consider such application after hearing the parties in accordance with law. No doubt it is made clear that in case the appellants are permitted to produce the documents, the respondent would be entitled to cross-examine the witnesses producing such documents and even lead rebuttal evidence, if any, in support of their contention. As such, the above substantial question of law framed by this Court is answered accordingly.

10. In view of the above, I pass the following order:

ORDER

(i) The appeal is partly allowed.

(ii) The impugned judgment dated 17/11/2007 is quashed and set aside.

(iii) The learned E.S.I. Court is directed to decide the said two contentions of the appellants afresh after hearing the parties in accordance with law in the light of the observations made herein above.

(iv) The appeal and the above application stand disposed of accordingly with no order as to costs.

(v) The parties are directed to appear before the learned Judge on 23/07/2012 at 10.00 a.m.


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