Merely Stating That Medical Benefits Are Provided Does Not Exempt The A Club, From The Purview Of ESI Act : High Court Of Jharkhand
Title: Beldih Club Jamshedpur v State of Jharkhand
Citation: L.P.A. No. 187 of 2023
Coram: Hon’ble Mr. Justice Sujit Narayan Prasad Hon’ble Mr. Justice Navneet Kumar
Decided on: 18/10/2023
Introduction:
The instant appeal, under clause 10 of the Letters Patent, is directed against judgment/order dated 02.02.2023 passed by learned Single Judge in W.P. (C) No. 3313 of 2008, whereby and whereunder the writ petition has been disposed of declining to interfere with order dated 25.02.2008. pursuant to order passed by this Court in W.P. (C) No. 6101 of 2007 has been rejected holding that E.S.I Act, 1948 is applicable on the petitioner’s establishment; and the demand notice dated 07.09.2007 issued by the ESIC for the recovery of its contribution for the period 01.09.2000 to 31.03.2007 for an amount of Rs. 17,35,556/- has been upheld to be legal and valid, however, to meet the ends of justice, the petitioner- club was directed to make the payment of liability in 12 equal monthly instalments commencing from 15.03.2023.
Facts:
The petitioner is a society registered under the Societies Act, 1860. The petitioner received a notice dated 20.09.2001 from the ESI Inspector asking the petitioner-club to produce the record register for the periods 01.10.1996 to August, 2001, to which the petitioner replied vide letter dated 26.10.2001. Thereafter, another notice dated 30.10.2001 was served by Insurance Inspector stating the petitioner club is covered under Section 2(12) of the ESI Act and as such all the workers/employees drawing wages below the prescribed limits are covered under the ESI Act and merely stating that medical benefits are provided in TMH does not exempt the petitioner-club, from the purview of ESI Act.
Again on 31.10.2001, a letter was received from the Deputy Director, ESIC stating that the petitioner- club is covered under ESIC Act since 01.09.2000 but is not paying ESI contributions and neither records are being produced, which is in violation of Sections 40 and 26 of the ESI Act, to which, the petitioner replied vide letter dated 24.11.2001 stating that it is not an establishment as such it is not covered under the E.S.I. Act.
Thereafter, on 07.05.2007, a demand notice was issued by the Deputy Director demanding contributions of Rs. 17,66,301 for the periods 01.09.2000 to 30.04.2007 and the petitioner was also asked to show cause within 15 days as to why the demand be not recovered.
Aggrieved thereof, the petitioner approached this Court by filing writ petition being W.P. (C) No. 6101 of 2007, which was disposed of vide order dated 20.12.2007 granting liberty to the petitioner to raise its grievance and claim before the Regional Director, Employees‟ State Insurance Corporation, Jharkhand, who shall determine the issues involved in the case and pass appropriate order and further the operation of impugned notice and demand was kept in abeyance for a period of 10 weeks.
the petitioner represented before the Regional Director, Employees‟ State Insurance Corporation, Jharkhand, who rejected the petitioner’s representation vide order dated 25.02.2008.
Court’s Analysis and Judgement
Submission has been made by learned counsel for the appellant that since the medical benefit has been given to the concerned employees in collaboration with Tata Main Hospital hence the benefit as has already been extended there is no reason for discharge of liability again as claimed by the ESI authority.
But the Court held petitioner-club is also not entitled to any remission or relaxation on the point of payment of interest. Rather the petitioner is bound by the obligations fastened upon the petitioner as per the mandate of the aforesaid Act. Further coupled with the aforesaid fact we are of the view that the said amount which ought to have been deposited in ESI fund has been kept by the appellant-club in their possession for its own use and purpose and as such fund has been made to suffer due to non-deposit on the one hand and on the other the appellant has utilized the same for other purposes i.e., for their own benefits, therefore, also the petitioner- club is liable to pay interest.
The Court on entirety of facts, as discussed hereinabove, is of the view that the order passed by learned Single Judge suffer from no error and accordingly requires no interference by the Court.
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Written by- Sushant Kumar Sharma