TaxTMI 
TaxTMI 
TaxTMI 
2012 (11) TMI 1317
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....he date of that show-cause notice as to why the petitioner as one of the factory of M/s. Nalco (Project) should not be prosecuted for non-compliance with the provisions of the ESI Act, 1948 and Regulations framed thereunder. Annexure-12 is also a show-cause notice dated 25.7.2012 issued by opp. party no. 2 to the petitioner to show-cause within fifteen days as to why assessment should not be made as proposed in the said letter with further opportunity to file statement showing full particulars of contribution and for personal hearing. Annexure-17 is also a show-cause notice dated 6.8.2012 issued by opp. party no. 2 to the petitioner-Company to show-cause within ten days from the date of that show-cause notice as to why the petitioner as one of the Principal Employer of their factory M/s. Nalco (Project) should not be prosecuted for non-compliance with the provisions of the ESI Act, 1948 and Regulations framed thereunder. Since the issues involved and the relief sought for in both the writ petitions are identical, they are dealt with together by this common judgment. 2. Petitioners' case in a nutshell is that NALCO is a Government of India Public Sector Company having its He....
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.... as to why the assessment so made will not be recovered and simultaneously also issued the other notice to show-cause as to why the petitioners shall not be prosecuted for non-compliance with the provisions of the ESI Act, 1948 and Regulations framed therein. In response to the said notices dated 22.7.2010, the petitioner submitted its reply on 5.8.2010. In spite of the objection of the petitioner, the opp. parties raised a demand of Rs. 62,96,648/- as ESI contribution for the period from 01.07.2010 to 30.09.2010 and further asked the NALCO authority to show-cause within fifteen days as to why the proposed assessment should not be made and further asked to produce all relevant records for arriving at actual assessment. Vide letter dated 13/15.11.2010, the petitioner indicated the reason not to apply the provisions of ESI Act requested the ESI Authority to treat the show-cause notice as withdrawn and waive the demand under assessment. However, the ESI Authority made the final assessment raising Rs. 60,92,873/- for the period from 1.1.2010 to 30.9.2010 in respect of Contractors' employees engaged in its Project Establishment (Annexure-9). Challenging the said final assessment ord....
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....sel appearing on behalf of NALCO Authority submitted that there is no ESI Dispensary at Damanjodi and therefore, the ESI authority is not entitled to apply the provisions of the ESI Act on the petitioner's establishment. In view of the settlement between the contractors' union and the workers' representatives dated 26.2.2007, the provisions of ESI Act should not have been enforced on the petitioner's establishment. As there was no Dispensary of the ESI Corporation, the immediate employer i.e. the Contractor has not made the necessary deduction from the Contractor's employee. Rather it goes on paying its employees engaged in NALCO, the ESI benefits of 4.75% of the earned wages subject to reimbursement of the same from NALCO, the Principal Employer. Deduction in this regard in absence of ESI Hospital in the locality may not be practical and will face resentment amongst the workers leading to industrial unrest. Being insisted by ESI authorities, NALCO Authority immediately provided the contractors and the workers with registration form and enrolment form, yet there is no move to file the same and submit the same with the management for their further action in the m....
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....in order to discharge statutory obligation, the petitioner-management can impose any condition which is not provided under the statute? (ii) Whether there is any relation between the contribution made by the employer and employee and the benefit availed by the employees ? (iii) Whether the operation of the statutory provisions can be suspended in view of any settlement entered into between the petitioner-management and the representatives of the union of contractor labourers? (iv) Whether any writ of mandamus can be issued directing opp. party nos. 1 and 2 not to insist implementation of the provisions of ESI Act and scheme framed therein until the ESI Dispensary functions effectively and starts parallel service to such contractor labourers ? 9. Since the question Nos. (i) and (ii) are interlinked, they are dealt with together. The Employees State Insurance Act, 1948 provides for certain benefits to industrial employees in case of sickness, maternity, employment injury. Under the statute, the liability to pay the entire contribution under Section 39 of the ESI Act is on the employer. This is because of the mandatory obligation fastened under Section 39 read with Section 40 o....
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....od and the benefit period. 12. Needless to say that it is the statutory duty of the employer to deposit its own contribution and employees' contribution once the factory or establishment is covered by the Act. 13. The Punjab and Haryana High Court in the case of Employees' State Insurance Corporation, Chandigarh V. T.C. Vermani, 1984 LAB I.C. 1406, held that there is no provision under the Act which enjoins a duty on the Corporation to keep on informing the factory owners that they are covered by the Act. The Corporation is not their advisor. On the contrary, the duty is enjoined on the principal employer of the factory to discharge statutory obligation the moment it stands covered by the provisions of the Act. If the employer fails to deduct the employees' contribution, no fault can be found with the Corporation. Section 40 of the Act fixes the responsibility on the Principal employer to pay the contributions. 14. Similar view has also been taken by the Madras High Court in the case of Regional Director of Employees' State Insurance Corporation V. Amalgamation Repeo Ltd., 1982 LAB I.C. 1691 wherein it has been held that management is liable to contribute on its ....