Case Note & Summary
The appellant, Supreme Industries Limited, an establishment governed under the Employees' State Insurance Act, 1948, filed an appeal under Section 82 of the Act against an order of the Employees' Insurance Court. The appellant had filed an application under Section 75 of the ESI Act challenging contributions demanded by the ESI Corporation for the period between 1994 to 1996-97 under several heads of accounts. The Employees' Insurance Court rejected the appellant's grounds, but the appellant contended that the order was passed in gross ignorance of law and evidence. The appellant argued that the Corporation failed to discharge its burden of proof, and that the Insurance Inspector had visited the premises on several occasions and prepared reports, but copies of those reports were not furnished to the appellant, depriving it of the opportunity to defend itself. The appellant also relied on the Supreme Court ruling in Employees' State Insurance Corporation, Bhopal vs. Central Press, AIR 1977 SC 1351, which held that the Corporation should gather information under Section 45A and apprise the court, and that the Employees' Insurance Court must determine the basis of calculation. The High Court found that the impugned order was not a speaking order, as it did not explain how the figures under different heads were arrived at. The Court held that fairness required that copies of inspection reports be provided to the appellant. The appeal was allowed, the impugned order was set aside, and the matter was remanded to the Employees' Insurance Court for fresh adjudication after providing copies of the inspection reports to the appellant and giving both parties an opportunity to be heard.
Headnote
A) Employees' State Insurance Act, 1948 - Section 75 - Adjudication of Disputes - Speaking Order - The Employees' Insurance Court must pass a reasoned and speaking order when determining contributions payable by an employer. The impugned order was set aside as it did not mention how conclusions were arrived at under different heads of accounts. (Paras 1-3) B) Employees' State Insurance Act, 1948 - Section 45A - Determination of Contributions - Burden of Proof - The ESI Corporation has the duty to gather information under Section 45A and apprise the Employees' Insurance Court of the basis of calculation. The Corporation failed to discharge its burden. (Paras 1-2) C) Employees' State Insurance Act, 1948 - Natural Justice - Inspection Reports - Fairness requires that copies of inspection reports prepared by the Insurance Inspector be furnished to the employer to enable effective defence. The Corporation did not provide such copies. (Paras 1-2) D) Employees' State Insurance Act, 1948 - Section 82 - Appeal - The High Court allowed the appeal and remanded the matter to the Employees' Insurance Court for fresh adjudication after providing copies of inspection reports to the appellant. (Para 3)
Issue of Consideration
Whether the Employees' Insurance Court erred in rejecting the appellant's application under Section 75 of the ESI Act without a speaking order and without considering that the respondent Corporation failed to discharge its burden and furnish inspection reports to the appellant.
Final Decision
The appeal is allowed. The impugned order dated 30th November 2012 passed by the learned Judge of the Employees' Insurance Court, Mumbai is set aside. The matter is remanded back to the Employees' Insurance Court for fresh adjudication after providing copies of the inspection reports to the appellant and giving both parties an opportunity to be heard. The Employees' Insurance Court is directed to decide the matter afresh in accordance with law within six months from the date of receipt of the order. Civil Application No.747 of 2013 is disposed of accordingly.
Law Points
- Burden of proof on ESI Corporation to establish basis of contributions
- Duty of Employees' Insurance Court to pass speaking order
- Right of employer to receive copies of inspection reports
- Section 45A ESI Act for determination of contributions
- Section 75 ESI Act for adjudication of disputes
- Section 82 ESI Act for appeal
