@JUDGMENTTAG-ORDER
R. Subbiah, J.@mdashThis revision petition is filed as against the orderdated 01.03.2011 passed in I.A. No. 41 of 2011 in ESIOP. No. 2of 2008 on the file of Employees'' State Insurance Court(Principal Labour Court), Chennai.
2. The Petitioner herein has filed ESIOP. No. 2 of2008 before the Employees'' State Insurance Court (PrincipalLabour Court), Chennai, u/s 75 of the EmployeesState Insurance Act (in short ''ESI Act'') to declare theimpugned order dated 28.10.2005 issued by the Respondent inProceedings No. TN/Ins.VI/51-3602-74, determining arrears ofcontribution for the period from 1980 to 1987 as illegal and void ab initio and also a permanent injunctionrestraining the Respondent from claiming contribution,interest and damages in terms of the said impugned order.
3. The brief facts, which are necessary to decide the issue involved in the appeal, are as follows:
(a) The Petitioner is a company incorporated underthe Companies Act and they are having their registeredoffice at No. 19, Rajaji Salai,Chennai-1. The Petitionercompany is engaged in manufacturing and selling commercialvehicles and engines. In the year 1952, the Petitioner putup its factory at Ennore and it has been covered under theESI Act with Code No. TN/INS/VI 51-3602-74. In the year1980-81, it started construction of its factory at Alwar inRajasthan and it commenced manufacturing activity only in1982 and it has also been covered under the ESI Act since inception with Code No. 15/7461/74. Apart from that, in theyear 1980-81, the Petitioner commenced construction of itsproposed factory at Bhandara in the State of Maharasthraand the factory building was completed and manufacturingactivity was commenced in the year 1982; but the Bhandarafactory has not been covered under the provisions of ESIAct. That apart, in the year 1980, another unit at Hosurwas also constructed and the ESI Act has been extended toHosur unit in June 1984. It was independently covered underthe ESI Act with Code No. 51-4500. The eligible employees ofthe respective units (Alwar and Hosur) were insured withrespective Regional Offices of the ESI Corporation andcontributions were remitted to the respective RegionalOffices of the Respondent Corporation. In between16.03.1988 and 28.07.1988, the Inspector of the RespondentCorporation visited Petitioner''s Ennore factory and on thebasis of the figures reflected in the balance sheet of thePetitioner, the Respondent had passed the impugned orderunder Section 45-A of the ESI Act dated 28.10.2005.
(b) Challenging the said order, the Petitioner filedE.S.I.O.P. No. 2 of 2008 before the ESI Court stating thatthe demand is primarily on the amounts reflected under theheads of accounts, namely, repairs to building, repairs to plant and machinery and building additions as wages and hassought contribution. The total amount spent under threeheads for the period 1980 to 1987 was Rs. 51.89 crores.While passing the impugned order, the Respondent failed toappreciate that the amount shown under the said three headsin the balance sheet also included the amounts pertainingto the other three factories at Alwar, Bhandara and Hosurand the amounts were not in respect of the Ennore factoryalone. A sum of Rs. 27.54 crores of the total sum pertainingto the other three factories of the Petitioner has to beexcluded from the total amount of Rs. 51.89 crores.
(c) During trial, the Petitioner had examined itsStatutory Auditor and two of its officials belonging to itsaccounts department. The Petitioner''s witnesses had adducedevidence to the effect that the balance sheet and the booksof account, based on which the contributions were claimed,reflected the amounts pertaining to all the factories ofthe Petitioner, namely, Ennore, Hosur, Alwar and Bhandara.Therefore, the amounts pertaining to the other factorieshave to be excluded.
(d) The Petitioner has filed an application in I.A.41 of 2011 in the said original petition stating that so far as Rs. 20.51 crores pertaining to Ennore factory isconcerned, contribution would not be payable and that a sumof Rs. 3.84 crores had been included due to an error inextraction from ledger account. Therefore, in view of theevidence adduced on the side of the Petitioner, the Courthas to frame the following preliminary issues and passorders as to
(1) Whether the Respondent has jurisdiction to claimcontribution in respect of the amounts pertainingto the other three factories of the Petitionersituated at Alwar, Hosur and Bhandara while theproceedings initiated u/s 45A against theEnnore factory ?
(2) Whether the sum of Rs. 27.54 crores, out of thetotal amount of Rs. 51.89 crores reckoned as wages bythe Respondent, has to be excluded as it pertains tothe other three factories of the Petitioner ?
(e) The said interim application for deciding thepreliminary issues was vehemently opposed by the Respondentby filing a counter stating that the framing of preliminaryissue could have been raised by the Petitioner either atthe time of filing the main original petition or at thetime when the issues were framed. But the Petitioner, having kept silent for long, after completion of recordingevidence and after filing the written arguments, filed thepresent application to decide the jurisdictional issue asthe preliminary issue, only to drag on the proceedings.Thus, they prayed for the dismissal of the application.
(f) The trial court, after analysing the entireevidence, dismissed the application filed by thePetitioner. Aggrieved over the same, the present revisionpetition has been filed.
4. Learned Counsel for the revision Petitionersubmitted that the Respondent has made inspection betweenthe period 16.03.1998 and 28.07.1988 only in the Ennorefactory. But all the accounts pertaining to the otherfactories were maintained in one general ledger. In fact,the Bhandara unit was not covered under the ESI Act andthat items relating to Bhandara unit have to be excluded.Similarly, ESI Act was extended to Hosur area only from1984 and hence, Hosur unit has also to be excluded as itwas an establishment having a different ESI Code No. Similarly Alwar unit has also to be excluded as the saidunit is also having a separate ESI code number. But,without considering the objections raised by the Petitionerwith regard to the other units, for which the Respondenthas No. jurisdiction, the order u/s 45-A of ESI Act has been passed. Therefore, the issue with regard tothe jurisdiction has to be decided preliminarily. ThePetitioner could not raise this issue at the earlier pointof time without evidence since the court below could nothave been able to decide the issue. Now, the evidence hasbeen adduced by both parties. Therefore, the issue withregard to the jurisdiction has to be decided as apreliminary issue, otherwise, the Petitioner would put tomuch hardship. In fact, the Petitioner, before passingorder u/s 45-A by the Respondent, made a requestfor deciding the preliminary issue in the first instance.But the Respondent refused to do so. Hence, the Petitionerhas also filed a writ petition in W.P. No. 25374 of 2005before this Court and this Court, by its order dated09.08.2005, directed the Respondent to consider therepresentation of the Petitioner dated 21.07.2005 prayingto decide the jurisdiction issue as a preliminary issue.But, the Respondent, having not chosen to give any rulingwith regard to the preliminary issue in the first instance,has passed the impugned order. Thus, the learned Counselfor the Petitioner submitted that since the Petitioner hasbeen raising the jurisdictional issue as a preliminaryissue right from the beginning, the court below ought notto have dismissed the application filed by the Petitioner.
5. On the contrary, the learned Counsel for theRespondent submitted that the issue is pending for a longtime. The Respondent issued a show cause notice in form C.18. The revision itself is not maintainable under section82(2) of ESI Act and only an appeal shall lie before thisCourt challenging the order passed by the ESI Court, if itis involved any substantial question of law. Moreover, thefirst notice was issued on 16.08.1990. Now, almost 20 yearshave elapsed. The present application has been filed aftercompletion of the evidence and written arguments werefiled, only with an intention to prolong the issue further.In this regard, the learned Counsel further submitted thatthe Respondent has required only records from the factoriesto decide the issue raised by the Petitioner. But thePetitioner has not produced the same. Hence, at thisstage, the question of deciding the preliminary issue doesnot arise.
6. By way of reply, the learned Counsel for thePetitioner submitted that the production of old recordspertaining to the factories in voluminous is not possible.Therefore, the jurisdictional issue has to be decided as apreliminary issue. In support of his submissions, the learned Counsel has relied upon the decisions reported in
7. Heard the learned Counsel for the parties.
8. It is the case of the revision Petitioner thatthe Respondent has made inspection only in the Ennorefactory and they are maintaining a General Ledgerpertaining to all the four factories, run into thousands ofpages for each month. From the total amount of Rs. 51.89crores, the amounts pertaining to other factories has tobe excluded. The Respondent has No. jurisdiction to claimcontribution in respect of the amounts pertaining to otherfactories. It is the further case of the Petitioner thatthe two factories one at Alwar and another at Hosur arehaving different ESI Code numbers and the factory atBhandara has not been covered by the ESI Code. Per contra,it is the contention of the Respondent that the RespondentCorporation required only the records from the otherfactories, for which, it is the reply of the Petitionerthat it is not possible to produce old records relating to the other factories and, therefore, the jurisdiction issue has to be decided as a preliminary issue.
9. The learned Counsel has also placed reliance onthe judgments reported in
According to me, that question can bedecided by the Court below by permitting the party to lead the evidence. The reason is that the Courtfee is a mixed question of fact and law and itcannot be decided as a preliminarily issue.Nevertheless, u/s 12(2) of the Tamil NaduCourt Fees and Suits Valuation Act, any Defendantmay, by his written statement filed before the firsthearing of the suit or before evidence is recordedon the merits of the claim but, subject to the nextsucceeding Sub-section, not later, plead that thesubject matter of the suit has not been properlyvalued or that the fee paid is not sufficient. Whensuch questions are raised, the same shall be decidedbefore the evidence is recorded. In this case, it isadmitted that the revision Petitioner has not raisedthis issue in the written statement nor filedapplication before recording the evidence.Admittedly, PW1 has filed proof and when the casewas posted for cross-examination, this Applicationwas filed by the revision Petitioner. Therefore, thepetition filed by the revision Petitioner cannot bebrought under the scope of Section 12(2) of theTamil Nadu Court Fees and Suits Valuation Act...
The dictum laid down in the said decision is squarely applicable to the facts of the case on hand.
10. It is to be noted that when an application hasbeen filed, after the evidence was recorded, that thejurisdictional question has to be decided as apreliminarily issue, the Court should not resort to try theissue as a preliminarily issue and it has to be tried alongwith other issues since the jurisdictional issue is a mixedquestion of fact and law. In this case, already evidencewas recorded and written arguments were filed. It is not indispute that the Petitioner has not raised the question ofjurisdictional issue as a preliminary issue when the issueswere framed by the Court. Under such circumstances, I am ofthe view, that at this stage, the application filed by thePetitioner cannot be entertained. I do not find anyinfirmity in the order passed by the court below; however,the Court is directed to deal with the issue raised by thePetitioner with regard to the jurisdiction along with otherissues in the main original petition while deciding themain original petition.
With the above observation, this revision petition is dismissed. No. costs. Connected M.P.is closed.
