EMPLOYEES STATE INSURANCE CORPORATION vs HOTEL KALPAKA INTERNATIONAL

The Supreme Court held that under Section 40 of the Employees' State Insurance Act, the employer has a primary liability to contribute to the ESI fund, which cannot be circumvented by claiming closure of the establishment. The Court emphasized that the liability arises from the commencement of business and continues until closure, thus allowing recovery proceedings for contributions due prior to closure. The judgment of the Kerala High Court was upheld, affirming the demand for contributions despite the establishment's closure.