No
order to such effect passed Payment to petitioner of salary at scale she was
getting prior to alleged discontinuance directed to be made.
Held:
In the present contempt
petition complaining of non payment of salary inspire of an order in W.P. 2690
of 1996, the Court finding that there was no order of discontinuing the service
of the petitioner, directed the non
petitioners to continue the services of the petitioner and to pay her
salary she was getting prior to so called discontinuance. (Para 4) Krishna Singh (Smt.) v. G.D. Gupta. [1999]
1. Appeal
2. Conviction criminal charges
3. Dismissal without enquiry
4. Dismissal whether proportionate to
gravity of misconduct
5. Findings of Labour Court/Industrial
Tribunal
6. Judicial review
7. Misconduct
8. Natural justice
9. Past record of Service
10. Validity
legality or constitutionality of dismissal
Dismissal
From service Appellate order not to be invalidated if it has taken into account
relevant factors laid down in rules.
Held:
This writ petition
filed by a Development Officer of the Life Insurance Corporation challenged his
dismissal from service by the Disciplinary Authority which was confirmed by the
appellate authority. The High Court dismissed the writ petition, finding the
two grounds on which the dismissal imposed was to be not sustainable. In the
first place the appellate authority had
duly considered, contrary to what the petitioner contended the factors laid
down in the regulations. It also found that the findings of the Disciplinary
Authority were based on evidence on record. Further the Disciplinary Authority
had not failed as contended by petitioner to appreciate the evidence of
statements of some witnesses which were considered by the Enquiry Officer; nor
was it necessary to re appreciate such evidence. (Paras 4 to 6) Thakur Das Bhaskar v. Life Insurance Corporation of India. [1999]
·
Supreme Court Rule, Order XLI, Rule 33
and Code of Civil Procedure, 1908 Section 107(l) (a) Powers of appellate Court
to do complete and substantial justice Dismissal of Government servant after
departmental enquiry on charge of misconduct of unauthorised absence from duty
Finding of Trial Court that he was not guilty of unauthorised absence from duty
since appellants themselves had treated the period as leave without pay Plea of
Government servant that he was not given opportunity of personal hearing upheld
First Appellate Court affirms about findings of non Survival of charges and yet remanded case to punishing authority
for passing fresh orders Held that
appellate Court has power to decide the case finally Having confirmed findings on facts by trial Court not open to
appellate Court to remand case to punishing authority for passing fresh orders
of punishment Trial Court's order
restored.
Held: The Supreme Court Rules, Order XLI, Rule
33 gives very wide power to the appellate Court to do complete justice between
the appellate Court to do complete justice between the parties and enables it
to pass such decree or order as ought to have been passed or as the matter of
the case may require notwithstanding that the party in whose favour the power
is sought to be exercised has not filed any appeal or cross objections. (Para 8)
The discretion, however, has to be
exercised with care and caution and that too in rare cases where there has been
inconsistent findings and an order or decree has been passed which is wholly
uncalled for in the circumstances of the case. (Para 9)
The powers of the appellate court are
also indicated in Section 107 of the Code of Civil Procedure which provides
that the appellate Court shall have the same powers as one conferred on the
original Court. If the trial Court could dispose of a case finally, the
appellate Court could also, by virtue of clause (a) of sub section (1) of
Section 107 determine a case finally. (Para
10)
The Lower appellate Court confirmed the finding that since the
period of unauthorised absence from duty was regularised, the charge did not
survive but it did not say a word about
the finding relating to the opportunity of hearing in the departmental
proceedings. Since those findings were not specifically set aside and the lower
appellate Court was silent about them, the same will have to be directed to
have been affirmed. In the face of these findings, it was not open to the lower
appellate Court to remand the case to the punishing authority for passing a
fresh order of punishment. (Para 11) State of Punjab v.
Bakshish Singh. [1999]
2. CONVICTION ON CRIMINAL CHARGES
Constitution
of India, 1950 Article 311 Kerala State Police Departmental Inquires,
Punishment & Appeal Rules, 1958 Rule 17 Indian Penal Code Section 325 Sub
Inspector of Police Convicted by Criminal Court for voluntarily causing
grievous hurt based on private complaint Appeal pending against such conviction
Based on conviction, Sub Inspector dismissed from service Conviction in
criminal case does not warrant extreme punishment of dismissal, removal or
compulsory retirement from service Conduct of Government servant is relevant
factor to be taken into account for taking disciplinary action when appeal
against conviction is pending Conduct
of petitioner has no nexus with conviction by Criminal Court for offence of
voluntarily causing grievous hurt
Conviction by Criminal Court will not automatically result in dismissal
or removal of civil servant Punishment
imposed on Sub Inspector of Police is not in connection with any discharge of
official duties or matters adversely affecting discharge of public duties Removal from service of Sub Inspector is totally unwarranted Sub
Inspector of police directed to be reinstated in service subject to
final outcome of criminal appeal No
need to take any further action
Reinstatement to stand if conviction is set aside Government can consider nature of punishment
to be imposed if conviction is confirmed but such punishment should be other
than removal from service or dismissal or compulsory retirement.
Muraleedharan
Nair v. State of kerala. [1999]
·
Disqualification
attaching to conviction Dismissal of Government servant from service by reason
of conviction under Section 408 of IPC Conviction for offence can be taken into
account for purpose of dismissal of person convicted from Government service
Section 12 of Probation of Offenders Act only in respect of disqualification
that goes with conviction under law which provides for offence and its
punishment Probation of Offenders Act, 1958.
Harichand
v. Director of School Education. [1999]
Differences
in effects of dismissal of workman after defective enquiry and dismissal
preceded by no enquiry Further effect on justification of dismissal by leading
evidence before Labour Court.
In a case of dismissal without enquiry,
but justified by employer by leading evidence before the Labour Court, from
which date to which date the back wages should be paid to the workman. That is
the point of law which came up for consideration of the Division Bench in these
Writ Appeals.
Held:
(i) If the enquiry
conducted before the dismissal of the employee was defective, and if the
dismissal is justified before the Labour Court by leading evidence, the order
of dismissal would relate back to the date when it was actually passed by the
Management. (Para 7)
(ii) Where the order of dismissal is
passed without holding any enquiry and the action is justified by the
Management before the Labour Court after adducing evidence, the order of
dismissal would become effective from the date of the order of the Labour Court
and in that event the workman would be entitled to full back wages from the
date of termination of his services till the date of award of Labour Court. (Para 7) Management of Mysore Coffee
Processing Co operative Society Limited, Mysore v. Presiding Officer, Labour
Court, Mysore. [1999]
Before
dismissing Government servant, it is mandatory to hold enquiry in accordance
with principles of natural justice.
Narendra
Pal Singh Teotia v. State of U.P. [1999]
4. DISMISSAL WHETHER PROPORTIONATE TO GRAVITY OF
MISCONDUCT
Dismissal
From service Inference of theft from arrest and FIR registered against workman
Cannot be sustained Charge of absence from leave also not proved Dismissal held
disproportionate to charge proved.
Held:
The present writ appeal
was disposed of by the High Court by modifying the Single Judge's order by
limiting back wages to 75%. The workman was otherwise held entitled to
reinstatement with all other retirement benefits. The punishment of dismissal
was held not only disproportionate to the charge attributed or proved but also
unconscionable. (Para 4)
There was no proof of charge of theft or
unauthorised absence from duty which was made against the respondent workman. (Paras 2 and 3) Chief Engineer, T.N. Electricity
Board v. Govindaraj M. [1999]
Punishment
Of dismissal from service To substitute quantum of punishment two conditions
necessary; it has to be pleaded before Labour Court, and punishment,
unconscionable and disproportionate to charges attributed Industrial Disputes
Act, 1947 Section 11 A.
Kallakurichi Agricultural and Marketing Society Limited, Kallakurichi v. P. Rengabashiyam. [1999]
Disciplinary
Enquiry Driver allowing a person to act as conductor in place of authorised
conductor It is an act of serious indiscipline and dismissal is proper
punishment Person, entitled to protection under Article 20(3) of Constitution
cannot make false statements.
SuJan
Singh v. R.S.R.TC. [1999]
·
Constable on fast for a day as protest
against transfer But dismissal is too harsh for it Reinstatement ordered.
Ram
Autar Singh v. State Public Service Tribunal. [1999]
Bus
conductor in Public Roadways Collected fare from passengers but did not issue
tickets Dismissed after enquiry Amount being too small, Labour Court ordered
reinstatement as a fresh appointee Held, fraud of even small amount renders
conductor unfit for retention in service.
Harjinder
Singh v. State of Punjab. [1999]
Punishment
of dismissal Inquiry held found to be proper Finding of guilt of workmen not
perverse However punishment held to be shockingly disproportionate Order of
reinstatement without back wages but continuity of service, upheld Bombay
Industrial Relations Act, 1946.
In these petitions, an order of the
appellate authority under the Bombay Industrial Relations Act, 1946, setting
aside the Labour Court's order of reinstatement of workman without back wages
but with continuity of service, and passing instead an order of reinstatement
with 50% back wages, was challenged. The High Court allowed the petitions in part.
Held:
The High Court
discussed the arguments advanced by the petitioners and decisions cited, and
concluded that in the facts and circumstances of the case, the impugned order
of the appellate authority had to be set aside and consequently the order of
the trial Court was restored. (Para 31) Municipal
Corporation of Greater Bombay v. Hanumant Jotiram Mane. [1999]
·
Dismissal Punishment of dismissal
imposed after departmental enquiry and upheld on appeal Tribunal converting it
into stoppage of two increments with cumulative effect on ground that it was
harsh Proportionality When it can be considered In view of decision in J.T.
1997(7) SC 572, Tribunal's order set aside and order of appellate authority
restored.
Held:
Principle of
proportionality can be invoked regarding punishment only in a case where the
punishment was totally irrational in the sense that it was in outrageous
defiance of logic or moral standards such is not in the present case. Hence the
order of the Tribunal set aside and the order of appellate authority restored. (Para 3) State of Karnataka v. H. Nagaraj.
[1999]
Punishment
of dismissal Inquiry held found to be proper Finding of guilt of workmen not
perverse However punishment held to be shockingly disproportionate Order of
reinstatement without backwages but continuity of service upheld.
Municipal
Corporation of Greater Bombay v. Hanumant Jotiram Mane. [1999]
Shocking
to judicial conscience Court can set aside punishment of dismissal and order
fresh punishment in accordance with law In rare cases, High Court itself can
impose appropriate punishment with cogent reasons In instant case,
reinstatement without backwages ordered.
Indian
Oil Corporation Ltd. v. Panchanan Manna. [1999]
Misconduct
Petitioner workman found absent habitually and constantly on two dates without
obtaining any leave Conduct of petitioner workman amounted to misconduct and
consequently management lost confidence in him Punishment of dismissal imposed
on workman is not arbitrary and shockingly disproportionate. (Paras
27 and 29)
Verma
V.K. v. Hindustan Machine Tools Ltd., Pinjore. [1999]
Kerala
Co operative Societies Rules, 1969 Rule 176 Power of Registrar of Co op.
Societies to rescind Resolution, Resolution passed by society to terminate
services of employee for proved misconduct joint Registrar of Co op. Societies
rescinding Resolution on ground that punishment was not proportionate to proved
misconduct and no opportunity given to employee to correct himself No specific
violations of provisions of Act or Rules or Bye Laws was pointed out by Joint
Registrar Joint Registrar of Co Op.
Societies has no power to consider adequacy of punishment or findings of
Enquiry Officer Findings of Enquiry
Committee or Enquiry Proceedings cannot be scrutinised by Joint Registrar of
Co op. Societies as Appellate
Authority Order of Dismissal passed
with retrospective effect will not be void but will be valid and effective from
date of dismissal Le. prospective
date.
Punishment
of dismissal Allegations of indecent and threatening behaviour proved by
witnesses and also corroborated On facts, punishment cannot be said to be
disproportionate to offence Industrial Disputes Act, 1947 Section 11 A.
Venugopal
V. v. Management of Reed Relays & Electronics Ltd., Madras. [1999]
Dismissal
From service Punishment for failure to 'fall in" first call Held
disproportionate.
Writ petitioner challenged his dismissal
from service mainly on the ground that the charge against him being not
serious, the punishment of dismissal from service was grossly disproportionate.
Held:
The High Court accepted
the petitioner's contention. It observed that though the petitioner did not
comply with the direction to "fall in" for inspection at the first
instance, within few minutes he came to the spot and replied to the question of
the company Commander. Hence the dismissal was held to be a punishment
disproportionate to the charge proved. (Para
4) Awadesh
Pandey v. Union of India. [1999]
5.
FINDINGS OF LABOUR COURT/ INDUSTRIAL TRIBUNAL
Preliminary order of Labour Court holding that domestic enquiry conducted by management on account of non payment of subsistence allowance during period of suspension Writ Court cannot interfere with orders passed by Labour Court at preliminary stage unless there are extraordinary reasons Order of learned single Judge interfering with orders of Labour Court at preliminary stage before deciding main issue relating to non employment is not warranted especially when worker lost his job two decades ago and is waiting decision on merits.
Tube
Products Employees Union v. Management of Tube Products of India. [1999]
Labour
Court can interfere with punishment imposed by employer after holding that
departmental enquiry was not vitiated.
Indian Farmers' Fertilizer Corporation
Ltd. etc. v. P.O., Labour Court, Chandigarh. [1999]
Powers of
Industrial Tribunal to interfere with quantum of punishment Clerk in Bank
dismissed from service on proved misconduct of crediting his account with money
that should have been credited to account of customer and withdrawing such
money and utilising for himself Industrial Tribunal directing reinstatement of
employee with continuity in service and 50% of back wages because punishment
was harsh and disproportionate to gravity of proved misconduct Finding that
employee committed fraud on customer was established in Domestic Enquiry and
same was not questioned before Industrial Tribunal Confidence of customer is paramount for success of Banking
Business Continuing in employment a
person who committed fraud on customers would be prejudicial to interest of
Bank Industrial Tribunal is Judicial
Forum who records conclusions based on findings and available relevant
materials Discretion vested in Tribunal
to interfere with quantum of punishment should be properly exercised by
discharging its functions judicially
Discretionary power does not mean licence to direct reinstatement even
where it is not warranted and to set aside Order of Dismissal when records do
not warrant such setting aside of Order of Dismissal industrial Tribunal cannot interfere with quantum of punishment
if proved misconduct is grave in nature warranting dismissal from service Discretionary powers to interfere with
quantum of punishment can be exercised only when it is established that proved
charges and penalty imposed are not proportionate to each other after
considering all aspects Failure to
consider past conduct by itself is not sufficient to hold Order of Dismissal as
not warranted where proved misconduct is grave
Employee cannot claim right to commit fraud during course of
employment Employee should maintain
such ethical standards embodied in Rules and Regulations Ethical standards
cannot be abandoned on plea the Justice should be rendered with mercy Employee
should maintain minimum standard of integrity
Award of Reinstatement and back wages to workman who did not maintain
minimum standard of integrity would amount to rewarding fraudulent and
dishonest conduct and would be mocking at integrity and honesty of majority of
workmen Order of Dismissal cannot be
invalidated on ground of sympathy where such sympathy would be misplaced because
of proved grave misconduct of fraud committed by employee.
Management
of Catholic Syrian Bank Ltd. v. Industrial Tribunal, Madras 104. [1999]
·
Sikh Gurdwara Act, 1925 Section 142
Service Rule 4(b) Dismissal of employees of Gurdwara Prabandhak Committee,
Committee, a creation of statute Service rules framed by it have force of law
Violation of Act and Rules will make it amenable to writ jurisdiction of High
Court Nor can employee be denied relief on ground of alternative remedy.
Mewa
Singh v. Shiromani Gurdwara Prabandhak Committee. [1999]
·
Dismissal Of employee No errors of law
or procedure, leading to manifest injustice or violation of principles of
natural justice, found committed Examining evidence as first appellate Court
and reversing finding of fact recorded by enquiry officer and accepted by
disciplinary authority, in proceedings under Article 226 of Constitution, held
illegal and unsustainable.
The present appeal by Kshetriya Gramin
Bank impugned the judgment of a Single Judge in a writ petition filed before
the Allahabad High Court by the respondent, a dismissed Cashier cum Clerk, of
the Appellant Bank. In the impugned judgment, the Single Judge has quashed the
dismissal of the respondent from service. The Supreme Court allowed the appeal
and consequently the order of dismissal stood upheld.
Held:
The Supreme Court
observed that the High Court examined the evidence as if it were a Court of
first appeal and reversed the finding of fact recorded by the enquiry officer
and accepted by the disciplinary authority. In proceedings under Article 226
(of the Constitution) the High Court does not act as an appellate authority.
There was no error of law or procedure in this case, nor any finding in that r
behalf was recorded by the High Court. Under these circumstances the judgment
of the High Court could not be sustained. (Para
6) Rai
Bareli Kshetriya Gramin Bank v. Bhola Nath Singh. [1999]
Dismissal Punishment of For absence from duty Same absence cannot be subject of punishment for second time Principle of double jeopardy will apply.
Held:
A Head Constable in the
Police Department of Haryana was visited with the penalty of dismissal from
service for absence from duty but the dismissal was set aside in appeal,
placing him in reduced rank. For the same absence from duty, he was punished
for a second time, after enquiry and charge sheet, with dismissal. He
challenged this second dismissal in the present petition. The High Court
allowed it, holding that the principle of double jeopardy would apply in the
present case. (Para 3) Satpal Singh v.
State of Haryana. [1999]
Opportunity
of hearing denied Appointment of inquiry officer after recording adverse
findings was empty formality to give colour of authenticity to dismissal order
Impugned order of dismissal held to suffer from serious infirmities and hence
quashed.
The grievance made by a dismissed
General Manager of the respondent Nigam in this writ petition was found to be
justified. The High Court therefore allowed the writ petition, quashing the
dismissal of the writ petitioner.
Held:
The High Court observed
that the second respondent had made up his mind to dispense with the services
of the petitioner; the subsequent appointment of inquiry officer or asking for
explanation of the petitioner carried little weight; it was an empty formality
to give an appearance of authenticity to the dismissal order subsequently
passed. The impugned order of dismissal suffered from serious infirmities. (Para 28) Girija Shanker Pant v. State of
U.P. [1999]
Domestic
enquiry In view of specific provision in Standing Orders governing conditions
of service of workman permitting employer to take into account previous record
of workman, no illegality is involved in taking into consideration past record
while passing order of dismissal. (Para 26)
Verina
V.K v. Hindustan Machine Tools Ltd., Pinjore. [1999]
Dismissal
for grave misconduct by employee in nationalised Bank Past record in such cases
has no relevance Likewise question whether Bank sustained loss also not
relevant.
Baby
Vijayan v. Industrial Tribunal. [1999]
No
material incriminating delinquent employee in offence alleged While determining
punishment of dismissal relevant circumstances like past conduct, length of
service, gravity of offence etc., have to be taken into consideration.
Velappan
M.M. v. Commissioner, Madurai Municipal Corporation, Madurai. [1999]
10.VALIDITY, LEGALITY OR
CONSTITUTIONALITY OF DISMISSAL
Dismissal
Of Branch Managers of Co op. Bank in 1983 during pendency of proceedings before
Industrial Tribunal Reinstatement after Tribunal's order Revival of dismissal
order after 9 years Impermissible Revival of dismissal order of Bank which is
styled by Bank itself as NISHPRABHAVI (ineffective) is glaringly arbitrary and
unsustainable in law.
During the pendency of the proceedings
before the Industrial Tribunal on the question of suspension of the
petitioners, the respondent Co op. Bank dismissed the petitioners in April/May
1983. Dismissal orders were challenged in the High Court which issued interim
orders for payment of subsistence allowance. On September 30, 1985 Tribunal
directed the Bank to reinstate petitioners with full salary. Accordingly
respondent Bank complied with Tribunal's orders. In the reinstatement orders it
was also stated that the dismissal orders have become Nishprabhavi (ineffective).
After reporting back the petitioners
continued in their posts till March 22, 1995. On August 18, 1994 the Counsel
for the petitioners informed the High Court of the reinstatement of the
petitioners. The High Court then dismissed the writ petitions as they have
become infractions, and also vacated the interim orders. The respondent Bank,
on the basis of the dismissal of the writ petitions, revived the dismissal orders
passed against the petitioners in 1983, and gave show cause notices to
petitioners as to why they should not be treated as dismissed from service.
Therefore the petitioners are before the
High Court again assailing the show cause notices.
Held:
This Court had never
stayed the operation of the orders dismissing the petitioners. Therefore,
dismissal of the writ petitions and vacation of the interim orders could not
ipso facto result in reviving the
dismissal orders. For revival of the dismissal orders neither dismissal of the
writ petition nor vacation of the interim orders can be held to be valid
reason. The petitioners were reinstated in pursuance of the award of the
Tribunal and not in pursuance of any order passed by this Court. Therefore the
plea of the respondent Bank that dismissal orders passed against the
petitioners in 1983 revived as a consequence of the dismissal of the writ
petitions and vacation of the interim orders passed therein does not hold
water. (Para 23)
At no point of time were the petitioners
notified that their reinstatement would be subject to the results in the writ
petitions. On the contrary, the petitioners were allowed to continue for about
9 years after the reinstatement without any rider. It cannot therefore be held
that the petitioners were wrong in assuming that their dismissal had lapsed and
they were entitled to continue in service. (Para
25)
The respondent Bank is estopped from
reviving the dismissal orders passed against the petitioners in 1983. The
action of the respondent Bank is wholly arbitrary and cannot be countenanced. (Para 27) Balraj Singh v.
Sachiv/Mahaprabandhak, District Co op.
Bank Ltd., Moradabad. [1999]
·
Jurisdiction
and Powers of High Court Employee appointed as Industrial Worker based on
National Trade Certificate National Trade Certificate cancelled by Director of
Employment & Training on ground that employee got admission by unfair means
by altering marks in English and Mathematics in IX std. Examination Employer
can dismiss employee from service based on cancellation of National Trade
Certificate Employee has no right to continue in service after cancellation of
ITI Certificate High Court should not have set aside order of dismissal on
ground that cancellation of National Trade Certificate was not part of charge
in disciplinary proceedings.
G.M.,
Mines I, Neyveli Lignite Corporation Ltd. v. T. Elayaperumal. [1999]
Dismissal
order passed in violation of Section 12(3) That vitiates domestic enquiry
However award is not vitiated as enquiry was conducted before Labour Court
itself Industrial Disputes Act, 1947 Sections 11 A and 12(3).
Venugopal
v. Management of Reed Relays & Electronics Ltd., Madras. [1999]
Dismissal
of workman Labour Court finding dismissal justified on ground of contumacious
behaviour and instigating strike No interference called for in writ
jurisdiction Constitution of India, 1950 Article 226.
Kuldip
Singh v. Presiding Officer, Labour Court. [1999]
Industrial
Disputes Act, 1947 Section 10(l) Industrial award Conductor charged with
carrying passengers without tickets Also quarrelling with checking staff
Dismissed after due enquiry Award upheld as based on cogent and reliable
evidence Sophisticated rules of evidence not applicable in domestic enquiries.
Held:
There is no perversity
or illegality in the award of the Labour Court. It is on record that, on
inspection by the checking staff, it was found that at least nine passengers
were found traveling without tickets from whom the conductor had collected the
fare. All the said nine passengers were duly examined and their statements
corroborate it. (Para 15)
It was observed that there is cogent and
reliable evidence on record against the petitioner conductor. In matters
pertaining to domestic enquiries, sophisticated rules of evidence are not
attracted. (Para 16) Sampat Raj Pareek v. Rajasthan
State Road Transport Corporation, Jaipur. [1999]
Dismissal
without following procedure for retrenchment Held direction for reinstatement
with continuity of service by Labour Court valid.
Kutch
District Panchayat Executive Engineer v. Kishor D. Varu. [1999]
Dismissal
of domestic orderly by Court martial Nothing on record to show that Rule 22 of
Army Rules, 1954 was followed It showed total non application of mind nor was
there any admission of guilt by domestic orderly.
Harnarayan
Singh v. Union of India. [1999]
Scheme
under Act Regulations under scheme Clause 3 of Regulation 56 Interpretation of
Clause 3 on approval, Approval has to be positive act on part of Central
Government Exposit facto approval is not something that should be eschewed
under all circumstances.
Different Writ Petitions were filed by
respondents against the appellant on the question of sanction of levy exceeding
100% of the total wage bill as envisaged under Regulation 56 of the Scheme framed under Dock Workers (Regulation of Employment)
Act, 1948. While disposing of one of these writ petitions, the learned single
Judge gave a direction to the Dock Labour Board to seek the approval of the
Central Government for the fixation of levy at 202.67%. In response to this
direction, the Central Government refused to grant ex post facto sanction
to the resolution in question on the ground that Regulation 56(3) of the Scheme
does not envisage ex post facto approval
since it clearly provides for obtaining prior approval of the Central
Government.
In the meanwhile, another judgment in a
different writ petition came to be passed, holding that the approval of the
Central Government in terms of Regulation 56(3) of the Scheme should be deemed
to have been granted by the Central Government. And this learned single Judge
had further held that the approval can be presumed by the silence of the
Central Government in either not according the approval during all the relevant
years or not conveying its rejection.
Under these circumstances the Division Bench.
Held: We disagree with the view that the
approval can be presumed to have been accorded by the Central Government as
contemplated in the Regulations, either by its silence in not doing anything or
by its conduct during the relevant period. According of approval as envisaged
under Regulation 56(3) in the Scheme is a positive act which has to be
performed by the Central Government as in the context in which the expression
'prior approval' has been used in Regulation 56(3). (Para 3)
The sanction cannot be brought into
force unless approval of Central Government was obtained. An obligation is cast
upon the Dock Labour Board to seek the approval of the Central Government in
respect of the Resolutions in question. The Central Government was under a
corresponding obligation to consider the question of according its approval to
the resolutions in question, of course on the merits of the case. Ex post facto approval is not something
which is not to be considered in respect to the Resolutions in question. It was
not open to the Central Government to refuse to consider the very question of
grant of approval on the ground that Regulation 56(3) did not envisage the
grant of ex post facto grant approval
at all. Such stand of the Central Government ran counter to the ratio and the
findings of the judgment dated September 15, 1989 (in one of the writ
petitions). We therefore set aside the communication dated April 12, 1990 (the
communication issued by the Central Government refusing to grant ex post facto sanction). (Para 5)
Matter remanded for reconsideration by
Central Government. Calcutta Dock Labour Board v. Master Stevedors' Association. [1999]
SEE UNDER THE HEADING "DISCIPLINARY PROCEEDINGS". [1999]
Caution
administered, not being one of prescribed punishments is no bar to initiation
of disciplinary proceedings, as violating principle against double jeopardy.
Held:
Yet another desperate
attempt of the petitioner to stall the proceedings was his invocation of the
principle of double jeopardy; the petitioner had been cautioned to be careful
on the basis of the same transaction for which the disciplinary proceedings had
been initiated. Hence according to him, the impugned proceedings were
impermissible on the basis of principle of double jeopardy. The High Court
rejected also this argument. It observed that the caution administered, even
assuming that it related to the same transaction, was not one of the prescribed
punishments under the Service Regulations governing the petitioner. Hence the
impugned proceedings did not amount to double jeopardy. (Para 4)
The writ jurisdiction of the High Court,
wide though it be, cannot be invoked by a ' delinquent official to frustrate
enquiry proceedings. (Para 5) Shantharaju N. v.
State Bank of Mysore. [1999]
Compassionate
Appointment Karnataka Electricity Board Employee dying in harness leaving
behind wife and three sons Wife got ADCRG and getting monthly pension Two sons
are employed Compassionate appointment refused to third son Board, in the
circumstances, rightly refused to grant appointment on compassionate grounds to
the third son.
Krishnappa
R. V. v. Karnataka Electricity Board, Bangalore. [1999]
Rule
36(2) Negligence On facts, held negligence cannot be attributed to deceased.
Held: Under the circumstances, the
learned Judge was not justified in coming to the conclusion that the deceased
had not used shock proof shoes or rubber gloves and therefore he was himself
responsible for the accident. But for the carelessness of the D 2 the accident
would not have occurred. The D 2 being the supervisor of the first defendant,
the Electricity Board would be vicariously responsible for the negligence of
the Supervisor. (Para 15) Jasuben wdlo
Devchandbhai Pannar v. Gujarat Electricity, Board [1999]
Section
79(c) T.N. Electricity Board Service Regulations Regulation 92 Note 3 of
Division VII C I No classification among Helpers as technical and non technical
banning promotion to those Helpers possessing technical qualifications held
irrational and arbitrary.
Petitioner union challenged in this
petition a certain note in the Service Regulations of the respondent
Electricity Board which denied promotion, on selection to the post of Junior
Assistants and Typists including Steno typists, to candidates recruited as
Helpers possessing National Trade/Apprenticeship certificates. The High Court
upheld the challenge and allowed the writ petition.
Held: The High Court, after referring to
the relevant Regulations, observed that the writ petition was maintainable
inspire of the order of dismissal of earlier writ petition by the same Helpers,
since the dismissal was on the ground that petitioners therein could not invoke
Article 226 of the Constitution to decide whether the impugned action was
contrary to Section 9 A of the I.D Act and Rule 57 of the I.D. Rules and since
the present petition sought a declaration that the impugned note was ultra
viresand violative of Arts. 14,16 and 19(l)(g), which could not be decided by
the Labour Court. Further availability of alternative remedy could not by
itself be a bar to invoke Article 226 for enforcement of fundamental
rights.(Para 20)
The High Court further observed that the
impugned note was irrational, arbitrary and discri minatory. (Para 22)
It was further noticed that the impugned
note was also contrary to the spirit of the report of Justice Khalid
Commission.(Para 23) Tamil Nadu
Electricity Board Thozilalar lykkia Sangam v. T.N. Electricity Board. [1999]
·
Rule 6 Benefit conferred for limited
purpose of seniority, pay and pension By a deeming fiction of commencement of
service from earlier date Such fiction cannot be extended in respect of other
service conditions As, for example, for claiming benefit of service beyond 58
years, under First proviso to Rule 19(l) of State Bank of India Service Rules.
State
Bank of India v. Hanumantha Rao D. [1999]
Occupational
disease Silicosis caused by silicones Occupational hazard in State
manufacturing industry Contracting of disease deemed to be employment injury
arising in course of employment Employees' State Insurance Act, 1948 Section 52
A.
E.S.I.
Corporation, Indore v. Siara (Smt.). [1999]
1. General
2. Bombay Port Trust Rules of Provident
Fund
3. Employees of Pune Municipal Corpn.
Transport Undertaking Governed by Provident Fund Scheme
4. Employees' Provident Funds &
Miscellaneous Provisions Act, 1952
5. Employees' Provident Funds Scheme, 1952
6. Employees' Superannuation Benefit Fund
of Steel Authority of India, 1994
7. Provident Funds Act, 1952
Employees
entitled to contribute to provident fund without ceiling Under voluntary
scheme, and exemption from Act obtained Not permissible for employer to impose ceiling,
subsequent to grant of exemption.
Madura Coats Employees Union v.
Regional Provident Fund Commissioner, Maharashtra, & Goa. [1999]
·
Bank
entitled to forfeit bank's contribution to provident fund of employee after due
enquiry towards liability incurred by employee to bank State Bank of India
(Supervisory Staff) Rules, 1975 Rules 20.
Held:
As regards the bank's
contribution to the provident fund the bank was entitled to forfeit such amount
as was arrived at after due enquiry, representing the liability of the
respondent employee to bank.(Para 9) State Bank of
India v. CB. Dhall. [1999]
2. BOMBAY PORT TRUST RULES OF PROVIDENT FUND
Rule 16
Enquiry, as contemplated in said rule, pending which payment of Board's
contribution to provident fund was not to be made, was domestic enquiry
Withholding such payment on ground of pending criminal case is held not
justified.
A clerk cum typist of the Bombay Port
Trust did not receive on his retirement employer's contribution to the
Provident Fund and interest thereon. He therefore filed this petition for
getting the said amount, from his employer, namely the Bombay Port Trust. The
High Court declared him entitled to the amount and made the Bombay Port Trust
liable to pay it.
Held:
The High Court observed
that on a proper reading of Rule 16 of the Bombay Port Trust Rules of Provident
Fund, on which the Port Trust relied, the enquiry contemplated therein was
domestic enquiry. Further the offence, of which the petitioner was accused, was
reported long after the petitioner retired. Hence there was no question of
withholding payment by the Port Trust on the ground that a criminal case was
pending against the petitioner.(Para 5) Vasant Rainkrishna
Bhide v. Board of Trustees of Port. [1999]
3. EMPLOYEES OF PUNE MUNICIPAL
CORPORATION TRANSPORT UNDER TAKING GOVERNED BY P.F. SCHEME
·
In
1970, Pension Regulation Scheme for employees of Transport Under taking
introduced effective from April, 1967 Modification made to scheme in 1975 and
1985 Municipal Corporation extended modified scheme to its employees with
effect from January 1, 1957 by its resolution dated November 18, 1986
Applicability of Regulations to employees of Transport undertaking who opted or
governed by P.F. Scheme who retired between January 1, 1957 and November 29,
1986 High Court in writ petition filed by employees of Transport Undertaking
held that cut off date of April 1, 1967 was arbitrary and directed Corporation
to extend benefits modified scheme to employees who had retired after April 1,
1967Supreme Court held that P. F. scheme applicable to employees of Transport
undertaking was different from scheme of Municipal Corporation Hence they could
not be extended to employees of Transport Undertaking who retired before April
1, 1967 which date was fixed under agreement Said date cannot therefore be
termed 'arbitrary' or violative of Article 14 of Constitution, Constitution of
India, 1950 Artic1e14.
4.
EMPLOYEES'PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952
Act makes
it incumbent on employer to deposit its share and that of employees P.F.
Commissioner has to take prompt action against those who are responsible for
default/delay in complying with Act.
Held:
As regards the second
relief, the High Court directed the respondent to make the P.F. contributions
upto date and the P.F. Commissioner to take action in case of default or
delay.(Para 10) Deepak
Kumar Sahu v. Orissa State Road Transport Corporation. [1999]
Claim of
company to be sick undertaking Not substantial Nor was it proved that it was
having two separate units Held order of P.F. Commissioner neither illegal nor
erroneous.
In this petition challenging an order of
the Regional P.F. Commissioner, it was claimed that the petitioner company had
become a sick undertaking and therefore it could seek the aid of clause (iii)
of notification dated May 1989. The High Court rejected the petition.
Held:
The High Court observed
that it could not be said the impugned order of the Regional P.F. Commissioner
was in any way illegal or erroneous.(Para 7)
No case was made out by the petitioner
that it had suffered loss equal to or exceeding its entire net profit.(Para 5) Sarabhai Machinery
v. Regional Provident Fund Commissioner. [1999]
Sections
10), 2(e), (f) and (g), and 17Employees' State Insurance Act, 1948 Companies
Act, 1956 Section 445(3) Establishment in process of winding up, not engaged in
industrial activity, nor specifically notified under Section 1(3)(b) of E.P.F.
Act E.P.F. Act not applicable to such establishment Official liquidator not
liable for contribution under said Act Same finding applies to liability under
E.S.I. Act.
The Official Liquidator of a company
(Rohtas Industries Ltd.) sought in these proceedings directions, pursuant to
notices by the concerned authorities under the E.P.F. Act and the E.S.I. Act to
appear with records for determining amount of contribution due from him under
the said Acts. The High Court held the E.P.F. Act (as also the E.S.I. Act) was
not applicable and the Official Liquidator was not liable for contribution
under the said Acts.
Held:
The High Court
observed, after referring to the relevant statutory provisions, that the
different units of the company in liquidation had been out of operation since
1984. The establishment being in the process of winding up, pure and simple,
not engaged in any industrial activity specified in Schedule I nor specifically
notified under Section 1(3)(b) (of the E.P.F. Act), the Provident Funds Act (as
well as the E.S.I. Act) was not applicable and the Official Liquidator was not
liable for contribution under the Act.(Para 10)
In the
matter of Rohtas Industries Ltd. (in liquidation). [1999]
Section
1(3)(b) Coverage Calculation of infancy period of establishment Change of name
and area of activity do not warrant change in period of commencement of
infancy.
In 1980 the Petitioner was registered as
Gem Exports Private Limited under the Companies Act. From 1980 to 1985 the activity of the Petitioner
was confined to trade and commerce. In 1985 there was a change in the area of
operation and name of Petitioner. Petitioner became Gem Properties Private
Limited, and started manufacturing fabrics and sacks. The Respondent Authority
had covered the Petitioner establishment under P.F. Act with effect from
September 1, 1985.
The contention of the Petitioner before
the learned single Judge was that the Petitioner establishment must be taken as
having been set up for the first time in the year 1985 and the Respondent
should not have computed the infancy period from 1980.
Held:
Petitioner was an
establishment covered under Section 1(3)(b) of the Act right from 1980 because
it had admittedly been carrying on trading and commercial activity which is an
item covered by the Notification issued by Central Government under Section
1(3)(b) of the Act. The period of infancy must be calculated from the first
establishment and the figure of employment of 20 is first reached.(Para 5)
Merely because there was a change in the
name and a change in line of activity, it cannot be called a new establishment
set up for the first time in 1985.(Para 6) Gem
Properties Private Limited v. Regional Provident Fund Commissioner. [1999]
Section
1(3) (b) Cine Workers and Cinema Theatre Workers (Regulation of Employment)
Act, 1981 Section 24 Notification under Extending P.F. Scheme to cinema theatre
employing 5 or more workers Not ultra vires P.F. Act.
The writ petitioner, Shakti Theatre,
filed this writ petition seeking the issue of a writ of certiorari quashing a
notification issued by the Central Government which extended the P.F. Scheme to
cinema theatre employing five or more workers. The High Court dismissed the
writ petition.
Held:
The High Court rejected
every one of the contentions raised by the petitioner in support of the
petition. The main among those contentions was that the impugned notification
was ultra vires the provisions of the P.F. Act. The High Court pointed out that
this submission had no substance in as much as Section 24 of the Cine Workers
etc. Act, 1981 had applied the provisions of the P.F. Act to every cinema
theatre in which 5 or more workers were employed on any day.(Paras 7 to 11) Shakti Theatre,
Bijnor v. Union of India. [1999]
Sections
1(3)(b) A public undertaking to which activities carried on by Department of
Government were transferred was not new establishment Benefit of infancy period
will not be available to it.
The Punjab Tourism Development
Corporation, incorporated in 1979, for handling matters relating to tourism
under the Companies Act, 1956, claimed the benefit of infancy period under
Section 16(l)(b) of the P.F. Act, which was denied by the respondent Commissioner. Hence the writ petition by the
Corporation. The High Court dismissed the writ petition.
Held:
The High Court observed
that the functions and activities which were previously being performed by the
Government Department of Tourism had been transferred to the petitioner
Corporation. Hence it was not a new establishment. There was continuity of the
business, and no question of granting exemption under the Act under Section
16(l)(b).(Para 6) Punjab
Tourism Development Corporation Ltd.,
Chandigarh v. Regional
Provident Fund Commissioner, Chandigarh. [1999]
·
Section 1(3)(b) Entry 24 Inserted by
notification dated April 30, 1962 covered manufacturer of sweet meats selling
his own sweetmeats However direction to apply Act only prospectively was issued
in interest of justice and in peculiar facts of this case.
Apparently this appeal was filed by a
manufacturer of Lijjat Papads, calling in question the applicability of the
E.P.F. Act, 1952 to the appellant's establishment and demand for contribution
from 1986 to 1991. The appellant finding that it could not seriously contest
the applicability in view of Entry 24 inserted by a notification under Section
1(3)(b) of the Act and the decision of the Supreme Court's Constitution Bench
in 1963 SC (Notes) 114, the appellant pleaded that the application of the Act
might be made prospective. Lending countenance to this submission, the Supreme
Court, while dismissing the appeal, directed that the Act might be applied to
the appellant's branch at Jabalpur only from April, 1999.
Held: The Supreme Court tempered the
rigorous wind of the law of the shorn lambs of employee women who were to be affected by its
judgment. It referred to the disastrous consequences that would ensue not only
to the appellant but also to the poor women employees, if the past demands were
reviewed. It gave therefore the direction of prospective application of the
Act, as already noted.(Paras 2 and 3) Shri
Mahila Griha Udyog Lijjat Papad v. Union of India. [1999]
Sections
2(b) and 6 Employer bound to pay Provident Fund Contribution not only on basic
wages but also on Dearness Allowance.
Petitioner School management challenged
in this appeal an order of a single Judge whereby its writ petition was
dismissed. In the writ petition the
management contested its liability to make Provident Fund Contribution
in respect of Dearness Allowance paid by the Government to the teaching and
non teaching staff of the School. The
High Court dismissed the appeal.
Held: The High Court observed that under
Section 6 of the E.P.F. Act, 1952 a liability was cast upon the management as
employer to pay P.F. Contribution not only on basic wages but also on Dearness
Allowance.(Para 5)
The fact that
the Government released Dearness Allowance not every month but at irregular intervals would not affect
the aforesaid liability of an employer, the P.F. Act being a piece of welfare
legislation. (Para 6) Gyan Bharti v.
Regional Provident Fund Commissioner. [1999]
Sections
2(e) and 2(f) and Section 7 A Employer and Employee Definition Employer has
control over affairs of establishment Not control over functioning of employees
Even persons employed indirectly through contracts are employees. (Paras 10
& 12)
Gujarat State Civil Supplies
Corporation Ltd. v. Regional P.F.
Commissioner. [1999]
Sections
2(e), 14(2) and 14 A Employees' Provident Fund Scheme, 1952 Paras 43, 76Failure
to submit monthly returns and contribution cards by due date Vague averments in
complaint That all Directors are in charge of establishment will not be enough
to sustain complaint against accused.
This writ petition under Article 227 of
the Constitution read with Section 482 of the Code of Criminal Procedure, 1973,
was filed by the first petitioner company and its Directors, impugning the
issue of process against them by the concerned Magistrate for offences of not filing
monthly returns and contribution cards, under Sections 14(2) and 14 A of the
P.F. Act and relevant paras to the P.F. Scheme. Their contributions against the
Magistrate's order were two fold:
i) that complaint of the P.F. Inspector (respondent) did not indicate in what manner the accused persons were in charge of the (petitioner's) establishment and how they were responsible for the conduct of its business;
ii) that the complaint was barred by limitation, under Section
468(2) of the Code of Criminal Procedure.
The High Court quashed the Magistrate's
impugned order as against all petitioners except the first and even against the
first petitioner it was quashed so far as it related to the year 1981 1982 on
the ground that the complaint was time
barred.
Held:
The High Court observed
that in the face of the statutory provisions, it would be futile to vaguely
aver in the complaint that all Directors named in the complaint were in charge
of the establishment and responsible for the conduct of its Business.(Para 22) Transport Corporation of India Ltd. v. R.M.
Gandhi. [1999]
Section
2(f)'Employee' Meaning of Club meant for benefit of employees of factory
Employees of club held employees of factory.
Held:
The High Court
confirmed the decision of a single Judge holding employees in question were
employees of the factory. Hence present appeal was dismissed. (Para 3) Mysore Kirloskar Ltd., Harihar v.
Regional Provident Fund Commissioner, Bangalore. [1999]
Section
2(f) Meaning of 'employee' There should be relation of employer and employee If
only training is imparted, person receiving it, cannot be called 'employee'.
This writ appeal filed by the P.F.
Commissioner challenged an order of a single Judge allowing a writ petition and
quashing the demand of the P.F. Commissioner as against 27 trainees undergoing
training in the respondent company. The High Court dismissed the writ appeal.
Held:
The High Court observed
that where only training was imparted and wages were paid, it was unable to see
as to how they could be called ,employees' at all. Until there was a
relationship of employer and employee, definition of 'employee' in Section 2(f)
(prior to the amendment) could not be put in motion, The crux of the matter was
whether there was such a relationship.(Paras 5 and 6) Regional Provident Fund Commissioner v. Management of Hotel Highway
Limited, Mysore. [1999]
Section
2(f) Contract between establishment and contractor Meaning of It must be
contract by which contractor agrees to bring labour for employment by establishment
Contractor must purely be labour contractor and not independent contractor
undertaking to deliver finished product to establishment.
The present writ appeal was against an
order of a single Judge dismissing a writ petition filed by the appellant, Karachi Bakery. In the said
writ petition, the appellant challenged an order of the Regional P.F.
Commissioner by which the Commissioner treated employees of two other firms to
be employees of the appellant firm for the reason that the appellant had
entered into contracts with those two firms for supply of certain bakery
products and that the said contracts were in connection with the business of
the appellant firm within the meaning of Section 2(f) of the P.F. Act. The High
Court allowed the writ appeal.
Held: The High Court observed that the
words, (in Section 2(f) of the RE Act), whether they (employees) are employed
"by or through a contractor in, or in connection with, the work of the
establishment" postulate that such persons (employees) must be employed by
or through a contractor as "contract labour". The contractor for
purposes of Section 2(f) is purely a labour contractor and not an independent
contractor who contracts to deliver "finished product" to the
establishment.(Para 13)
In the present case, the High Court
found that the contracts of the appellant with the said two firms fell within
the latter category, and they were for the purpose of delivering to the
appellant finished (bakery) products, although the raw material was supplied by
the appellant.(Para 15)
The High Court further observed that the
findings of the P.F. Commissioner on which the Single Judge relied in the
impugned order were based on no evidence.(Para 10)
The High Court rejected the other
contentions of the respondent and allowed the appeal. (Paras 16 to 21) Karachi Bakery v. Regional Provident Fund
Commissioner. [1999]
Sections
2(f) and 2 A Any person employed by or through contractor in connection with
work of establishment is 'employee'.
The petitioner challenged in this
petition orders of Regional RE Commissioner, which clubbed the petitioner's 7
employees with 14 employees of another concern for determining applicability of
the EY.F. Act to the petitioner's establishment. The High Court dismissed the
petition.
Held: The High Court observed that there
was a clear cut admission of the petitioner to the effect that the 14 employees
were employed through contractor, hence its (total) number of employees was 21,
bringing it within the pale of the Act.(Para 7)
Further there was functional integrality
between the two units according to the finding of the first respondent. This
finding of fact, not being perverse, was not open to challenge in writ
proceedings under Article 226 of the Constitution. (Para 9) Goel Textile Industries v. Union of India. [1999]
Sections
2(f), 3 A, 7 A Officer conducting enquiry for determining liability under Act,
has same powers as are vested in Civil Court in respect of examining witnesses
or production of documents, affidavits, issuing commissions etc. Issuance of
summons to appear not enough Forcing concerned persons to appear, where called
for, has to be resorted to.
This writ petition by the N.T.P.C.
challenged an order fixing liability to pay certain sum of money under the
E.P.F. Act, 1952. The High Court directed respondents to keep the order in
abeyance till the matter was heard afresh in accordance with law and thereafter
to confirm or revoke the same.
Held:
The High Court referred
to Sections 3 A and 7 A (2) of the E.P.F. Act, 1952, and observed that the
authorities had to collect material for the purpose of discharging their
statutory duties under the law.(Para 3)
It therefore directed the respondents to
keep the impugned orders in abeyance until opportunity was given to the petitioner
and all other parties to produce documents and thereafter pass fresh order
either confirming with alterations, if any, or revoking the impugned
order.(Para 4) N.T.P. Corporation Ltd. v.
Regional Provident Fund Commissioner. [1999]
Sections
2(f) and 8 A Meaning of employee' It includes person employed through
contractor connected with work of establishment Contribution payable in respect
of such employee may be recovered by employer from contractor Hence contractor
cannot be called upon to furnish his own P.F. account code numbers.
Petitioner contractor impugned in this
petition a demand of the first respondent (principal employer) calling upon the
petitioner to furnish his own P.F. and E.S.I. Code numbers, in order to
consider his request for issue of tender document. The High Court allowed the
petition.
Held:
The High Court
observed, after referring to the relevant statutory provisions, that there was
no statutory obligation on the part of a contractor to compulsorily possess
separate accounts under the E.P.F. Act or the E.S.I. Act and the rules framed
there under. The contributions of employees employed through a contractor were
required to be recovered by the employer from the contractor.(Paras 5, 7 and 8) Venugopala Reddy' M. v. Hindustan
Aeronautics Ltd., Bangalore. [1999]
Section
2 A Unity of ownership, management and control are not always deciding factors
What matters most is functional integrality On facts, held three units in
question Could not be treated as part of one establishment.
The present writ application challenged
an order of the Regional P.F. Commissioner which treated three concerns as part
of one establishment and so held the provisions of the E.P.F. Act was
applicable to them. The High Court allowed the writ application, quashing the
impugned order.
Held:
The High Court observed
that there was nothing to show if common accounts were maintained for the three
units or if their workmen were inter transferable. On the facts, the High Court
was of the view that they could not have been regarded in law to be part of one
establishment. Earlier, the High Court referred to decisions on the point and
observed that unity of ownership, management and control are not always the
deciding factors. What matters most is functional integrality. (Para 6) AlliedAgencies v.
Regional Provident Fund Commissioner, Orissa. [1999]
Section 2 A If financial managerial and functional unity between different units is found and one unit cannot exist without other, they can be treated as one unit.
This petition by an employer challenged
an order of the respondent P.F. Commissioner clubbing three units run by the
partners of one family as one unit for the purpose of the E.P.F. Act, 1952. The
High Court allowed the petition.
Held:
The High Court observed
that the P.F. Commissioner while exercising powers under the Act, acted in quasi judicial capacity. It was,
therefore, incumbent on him to decide the controversy arising before him after
grant of due opportunity to the party. The P.F. Commissioner in this case committed
a mistake in exercising his jurisdiction by placing reliance on the report of
the Inspector, which was not put to the employer (petitioner) for rebutting the
same or leading evidence to controvert the same.(Para 12)
The impugned order was therefore quashed
and the case remanded for fresh disposal after affording full opportunity to
the petitioner to show cause in the matter.(Para 15) Manav Mandir Hotel v. Regional
Provident Fund Commissioner, Indore. [1999]
Sections 6,
7 A, 7 B and 17 Concerned authority passing order without giving opportunity of
hearing Order arbitrary Filing of review or appeal against such order not
efficacious or speedy remedy Writ petition maintainable Authority deciding
proceedings under Section 7 A competent to decide pendency of exemption
application Matter sent back for fresh consideration.
This, writ petition challenged an order
of the respondent P.F. Commissioner passed against the O.N.G.C. (petitioner),
under Section 7 A of the E.P.F. Act,
1952. The High Court, after lengthy discussion of the arguments, sent back the
matter for consideration afresh by the respondent.
Held:
The High Court made an
elaborate discussion of the facts, the provisions of the E.P.F. Act, 1952 and the arguments of counsel of the parties.(Paras
3 to 42)
It concluded that the writ petition was
maintainable as the impugned order was one without giving opportunity of
hearing and hence arbitrary. Filing of review or appeal against such order
would not be an efficacious or speedy remedy.(Para 44)
While deciding proceedings under Section
7 A of the Act the respondents were competent to consider pendency of the
application (for exemption from the E.P.F.
Act). As the order was ex prate, it was not necessary for the High Court to decide the controversy
with regard to the pendency of the application. (Para 46)
The impugned order was therefore set
aside and the matter sent back to the first respondent for fresh consideration
after giving opportunity of hearing to the parties.(Para 47) Oil
and Natural Gas Corporation Ltd. v. Asst. Provident Fund Commissioner. [1999]
Sections 7
and 7 A When allegations of discriminatory coverage in matter of P.F. were
made, and it was not possible for Court to go into merits and demerits of
allegations, Regional P.F. Commissioner was directed to look into grievances of
petitioner based on those allegations.
Allegations by petitioner employee of
respondent were made of discriminatory coverage in the matter of Provident
Funds and Family Pension, went unheeded and hence the present petition seeking
direction against the RPFC to
initiate proceedings under Section 7 A of the E.P.F. Act.
Held:
The High Court directed
the RPFC to look into the
grievances of the petitioner and pass a reasoned order for intervening or
declining to intervene in the matter and to examine whether Section 7 A of the
Act should be invoked or not. The petitioner was directed to make a de novo application within 2 weeks
stating his grievances (to the RPFC).(Paras
5 & 6) Bhasjaran
C.N. v. Central Provident Fund Commissioner. [1999]
Sections
7(a) and 19 A Order of Central Government under Section 19 A Passed on merits,
without granting request for adjournment of hearing Request found to be for
sufficient reason Order set aside.
Petitioner Hotel owner challenged in
this petition an order of the Central Government under Section 19 A of the
E.P.F. Act, 1952 passed on the petitioner's representation that in the Hotel
less than 20 persons were employed and therefore the notice of the Regional
P.F. Commissioner under Section 7(a) of the E.P.F. Act was not tenable. The
High Court allowed the petition.
Held:
The High Court found
that there was sufficient reasons for the petitioner's non appearance on the
date of hearing. The impugned order had been passed without hearing the
petitioner. Hence it was quashed leaving it open to the Government to pass
fresh order after giving opportunity of hearing to the petitioner.(Para 3) Himalaya Hotel v. Government of India. [1999]
Section
7 A Commissioner of Provident Fund His function is not to determine adversarial
disputes but a statutory obligation to hold enquiry and find about liability
and obligations of employer. (Para 20)
Gujarat State Civil Supplies
Corporation Ltd. v. Regional P.F.
Commissioner. [1999]
Section
7 A Finding by Commissioner that second respondent was employee of appellant
company and it was bound to enroll second respondent as member of Provident
Fund Second respondent, having entered into compromise under which he had given
up all claims in respect of employment, cannot demand provident fund by
approaching Commissioner.
The present appeal was the sequel of a
prolonged litigation between appellant company and the second respondent had
acted in the twin capacities of employer as well as Director of the company.
The second respondent, having entered into a compromise with the company in
suits filed by him and having given up, in consideration of payments made to
him, all claims against the company in respect of his employment, set in motion
through the Regional Provident Commissioner proceedings for obtaining provident
fund in respect of his service to the company. The second respondent succeeded
in this effort before the Regional P.F. Commissioner as well as before a Single
Judge in a writ petition preferred by the company Hence the present appeal,
which was allowed.
Held:
The High Court rejected
the contentions of the second respondent advanced in support of the impugned
judgment of the Single Judge. It observed that as part of the over all
settlement it was always open for the second respondent to give up the claim in
respect of the provident fund and there was no rule of law which prescribed
that a beneficiary could not give up or surrender his claim even though it
arose out of statutory provision. (Paras
6 to 8) Automotive
and Allied Industries Pvt. Ltd. v. Regional Provident Fund Commissioner. [1999]
Section
7 A Objections by establishment regarding rate of contribution Authority had
not applied mind to objections Nor considered them in impugned order, Order was
held not sustainable.
The petitioner undertaking challenged in
this writ petition an order of the respondent P.F. Commissioner requiring the
petitioner to deposit a certain sum as P.F. contribution. The High Court
allowed the writ petition, quashing the impugned order.
Held:
The High Court observed
that the respondent had not applied (its) mind to the objections raised by the
petitioner. The authority (respondent) had no authority to demand the
contribution at a rate specified in a Government order, unless the authority
had dealt with the question (raised by the petitioner) as to whether the said
Government order was or was not applicable to the petitioner. (Para 5)
The impugned order was laconic; it
failed to disclose at what rate the petitioner was required to deposit the
contribution or as to what contribution of the employer and employees had not
been deposited. (Para 6) Meekan Transmissions Ltd. v.
Regional Provident Fund Commissioner. [1999]
·
Sections 7 A and 7 D Validity of Section
7 A challenged on ground that no appeal is provided for Meanwhile Section 7 D
inserted providing for appeal Question of vires of Section 7 A does not survive
Appellants relegated to statutory remedy of appeal before Tribunal.
Section 7 A of the E.P.F. Act was
challenged in the High Court inter
alia on the ground that the Section did not provide for appeal and hence
ultra vires the Constitution
of India. The High Court repelled the challenge to the vires and also made
certain observations on the merits of the case.
Held:
Pending these appeals,
the legislature itself amended
the Act by inserting Section 7 D providing for an appeal before the Appellate
Tribunal, which has already been constituted and is also functioning. The
question of challenge to the vires of
Section 7 A on the ground that there was no appeal provided under the Act does not survive and it has
become academic. (Para 2)
Without expressing any opinion on the
merits of the case, the appellants are relegated to the statutory remedy of
appeal before the appellate authority for decision on merits. (Para 10) Sumedico Corporation v. Regional
Provident Fund Commissioner. [1999]
Sections
7 A, 14 and 16 Before determining amount due from employer, concerned authority
has to decide dispute relating to applicability of Act.
Writ petitioner employer sought
protection afforded to infant factories under Section 16(l)(d) of the E.P.F.
Act, 1952 and, till decision of the question, stay of proceedings under Section
7 A or action under Section 14 of the Act. The High Court directed the
concerned authority to decide the aforesaid question and dispose of the writ
petition.
Held:
It observed that in
view of the specific language of Section 7 A of the Act, there could not be any
doubt that before determining the amount due from the employer as envisaged
under Section 7 A(l)(b) of the Act, the concerned authority had to decide the
dispute relating to the non
applicability of the Act, for example, due to the protection under Section
16(l)(d), as in the present case, as envisaged in Section 7 A(l)(a) of the Act. (Para 6) Sri Mayur Biscuit Co. (P) Ltd. v. Regional Provident Fund Commissioner,
Orissa. [1999]
Sections
7 A, 14(1 A), 14 A, 76(d) If allegations in complaint make out offence,
criminal prosecution cannot be quashed Since there were no deliberate laches,
P.F. Commissioner was directed to reconsider matter.
In the present batch of writ petitions a
wholesale cooperative stores and its Secretary sought quashing of criminal
proceedings against them instituted by the P.F. Commissioner for delay in
making the deposit of P.F. dues.
Held:
The High Court observed
that it was difficult to hold that allegations in the complaint did not make
out the offence in question and hence the complaint could not be quashed.
However as there had been absolutely no
deliberate laches, the P.F. Commissioner might reconsider the matter whether
the complaint could be withdrawn. (Para
3) Cuttack
Wholesale Cooperative Stores Ltd., Cuttack v. Regional Provident Fund
Commissioner, Bhubaneswar. [1999]
Sections 7A
and 14 B (as they Stood prior to amendment Act 40 of 1973) Principles of
natural justice must be complied with before passing orders imposing damages,
penalty etc., for failure to make P.F. contributions, even if statute be silent
on the point.
Orders by the State Government imposing
damages and penalty for failure of petitioners (employers) both to make
contributions towards provident fund of workmen as well as to transfer the
amount, deposited by workmen towards the provident fund accounts, were impugned
in the present writ petition, mainly on ground of noncompliance with principles
of natural justice while passing the impugned orders. The High Court,
unwillingly though, upheld the contention of the petitioners and allowed the writ
petition.
Held:
The High Court observed
that principles of natural justice, even if not specifically provided under
Section 14B of the P.F. Act as it stood prior to the amendment by Act 40 of
1973, have to be read in that provision and consequently before determining the
imposition of damages or penalty and before initiating proceedings for recovery
of the same those must have been complied with. The impugned orders were
manifestly erroneous having been passed in violation of the principles of
natural justice. (Para 18) India Supplies
Engineering Works Ltd. v. State of U.P. [1999]
Sections 7A
and 16(l)(b) If separate legal entity starts business, it will be entitled to
infancy period It cannot be treated as a department or branch of its holding
company Though Provident Fund Act is piece of benevolent legislation, benefit
of infancy period intended to generate production and growth in economy cannot
be ignored Balance has to be struck in matter of interpretation of its
provisions.
A company engaged in the manufacture of
rubber sheets was aggrieved by an order of the Regional P.F. Commissioner by
which the benefit of infancy period under Section 16(l)(b) of the P.F. Act was
withdrawn, treating it as a department/branch of its holding company, and by
which it was called upon to pay P.F. Contributions from the date of its
incorporation. Hence the present writ Petition by the company. The only point
that arose for consideration was whether the benefit of infancy period given to
the company was validly withdrawn or not. The High Court found merit in the
writ petition and made the rule absolute.
Held:
The High Court observed
that while interpreting the provisions of Section 16(l)(b) of the P.F. Act,
which provision was required to be read as a code by itself, if the Court finds
that a new legal entity starts a business, then certainly certain incentives
are required to be given. (Para 5)
A subsidiary company, as in the present
case and the circumstances of the case, could not by any stretch of imagination
be treated as a department or branch of the holding company. (Para 6) Associated Polymers Ltd. v. Union
of India. [1999]
Sections 7
A and 17 Statutory requirement as to reasonable opportunity No complied with
Matter remitted for fresh disposal.
Held:
Writ petitioner firm
contended that no opportunity was given for representing its case, before the
Regional Provident Fund Commissioner passed his impugned order demanding P.F.
contribution in a certain sum from the petitioner. Part of the amount had been
already deposited. The High Court remitted the proceedings to the Commissioner
for fresh disposal as per Section 17 of the E.P.F. Act, setting aside the
impugned order.
Rule made absolute. Hotel Dove Bird, Thane v. Union
of India. [1999]
Sections 7
A, 19 A and 71 (as amended by Act 33 of 1988) For a proper implementation of
provisions of Act, Courts are bound to give meaningful and purposive
interpretation Consideration of crucial
facts to conclude whether four firms can be clubbed together, not made Impugned order set aside and case remitted
for fresh disposal.
Petitioner firm challenged in this
petition an order of the first respondent passed under Section 19 A of the
E.P.F. Act, confirming an order of the second respondent by which it was held
that four other firms carrying on business at different places were only
branches of the petitioner firm. The High Court set aside the impugned order
and remitted case to the authority under Section 19 A for fresh disposal.
Held:
The High Court found
that the first respondent omitted to consider matters which ought to have been
adverted to, correctly applying the correct law in the matter. Other statutory
authorities like the Income Tax Department, Sales Tax Department had considered
the four firms as independent establishments. Even for the purpose of Section 7
A of the P.F. Act, one of the firms in Tamil Nadu had been found to be an
independent establishment. (Para 7)
Though a
partnership is not
considered to be a legal person, it has got all the trappings of a legal
person. (Para 16)
Further the four firms filed petitions
before the first respondent but no notice was issued to the firms and they had
not been heard. (Para 17) Parthas Textiles,
Kottayam v. Union of India. [1999]
Section
13 Criminal Procedure Code, 1973Section 482 Offences under P.F. are continuing
ones Hence law of limitation is not applicable to them Respondent Complainant
was competent to launch prosecution.
The present criminal Revision Petitions
for quashing the prosecution launched against the petitioners for failure to
pay Employees' Deposit linked contributions and administrative charges, within
the prescribed time, failed as the High Court accepted none of the contentions
of the petitioners.
Held:
In the first place the
offences being continuing ones, the law of limitation was not applicable to the
proceedings initiated against the petitioners. (Para 5)
Secondly, want of application of mind in
according the sanction to prosecute, was not a matter which could be gone into
in the petitions of present nature. (Para
6)
Finally the grievance of the petitioners
that the respondent complainant could not be treated as Inspectors for
enforcing the Act, was held to be misconceived, as the respondent was a person
appointed under Section 13 of the E.P.F. Act. (Para 7) Meenakshi Industries, Coimbatore v. G. Gursuwamy. [1999]
Sections
14, 14 A E.P.F. Scheme, 1952 Para 76(b) Culpability under sub section (1) of
Section 14(l) different and based on false representation Under sub section (2)
of Section 14 and para 76(b) of E.P.F. Scheme, it is failure to submit return
or documents supporting it, within time.
The present appeals filed by the P.F.
Inspector, challenged orders of acquittal of the respondent company in cases of
prosecution for offences under Sections 14(2), 14 A of the E.P.F. Act, 1952 and
para 76(b) of the E.P.F. Scheme, 1952. The impugned orders were those of the
lower appellate Court, reversing the trial Court's conviction of the company
for the said offences. The High Court allowed the appeals, and restored the
judgment of the trial Court.
Held:
The High Court observed
that the lower appellate Court did not advert to Section 14 A of the E.P.F. Act
or para 76(b) of the E.P.F. Scheme. Its discussion revolved around the
culpability under Section 14(l) which was in different situation, namely
punishment for making false statement in order to evade payment due under the
Act. But the culpability under Sections 14(2), 14 A and para 76(b) of the
scheme is the outcome of failure to submit the return or documents supporting
it within time. The lower appellate Court's judgment was held to be wholly out
of context and redundant. (Para 4) Provident Fund
Inspector, Batala v. New Janta Bus Service Co. Ltd., Batala. [1999]
Sections
14(l) & 17 Notification under Section 17 Cannot be construed as declaring
moratorium to crimes punishable under Act Prosecution under Act not to enforce
financial liability but to punish offenders violating provisions.
These criminal miscellaneous filed by
the petitioner and its Directors and officers sought the quashing of criminal
proceedings initiated against them for failure to remit P.F. contributions. The
High Court dismissed the petitions.
Held:
In rejecting the
contention of the petitioners that in so far as all the P.F. contributions and
other dues had been remitted by the petitioners subsequent to the launching of
the prosecution against them, pursuant to an agreement with the P.F.
Commissioner, the prosecution was no longer maintainable, the High Court
observed that the offences became complete on the expiry of the due date
(before which the contributions were statutorily required to be made) and the
late (subsequent) payment could not have absolved the petitioners of their
original guilt. (Para 11)
Nor did the contention of the
petitioners that the establishment had been declared a "sick industrial
company" under the Sick Industrial Companies Act, 1985, succeed before the
High Court. It pointed out the liability to pay P.F. contribution and other
dues were the personal obligations of petitioners and the prosecution launched
in respect of such personal obligations could not be impugned. (Para 19)
As the prosecution under Section 14(l)
of the RE Act was only to punish the offenders and not to enforce any financial
liability, subsequent discharge of that liability by the petitioners might not
by itself exonerate them from the penal consequences of their failure to pay.
However such discharge of the liability could be a circumstance for considering
the petitioners' case leniently in the award of punishment. (Paras 20 & 21) Hackbridge Hewitic and Easun Ltd.
v. Provident Fund Inspector, Exempted
III Divn, Madras. [1999]
Sections
14(1 A) and 38 Form 5 A Non payment of employer's contribution to Provident
Fund is continuing offence No plea of limitation against such offence can
therefore succeed.
Held:
These criminal appeals
against dismissal of complaints against the respondent for the offence of
non payment of contributions to
provident fund failed because there was nothing to show either that the coffee
estate in question was covered by the PR Act and the Scheme or that the
respondent was its owner or manager. (Para
6)
It was however observed that non payment
of employer's contribution being a continuing offence, the Magistrate's
rejection of the complaint on the ground that it was barred by time, was liable
to be set aside. (Para 7) Shivarama K.M. v.
K.C. Puritshothama. [1999]
Sections 14(2) and 76 (b) Prosecution
for default in filing returns Sanction orders of P.F. Commissioner although
produced with complaint not marked in evidence Acquittal of accused for want of
sanction set aside Matter remitted for de
novo disposal.
These criminal appeals against acquittal
of the accused for default in filing returns under the E.P.F Act, were allowed
by the High Court.
Held:
The High Court found
that sanction of the RE Commissioner to prosecute the accused had been produced
with the complaint of the Inspector under the P.F. Act, but omitted to be
marked in evidence. This omission led the High Court to observe that the
(trial) Court shared the folly since it was the duty of the Court to monitor
the materials produced before rejecting the prosecution case and to have been
alert in noticing such omission and rectifying it then and there. (Para 7)
The order of acquittal was therefore set
aside and cases remitted back for de novo
disposal. (Para 11) Sadashiva H.S. v. Muthappa M.S.
[1999]
Section 14
A Prosecution under Accused pleading guilty Sentence imposed was less than
minimum punishment prescribed by statute Court cannot try cases summarily even
if accused desires to plead guilty Magistrate should have pointed out to
accused that there was statutory minimum punishment prescribed Duty to act
fairly is as much duty cast on Courts as on every public authority.
The State of Maharashtra as appellant in
the present set of criminal appeals had apparently an invincible case in its
prayer for enhancement of the punishment imposed on the respondent accused,
because the sentence actually imposed by the Magistrate, though on a plea of
guilty by the accused, was less than the minimum prescribed by the E.P.F. Act,
1952 for the offences concerned. The High Court, while deprecating the slipshod
fashion in which the trial Court rushed through the case as well as the casual
manner in which the Department filed complaints in Provident Fund and
Employees' State Insurance cases, set aside the convictions and sentences
against the accused and remanded the cases to the trial Court for disposal
afresh according to law.
Held:
The High Court observed
that in these cases undoubtedly there might be nothing on record to indicate
that the accused were induced to plead guilty on the ground that they would be
let off with a light sentence. That aspect of the matter was irrelevant, the
High Court remarked, because the (trial) Court ought not to have tried these
cases summarily, even if the accused desired to plead guilty. The Magistrate
ought to have told the accused that there was a minimum sentence prescribed by the
statute and recorded that the accused was pleading guilty in spite of being
aware of the statutory provision of minimum punishment. Hence the present set
of appeals was remanded to the trial Court for fresh disposal according to law.
(Para 5) State of Maharashtra v.
Shiyprakash Seth. [1999]
Section
14 B Order passed by Regional Provident Fund Commissioner Scope of judicial
review under Article 226 is very narrow High Court will not sit in appeal over
the decision.
Held:
The High Court sitting
under Article 226 cannot sit in appeal over the order passed by the R.P.F.
Commissioner under Section 14 B. The High Court has very limited powers of
judicial review in such cases. It can only go into the question whether the
Commissioner has applied his mind or not. In the instant case the Commissioner
has after affording full opportunity to the petitioner and after considering
all the facts and circumstances brought on record, has imposed the damages. The
reasoning adopted is not perverse. No interference is called for. (Para 11) New Commercial Mills Co. Ltd. v.
Union of India. [1998]
Section
14 B Plea of financial stringency cannot be accepted as justifying default in
making payment and excusing defaulter from penal damages.
This writ application challenged an order
of the Regional P.F. Commissioner imposing penal damages under Section 14 B for
delay in deposit of RE funds committed by the writ applicant. The High Court
directed that 50% of demand should be deposited by applicant before the
applicant sought diction from the Central Board for waiver of damages.
Held:
The High Court observed
that there was no scope for accepting the plea that because of financial
stringency there was default in making payment and consequently penal damages
could not be levied. (Para 8) Esskey Machinery
(P) Ltd. v. Regional Provident Fund Commissioner, Orissa. [1999]
Section
14 B Before imposing damages, authority has to consider relevant facts like
nature, number and frequency of defaults, period of delay etc. If reasons are not mentioned in order
imposing damages they cannot be treated as given when stated in counter
affidavit sworn to in reply to petition.
The petitioner against whom a penalty of
80% was imposed under Section 14 B of the E.P.F. Act, challenged its
imposition. The High Court allowed the petition, quashing the impugned order
imposing the penalty.
Held:
The High Court observed
the authority before imposing the penalty under Section 14 B had to consider
relevant facts like the petitioner's habit of regular payment, nature, number
and frequency of the defaults, the period of delay etc. There was no such
consideration in the present case. The reasons given in the counter affidavit could not be read into the
impugned order. If that were permitted, the order which was invalid at the
admission stage for lack of reasons would become valid at the stage of final
hearing. (Para 1) Cannanore Shop v. Regional P.F.
Commissioner. [1999]
Section
14 B Paras 32 A and 32 B of E.P.F. Scheme, 1952 Penal damages for delay in
depositing P.F. amount Held levy was calculated on sufficient material and
after considering written submissions of petitioner Waiver of damages directed
to be considered by Central Board.
Held:
This writ application
challenged imposition of penal damages upon the applicant Corporation. The High
Court disposed of the writ application with directions. It found that the
impugned order was passed after considering the written submissions of the
petitioner and after calculating the damages on sufficient material for the
periods of delay. The Central Board was to direct reduction or waiver of
damages on due application made to it by the petitioner, under para 32 B of
E.P.F. Scheme, 1952. (Paras 4 and 5) Saila Behari Das,
Sr. Manager, Orissa Construction Corporation Structural Steel Part I v.
Regional P.F. Commissioner, Orissa. [1999]
Section
14 B Imposition of damages depends on facts and circumstances of each case It
is not subject to any strait jacket formula Appropriate date to be considered
in levying damages is date of payment by draft/cheque and not date of
encashment.
Petitioners challenged in this case an
order of P.F. Commissioner imposing on them 25% as damages under Section 14 B
of the E.P.F. Act, 1952 for default in paying P.F. dues. The High Court reduced
the levy to 12% of the defaulted amount.
Held:
The High Court observed
that no strait jacket formula as to maximum limit of damages (under Section 14
B) was ever laid down by the High Court. (Para
3)
Further the appropriate date to be taken
note of (for levying damages) was, according to the High Court, the date of
payment by draft/cheque and not date of encashment. (Para 4) Orissa State Electricity Board v. Union of India. [1999]
Section"
14 B Initiation of proceedings and levy of damages after a lapse of 41A to 8
years Whether vitiates the order levying damages Initiation of proceedings by
the Regional Provident Fund Commissioner after a lapse of 41,,2 to 8 years
would not vitiate the order levying damages
However considering the prejudice caused to employer on account of such
delayed action on the part of the Provident Fund Commissioner the quantum of
damages reduced by 50%.
The employer challenged the order
levying damages for belated payment of contribution under the Act. The rate of
damages varied from 20% to 100%. The employer contended that such belated
initiation of proceedings vitiates and invalidates such order.
Held:
The High Court held
that though such an action is unreasonable and totally handicaps the employer
from putting forth the reasons for the alleged delay in the payment of
contribution the order is not non est in
law. However it was held that the order is liable to be modified. In the
interest of justice and fair play the amount of damages levied was reduced by
50%. (Para 13) Presidency Kid Leathers (P) Ltd.,
Madras v. Regional Provident Fund Commissioner, Madras. [1999]
Section 14
B Power to recover damages is penal Impugned order imposing damages showed
total non application of mind No reasonable person could come to conclusion that
petitioner company had committed any default.
The present writ petition filed by a
Government company challenged an order of the Regional P.F. Commissioner
imposing damages for alleged default on the part of the petitioner company in
remitting the P.F. contributions. The High Court made the rule absolute with
costs to be paid by the public authority (P.F. Commissioner) to the petitioner.
Held:
The High Court found it
impossible to sustain the impugned order. As it prefaced its judgment, a public
authority (like the P.F. Commissioner) enjoined with a duty of protecting the
public interest itself committed default and penalised the person who was not
at fault at all. The facts of this case showed that the authority who passed
the impugned order had shown total lack of application of mind. (Para 1)
Though normally the Court does not pass
order of costs against the public authority, in this case the High Court deemed
it necessary to pass order for costs in favour of the petitioner. Accordingly
it directed respondents to pay a sum of Rs. 1000/ by way of costs to the
petitioner. (Para 13) Abhijat Samayadarshika
(Maharashtra) Ltd. v. Union of India. [1999]
Sections 14 B, 16 and 17 Order levying
damages, being punitive in nature, action thereupon should be initiated within
reasonable time Employer cannot take shelter behind fact it has applied for
exemption Applicability of Act to
establishment is sine qua
non for imposing penalty by way of damages.
This writ petition by a Government
undertaking challenged an order of the respondent P.F. Commissioner levying damages against it under Section 14 B
of the EY.F. Act, 1952. The High Court allowed the petition and quashed the
impugned order.
Held:
The High Court observed
that the respondent in the impugned order nowhere recorded a finding about the
date since when the Act would apply to the petitioner. In the absence of such a
finding the impugned order stood vitiated. (Paras
19 and 20)
As
regards the other ground taken by the petitioner, the High Court observed that
an employer otherwise covered by the provisions of the Act could not take
shelter behind the fact that it had made an application under Section 17 of the
Act seeking exemption from the operation of the Act. (Para 12)
It was also pointed out that
delay in levying damages would not amount to waiver of the rights, if liability
to pay damages had otherwise been incurred by the employer. (Para 11) H.P. Agro Industries Corporation Ltd. v.
Regional Provident Fund Commissioner. [1999]
Section 16(l)(b) Change of management does not attract provision Real
test is whether industry is started afresh to get benefit under provision.
The question raised in this
writ petition was whether petitioner company could claim the benefit under
Section 16(l)(b) of the P.F. Act. The
High Court held against the company and dismissed the writ petition.
Held: The High Court observed
that admittedly the petitioner company had taken over the machinery of another
company (Organo Chemical Industries ) on lease. Thus at the most it could be
said there was a change of management. But change of management of an
establishment does not attract Section 16(l)(b) of the Act. (Para 3) Kapoor Rubbers Pvt. Ltd. ' Sonepat v.
Regional Provident Fund Commissioner. [1999]
·
Section 16(l)(b)
Firm's business bona fide closed New firm of different partners utilizing
licence and name of closed firm Employing some of its workmen and using items
of its machinery Findings of fact Conclusion, infancy benefit available to new
firm could not be interfered with.
Held: This appeal against a
judgment of the High Court of Madras challenged it on the ground that the
respondent firm had only continued the business of a firm which had closed its
business and therefore could not claim the infancy benefit available under
Section 16(l)(b) of the E.P.F. Act, 1952. The Supreme Court dismissed the
appeal. It observed that the view taken by the High Court that the respondent
firm was a new concern entitled to claim the infancy benefit was based on pure
findings of fact based on relevant evidence and therefore required no
interference. The High Court had found that it could not be held that the
business of the old firm (which had been bona fide closed) was continued by the
new respondent firm, (its partners being entirely different), although the
respondent firm had used the licence, name and some items of machinery and employed some workmen of
the old firm. (Para 1) Union of India v. A.S. Amarnath. [1999]
Section
16(l)(b) and (d) As amended in 1988 Amended provision applies to establishments
newly set up after said provision came on statute book, though its enforcement
was from later date Intention of Legislature was not to take away benefit of
infancy period already accrued to establishments under unamended provision.
Writ petitioner, a small scale
industrial unit, challenged in this petition an order of the P.F. Commissioner
holding the petitioner to be within the purview of the E.P.F. Act, by virtue of
the provision 16(l)(d) as amended in 1988, on the expiry of three years,
instead of the five year infancy period allowed under Section 16(l)(b) as it
stood before the said amendment. The High Court allowed the writ petition.
Held:
The question to be
determined in this petition was, as the High Court said, whether the amended
provision Section 16(l)(d) curtailed to three years the infancy period of
establishments, such as the petitioner, which were already existing and which
therefore enjoyed the five year infancy period under the unamended Section
16(l) of E.P.F. Act, 1952. (Para 4)
The High Court referred to the statutory
provisions, as they stood before and after the amendment in 1988, and relevant
decisions and observed, that vested rights under legislation could be
retrospectively taken away by legislation but then the Statute taking away such
rights must expressly reflect its intention to that effect. Such rights have
not been either expressly taken away or by implication taken away by the
amended provision Section 16(l)(d). The petitioner was held entitled to enjoy the
earlier five year infancy period. The impugned order was therefore quashed. (Para 15) Magic Wash Industries (P) Ltd. v.
Asst. Provident Fund Commissioner. [1999]
Section
17(2 A) Exemption of establishment from Insurance Scheme, if employees were in
enjoyment of benefits of life insurance, more favourable than those under
scheme It is only by notification, published in official Gazette by which
exemption can be granted Not by communication from Regional Communication.
Writ petitioners who were legal representatives
of deceased employees of respondent
management could not succeed in their writ petition seeking a writ of mandamus to direct the respondent to pay
them death benefits due under a Group Life Insurance Scheme. Hence the
present appeal. The High Court allowed the appeal.
Held: The High Court observed
that the alleged exemption of the respondent under Section 17(2 A) of the
E.P.F. Act from the operation of the Deposit Linked Insurance Scheme had to be
granted only by a notification in the official Gazette. A communication to such
effect was not a notification as required. (Para 8)
It was obvious that the
employees of the respondent were entitled to the benefits both under the
Employees Deposit Linked Insurance Scheme as well as under the Group Insurance
Scheme. Hence the plea of the respondent that the employees could not get the
benefit under both the Schemes on the basis of the alleged exemption under
Section 17(2 A) was a denial of benefit to the dependants of the employees
(writ petitioners) of the Welfare Legislation, defeating the intendment of the
Act. (Para 9) Rani D. v. Management of
Indian Drugs and Pharmaceuticals Ltd., Madras. [1999]
Section 17(3)(b) Employees entitled to contribute to
provident fund without ceiling Under voluntary scheme, and exemption from Act
obtained Not permissible for employer to impose ceiling, subsequent to grant of
exemption.
In the present writ petition,
which was preceded by a writ petition by the same petitioner, the
representative employees' union of the second respondent employer challenged an
order of the Regional P.F. Commissioner. By the said order the Commissioner
held that the imposition by the second respondent (employer), of a ceiling as
regards contribution to P.F., under a voluntary P.F. Scheme, subsequent to
grant of exemption under Section 17(l) of the EY.F. Act, 1952, was not hit by
Section 17(3)(b) of the Act. The High Court t allowed the writ petition.
Held: The High Court observed
that under the voluntary scheme there was no ceiling on the salary. This
benefit could not be taken away by the employer without prior permission of the
Central Government. The first respondent (P.F. Commissioner) had completely
ignored the provisions of Section 17(3)(b) of the Act. (Para 8) Madura Coats Employees Union v. Regional Provident Fund
Commissioner, Maharashtra & Goa. [1999]
Section 21 General Provident Fund (Central a
Service) Rules, 1960 Rules 12 and 15 Advance y and withdrawals Permitted in
case of emergencies G.O. banning withdrawal is illegal.
Held:
Rule 12 and Rule 15
entitled the Govt. s servants for advance and withdrawal respectively. The Rule
is admittedly applicable in the State of Nagaland. There is no other rule
framed by any other authority contrary to the Rules. Therefore, what is allowed
by the Rules cannot be taken away by an executive order. The Rule has to be
interpreted as it is. The G.O. dated December 30, 1995 banning withdrawal of
provident fund, subscribed to by the Government servant, is illegal. (Paras 10 & 15) Dr. L Shikikhe v. State of
Nagaland.[1999]
5. EMPLOYEES'PROVIDENT FUND SCHEME, 1952
Penal
damages for delay in depositing P.F. amount Held levy was calculated on
sufficient material and after considering written submission of petitioner
Waiver of damages directed to be considered by Central Board.
Paras
2(g)(i), 61 and 70 Nomination Mother nominee of deceased Widow of deceased
employee claiming exclusive entitlement Mother, as member of family, is
entitled to receive amount along with wife.
Under Para 70, read with para 61 of the
E.P.F. Scheme, 1952, the nominee is the person authorised to receive the amount
of provident fund of member. Mere nomination does not negate the rights of
other successors. The nominee is only entitled to receive the amount but he
cannot claim absolute right.
Held:
In the instant case,
the order of the Additional District Judge granting succession certificate to
the widow of the employee and the mother of the deceased was challenged in the
appeal by the widow claiming the entire amount.
The nominee cannot claim absolute right
to the amount, excluding the rights of the heirs which they may have according
to the law of succession governing them. Both the mother and the daughter in
law do have their shares and accordingly the Additional District Judge is right
in granting the succession certificate. (Para
9) Pushpa
wdlo Virendra Kumar Yadav v. Jiya Bai wdlo Babulal i Yadav. [1999]
Paras 43,
76 Failure to submit monthly returns and contribution cards by due date Vague
averments; in complaint That all Directors are in charge of establishment will
not be enough to sustain complaint against accused E.P.F. Act, Sections 2(e),
14(2) and 14 A.
Transport
Corporation of India Ltd. v. R.M. Gandhi. [1999]
Para
76(b) Culpability under sub section (1) of Section 14(l) of E.P.F. Act
different and based on false representation Under sub section (2) of Section 14
of E.P.F. Act and para 76 (b) of E.P.F. Scheme, it is failure to submit return
or documents supporting it, within time.
Provident
Fund Inspector, Batalav.NewJanta Bus Service Co. Ltd, Batala. [1999]
6. EMPLOYEE'S SUPERANNUATION
BENEFIT FUND OF STEEL AUTHORITY OF INDIA, 1994
Respondent
company had no control over manner of disbursement including refund Petitioners
had therefore to work out their remedy in accordance with E.P.F. Act, 1952 as
amended in 1995 and Scheme Employees' Provident Funds & Miscellaneous
Provisions Act, 1952, (as amended in 1995).
Held: The
High Court dismissed the present writ petition which was filed by retired
employees of the Steel Authority of India seeking pensionary benefit. It
observed that since the respondent company did not have control over manner of
disbursement including refund, the petitioners had to work out their remedy
under the provisions of the E.P.F. Act, 1952, as amended in 1995 and the
scheme. Writ petition was not appropriate for getting the relief sought.(Para
3) Seva Nivritt Ispat Karamchari
Association v. Union of India. [1999]
Section
3(2) Any sum standing to the credit of any subscriber at the time of his death
vests in the dependant of the deceased subscriber and is free from any debt or other
liability incurred by the deceased (subscriber) or incurred by the dependant
before the death of the subscriber There is a statutory vesting of the fund on
the dependants after the death of the subscriber which on such vesting becomes
the absolute property of the dependants and which cannot be held to have
devolved upon the dependants by inheritance and so cannot be regarded as assets
of the deceased subscriber in the hands of dependants Civil Procedure Code,
Section 60(l) This provision exempting
from attachment provident fund contributions is one conceived in public
interest and the refusal to order attachment of; the sum standing to the credit
of the deceased subscriber cannot be said to be invalid.
A Creditor of a subscriber to Provident
Fund sought attachment of the PR dues of the subscriber to be paid over to the
legal representative after the subscriber had died. On the trial court negative
the claim for attachment, the creditor preferred the present appeal.
Held:
The question for
decision in the appeal was whether the sum sought to be attached was exempt
from attachment under Section 60(l) of the C.P.C. read with Section 3(2) of the
RE Act, 1925. The court answered the question in the affirmative and dismissed
the appeal. It observed that there is a statutory vesting of the fund on the
dependant (s) after the death of the subscriber under Section 3(2) of the PR
Act and on such vesting becomes the absolute property of the dependant (s)
which cannot be held to have deviled upon the dependants by inheritance and so
cannot be regarded as assets of the deceased subscriber in the hands of the
dependants. The provision contained in Section 60(l)(K) of the C.P.C. is
conceived in the public interest and the refusal to order attachment of the sum
standing to the credit of the deceased subscriber cannot be held to be
invalid.(Para 5)
The sanctity attached by the Act to
compulsory deposit as defined in the Act does not cease on the death of the
depositor. The amount standing to the credit of the subscriber is not liable to
attachment or sale on the ground that it has ceased to be a provident fund
after the death of the subscriber.(Para 8) Thomas George v. Soudamini Manakkal. [1997]
Sections
3(2), 4(1) & 5(l) Amendment Act of 1946 State Ry. P.F. Rules Nominee
entitled to receive the fund on the death of the subscriber Whether the fund
becomes an estate of the deceased Subscriber Special contributions To whom
payable.
The question here is whether, under the
Act, the nominee is entitled to exclude all other heirs and the RE is liable to
be paid to such nominee exclusively.
Held:
Sections 3(2) and 4(l),
read with Section 5(l), would show that the fund would vest in the nominee,
when the nominee is a dependant and the fund is payable absolutely to the
exclusion of others (In the instant case, there is no dispute that the nominee
is a dependant). Section 2(c) merely defines who is the dependant and does not
purport to confer any right upon the dependant. Section 3(2) provides that if
under the rules, the fund is payable to the dependent then it vests in him and
shall be free from any debt or other liability incurred by the deceased
subscriber. Section 4(l) contains instructions for payment. Thus, when the nominee is dependent by virtue
of operation of Section 3(2), read with Section 4(l)(a) and Section 5(1) of the
Act, the fund vests in the nominee and is payable absolutely to the nominee to
the exclusion of others. It is difficult to hold that such vesting is for a
limited purpose of receiving the amount but not carrying the beneficial
interest with it. When a special provision is made under Section 3(2) vesting
the fund in the nominee dependant and the rules provide for such nominee that
provision must be given effect to, irrespective of the nomination in general under
Section 5(1). The dependant nominee is entitled to receive the said fund and it
would not become the estate of the deceased
subscriber. (Paras 8 & 9)
Sections 3 and 4 must be subject to special rules; Rules
1338 and 1340 disclose that the special contribution credited to the
subscriber's account shall become payable to the widow or widows and the
dependent children of the deceased subscriber in such share the controlling
officer may determine. So, Sections 3 and 4 must be read subject to these rules
and the special contribution is exclusively payable to the widow and children
and the other dependents are excluded. Kadim Kusuma v. Kadiam Appachiamma. [1985]
Sections
4(l) and 5(l) Amendment Act of 1946 State Railway P.F. Rules Nominee whether
entitled to receive the fund on the death of the subscriber Whether the fund
becomes an estate of the deceased subscriber Special contributions To whom
payable.
Section 3(2). [1985]
Section
5 Effect of personal law in the matter of nomination Mother nominating sons to
receive Provident Fund standing to her credit Mother died leaving behind two
sons and two daughters Provisions of Section 5 have overriding effect and will
override personal laws Sons are entitled to receive P.F. standing in Provident
Fund account of mother who worked as Aaya under the Senior Medical
Superintendent.
An Aaya working under Senior Medical Superintendent nominated her sons who was a subscriber to the
RE to receive the amount standing to her credit. When the sons made an
application for payment of the RE amount, the authorities did not hear the
same. Hence, the sons and the mother have filed a Writ Petition and the mother
died leaving behind two sons and two daughters.
Held:
The words
"notwithstanding anything contained in any law for the time being in force
or in any disposition whether testamentary or otherwise, by a subscriber to or
depositor" are very significant and give overriding effect. They purport
to abrogate even the personal law of the subscriber/depositor in the matter of
distribution of his Provident Fund assets. Section 5 leaves the sole discretion
of the subscriber/depositor in this regard and the persons so nominated have
right to receive the sum on the death of the subscriber or depositor. Since the
sons have been nominated to receive the sum of PR standing in the credit of the
mother, the sons have the right to receive the same.(Paras 6, 7) Ugra Sen Singh v. State of U.P. [1996]
·
Section
7(l) Powers given to P.F. Commissioner under Section 7(l) Scope of Power given
to him is not to decide abstract questions of law.
The question here is whether the P.F.
Commissioner, who is a statutory authority, has exercised powers vested in him
to collect the relevant evidence before determining the amount payable under
the Act.
Held:
While conducting an
enquiry under Section 7(A) of the Act, the Commissioner has the same powers as
are vested in a Court under the C.P.C. for trying a suit. It is seen from the
provisions of Section 7(A) that the Commissioner is authorised to enforce attendance
in person and also to examine any person on oath. He has powers requiring the
discovery and production of documents. This power is given to the Commissioner
not to decide abstract questions of law, but only to determine the actual
concrete differences in payment of contribution and other dues by identifying
the workmen. The Commissioner should exercise all his powers to collect all
evidence and collate all material before coming to a proper conclusion. This is
the legal duty of the Commissioner. It would be failure to exercise the
jurisdiction particularly when a party to the proceedings requests for
summarising evidence from a particular person.(Paras 8 & 9)
Appeal allowed and matter remanded to
Commissioner for fresh disposal. Food Corporation of India v. P.F. Commissioner. [1994]
1. Employees'
State Insurance Act, 1948
2. Employees'
State Insurance (Central) (Second Amendment) Rules, 1996
3. Employees'
State Insurance (General) Regulations, 1950
ACT, 1948
Establishment in process of
winding up, not engaged in industrial activity, nor specifically notified under
Section 1(3)(b) of E.P.F. Act E.P.F. Act not applicable to such establishment
Official Liquidator not liable for contribution under said Act Same finding
applies to liability under E.S.I. Act.
In the matter of Rohtas
Industries Ltd. (in liquidation). [1999]
Code of Criminal Procedure,
1974 Sections 212 and 219 Indian Penal Code,
1860 Sections 406 and 409 Deposit of amount deducted from wages of employees,
before accused acquired knowledge of launching of prosecution, would not
absolve him of criminal liability Framing charges and holding joint trial for
offence committed beyond period of one year, not justified.
The present criminal
miscellaneous (petition) preferred by an employer sought the quashing of a
complaint and charges framed thereon against him and at the instance of the
E.S.I. Corporation. The employer was accused of failure to deposit the amount
deducted from the wages of the employees as contribution to the E.S.I. fund.
The High Court accepted the criminal miscellaneous (petition).
Held: The High Court observed that deposit of the amount before the
petitioner acquired knowledge of the criminal complaint did not absolve him of
the criminal liability incurred by not making the deposit in proper time.(Para
4)
However, referring to
Sections 212 and 219 of the Criminal Procedure Code, the High Court observed
that the Magistrate was not justified in framing the charges and holding a
joint trial for offences committed beyond the period of one year. Hence the
charge was quashed and direction to Magistrate to reframe the charge in
accordance with law issued.(Para 4) Mukesh Kr. Aggarwal, Prop. Mahalakshmi Industries,
Khanna v. E.S.I. Corporation, Chandigarh. [1999]
Section 1(3) Notification under this Act comes into
force in particular area only from date specified in such notification.
These writ petitions sought
directions for refund of amounts from the E.S.I. Corporation paid as
contribution for petitioners' factories and establishments for periods prior to
the E.S.I. Act coming into force in the area concerned. The High Court allowed
the writ petitions.
Held: Referring to Section 1(3) of the E.S.I. Act, the High Court
observed there was no room for any
doubt that the Act came into force in the area in question with effect from
January 1, 1984. (Para 6) Anil Textile
Industry v. Employees' State Insurance Corporation. [1999]
Section
1(3) Notification extending Act to shops' Premises where orders for supply of
goods and payment there for are received, would be shop and liable to be
covered under Act.
The appellant company, undeterred by
adverse findings by two lower judicial for a, filed this L.P. appeal only,
however, to receive a further appellate judicial verdict against its attempt to
escape coverage under the E.S.I. Act. Its plea that it was not a 'shop' so far
as its branch office in Madras was concerned, was turned down first by the
E.S.I. Court, then by a Single Judge of the High Court in an appeal from the
E.S.I. Court's order and now by the Division Bench in this L.P. appeal.
Held:
While dismissing this
L.P. appeal the High Court observed that it was manifest that the Madras Branch
of the appellant company was a shop coming within the purview of the Government
Order No. 1088 dated December 22, 1976 and the E.S.I. Act was applicable to it,
keeping in view the decision of the Supreme Court in [1988].(Para 3) Heatly &
Gresham (I) Ltd. v. Employees'State Insurance Corporation, Madras. [1999]
Sections
1(4), 1(5) and 82(2) Whether weavers concerned were employees or independent
contractors is not substantial question of law Finding of trial Court, that
nexus was established between 3 factories, was reached by applying correct test
Correctness of said finding also did not involve substantial question of law.
The present appeal from E.S.I. Court
challenged its dismissal of the appellant's application praying for a
declaration that the factories of the appellant were not covered by the E.S.I.
Act, 1948. The High Court dismissed the appeal.
Held:
The High Court observed
that the appeal could not assail a finding of fact recorded by the E.S.I. Court
that the weavers concerned were liable to be treated as employees of the
appellant, in view of restricted ambit of Section 82(2) of the E.S.I. Act.(Para
7)
It was established beyond doubt that
there was financial and functional integrality between the three units of the
appellant. The trial Court had taken the correct view in the matter.(Paras 8
& 9) Narsayya Sayanna Kunden v. Joint Regional Director, ESIC,
Pune. [1999]
Sections
1(4) and 2(12) Act applies from day conditions laid down in Section 2(12) are
fulfilled and premises become factory Act contains no provision empowering
Insurance Corporation to determine date from which factory is to be covered by
Act.
The present appeal from an order of the
Insurance Court was necessitated because it dismissed the appellant's petition
under Section 75 of the E.S.I. Act. The High Court allowed the appeal.
Held: The High Court observed, that the
question raised in the appeal was one of law, the question raised being as to
from which day the factory of the appellant is covered and that would depend
upon the provisions of the Act.(Para 5)
It further observed that Sections 1(4)
and 2(12) of the Act showed that the day the conditions laid down in Section
2(12) were fulfilled, the premises became a factory and the Act applied to such
a factory by virtue of Section 1(4) of the Act. No provision was found in the
Act which empowered the Insurance Corporation to determine the date from which
the factory was to be covered under the Act.(Para 6)
Also the evidence in the case supported
the appellant's case that the factory employed 10 employees with effect from
November 3, 1986 and hence the appeal had to be allowed.(Para 7) Reshma Industrial Corporation, Chandigarh v. Employees'
State Insurance Corporation, Chandigarh. [1999]
Section
1(5) Clubbing different establishments Test laid down by Supreme Court in ACC
case to be applied Each case has to be decided on merits.
Held: Clubbing various establishments
for the purpose of E.S.I. Act will be governed by the tests laid down by the
Supreme Court in A. C. C Ltd. v. Workmen
[1960]
The trial Court has applied the relevant
tests and has drawn its own inferences in support of its view that the
different shops, the Central offices and the two godowns cannot be considered
as one establishment. It appears that the trial Court has also recorded an
alternative finding from another angle. The trial Court has, however, held that
even if the central office and the godowns could be clubbed together the number
of employees working in the central office and the two godowns at the material
time were less than 20 and on that count also the central office and the
godowns could not be covered under the Act.
Each case has to be decided on its own
facts.(Para 8) Joint Regional Director,
E.S.I.C. v. L.D. Bhave & Sons.[1999]
Section
1(5) Notification under Whether General Sales Agent of other Airlines falls
within category of 'shop' under said notification Shop is place where
systematic economic or commercial activities are carried on Hence said Agent
was held 'shop' within meaning of said item.
The present writ petition by a General
Sales Agent of various International Airlines carrying on the business of
handling passengers and cargo on behalf of those Airlines, impugned in this
petition action of the respondent Regional Director, E.S.I. Corporation seeking
to apply the provisions of the E.S.I. Act to the petitioner Company. The High
Court held the petitioner to be "shop" failing within the scope of
notification under Section 1(5) of the Act but stayed the demand for payment on
ad hoc basis under Section 45 A for 8
weeks enabling the petitioner to file returns, statements etc.
Held:
The High Court observed
that a wide meaning had been given to the expression 'shop' to include "a
place where systematic economic or commercial activities are carried on."
Applying the above test, the petitioner's establishment was held to be a
"shop".(Paras 8 & 9) Jet Air Private Ltd. v. Employees' State Insurance
Corporation. [1999]
Section 1(5) Expression 'shop' is to be
construed widely Trial Court's judgment upheld.
Held: Having regard to the circumstances of
the present case, the High Court held the commercial establishment of the
appellant would fall within the term 'shop' for the purposes of the E.S.I. Act.
It observed that the expression 'shop' was liable to be construed widely. Thus
construed the High Court concluded that there was no merit in the appeal and
therefore dismissed it.(Para 3) Walchandnagar In dustries Ltd. v. Employees' State
Insurance Corporation. [1999]
Section
1(5) Tamil Nadu Shops and Establishment Act, 1947 Section 2(3) Merely because
of a finding by Commissioner of Labour that establishment in question was only
commercial establishment and not shop Establishment does not cease to be 'shop'
for purposes of E.S.I. Act Where manufactured products were dealt with in
Madras branch office, it is 'shop' and its employees cannot be deprived of
E.S.I. benefits.
The present appeals by the employees of
the second respondent challenged orders of the E.S.I. Judge which held that
they were covered by the E.S.I. Act. The High Court dismissed the appeals.
Held:
The High Court observed
that it was on account of the services rendered by the second respondent the
products of the manufacturer were to be routed. Considering these aspects the
finding of the Lower Court that the employees' establishment was one covered by
under the E.S.I. Act could not be challenged. The finding of the Commissioner
of Labour that the second respondent was only a commercial establishment and
not a shop, as defined by the Tamil Nadu Shops and Establishments Act did not
prevent the establishment from being covered by the E.S.I. Act. Gopikrishnan M. v. Employees'
State Insurance Corporation. [1999]
Section
1(5) Notification under Can be issued to establishment employing less than 20
but more than 10 persons.
A partnership concern employing less
than 20 but more than 10 persons challenged in this writ petition a
notification under Section 1(5) of the E.S.I. Act, 1948, applying the Act to
it. The High Court dismissed the writ petition.
Held:
The High Court observed
that the impugned notification could be issued to a factory which had less than
20 but more than 10 persons by describing it to be an establishment and that
the definition of the word 'factory' in such a situation would not be deemed to
have been changed. (Para 7) Micro Alloys
& Castings, Chandigarh v. Union of India. [1999]
Sections
1(5) and 2(l) Appropriate Government in respect of establishment not under
control of Central Government is State Government In absence of notification by
such Government, provisions of E.S.I. Act cannot apply to such establishment.
The present writ petition was filed by
the Ministerial staff consisting of Drivers, Conductors etc. of the Punjab
Roadways, challenging orders by which the E.S.I. Act was made applicable to
them. The High Court allowed the writ petition.
Held:
The High Court observed
that the appropriate Government in relation to the petitioners' establishment
(the Punjab Roadways) was the State Government. Admittedly it had not issued the
notification applying the provisions of the E.S.I. Act to the Punjab
Roadways.(Para 6) Chopra R.P. v. State of
Punjab. [1999]
Sections
1(5), 2(9), 45 A and 75 Notification under Section 1(5) did not cover road
transport organisation Deputy Regional Director's order under Section 45 A
demanding contribution with interest from petitioner Transport Corporation,
held, therefore, bad in law.
Petitioner Transport Corporation
challenged in this petition an order of the Deputy Regional Director of the
respondent E.S.I. Corporation calling upon the petitioners to pay a sum as
contribution with a specified amount as interest due thereon. The High Court
set aside the impugned order.
Held:
The High Court observed
that although a notification under Section 1(5) of the E.S.I. Act had been
issued, Road Transport Organisations had not been roped in as one of the
establishments to which the provisions of the Act would apply. In this view of
the matter, the impugned order was bad in law.(Para 15) Transport Corporation of India v. Employees' State Insurance
Corporation. [1999]
Sections
1(5), 12 and 38 Notification bringing establishments employing 10 or more but
less than 20 persons in which manufacturing process is carried on with aid of
power within purview of E.S.I. Act, held not beyond power of appropriate
Government to extend provisions of Act.
This writ petition by a dealer of Indian
Oil Corporation at Hassan, running therewith a Service Station employing 7 or 8
persons, challenges a demand of the E.S.I. Corporation to make contributions
under the E.S.I. Act, as well as a notification of the State Government under
Section 1(5) of the Act, in pursuance whereof the said demand was made. The
High Court dismissed the writ petition and consequently the connected M.F. Appeals.
Held: The High Court observed that the
impugned notification could not be said in anyway as amending the definition of
Factory but could only mean it brought within its net establishments which also
indulged in manufacturing process with the aid of power employing 10 or more
persons but less than 20 persons. In other words this new category of employees
were sought to be provided the benefit which was denied to them earlier, by
means of the impugned notification. (Para 8) Kenchamba Service Station v.
Union of India. [1999]
Section 2(4) Payment of contribution by an employee is compulsory It is in nature of tax.
Held: The High Court upheld the
contention of the petitioners that contribution as defined in Section 2(4) of
the Act was a tax and not a fee.(Para 7) Anil
Textile Industry v. Employees' State Insurance Corporation. [1999]
Sections 2(8) and 46(l) Meaning of 'employment injury' Deceased employee being knocked down by motor while on way back to factory after taking lunch on public road Held employee died as result of accident arising out of and in course of his employment.
The present appeal by the E.S.I.
Corporation challenged an order of the Employees' Insurance Court which held
that the injury sustained by a deceased employee was an employment injury and
the dependants of the deceased employee were entitled to receive dependants'
benefit under the E.S.I. Act. The High Court dismissed the appeal.
Held: The High Court found in the facts
and circumstances of the case the E.I. Court was right in reaching the above
conclusion in its impugned order. The appeal was therefore dismissed.(Paras 7
and 8) Employees' State Insurance
Corporation, Bombay v. Mary Cutinho (Smt)
[1999]
Sections 2(8) and 53 Motor Vehicles Act, 1988 Section 167 Bar created by Section 53 of E.S.I. Act with respect to claim for compensation under any other law like Motor Vehicles Act, for injuries in accident arising out of and in course of employment, operates even upon filing claim application before E.S.I. authorities and is in stage of being processed.
The success that the present appellants
achieved before the Motor Accident Claims Tribunal in their claim for
compensation for the death of one Subramaniam who was their bread winner and
who died in a motor accident, was only short lived, since the High Court in the
present appeal by the Insurance Company against the judgment of the Motor
Accident Claims Tribunal held that the claimants having exercised their option
to avail of the benefits under the E.S.I. Act could not succeed in their claim
before the Motor Accident Claims Tribunal.
Held: The High Court observed that in
this case the claimants (appellants) had filed a claim application before the
E.S.I. authorities and that it was being processed. They had exercised their option
by such application. Therefore it could not be stated that the claimants had
got time to exercise their option till an order was passed by the E.S.I.
authorities. The objection taken by the appellant Insurance Company with regard to the maintainability of the claim
petition (before the Motor Accident Claims Tribunal) was therefore well founded
and the appeal had got to be allowed.(Para 6) United India Insurance Company Ltd. v. Saraswathi. [1999]
Section
2(9) Meaning of 'employee' Homilies come within definition, as loading and
unloading is part of work carried on by employer.
Appellant Transport Corporation was
aggrieved by orders of the E.S.I. Court, holding the appellant liable to pay
contribution in respect of Hamalies doing loading and unloading work. The
challenge to the said orders in these appeals was based on the argument that
hmalies were not the employees of the appellant within the meaning of Section
2(9) of the E.S.I. Act, 1948. The High Court dismissed the appeals.
Held: The High Court observed that, as
per the decision of the Supreme Court in [1996], Hamalies did come within the
meaning of Section 2(9) of the E.S.I. Act, 1948.(Para 6) Transport Corporation India Ltd. v. Employees State
Insurance Corporation. [1999]
Section 2(9) Meaning of 'employee' Persons employed for work connected with administration of establishment are employees Casual employees engaged for purpose of loading and unloading goods, by company carrying on business of export of garments, held employees covered under Act.
The present appeal by the E.S.I.
Corporation challenged an order of the E.S.I. Court, holding persons employed
by respondent firm for the purpose of loading and unloading goods in its
business of exporting garments as casual or stray workers were not employees
and that contribution was not payable for payment made to them. The High Court
allowed the appeal.
Held: The High Court observed that
loading and unloading was a regular feature in the factory of the respondent.
When this work done by employees was in connection with the work on the
establishment, contribution on amounts paid to them was payable under the
E.S.I. Act, even though they might be casual employees.(Para 5) Employees'
State Insurance Corporation v. Jaipur Enterprises,
Jhotwara. [1999]
Section
2(9) 'Employee ' Meaning of Merely
because persons are working in Administrative office, they cannot fall outside
definition of "employee".
This appeal under Section 82(2) of the
E.S.I. Act, 1948 by the Employees 'Union of the National Textile Corporation
called in question an order of the E.S.I. Court declining a declaration sought
by the appellant union that no contribution was liable to be paid by them. The
High Court dismissed the appeal.
Held:
The High Court observed
that merely because they were working in the administrative office, they would
not fall outside the definition of 'employee' contained in Section 2(9) of the
E.S.I. Act.(Para 7) Employees of National Textile Corporation (APKK & M) Ltd.,
Bangalore v. Regional Director, ESI Corporation, Bangalore. [1999]
Section
2(9) Members of co operative society engaged in manufacture of cloth were held
not workers of society There was no employer employee relation Act has
therefore no application to society.
The E.S.I. Corporation, as appellant,
challenged in this appeal an order of the E.S.I. Court. By that order the
E.S.I. Court held there was no employer employee relation between the
respondent co operative society and its members. It held therefore that the
E.S.I. Act did not apply to the society which was engaged in the manufacture of
cloth. The High Court dismissed the appeal.
Held:
The High Court pointed
out that members of the society were not workers but were self employed and
they shared the profits. The Insurance Court had rightly held the society was
not covered by the Act.(Para 7) E.S.I.
Corporation v. Vattiyoorkavu H. W. Co
operative Society. [1999]
Section
2(9) Director drawing salary of more than Rs. 1600/ p.m. and apprentices
(trainees) do not come within meaning of 'employee'.
Appellant company had 11 employees, 7
trainees, one Watchman, and one Director. The Director's monthly salary was
more than Rs. 1600. It filed the present appeal against the E.S.I. Court's
finding that the appellant had engaged 20 employees which included the seven
trainees and the Director. The appellant was therefore held liable under the
E.S.I. Act. The High Court allowed the appeal.
Held:
The High Court observed
that neither the Director nor the seven apprentices (trainees) were employees'
under Section 2(9) of the E.S.I. Act, which was not therefore attracted for the
relevant period in the case of the appellant.(Para 3) Dynamic Electronics (Pvt.) Ltd.
v. Employees' State Insurance Corporation. [1999]
Section
2(9) Shop employee A.P. Shops and Establishments Act, 1966 Sections 2(9), 10
& 22Employees on deputation in another sister concern are to be calculated
to fix liability to pay contribution.
The present L.P. Appeal by the E.S.I.
Corporation impugned an order of a Single Judge in which it was held that
employees on deputation to another concern were not liable to be counted for
purpose of applying the E.S.I. Act and demanding E.S.I. contribution. The
appeal was allowed.
Held:
The High Court
(Division Bench) observed that the Respondent was a 'shop' and its employees
who had gone on deputation were to be calculated to fix the liability to pay
the (E.S.I.) contribution and so also employees who were getting salary
exceeding Rs. 1000/ per month. The concern in question (the respondent) was therefore
held liable for payment of contribution demanded by the E.S.I.
Corporation.(Paras 6, 7 & 8) Employees'State Insurance Corporation v. Scientific
Fertilizer Co. (Pvt.) Ltd. [1999]
Section
2(9) Definition of 'employee' Work may be done by employee in factory or
establishment or elsewhere Employees performing work in branch office fall
within definition Branch office is only appendage to head office and cannot be
considered as independent entity Once establishment is covered, branch office
stands automatically covered.
The present appeal by the E.S.I.
Corporation, challenged the judgment of a single Judge which allowed the writ
petition of the respondent Transport company. The said writ petition impugned
an order of the appellant Corporation
demanding contribution under the E.S.I. Act, in respect of the respondent's
branch office at Bombay, for the period from May '1981 to July 1985. The High
Court allowed the appeal but remitted the matter back to the E.S.I. Corporation
for determination of the contribution amount payable.
Held:
The High Court upheld
the following contentions of the appellant:
a) that the trial judge was in error in
holding that the appellants could not pass orders under Section 45 A of the Act but should have taken recourse
to proceedings under Section 75. In case the branches of the respondent company
at Bombay were covered by the Act, it was unnecessary for the appellants to
adopt proceedings under Section 75 of the Act.(Para 4)
b) The definition of 'employee' included
employees in branch offices of an establishment. Once the establishment was
covered, its branch offices stand automatically covered.(Para 5) Employees' State Insurance
Corporation v. Transport Corporation of India.[1999]
Sections 2(9), 40, 41 and 44 Meaning of 'employee' It includes person employed through immediate employer Principal employer has to pay contribution in first instance and recover same from immediate employer.
Held:
The High Court applied
the same principle above mentioned to the contributions under the E.S.I. Act
and held that the condition imposed on the petitioner to furnish his own
separate E.S.I. account, as not sustainable.(Para 8) Venugopala Reddy M. v. Hindustan
Aeronautics Ltd., Bangalore. [1999]
Sections
2(9) and 2(22) Meaning of 'employees" and wages " Contractor's
employees are also covered by expression 'employees' If their work could be
considered as 'ordinary part of work of factory or establishment'.
In the present appeal, the E.S.I.
Corporation impugned an order of the Employees' Insurance Court which held that
workers of a contractor employed in erecting a residential building for the use
of the Respondent's officers, were not 'employees' within the meaning of
Section 2(9) of the E.S.I. Act, and that amounts paid to those workers by the
respondent company through the Contractor would not be 'wages' within the
meaning of Section 2(22) of the Act and therefore the respondent was not liable
to pay any contribution to the E.S.I. Corporation on those amounts. The High
Court allowed the appeal.
Held: The High Court observed that all that
was required to be seen was whether there was some link between the work in
question and the work of the factory or establishment covered under the Act.
The E.S.I. Court had applied an erroneous test and held erroneously that the
construction of residential building for the staff could not be considered as
work connected with or incidental to the work of the factory.(Para 9) Employees' State
Insurance Corporation v. Hindustan Cocoa Products Ltd. [1999]
Sections
2(9), 2(22) and 45BMaharashtra Cooperative Societies Act, 1960Section 65(2)
Petitioners No. 2 to 25 are working members of Petitioner No. 1 registered
cooperative society doing honorary work and getting honorarium No disciplinary
control over them like employees Not covered by other labour laws Honorarium,
not wages under Section 2(22) Petitioners 2 to 25 not employees under Section
2(9) Hence recovery orders of contributions quashed.
Held:
The working members are
governed by the obligation of their partnership of the cooperative society to
assist in managing the affairs of the society for which they are paid
honorarium. It does not constitute service and the assistance rendered by the
working members is rendered without entering into any contract of service.
There is no contractual obligation on the part of the working members of the
society. They are not also subject to disciplinary control like employees.(Para
17)
There lacks employee employer or master
servant relationship between petitioner No.1 society and working member
(petitioner Nos.2 to 25). In the absence of such relationship, the petitioners
are not liable to fasten with any liability of contribution.(Para 18) Armed Forces Ex
Officers Multi Service Coop Society Ltd. v. Employees' State Insurance
Corporation. [1999]
Sections
2(9) and 73AWhat is to be seen is total wage bill of employer and not place
where some employees are working Levy of special contribution under Section 73A
is constitutionally sanctioned It is unnecessary to determine whether such
contribution is tax or fee requiring proof quid pro quo.
This L.P. appeal was filed by the Punjab
Dairy Development Corporation challenging an order of a Single Judge dismissing
an appeal from the verdict of the Insurance Court which in its turn had
upheld the inclusion of the appellant's
employees who were working in its various milk collecting centers, for purposes
of special contribution due under the E.S.I. Act. The High Court dismissed the
appeal.
Held:
The High Court observed
that a reading of Section 2(9) with Section 73A of the E.S.I. Act made it clear
that what was to be seen was the total wage bill of the employer and not the
place where some of the employees were working.(Para 4)
Nor could the levy of special
contribution be challenged on the ground that it was in the nature of a fee
without an element of quid pro quo. The
levy was constitutionally sanctioned and it was wholly unnecessary to determine
whether it was a tax or fee.(Para 5) Punjab Dairy Development Corporation Ltd. v.
Employees' State Insurance Corporation. [1999]
Section
2(12) Establishment, engaged in blasting operations of rubbles and crushing
materials It cannot be treated as engaged in mining activities Held
establishment was covered by Act.
The E.S.I. Corporation challenged in this appeal as order of the
E.S.I. Court by which it held the respondent establishment which was engaged in
blasting operations of rubbles and crushing materials with explosives for which
it held that licence, could not be covered by the E.S.I. Act on the ground that
the establishment came within the exemption of mining operations under Section
2(12) of the Act. The High Court allowed the appeal.
Held: The High Court observed that the
aforesaid activities of the establishment were not such as could be treated as
mining activities. They were not operations "for the purpose of searching
for or obtaining minerals" within the meaning of Section 2(1)(j) of the
Mines Act, 1952.(Paras 15 & 22) Regional Director, E.S.I. Corporation v. David C.P.
[1999]
Section
2(12) Factories Act, 1948Section 2(k)'Manufacturing process' Its definition is
wide enough to include dry cleaning process.
The present appeal by the E.S.I.
Corporation raised the issue whether dry cleaning and washing was manufacturing
process, so as to fall within the scope of Section 2(12) of the E.S.I. Act and
thereby whether the respondents engaged in dry cleaning business would be
covered by the E.S.I. Act. The High Court allowed the appeal.
Held:
The High Court observed
that the definition of manufacturing process in the Factories Act, 1948 and
applicable under the E.S.I. Act was wide enough to include the dry cleaning
process.(Para 3) Employees'
State Insurance Corporation, Chandigarh v. Amar Dry Cleaner, Chandigarh. [1999]
Sections
2(12), 2(19A) and 75Question whether rice shellers are factories or not One of
fact, not capable of determination in writ proceedings After expiry of
exemption period, rice shellers having more than 10 employees, become subject
to E.S.I. Act, they being not 'seasonal factories'.
Rice Shellers were the writ petitioners
here, who challenged a notice of the E.S.I. Corporation calling upon them to
get their factories registered under the E.S.I. Act and deposit arrears towards
contribution payable by them. The High Court dismissed the writ petition.
Held:
The High Court observed
that the contention of the petitioners that they were not factories as defined
in Section 2(12) of the E.S.I. Act could not be raised it, being a disputed
question of fact in writ proceedings.(Para 5)
Further the High Court pointed out that
the petitioners did not fall within the definition of seasonal factory' in
Section 2(19A) of the Act. After the expiry of the period of exemption granted
to rice shellers, the Act automatically became applicable to the petitioners.
(Para 6) Shiva Trading Co. v. Secretary
to Government of India. [1999]
Sections
2(12) and 82Meaning of 'factory' No evidence to establish that premises where
manufacturing process was carried on fell within definition of factory Question
whether it fell within definition is substantial question of law Appeal held
maintainable but on basis of evidence produced, held to be without merit and
therefore dismissed.
The present appeal by an employee
challenged an order of the Employees' Insurance Court which held the appellant
liable to pay contribution under the E.S.I. Act and the recovery certificate by
the respondent Corporation was held valid. The High Court dismissed the appeal.
Held:
The High Court observed
the respondent Corporation failed to establish that the premises (of the
appellant) fell within the ambit of clause 12 of Section 2 of the Act. The
issuance of the notice determining the liability of the employee under Section
45A of the Act was without any legal sanction.(Para 9)
The High Court turned down the objection
revised by the respondent Corporation as to the maintainability of the appeal
by observing that the question whether the appellant factory would fall within
ambit of Section 2(12) of the Act was a substantial question of law, although
it had to be answered on the basis of the evidence, produced.(Para 10) Sudershan Weaving
Factory, Amritsar v. Employees' State Insurance Corporation. [1999]
Section
2(17) Factories Act, 1948Section 2(n) Meaning of 'Principal employer' Director
of Company cannot be treated as such employer If person is named as Manager of
factory, he will be principal employer.
The first petitioner being a Director of
the second petitioner Company challenged his prosecution under the E.S.I. Act
contending that he was not liable as 'principal employer' particularly when a
Manager within the meaning of Section 2(n) of the Factories Act had been
appointed. The High Court allowed the writ petition.
Held:
The High Court observed
that where a Manager was appointed for carrying out the provisions of the
E.S.I. Act, a Director of the company, like the first petitioner would be
excluded from the definition clause (namely, Section 2(17) of the E.S.I.
Act).(Para 7) Gupta C.K. v. Employees'
State Insurance Corporation.[1999]
Section
2(17)(iii) Only persons responsible for supervision and control of
establishment are 'principal employers'.
The present criminal revision petition
was preferred by partners of a firm who were convicted of offence punishable
under Section 85 (g) of E.S.I. Act, namely, for failure to submit contribution
cards and return required under the Act, and sentenced to pay a fine of Rs.
500, by virtue of an order of the Judicial Magistrate, Sealdah. The conviction
was confirmed by the Additional Sessions Judge on appeal by the petitioners but
the fine was reduced to Rs. 200/. Hence the present revision against the
judgment of the Additional Sessions Judge. The revision was allowed by the High
Court.
Held: The High Court observed that in the
Criminal Complaint against the petitioners there was a specific averment that
the petitioners were partners of the establishment which was the principal
employer. In the absence of further averment that the accused persons
(petitioners) were responsible for the supervision and control of the
establishment, the Magistrate was not justified in taking cognisance against
the petitioners and such cognisance must be held to be bad in law.(Para 8)
The High Court, however, did not uphold
the other contentions of the petitioners.(Paras 6 & 7) Vidyasagar Kejriwal v. Employees State Insurance
Corporation. [1999]
Sections
2(17), 85 and 85A Not all Directors, but any one of them who was in ultimate
control over affairs of factory at relevant time would be treated as principal
employer.
The present revision petition was filed
by a lady Director of a company seeking the quashing of an order of the Chief
Metropolitan Magistrate taking cognisance of offence under Section 85 (a) and
(g) read with Section 85A of the E.S.I. Act, for failure to submit contribution
cards within a prescribed time. The revision petition was allowed.
Held:
The High Court observed
that the petitioner being a lady and no averment having been made in the
complaint that she was in ultimate control over the affairs of the factory she
could not be said to be liable in any way for the commission of the offence as
alleged.(Para 6) Ghouri
Adhikary (Smt.) v. Employees' State Insurance Corporation. [1999]
Sections
2(17) and 85(e) Meaning of 'principal employer' Factories Act, 1948Section 2(n)
Meaning of 'occupier' In case of breach of a duty under E.S.I. Act and
prosecution there for under Section 85(e) Averments in complaint should be
definite and not vague Unless accused is made known in which category his
capacity fits in under definition of principal employer, prosecution has to
fail.
The present appeal by the E.S.I.
Corporation challenged the acquittal of the respondent from the charge of an
offence punishable under Section 85(e) of the E.S.I. Act. The order of
acquittal was based on the ground that the respondent accused, being the
Managing Director, was not shown to be the 'principal employer' within the
meaning of Section 2(17) of the Act. The High Court dismissed the appeal.
Held:
The High Court observed
that the averments in the complaint were too vague. Unless the accused was made
known in which category his capacity fitted in under the definition of
principal employer and evidence was led to prove it, it would not be open for
the complainant to say whatever might be the averment (in the complaint) the
Court should take into consideration whichever the complainant now wanted to
urge. There was no averment or evidence that the respondent had the ultimate
control over the affairs of the company.(Para 11) Employees' State Insurance
Corporation v. B.S. Narayana Rao. [1999]
Sections 2(17) and 85ABelated payment cannot absolve accused of charge of omission to remit employees' contribution within stipulated time In absence of evidence as to who is principal employer, acquittal of respondents of said charge cannot be set aside.
These appeals against orders of
acquittal of the respondents were filed by the E.S.I. Corporation. It had
launched the prosecution against the respondents for their failure to remit the
employees' contribution within the stipulated time. The High Court expressed
its inability to set aside the impugned orders of acquittal and therefore
dismissed the appeals.
Held:
The High Court observed
that failure to pay the contributions within the specified time could give rise
to prosecution irrespective of the fact that the amount had been subsequently
paid. In that view the orders of acquittal were wrong.(Para 6)
However in the absence of evidence as to
who was the principal employer of the mill in question, the prosecution against
respondents 1 to 7 who were merely shown as Directors could not be
sustained.(Para 7) Employees' State Insurance Corporation v. Alagusundaram Chettiar. [1999]
Sections
2(22) and 85A Damages for default in payment of contribution Remuneration paid
to workmen on account of building repair and production Incentive Plea that
employer had doubts regarding liability to contribute for such remuneration,
found to be fallacious Imposition of damages held not erroneous.
The employer appellant challenged in
this appeal, a concurrent finding of liability cast upon the appellant for
damages imposed under Section 85 A of E.S.I. Act, 1948 by the Insurance Court
and a Single Judge on first appeal. The High Court dismissed the appeal.
Held:
The High Court held the
appellants were liable to make contribution in respect of remuneration paid on
account of building repair and production incentive. The plea that the
appellants had doubts (regarding liability to contribute) on account of
judicial interpretation was wholly fallacious. There was no error of law
calling for correction in this appeal.(Para 4) Ralson (India) Limited v.
Employees' State Insurance Corporation, Chandigarh. [1999]
·
Section 2(22) Meaning of 'wages' 'Incentive
bonus' and 'sales commission', whether would fall within ambit of 'wages'
Matter remanded to High Court for fresh consideration.
Appellant Cooperative Society engaged in manufacturing and
selling handloom fabrics challenged in this appeal the judgment of a Division
Bench of the Kerala High Court in which the Insurance Court's finding that
benefits of 'incentive bonus' and 'sales commission' paid by appellant to its
employees did not form part of wages and that demand of the E.S.I. Corporation
for contribution in respect of those benefits was unsustainable was quashed.
The Supreme Court allowed the appeal by remitting the case, back to the High
Court for decision whether the said benefits would fall within the definition
of 'wages' in Section 2(22) of the E.S.I. Act, 1948.
Held:
The Supreme Court
observed that the High Court did not say anything about the factual position
while the Insurance Court gave the finding that the incentive bonus and sales
commission were paid at intervals exceeding two months. The question whether
incentive bonus and sales commission would fall within the third category of
'wages' as defined in Section 2(22) of the E.S.I. Act had to be considered by
the High Court afresh and thereafter it had to decide whether the finding made
by the Insurance Court on that aspect could be upheld or not. (Para 14)
The main body of definition of wages in Section 2(22) encompassed within its fold three kinds of payments made to the employees:
i) remuneration
under terms of employment
ii) payment
in respect of authorised leave, etc.
iii) 'other
additional remuneration' paid at intervals not exceeding 2 months. (Para 8)
The only question to be determined in
this case was whether the incentive bonus and sales commission would fall
within the third category. (Para 11)
Going into the rationale of excluding
from wages' other additional remuneration paid at intervals exceeding two
months, the Supreme Court referred to Sections 2(23), 39(4) and 40, and
observed that Parliament would have thought that 'wage period' might be
extended to a little more than the normal period of one month but no employer
shall make it longer than two months. This could be the reason for specifying
the limits of two months in the third category aforesaid. (Paras 11 to 13) Handloom House, Ernakulam v. Regional Director, ESIC. [1999]
Section 2(22) Increase in wages under agreement, although paid in lumpsum for one year constituted temporary increase in wages every month.
The present appeal against an order of
the E.S.I. Court was filed by the E.S.I. Corporation. The said order directed
refund of certain amount of contribution paid by the respondent under protest.
The amount was remitted as being due on certain payment made to the workmen
under an agreement in the course of conciliation. The High Court allowed the
appeal.
Held:
The High Court observed
that having regard to the nature of the abovesaid agreement there was no
(other) alternative than to hold that it was increase of wages for a period of
one year. The fact that the entire sum was paid in a lumpsum was no ground to
hold that it was not a periodical payment. Really speaking it was a case of
retrospective increase of salary for each month. (Para 8) Employees' State Insurance Corporation v. Sujirkar's Tile Works. [1999]
Section 2(22) Meaning of "wages" Incentive and plant performance bonus cannot be considered as wages Nor can payment towards reimbursing cost of milk, tea and eggs given to workmen under long term settlements be so considered.
The E.S.I. Corporation preferred this
Civil Miscellaneous Appeal against an order of the E.S.I. Judge holding that
the E.S.I. Corporation was not entitled to include incentive and plant
performance bonus, cash payments towards tea, milk and eggs, for calculating
contribution payable to the Corporation by the respondent company. The E.S.I.
Judge in the impugned order further directed that 'the matter be remitted to
the E.S.I. Corporation to investigate the quantum paid by the respondent to
certain contractors. The High Court dismissed the present C.M.A.
Held:
The High Court observed
that as per the terms of an agreement between management (respondent) and
employees' union which provided for incentive and plant performance bonus, the
employees could not claim these two as of right, they could not be considered
as wages. (Para 7)
Similarly amounts paid by way of
allowances towards milk, tea and egg to the employees by the respondent could
not be considered as wages coming under the definition of Section 2(22) of the
E.S.I. Act. (Para 10)
The order of the E.S.I. Court so far as
it directed remand of the matter for the E.S.I. Corporation to enquire and fix
the quantum paid by respondent to certain contractors, was also upheld. (Para 11) Employees 'State Insurance
Corporation v. Enfield India Ltd. [1999]
Section 2(22) Incentive or production bonus constitutes 'other additional remuneration' and therefore forms part of "wages" for which contribution has to be paid.
Appellant in this appeal contested a
demand of the respondent E.S.I. Corporation to pay contribution on 'production
bonus' paid by the appellant to its workmen. The Employees' Insurance Court
dismissed the application of the appellant seeking relief against the impugned
demand. Hence the present appeal which was dismissed by the High Court.
Held
The High Court observed
that the amount paid to the employees under the incentive or production bonus
scheme constituted "wages" within the definition under Section 2(22)
of the E.S.I. Act and the demand made by the respondent Corporation for
contribution in respect thereof was valid. (Para
17) All
India Glass Works Pvt. Ltd. v. Regional Director, Employees' State Insurance
Corporation. [1999]
Section 2(22) Wages Production incentive
bonus and productivity incentive bonus made voluntarily by employer on
increased monthly turnover when it exceeds a particular limit and given as gift
at varying rates as gesture of good will for
achieving target is presentation or gift and not wages.
Held: Employer paid Rs. 100 each to every
employee as presentation or gift whenever the monthly turnover exceeded Rs.
1.25 lakhs. No payment was made during months in which turnover was less than
Rs. 1.25 lakhs. The target amount varied depending upon the income of the
previous year. The rate of presentation may also vary from month to month and
it is paid as a gesture of good will and can be withdrawn at any time by the
employer as there is no contract or agreement. The ESI Court held that these
amounts are wages under the Act and contributions are payable in respect
thereof. On appeal, the High Court on an elaborate discussion of the decisions
of Supreme Court held that even if an
additional remuneration is paid by the employer to the employee at the
will of the employer without any agreement or contractual obligation, styled as
gift or inam at intervals not
exceeding two months, it will partake of the character of wages under Section
2(22) of the Employees' State Insurance Act and mere ex gratia payments or gifts or inams paid at the will of the employer as a gesture of goodwill
will not come within the ambit of "Wages" under Section 2(22) of the
Act.
The payment made by the employer to the
employees in these cases voluntarily of a gratuitous nature being ex gratia payments as presentation or
gift in a gesture of goodwill for achievement of the target fixed for each
month within the same frame work cannot be held to be additional remuneration
as contemplated in the definition of "Wages" under Section 2(22) of
the Act so as to claim the Employees' State Insurance contribution on those
amounts. (Paras 19 & 20) Management of
Kuttukkaran Engine Rebuilders v. Employees' State Insurance Corporation. [1999]
Section
2(22) Honorarium paid to working members of cooperative society, not wages
Hence claim of ESI contribution not proper.
Held:
Working members of
Petitioner society do not fall within the meaning of Section 2(9) of the Act.
The honorarium paid to working members cannot therefore be termed as wages, as
defined in subsection 22 of Section 2 of the Act. (Para 21) Armed Forces Ex Officers Multi Service Coop. Society Ltd. v. Employees'
State Insurance Corporation. [1999]
Section
2(22)'Wages' Ex gratia interim relief made to employees it terms of settlement
before Tribunal is not wage for purposes of ESI contribution No implied
contract can be read into Government order issued under Section 10B of
Industrial Disputes Act, 1947.
What is decided in this case is that ex gratia and interim relief amounts paid to employees as per
the directions of Industrial Tribunal and Government orders, will not come
within the meaning of 'wage' as per Section 2(22) of ESI Act. And therefore no
contribution to be paid by the employer to the ESI Corporation on those
amounts.
Held:
Following the decision
in W.P. No. 5653 of 1980 dated April 16, 1998 by a Brother Judge of the same
Court, dealing with an identical question, the learned single Judge rejected
the contention of the respondent Corporation that the ex gratia interim payments made to the workers will fall within
the definition of 'wages' as defined in Section 2(22) of ESI Act.(Para 8)
Quoting Supreme Court held further :It
is perfectly legitimate for the employees, while settling their disputes, to
come to a settlement, that such payments shall not be reckoned for purposes of
Provident Fund, Bonus, Gratuity, Employees' State Insurance etc. Paragraph
65(f) of the award passed by the Special Industrial Tribunal in clear terms has
stated that the interim payments made pursuant to the Government order and the
accord reached before the Tribunal shall not be recovered from the workmen or
adjusted against the increase given under the award. Further, such payments are
to be written off as ex gratia payments.
The interim payments made to the employees cannot be brought within the
definition of 'wages' under Section 2(22) of ESI Act. (Para 9) Coimbatore Pioneer Mills Ltd. Peelamedu, Coimbatore v. Regional
Director, Regional Office (Tamil Nadu) Employees' State Insurance Corporation,
Madras 34. [1999]
Section
2 B Employer cannot raise dispute in Insurance Court unless 50 percent of
amount due from him as claimed by Corporation is deposited by him.
Held:
In this petition under
Article 227 of the Constitution of India, the High Court directed the
petitioner employer to deposit 50 percent of the amount due from him within one
month, in accordance with Section 2 B of the E.S.I. Act, failing which the
petition was to stand dismissed. (Para 4) Hannon & Sons, Chandigarh v. Regional Director,
E.S.I. Corporation. [1999]
Sections
39(5) and 48(c) No period of limitation for initiation of recovery proceedings
is prescribed under Act.
Held:
The High Court further
observed, in respect of a C.M.A. filed by respondent E.S.I. Corporation, that
the conclusion of the Court below (E.S.I. Court) that the claim of E.S.I.
Corporation was barred by limitation could not be sustained as the E.S.I. Act
itself was silent as to the period of limitation as regards the said claim. (Para 9) Transport Corporation India Ltd.
v. Employees State Insurance Corporation. [1999]
Sections
40(l) and 85Employees' State Insurance (General) Regulations, 1950Regulations
26 and 31Code of Criminal Procedure, 1973 Sections 468(2)(b), 472 and
473Failure to submit return of contribution due under E.S.I. Act, amounts to
continuing offence Trial Court ought not to have acquitted accused on ground of
limitation.
The appellant E.S.I. Corporation
challenged in this appeal an order of the Special Court for Economic Offences
acquitting the respondent accused of offence under Section 85(e)(ii) of the
E.S.I. Act, 1948. The High Court allowed the appeal.
Held:
The High Court observed
that on considering the objects of the E.S.I. Act, the offence of failure to
submit the return of contribution payable under the said Act, within the
limitation period prescribed under the Act, would amount to a continuing
offence. Hence the Court below ought not to have acquitted the accused only on
ground of limitation. At least the Court below should have exercised its
jurisdiction under Section 473 of Cr.P.C. and passed a judgment on merits. (Para 5) Employees' State Insurance
Corporation, Bangalore v. M.P. Mohammed Ali, Bangalore. [1999]
Sections 44, 45(2), 85(3) Employees' State Insurance (General) Regulations, 1950Regulation 102A and Form No. 7Nonproductionof documents cannot be construed as continuing offence Complaint filed beyond six months from date on which alleged offence was committed Held barred by limitation.
The present Criminal Revision petition
was preferred by the E.S.I. Corporation against the dismissal of its complaint,
under Sections 44 and 45(2) of the E.S.I. Act made against the respondent, on
the ground that it was barred by limitation under Section 86(3) of the E.S.I.
Act. The High Court allowed the petition in part.
Held:
The High Court observed
that there was no scope for contending that the alleged offence of non
production of documents could be construed as a continuing offence. Hence the
complaint as regards that offence filed beyond six months from the date of its
Commission was held rightly dismissed as barred by limitation. (Para 9)
However as regards ledgers for the
period from July 1983 to October 1986, the Special Court was held not justified
in dismissing the complaint as barred by limitation as it had been filed in
time. The matter was therefore remanded as regards the complaint in respect of
non production of the said ledgers. (Para
12) Employees'
State Insurance Corporation v. Krishna Dass. [1999]
Section
45A Demand under Based on Inspector's report, Report not containing required
details Held decision of E.S.I. Court, that applicant was not required to be
covered by Act, correct.
The present appeal from the E.S.I. Court
was preferred by the E.S.I. Corporation. It challenged the E.S.I. Court's
decision that the respondent was not required to be covered by the E.S.I. Act
as the respondent had less than 10 persons in his establishment. The High Court
dismissed the appeal.
Held:
The High Court observed
that the E.S.I. Court was correct in rejecting the report of the Inspector on
which the demand of the E.S.I. Corporation against the respondent was based.
The report did not contain the details required to be covered by it. (Para 3) Regional Director, ES.L
Corporation v. Karnataka Asbestos Cement Products. [1999]
Sections
45 A, 45 B and 75 Evidence Act, Section 102Burden of proof If liability under
Act or quantum of contribution is disputed, it is for person so disputing or
denying liability or quantum to prove by giving evidence in support of his
claim.
The Insurance Court in its impugned
orders held it was the burden of the appellant E.S.I. Corporation to prove by
leading evidence to show that respondents were covered by the E.S.I. Act and
were liable to pay contribution there under.
The E.S.I. Corporation having filed these
appeals against those orders, the High Court allowed the appeals.
Held:
The High Court pointed
out that it was not for the Corporation in each case, whenever there was a
dispute, to go to the Insurance Court and have the dispute adjudicated. Otherwise
the E.S.I. Act would become unworkable; its object and purpose would be
defeated. (Para 8)
The onus lay on the respondents herein
to let in evidence first and establish their case. The Insurance Court was
therefore directed to decide the case afresh on merit, the respondents having
to adduce evidence first (Para 8), Regional
Director, E.S.I. Corporation v. Safa International. [1999]
Sections
45A, 45B, 75, 85B, 94A Orders determining amounts of contribution and
quantifying damages to be paid for failure to pay them, not challenged
Execution levied for collection of amounts
so determined, cannot be challenged even before E.S.I. Court, rudimentary
principle of civil law being executing Court cannot go behind original order.
The verdict in the present appeal
demonstrates the fate that befalls a citizen who is not alert in seeking his
remedy before prescribed judicial forum against orders affecting him. The
present appellant challenged in this appeal an order of the E.S.I. Court
dismissing his petition against levy of execution for recovering amount due
from him as contributions due, and damages payable, under the E.S.I. Act. The
High Court short circuiting, as it were, the elaborate arguments on the
validity, rather the invalidity, of the orders of the E.S.I. authority,
dismissed the appeal.
Held:
The High Court observed
that the challenge before the E.S.I. Court was one revolving on the challenge
of levy of execution proceedings which were resorted to, for collection of
amount, by the Special Tahsildar (under Section 5 of the Revenue Recovery Act,
1890). It is the rudimentary principle of civil law that the executing Court
cannot go behind the original order. Applying the analogy of this principle,
the execution levied by the Special Tahsildar for collection of the amounts
determined under Sections 45A(l) and 85B which had become final (due to
omission on the part of the appellant to challenge them) could not at all be
challenged even before the E.S.I. Court. (Para 18)
Nor did the appellant's argument that the
orders in pursuance of which the execution was levied were void ab initio
succeed before the High Court.(Para 20) Ambikanathan P.S. v. Employees' State Insurance
Corporation, Tamil Nadu. [1999]
·
Section 45 B Revenue Recovery Act, 1890
Bengal Public Demands Recovery Act, 1913 Request of E.S.I. Corporation to
initiate recovery proceedings under State Act Corporation having option to
recover under either Central or State Act Refusal to grant Corporation's
request held, not proper.
The present appeal by the E.S.I.
Corporation challenged an order of the High Court dismissing its writ petition
seeking relief against the refusal of the Certificate Officer to grant the
Corporation's request to initiate recovery proceedings under the Bengal Public
Demands Recovery Act, 1913 instead of under Revenue Recovery Act, 1890 (Central
Act).
Held:
The Supreme Court
allowed the appeal, observing that the appellant Corporation having the choice
to initiate recovery proceedings either under the Central Act or the State Act,
the impugned refusal of the Certificate Officer had to be set aside. (Para 4) Employees 'State Insurance
Corporation v. Overseas Metal Industries. [1999]
Section 52 A Beneficial enactment like E.S.T. Act cannot be permitted to be defeated by technical objections Occupational disease Silicosis caused by silicones Occupational hazard in State manufacturing industry Contracting of disease deemed to be employment injury arising in course of employment.
This appeal by the E.S.I. Corporation
challenged an order of the E.S.I. Court granting sickness benefit to the first
respondent for her suffering from silicosis. The High Court deprecating the
attitude of the appellant Corporation in coming with objections to the grant of
the said benefit, dismissed the appeal.
Held:
The High Court observed
that the benevolent spirit behind a welfare State legislation, like the E.S.I.
Act, could not be permitted to be defeated by such technical objections as were
raised by the appellant. (Para 7)
The impugned order was therefore held to
be not in any way improper or illegal. (Para
9) E.S.I.
Corporation, Indore v. Siara (Smt). [1999]
Section 53 Maintainability of claim for compensation of an insured employee covered under this Act under Workmen's Compensation Act Claim not maintainable in law.
Employee covered under the Employees'
State Insurance Act filed claim for compensation before the Commissioner for
Workmen's Compensation. The Commissioner dismissed the claim application as not
maintainable in view of the statutory bar contained under Section 53 of the ESI
Act. Workman filed appeal to the High Court.
Held:
On appeal, it was held
by the High Court following the judgment of the Supreme Court in Trehan's case [1996] that Section 53
operates as a bar for insured employee from claiming compensation under
Workmen's Compensation Act. Order of the Commissioner for Workmen's
Compensation rejecting the application was upheld in appeal. (Para 1) Pandu d1o Shri Uma Charan Mishra
v. Divisional Manager of M.P. State Road Transport Corporation. [1999]
Section
53Employee sustaining injury in course of employment Employee claiming
compensation for 100% loss of earning capacity Employee proving he is not
covered by E.S.I. Act He is entitled to compensation under W.C. Act.
Held:
The appellant
management has failed to prove that the respondent employee is an insured
person under the E.S.I. Act. On the other hand, the respondent placed on record
a letter dated August 4, 1993 issued by the E.S.I. declining to pay any
compensation to him. In this kind of situation, the management can be more
magnanimous and pay an ex gratia amount
to the workman. Unfortunately, the appellant has filed this appeal and obtained
an interim stay order. It is admitted that no amount has been disbursed which
speaks of the callous attitude of the appellant. The pleas raised by the
appellant are clearly misconceived and cannot be entertained. (Para 7) Durga Steel v. Rajesh Kumar. [1999]
Section
61 Beedi Workers Welfare Fund Act, 1976Section 4 Merely because certain benefits
are given to workmen under another Act, they could not be deprived benefits
under E.S.I. Act.
The present appeal by an establishment
challenged an order of the E.S.I. Judge holding the appellant liable to pay
contribution under the E.S.I. Act. The High Court dismissed the appeal.
Held:
The High Court observed
that merely because certain benefits were given to employees Beedi Workers, in
this case Under the Beedi Workers Welfare Fund Act, it would not deprive the
said workers, if they were otherwise covered by the Employees' State Insurance
Act from deriving benefit under that Act. (Para
7)
Another ground on which the impugned
order was challenged was that there was no notice given before the said order
under Section 45 A of the E.S.I. Act was passed. The High Court observed that
it could not be stated from the record in the case that there was no notice
before passing the impugned order. (Para
8) Seyadu
Beedi Company, Tirunelveli v. Regional Director, Employees'State Insurance
Corporation. [1999]
Section
72 Constitution of India, 1950 Article 226 Writ can be issued to private
person, to enforce compliance with statutory provisions Appellant has been only
injected not to deny statutory benefits accrued under Act Interim Order
restraining withdrawal of benefits under settlement not to be interfered with.
An interim order was passed by a single
Judge in the writ petition restraining the appellant Management from
withdrawing the benefits given under a settlement from implementing the
provisions of Section 72 of the Employees' State Insurance Act.
Held:
A writ can be issued to
a private person also, to enforce compliance of statutory provisions, which he
is enjoined to observe. Writ jurisdiction is an equitable jurisdiction and
hence has to undo injustice. (Para 3)
The appellants have been only injected
not to deny statutory benefits accrued under the Act or under the regulation or
under the settlement which governs the parties. By the impugned order,
substantial justice has been done between the parties. There is no ground to
interfere with the interim order. (Paras
4 & 5) General
Manager, Eveready Industries India Ltd. v. Eveready Industries Employees Union.
[1999]
Section
75 Petition under Insurance Court finding that respondents never employed more
than 20 persons at any time Finding not perverse or erroneous Appeal against
finding dismissed.
Held:
By this short judgment,
the 'High Court dismissed the present appeal. It found that the Employees'
State Insurance Court's order was based on appreciation of evidence which
showed that the respondents never employed more than 20 persons at any time.
The premises of the respondents were accordingly held to be not covered by the
definition of factory as given in the E.S.I. Act. The finding of E.S.I. Court
could not held to be perverse as already noted or erroneous. Hence, as already
noted, the present appeal by the E.S.I. Corporation was dismissed. (Paras 2 and 3) Employees'
State Insurance Corporation v. Tariq Butt. [1999]
Sections
75 and 85 B Regulation 31CNonpayment of contribution Levy of damages Petitioner
not given any particulars as to how the quantum of damages was arrived at
Matter remanded for fresh consideration.
Held:
If the impugned order
is tested in the light of the statutory provisions, it is not possible to
accept the order of the Joint Regional Director since the said authority has
not given any particulars as to how he arrived at the figure of damages.
General regulation 31 C provides the method and rate to be fixed for damages
for belated contribution. The authority has not followed the regulations. The
petitioner has also not availed the alternative remedy of approaching the
E.S.I. Court. The matter has to be remanded to the Joint Regional Director for
fresh consideration. (Paras 9 & 10) Management
of Simpson & Co. v. E.S.LC. [1999]
Section
75 (l) (g) Controversy regarding demand by E.S.I. Corporation of contribution,
held, could be adjudicated by E.S.I. Court Direction to deposit sum and stay of
further proceedings till disposal of matter by E.S.I. Court, issued.
Petitioner Company was aggrieved by
demand notices of the E.S.I. Corporation to deposit a sum exceeding 3 cores of
rupees as contribution due under the E.S.I. Act, 1948 and it challenged the
same on several grounds. The High Court disposed of the writ petition with
directions.
Held:
The High Court
observed, after discussing the factual background, that the controversy raised
by the petitioner could well as decided by the E.S.I. Court. (Para 10)
Finding that the company itself had
calculated certain amount as payable, the High Court observed that it would be
just and proper to direct the company to deposit the amount with the first
respondent pending disposal of the matter by E.S.I. Court. On such deposit
being made, further recovery proceedings in pursuance of the impugned notices
were directed to be stayed. (Para 12) L.M.L. Ltd., Kanpur v. E.S.L Corporation, Kanpur.
[1999]
Section
82Appeal under Not invoking any substantial question of law Appeal dismissed.
Held:
This appeal by the
E.S.I. Corporation did not involve any substantial question of law. It was
therefore dismissed.(Para 2) Employees' State Insurance Corporation v. Nathu Haribhau Dharade.
[1999]
Section
82(2) Can be invoked only if question of law is involved Burden of proof loses
its significance when both parties adduce evidence For coverage under Act, 20
employees (including casuals) should have been employed on any day during
preceding one year from date of inspection.
In this appeal the ESI Corporation assails
the order passed by the ESI Court holding that the Respondent hotel cannot be
covered under the ESI Act as the number
of employees including casuals, was 19.
Held:
From the evidence
adduced by the Corporation it was found by the ESI Court that the Corporation
had miserably failed to prove that 20 employees were in the service of the
hotel at any time; and the Inspector was unable to produce any inspection note
with the names of those employees who may have been found working in the hotel
at the time of inspection. Therefore it was not possible for the ESI Court to
believe that the Inspector had carried out the inspection. At the same time the
Manager of the hotel had given documentary evidence to show that there were
only 19 employees at the relevant time. (Para
7) Employees'
State Insurance Corporation v. Hotel Samrat. [1999]
Sections
84 and 85Code of Criminal Procedure, 1973Section 13Confers powers on High Court
to authorise Industrial Tribunals to try offences under E.S.I. Act (Sections 84
and 85) No such authorisation made Held, impugned order was without
jurisdiction.
Held:
This revision against
an order of Special First Class Magistrate proposing to act as E.S.I. Court
under a G.O. dated January 12, 1963 notified in pursuance of Section 14(l) of the
old Cr.P.C., 1898, succeeded, the High Court observing the said G.O. was no
longer valid. Under the new Code, (Cr.P.C., 1973) Section 13 conferred powers
on the High Court to invest jurisdiction in Industrial Tribunals to try
offences under Sections 84 and 85 of the E.S.I. Act, 1948. That not having been
done, the order impugned in this revision was set aside. (Para 2) Jitendra Kumar Agarwal v. Employees' State Insurance Corporation,
Hyderabad [1999]
Section
85Though concerned authority is given discretion to impose penalty, such
discretion cannot be exercised arbitrarily Arbitrariness was further evident in
fixing date of hearing before expiry of time allowed in show cause notice for
giving reply.
Held: The High Court
while allowing the present
writ petition observed that the exercise of discretion to impose penalty under
Section 85 of the E.S.I. Act, 1948 could not be arbitrary. Further
arbitrariness in the impugned action of the concerned authority was indicated
by its fixing a date of hearing before expiry of the 15 days' time given to the
petitioner for filing reply to the show cause notice. (Para 8) M.P. State Cooperative Marketing Federation v. Employees' State
Insurance Corporation. [1999]
Section
85 A Damages, Damages for default in payment of contribution Remuneration paid
to workmen on account of building repair and production incentive Plea that
employer had doubts regarding liability to contribute for such remuneration,
found to be fallacious Imposition of damages held not erroneous Employees'
State Insurance Act, 1948Sections 2(22) & 58A.
Ralson
(India) Ltd. v. Employees' State Insurance Corporation, Chandigarh. [1999]
Section
85 B No presumption can be made that neither stamps were purchased nor
cancelled as required by law in time, merely from fact that contribution cards
had not reached competent authority within time stipulated Imposition of
damages on such presumption, held, not called for.
Appellant establishment filed this
appeal against an order of a Single Judge dismissing its writ petition, which
the appellant had preferred for obtaining relief against an order of the
respondent, holding the appellant liable to pay damages, though reduced from
the original demand, under Section 85B of the E.S.I. Act. The Division Bench
allowed the appeal.
Held:
The High Court observed
that since from the materials on record the High Court did not find any reason
to hold either that the stamps had not been purchased by the appellant in time
or that the same had not been cancelled in the manner provided by the
regulation, it apparently would only be a case where the contribution cards
complete in all respects had been submitted belatedly because of labour unrest
etc. as alleged by the appellant. The imposition of (even) reduced damages, on
the presumption or assumption made by the respondent based on the delayed
submission of contribution cards that neither the stamps were purchased nor
cancelled as required by law, in time, was not called for. (Paras 5 & 6) Venus Industries, Madras v. Regional Director, E.S.I. Corporation,
Madras. [1999]
Section
86 Requirement of sanction to prosecute is mandatory.
Held:
This application to
quash the prosecution of the applicant pending before the C.M. Magistrate,
Kanpur, was allowed, as no sanction as required by Section 86 of the E.S.I.
Act, had been obtained for prosecution of the applicant. It was observed that
this section was mandatory. (Paras 2
and 4) Viswanidhi Dalmia (Raja) v.
Director, Employees 'State Insurance Corporation, Kanpur.[1999]
Section 88 Government has to examine whether benefits provided by employer are similar or superior to benefits under Act Hearing employer/union must be afforded.
This writ petition by a registered union of employees of L.M.L. company challenged an order of the Government denying the exemption sought by its members from the operation of the E.S.I. Act, 1948. The High Court disposed of the writ petition directing the State Government to consider the matter afresh.
Held: The High Court observed that the State
Government did not apply its mind to the crucial question whether the benefits
provided by the employer were substantially similar or superior to the benefits
provided under the Act. (Para 12) Lohiya Machines (L.M.L.) Karmachari Sangh, Kanpur
v. State of U.P. [1999]
Sections 88, 89, 90 and 91A Insurance Court has no power to grant exemption in matter of payment of E.S.I. contribution.
Held:
The High Court further
observed that the appellant union had no right to obtain a declaration from the
Insurance Court that employees of the NTC in its administrative office were
entitled to the grant of exemption in the matter of payment of ESI
contribution. (Para 7) Employees of National Textile
Corporation (APKK&M) Ltd, Bangalore v. Regional Director, ESI Corporation,
Bangalore. [1999]
Section 95 Employees' State Insurance (Central) (Second Amendment) Rules, 1996 Modifying Rule 50 of E.S.I. (Central) Rules, 1950 Substituting 'six thousand and five hundred' for 'three thousand' rupees in the rule and proviso Widening of coverage by enhancing wage limit held valid and intended to keep scheme abreast with needs and requirements of society It cannot be castigated as being one for collateral purpose or for benefit of E.S.I. Corporation.
These writ appeals challenged an order of
a single Judge upholding as valid Rule 3(l) of E.S.I. (Central) Rules, 1996 and
proviso thereto widening the coverage of the E.S.I. Act to employees drawing a
monthly wage upto Rs. 6500 from the preexisting limit of Rs. 3000. The High
Court saw no merit in the challenge and dismissed the writ appeals.
Held:
The High Court, after
examining the relevant decisions, observed that the E.S.I. Act and the Scheme
there under have been accepted and upheld by the Courts in our Country to be
welfare oriented. The charge that widening of the coverage was for collateral
purpose could not be countenanced. It was to keep the scheme abreast with needs
of the society. (Para 8) T.V.S. Suzuki
Employees' Union v. Regional Director, E.S.L Corporation. [1999]
2. EMPLOYEES'STATE INSURANCE (CENTRAL) (SECOND AMENDMENT)
Modifying
Rule 50 of E.S.I. (Central) Rules, 1950Substituting 'six thousand and five
hundred' for 'three thousand' rupees in the rule and proviso Widening of
coverage by enhancing wage limit held valid and intended to keep scheme abreast
with needs and requirements of society It cannot be castigated as being one for
collateral purpose or for benefit of E.S.I. Corporation E.S.I. Act, 1948Section
95.
T.V.S.
Suzuki Employees' Union v. Regional Director, E.S.L Corporation. [1999]
3. EMPLOYEES'STATE INSURANCE (GENERAL) REGULATIONS, 1950
Regulations
26 and 31 Code of Criminal Procedure, 1973Sections 468(2)(b), 472 and
473Failure to submit return of contribution due under E.S.I. Act, amounts to
continuing offence Trial Court ought not to have acquitted accused on ground of
limitation.
Employees'
State Insurance Corporation, Bangalore v. M.P. Mohammed Ali, Bangalore. [1999]
Regulation
31 C Non payment of contribution Levy of damages Petitioner not given any
particulars as to how quantum of damages was arrived at Matter remanded for
fresh consideration.
Management
of Simpson & Co. v. E.S.I.C. [1999]
Regulation
40 Limitation for application to get refund of contribution erroneously paid On
facts, question of constitutional validity of Regulation, held became
unnecessary as application had been made within time.
Held:
The respondent in this
case had challenged in a writ petition the constitutional validity of
Regulation 40 of the E.S.I. (General) Regulations, 1950, because the E.S.I.
Corporation took the stand that respondent's application ought to have been
rejected on the ground that it was made after the period of limitation
prescribed by the said Regulation. The High Court found that the application had
been filed by the respondent in time and consequently the writ petition became
unnecessary. (Para 5) Employees' State Insurance Corpn.
v. Sujirkar's Tile Works. [1999]
Regulation 102 A v. Form No. 7 Non production of documents cannot be construed as continuing offence Complaint filed beyond six months from date on which alleged offence was committed Held barred by limitation.
Employees'
State Insurance Corporation v. Krishna Dass. [ 1999]