The Civil Miscellaneous Appeal No.2088 of 2002 filed against the order of the Employees State Insurance cum Principal Labour Court, Chennai passed in CMP.No.145/2002 in EIOP.No. of 2002 dated 04.07.2002.
The Civil Miscellaneous Appeal No.2089 of 2002 filed against the order of the Employees State Insurance cum Principal Labour Court, Chennai passed in CMP.No.143/2002 in EIOP.No. of 2002 dated 04.07.2002.
ESI Corporation/appellant herein issued the notification dated 06.01.1997 enhancing the coverage under ESI Act from Rs.3,000/- to Rs.6,500/-. As the employees of the respondent company were having more benefits under the scheme floated by the respondent company, challenged the said notification of the appellant by way of W.P.No.2720/1997. Interim order was granted on 28.02.1997, staying the notification of the appellant. Subsequently the Writ Petition was dismissed by the Hon'ble Division Bench of this Court by order dated 08.01.2001.
3. Immediately after the dismissal of the Writ Petition filed by the Workers Union, the ESI contribution was paid by the respondent-management on 09.03.2001, to the tune of Rs.85,85,329/-. Thus the respondent company complied with the requirements under the notification of the appellant.
4. When things stand so, the appellant issued notice on 15.05.2002 to the respondent company calling upon them to pay a sum of Rs.45,856.27 towards damages for non payment of ESI contribution as per the notification dated 23.12.1996 with effect from 01.01.1997 and another notice dated 20.05.2002 calling upon the respondent management to pay a sum of Rs.39,97,066/- towards interest and cost of charges in respect of the delay in making the ESI contribution.
5. Challenging the aforesaid notices dated 15.05.2002 and 20.05.2002, the respondent management moved the ESI Court. Pending disposal of the EIOPs before the ESI court, petitions to waive deposit of 50% of the amounts demanded in the aforesaid notices were filed. In the affidavit filed before the ESI Court the management explained in detail as to how they were prevented from making contribution, in view of the stay of the notification dated 23.12.1996 challenged by the workers union. Moreover the management also contented that pursuant to the dismissal of the Writ Petition of the workers on 08.01.2001, the management also paid the contribution on 09.03.2001.
6. In view of the contention made by the respondent management, the ESI Court allowed the petitions by order dated 04.07.2002. Challenging those order of the ESI Court dated 04.07.2002 only the present CMAs have been preferred by the ESI Corporation.
7. Mr.N.Balasubramanian learned counsel for the respondent- management, at the out set submitted that there was no fault on the part of the management, even though they were ready and willing to make the contribution as per the appellant's notification dated 23.12.1996, they were prevented from doing so by the orders of this Court in the Writ Petition filed by the workers challenging the notification. Hence, there is no question of any lapse or default on the part of the management. Pursuant to the dismissal of the Writ Petition, the management duly paid the entire ESI contribution at the earliest namely 09.03.2001 and hence, there is no question of any levy of interest or damage from the management. He relied upon Judgment of the Hon'ble Supreme Court in Employees State Insurance Corporation V.Distilleries & Chemical Mazdoor Union & Ors. reported in JT 2006 (6) SC 443 wherein in similar circumstances the employees filed Writ Petition challenging the notification of the appellant ESI corporation and interim order was obtained against the company. The Writ Petition was pending for more than 17 years and ultimately Writ Petition was disposed of by the High Court with a direction to deduct the contribution from the date of the Judgment. The said Judgment was challenged before the Hon'ble Supreme Court. While dismissing the appeal filed by the ESI corporation the Apex Court confirmed the Judgment of the High Court. Para 29 of Judgment reads as follows:
"As regards the question of law raised by learned counsel for the ESIC regarding the view taken by the High Court, we are of the opinion that the view taken by the High Court was on account of the peculiar facts and circumstances of the case. As already noticed, the deduction of contribution of the members of the Union had been specifically stayed by the High Court and the same continued for a period of 18 years till the disposal of the petition and that none of the members of the Union had availed facilities of the ESI. In our view, passing of the final order by the High Court directing the payment of ESI contribution from the date of the said Judgment does not amount to postponing the enforcement of notification and the same is also not in violation of the principles laid down by this Court in the various judgments referred to above. There has been no postponement of the enforcement of the notification in view of the peculiar circumstances of the case, namely, the non-availability of the facilities, non-deduction of contribution from the members of the Union for 18 long years, provision of medical relief by the Management. The High Court had directed deduction of contribution with effect from the date of Judgment, which, in our opinion, is perfectly justified."
8. In Employees State Insurance Corporation & Ors. V. Jardine Henderson Staff Appreciation & Ors. reported in JT 2006 (6) SC Page-530, the Hon'ble Supreme Court even in this case directed deduction of ESI contribution only from the date of the Judgment of the Division Bench of the High Court. Paragraph 43, 45 & 46 are extracted as follows:-
"We have already noticed that the respondent-companies have spent large amount of money on the employees and provided medical facilities in view of the order of the High Court granting stay/injunction etc. If the High Court had not passed the order of injunction, the respondent-companies would have contributed the ESI contribution instead of spending monies on the medical facilities and allowances. In these circumstances, the submissions made by learned senior counsel appearing for the respondents that it would be unfair and unjust to make the employer to pay contribution towards ESI since in lieu of the contribution to ESI, the employer provided better medical facilities, in our view holds water and it would cause extreme and grave hardship to the employer if they are required to pay contribution for the past several years for no fault of their own. In our view, no partly much less the respondents should suffer because of the orders of the Court if duly complied with.
In our opinion, the High Court was fully justified in passing the judicious order after considering the equities by directing the employer and the employees to make ESI contribution for the future and should not bear with the liability for the past inasmuch as the employees of the respondents have not availed any medical facilities from ESIC and at the same time the employer was providing the medical facilities due to interim orders of the High Court. The order passed by the High Court, in our considered opinion, meets the ends of justice and does not require interference by this Court under
Article 136 of the constitution of India.
In our view, passing of the final order by the High Court directing the payment of the ESI contribution from the date of the said judgment does not amount to postponing the enforcement of notification and the same is also not in violation of the principles laid down by this Court in various judgments referred to above. There has been no postponing of the enforcement of the Notification in view of the peculiar circumstances of the case, namely, the non-availability of the facilities, non-deduction of contribution from the members of the union for several years and provision of medical relief by the Management. The High Court's direction for deduction of contribution w.e.f. the date of the judgment in our view, is perfectly justified. This apart, the members of the union included casual, temporary contractual and it will be practically impossible to find each and every member of the union to recover their contribution for the past several years and in fact some of the workmen who would have been the employees during all these years would have left, expired etc. And on account thereof also their contribution cannot be recovered. The order passed by the High Court, in our opinion, is perfectly justified in view of the peculiar facts and circumstances of the case."
9. The learned counsel also relied upon another Judgment of the Division Bench of this Court passed in T.V.Sundaram Iyengar & Sons Limited and Ors. Vs. Union of India on 01.11.2006 wherein analysing the Judgment reported in AIR 2006 SC 2767 = JT 2006 (6) SC 530, held the appellants are entitled to benefits or relief granted by the Supreme Court from the date of the orders of the Writ Petition.
10. The aforesaid Judgements only speak about the postponement payment of ESI Contribution from the date of the Writ Petition. In this case the respondent company paid the entire amount rightly from the date of effect of the notification i.e. 01.01.1997. The payments were made as early as on 09.03.2001. By virtue of the aforesaid Judgment of the Hon'ble Supreme Court, the appellant company paid the ESI contribution for the period which was covered by the Writ Petition. when, such is the position there is no justification on the part of the appellant corporation to levy interest, damages, penalty whatsoever.
11. Immediately after the dismissal of Writ Petition on 08.01.2001, the management paid the entire amount on 09.03.2001 and therefore, no delay or laches can be alleged against the respondent/management and in view of that the notices issued by the appellant corporation are liable to be quashed.
12. Since this Court comes to the conclusion that the orders i) Order bearing No. TN/INS/VI/51/9024-75 dated 15.05.2002 (Damages) ii) Order bearing No.TN/INS/VI/51/9024-75-c18 Int. dated 20.05.2002 (Interest) issued by the appellant are not valid, in view of the Judgment pronounced by the Supreme Court. The aforesaid Judgment is binding on all Courts under
Article 141 of the constitution, under
Article 226 constitution of India, this Court has to necessarily come to the conclusion that the aforesaid notices are not valid. In view of the finding given on the notices issued by the appellant, the original proceedings initiated by the respondent company are disposed in terms of the orders by this Court, as there is nothing to be decided by ESI Court.
13. Mr.S.Vaidhiyanathan learned counsel for the Appellant submitted that this Court is only considering the interim order Under
Section 82 of the Employees State Insurance Act 1948 and this court cannot dispose of the proceedings initiated before the ESI Court by the respondent company.
14. As stated above the Judgment of the Hon'ble Supreme Court is binding on all the Courts and Tribunal. No proceedings can be allowed to continue contrary to the Judgment of the Supreme Court. In view of that, nothing survives in the proceedings pending before the ESI Court initiated by the respondent company.
15. Apart from that when this Court is empowered to decide the appeal Under Section 82 of the ESI Act, this Court has got power and jurisdiction to decide about the continuance of the original proceedings itself before ESI Court, Under
Article 227 of Constitution of India. In view of the Judgment pronounced by Hon'ble Supreme Court, the contention of learned counsel for the appellant regarding the powers of this Court is rejected and the original proceedings viz EIOP on the file of the Employees State Insurance Court (Principal Labour Court, Chennai) initiated by respondent company is disposed in terms of the orders passed by this Court.
N. KIRUBAKARAN, J.
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16. Though this Court intended to impose cost regarding the attitude of ESI Corporation, which is a State instrumentality, judicial restraint does not allow to impose any cost. Accordingly no cost is awarded.
27.08.2009 pbn To The Employees State Insurance cum Principal Labour Court, Chennai C.M.A.Nos.2088 & 2089 of 2002