2006 Supreme(SC) 660

2006(6) Supreme 220
SUPREME COURT OF INDIA
(From Calcutta High Court)
Dr. AR Lakshmanan and Lokeshwar Singh Panta, JJ.
Employees State Insurance Corporation & Ors. — Appellants
versus
Jardine Henderson Staff Association & Ors. — Respondents
Civil Appeal No. 1726 of 2005
With
Civil Appeal Nos. 3132, 3133, 3134, 3135, 3136, 3137, 3138, 3139, 3140, 3141, 3142, 3143, 3144, 3145, 3146, 3147, 3148, 3149 & 3150 of 2006
(@ SLP (C) Nos. 17431-17435, 19447-19451, 19453-19457, 19466-19470, 24210, 20831-20834, 20836-20840, 20841-20847, 20849-20853, 20855-20864, 20866-20873, 20874-20881, 20882-20891, 20893-20897. 20898-20907, 20933-20939, 24197-24206, 22783-22790 and 25482 of 2004)
Decided on 25-7-2006
Counsel for the Parties :
For the Appellants : C.S. Rajan, R. Venkatramani, Sr. Advocates, V.J. Francis, Jenis V. Francis, Anupam Mishra, Mrs. Anjali K. Verma, Niraj Gupta, Ms. Meera Mathur, S.B. Upadhyay and Shiv Mangal Sharma, Advocates.
For the Respondents : Gaurab Kumar Banerjee, Pradip Ghosh, Kailash Vasdev, Anil Divan, Sr. Advocates, B.C. Sharma, N.P. Agarwalla, P.H. Parekh, Sameer Parekh, Sumeet Lall, Mrs. Shakun Sharma, Mrs. Mary Mita (for P.H. Parekh & Co.), Gaurav Agrawal, Avijit Bhattacharjee, Pinaky Addy, Chiranjan Addy, Chanchal Kumar Ganguli, Vaibhav Gaggar, E.C. Agrawala, S.S. Jauhar, K.V. Vishwanathan, Rahul Ray, S. Rakshit (for M/s. Khaitan & Co.), Rauf Rahim, Mohammad Iqbal, Prashant Kumar, Suresh Kumar, Dinesh Verma, Nand Lal, Satish Pandey, Medhavi Kumar, A.P. Mohanty, Dr. Sumeet Bhardwaj, Ms. Mridula Ray Bhardwaj, Vipin Gogia, Ms. Jaspreet Gogia, Maninder Singh, Smt. Pratibha M. Singh, Gaurav Sharma, Rahul Ajatshatru, Tejveer S. Bhatia, Ms. Meera Mathur, Deepak Sabharwal, Vikrant Yadav, B.R. Sabharwal, S. Rajappa, Jay Savla, M/s. Corporate Law Group, Raj Kumar Gupta, Sheo Kumar Gupta, Bhanu Pratap Gupta, Smt. Rakhi Banerjee, A.N. Bardiyar, Rajindra Dhawan, Ms. Sefali Dhawan, Parmanand Gaur, P.N. Jha, Ms. Anitha Shenoy, Dhruv Mehta, Harshvardhan Jha, Yashraj Singh Deora, Ms. K.L. Mehta & Co., A. Bhattacharya, Rana Mukherjee, Siddarth Gambhir, Goodwill Indeevar, Arun Kumar Sinha, Mukesh Kumar Sinha, K.V. Mohan, Krishnendu Datta, Nitin Jain, Ms. Kumud Lata Das, Kishan Datta, Sushil Kumar Jain, Sarad Singhaniya, H.D. Thawri, Puneet Jain, Ms. Rani Maheshwari, Bharat Sangal, R.R. Kumar, Samyadip Chatterji, L. Roshmani, Jatin Zaveri, Pradeep Misra, Ms. Shalini Kumar, Vairav Gaggar, Rikusarma, Ghanshyam Joshi, Partha Gil, Mahesh Agarwal and Rishi Agarwal, Advocates.

IMPORTANT POINTS
1. It is permissible in law to prospectively overrule the judgment.
2. 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.

Headnote:(i) Employees State Insurance Act — Sections 2(9)(b), 26 and 28 — Employees State Insurance (Central) Rules, 1950 — Rules 50, 51 and 54 — Liability of employer to make ESIC contribution — Notification dated 23-12-1996 issued by Union of India amending Rules 50, 51 and 54 pursuant to which wage limit for coverage of an employee u/s 2(9)(b) of the Act was enhanced from Rs. 3,000/- to Rs. 6,500/- instead of existing wage ceiling of Rs. 3,000/- p.m. — Various Employees Associations challenged the Notification praying for quashing the Notification and for declaring the Amended Rules as ultra vires — Single Judge of the High Court disposed of writ petitions by quashing the amendment of the Rules of 1950 — Division Bench of the High Court set aside judgment of the Single Judge holding that enhancement could not be termed as ultra vires for the purpose of the Act — However, it was stated that employers who had stay order in their favour will implement the amendment only from the date of this judgment dated 16-3-2004 though the amendment came into operation w.e.f. 1-1-1997 — Whether order passed by the High Court in sustainable — (Yes) — High Court has taken a just, pragmatic, fair and judicious view after considering all the equities and facts and circumstances of the case.

       Held : 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 ESIC since in lieu of the contribution to ESIC, 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 party much less the respondents should suffer because of the orders of the Court if duly complied with. (Para 54)

       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 ESIC 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. (Paras 56)

       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 Courts 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. (Paras 57)

       The High Court, in our opinion, while disposing of the matter has taken a just, pragmatic, fair and judicious view after considering all the equities and facts and circumstances of the case. Extreme hardship might have been caused to both the employer as well as the employee since no medical facilities admittedly have been availed by the workmen from ESIC and the employer had provided medical facilities to the workmen as per the Court orders and in view of the interim order also had paid medical allowances.(Paras 58)

       In the present case, the law as well as the facts are in favour of the respondents. The High Court has correctly appreciated the tremendous hardship that will be caused if arrears are sought to be paid and nobody stands to gain, neither the employer nor the employee under the circumstances. Even assuming that the law is in favour of the ESI, keeping in view the special facts and circumstances of the present case, relief can be denied under Article 136 of the Constitution of India.(Para 60)

       The ESI Act has enacted to provide for certain benefits to employees in case of sickness, maternity and employment injury. Under the scheme of the Act, function of the ESI Corporation is to derive insurance fund from the contribution from employees and workmen. The employer is entitled to recover workmens share from the wages of the workmen concerned. It was argued by the respondent that the employer is providing better medical facilities to the workmen and, therefore, the object and purpose of the Act has been fully satisfied. It is pertinent to notice that none of the employees of the Union have complained about medical services provided by the employer since the object is otherwise fulfilled. No further direction, in our opinion, is required to be passed. (Para 65)

       The act of Court can prejudice no party either the ESI or the respondent-companies. We, therefore, relieve the respondents from making any contributions for the period in question and direct them to make the contribution as directed by the Division Bench of the High Court. It is stated that some of the respondents have already filed exemption applications and that the appellant-Corporation has also granted them necessary relief. We also permit the other respondents who have not filed any exemption application may now file the same and if such application for exemption is filed, it is for the authorities to consider the same on merits and in accordance with law.(Para 66)

       (ii) Constitution of India — Articles 142, 136 and 226 — Powers of Court to mould the relief — High Court under Article 226 and the Supreme Court under Article 136 read with Article 142 of the Constitution have the power to mould the relief in the facts of the case — Supreme Court is empowered to pass such orders as would do complete justice between the parties — This Court is also empowered to mould the relief in such a manner so that it is not only just but also equitable even while declaring the law.(Paras 61 & 62)