Employees State Insurance Corporation vs Distilleries & Chemical Mazdoor Union

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2006 Supreme(SC) 627

2006(6) Supreme 238
SUPREME COURT OF INDIA
(From Allahabad High Court)
Dr. AR. Lakshmanan and Lokeshwar Singh Panta, JJ.
Employees State Insurance Corporation — Appellant
versus
Distilleries & Chemical Mazdoor Union & Ors. — Respondents
Civil Appeal No. 1727 of 2005
With
Civil Appeal Nos. 3002 of 2006
(@ SLP (C) No. 18215 of 2004) and
Civil Appeal 3003 of 2006
(@ SLP (C) No. 4202 of 2005)
Decided on 17-7-2006
Kerala and Others, (1994) 1 SCC 268.(Para 14)
Counsel for the Parties :
For the Appellant : 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, Anita 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, Rikusarma, Ghanshyam Joshi, Partha Gil, Mahesh Agarwal and Rishi Agarwal, Advocates.

Headnote:Employees State Insurance Act — Liability to pay ESIC contributions — Writ petitions filed by Employees Union for seeking direction in the nature of mandamus not to realise any contribution from the workmen of respondent company — Interim orders passed staying deductions to be made towards the contribution of ESIC from members of the petitioners-Union — Despite the pendency of matter for 17 years, ESIC did not file any reply — Employees were not getting any medical facilities from ESIC — They were in fact getting medical facilities from the employer — High Court passed final order holding that ESI contributions to be paid from the date of the judgment — Whether order passed by the High Court requires interference by the Supreme Court — (No) — Order passed by the High Court held perfectly justified.
       Held : 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 i.e. from the date of disposal of the writ petition and should not bear with the liability for the past inasmuch as the employees of the respondent No.2 has not availed any medical facilities from ESIC and at the same time the employer was providing the medical facilities due to interim order of the High Court. In these circumstances, 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. (Para 23)
       This apart it is important to note that in the past 17 years when the interim orders passed by the High Court was enforced, several employees have left/retired and were paid the entire salary without any deduction and, therefore, it will be impossible for the employer to recover the part of the employees contribution in respect of the ESIC from the employees. (Para 24)
       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 the judgment, which, in our opinion, is perfectly justified. (Para 26)
       This apart, the members of the Union included casual, temporary, contractual, badli workmen and it will be practically impossible to find each and every member of the Union to recover their contribution for the last 18 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.(Para 27)
       The High Court, in our opinion, while disposing off the writ petition filed by the Union 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 have been availed by the workmen from ESIC and the employer had provided medical facilities to the workmen as per the Court orders and also had paid medical allowances. (Para 28)

JUDGMENT

Dr. AR. Lakshmanan, J. —

Civil Appeal No. 1727 of 2005

This appeal was filed by the Employees State Insurance Corporation (in short the "ESIC") against the final judgment and order dated 11.05.2004 passed by the High Court of Judicature at Allahabad in C.M.W.P No. 6920 of 1986. The High Court disposed off the writ petition with certain directions which are in challenge in this appeal by the ESIC.

C.A. No. 3002/2006 @ SLP (C) NO. 18215 OF 2004

Leave granted.

2. This appeal was filed by the ESIC against the final judgment and order dated 11.05.2004 passed by the said Court in C.M.W.P No. 27607 of 1998 which was disposed off by the High Court with certain directions which are in challenge in this appeal.

C.A. No. 3003/2006 @ SLP (C) NO. 4202 OF 2005

Leave granted.

3. This appeal was filed by the ESIC against the final judgment and order dated 16.09.2004 passed by the said Court in C.M.W.P No. 32843 of 1997 which was disposed off by the High Court with certain directions as covered by the earlier decision in C.M.W.P. No. 6920 of 1986.

4. Since parties to the above three appeals and the question of law to be decided are the same, by consent of parties, all the three matters were taken up together for final disposal. Respective employer, the Trade Union and the State of U.P. have been impleaded as party respondents in these appeals.

5. We shall now take up the facts mentioned in civil appeal No. 1727 of 2005 for reference. Since the facts are identical in other matters we are not stating them in the other cases.

6. A writ petition No. 6920 of 1986 was filed by the Distilleries and Chemical Mazdoor Union, Meerut against the State of U.P., the ESIC and the Company, namely, Central Distilleries and Breweries Limited (CSBL) merged with Shaw Wallace Distilleries Limited (SWDL) for seeking direction in the nature of mandamus not to realise any contribution from the workmen of respondent No.2-herein.

7. The writ petition was admitted and an interim order was passed stating that, meanwhile no deduction shall be made towards the contribution of ESIC from the members of the petitioners-Union under the ESI Act.

8. An application was filed on behalf of respondent No.2 herein for vacation/suitable modification of the order, in order to safeguard the interest of the Company keeping in view all the provisions of the Act. On 17.07.1987, the Court, after hearing all the parties on the application of the company, confirmed the previous order dated 19.05.1986 with the modification that "no deduction shall be made from the employer or the employees towards the contribution under the ESI Act provided the respondent-employers shall pay the medical allowance to its workmen."

9. An application for modification of the order dated 17.07.1987 was filed by respondent No.2 herein to substitute the words "provide" and "facility" instead of "pay" and "allowance". The Court modified the above order dated 17.07.1987 as sought for.

10. The writ petition remained pending and no contribution was either deducted or deposited. Management continued to provide the medical facility to its workmen as directed by the Court, which fact has not been disputed either by the ESIC or by the workmen. The ESIC did not file any counter affidavit/opposition to the writ petition. The writ petition was finally heard and disposed off along with another writ petition No. 27607 of 1998 which had been filed by another employees Union.

11. Another Union - Distilleries and Breweries Shramik Sangh, Meerut filed writ petition No. 27607 of 1998 against the State Government of U.P., ESIC and CDBL on the ground that no medical facility has been provided by the ESIC Authority in the area and the exemption application filed before the Secretary of Labour Department has not been decided and sought direction from the Court not to realise any contribution from the workers of the Union under the ESI Act and also sought exemption from applicability of the Act for the employees of CDBL.

12. An in

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2006 Supreme(SC) 627

Cases Referred (2)