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2009 Supreme(SC) 1467

Supreme Court of India
THE HONOURABLE MR. JUSTICE MARKANDEY KATJU & THE HONOURABLE MR. JUSTICE ASOK KUMAR GANGULY
Fertilizers & Chemicals Travancore Ltd.
Versus
Regional Director, ESIC & Others
CIVIL APPEAL NOS.917-918 OF 2004
Decided On : 20-08-2009

IMPORTANT POINT
In a proceeding u/s 75 of ESI Act, at least some of the workmen must be impleaded.

Headnote:Employees State Insurance Act, 1948 – Section 75 – Appellant impleading only the ESI Corporation and District Collectors – Not a single workman was impleaded – Appellant pleading hat concern persons were not its workmen – It ought to make at least some of them parties to the case – The Employees Insurance Court should have issued notices to some of them – Employees Insurance Court asking ESI Corpn. to identify the workmen and register them – Court should itself have determine the issue – Violation of principles of natural justice – Proceedings vitiated – Matter remitted back to ESI court. (Para 15, 16)

       Facts of the case:

       A demand notice was sent against the appellant company in respect of the employers contribution under the Act. The appellant challenged the said demand notice by filing a petition before the Employees Insurance Court, Alleppey.

       Aggrieved against the order of the Employees Insurance Court, both the appellant herein as well as the Employees State Insurance Corporation filed appeals before the High Court. The appeal filed by the respondent-ESIC has been allowed and the appeal filed by the appellant herein has been dismissed.

       Finding of the Court:

       Non-joinder of the workmen has vitiated the proceedings.

       Result:

       Appeal allowed. Matter remitted back to EI court.

Judgment :

1. Heard learned counsel for the parties.

2. These appeals have been filed against the common impugned judgment and order dated 30.10.2002 of the High Court of Kerala at Ernakulam whereby the appeal filed by the respondent-Employees State Insurance Corporation (hereinafter for short the ESIC) under Section 82(2) of the Employees State Insurance Act, 1948 (hereinafter for short the Act) has been allowed and the appeal filed by the appellant herein has been dismissed.

3. It appears that a demand notice was sent against the appellant company under Section 45A of the Act in respect of the employers contribution under the Act. The appellant challenged the said demand notice by filing a petition under Section 75 of the Act before the Employees Insurance Court, Alleppey. The Employees Insurance Court in its order dated 4.2.1993 made the following observations:-

"12. If reliance is made on the rational laid down by the High Court in the abovesaid decisions it is very clear that the identities of the employees should be an essential factor for bringing under coverage employees and paying contribution in respect of them. Here, in this case, because of the peculiar nature of the work arrangement, at Depots, it is impossible to register an employee engaged in the loading and unloading work under the ESI Scheme. If there is requirement, a group of headload workers will come and they do the work collectively and payments are received on tonnage basis. On behalf of this group engaged, one person will collect payment from the depot and distribute the same among themselves. Such labourers coming on one day may not be the same in next day. That is because of this peculiar nature of arrangement among workers on the basis of understanding or agreement reached between trade unions. After completing work in the depot they will go elsewhere and do identical nature of work. If such is the nature of work it is quite improper to compel the applicant to pay contribution on the payments given in various depots merely because they obtained the services of such workers. However as a principal employer the applicant cannot absolve themselves from the responsibility of covering such employees under the scheme because those employees are rendering service to them. Therefore it would be appropriate that in close co-operation with the ESI Corporation they should take effort at least now to ascertain the identities of those headload workers so as to cover them also under the ESI Scheme. The ESI Corporation will also make immediate arrangement for bringing all the loading and unloading workers in the depots under the ESI Scheme. The ESI Corporation shall work out the modus operandi for bringing these workers under the coverage. On such registration of the headload workers under the scheme, the applicant will pay contribution from the date of passing of the order passed under Sec. 45-A of the ESI Act viz., 15.6.1989. The ESI corporation shall work out the contribution from that date in respect of workers who are brought under scheme and who were found to be working from that day onwards.

With the above observation and direction, this application is disposed of."

4. Aggrieved against the said order dated 4.2.1993 of the Employees Insurance Court, both the appellant herein as well as the Employees State Insurance Corporation filed appeals before the High Court under Section 82 of the Act. The appeal filed by the respondent-ESIC has been allowed and the appeal filed by the appellant herein has been dismissed. Hence, the appellant is before us by way of the present appeal by special leave.

5. It may be noted that in its petition before the Employees Insurance Court, the appellant herein only impleaded the Employees State Insurance Corporation and the District Collectors of Alleppey, Palaghat and Cannanore as the respondents but did not implead even a single workman as a respondent.

6. Labour statutes are meant for the benefit of the workmen. Hence, ordinarily












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