Managements of Independents CBSE Schools Association Karnataka vs Union of India

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2012 Supreme(Kar) 241

High Court of Karnataka
ASHOK B. HINCHIGERI
Managements of Independents CBSE Schools Association Karnataka & Others
Versus
Union of India, Represented by its Secretary, Ministry of Labour and Employment Shram Shakti Bhawan & Others
Writ Petition Nos. 31457-31460 of 2011 (L-RES) C/w Writ Petition Nos. 4038840393, 22828, 28326-28328, 42946, 44578-44579 of 2011
Decided on : 09-04-2012

Advocates appeared:
For the Petitioners:S. Basavaraj, Advocate.
For the Respondents:R1 -B. Palakshaiah, CGSC, R2-N.B. Vishwanath, AGA, R3 – R4 -Smt. Geethadevi, G.R. Mohan, K V Shananjay, A. Lobo, B. M. Arun, Advocates.

Headnote:EMPLOYEES STATE INSURANCE ACT, 1948 - Section 1(5): [Ashok B. Hinchigeri, J] Issuance of Notification - Approval of Central Govt. and consultation with ESI Corporation - Notification issued under Section 1(5) of Act reducing threshold coverage from 20 to 10 employees in case of educational institutions - Same preceded by Central Government- s communication, indicating its general approval to issuance of notification by State Governments to reduce threshold of coverage for non-factory establishments - Intention and earnestness of Central Government were thus explicit - In circumstances non-mentioning by State Government in notification fact that it had consulted ESI Corporation and that it had obtained approval of Central Government would not render notification void or unsustainable.
       EMPLOYEES STATE INSURANCE ACT, 1948 - Section 1(5): [Ashok B. Hinchigeri, J] Notification - Statute does not prescribe any time limit for issuing final notification - Time-gap between intention notification and final notification can exceed six months or one month - On ground that final notification was issued after 6-7 years of issuance of intentment notification, former cannot be invalidated.
       EMPLOYEES STATE INSURANCE ACT, 1948 - Section 1(5): [Ashok B. Hinchigeri, J] Applicability - Employees of educational institution can be brought within purview of Act - Word ’otherwise’ used in Section 1(5) of the ESI Act cannot be given restrictive meaning by applying principle of ejusdem generis.
       EMPLOYEES STATE INSURANCE ACT, 1948 - Section 1(5): [Ashok B. Hinchigeri, J] Applicability - Provisions of Act can be made applicable for self-financing, that is, for the unaided institutions - Since Section 1(5) of ESI Act enables State Government to extend scheme to any establishments or class of establishments, unaided educational institutions being no exception.
       CONSTITUTION OF INDIA - Article 141: [Ashok B. Hinchigeri, J] Judgments of other High Courts - Held, The judgments of other High Courts may not be binding on this Court, but they have persuasive value. When the identical notifications are already upheld by the other High Courts and when there is no reason for this Court to take a different view in the matter.
       EMPLOYEES’ STATE INSURANCE ACT, 1948 - Section 1(5): [Ashok B. Hinchigeri, J] Fixing of minimum number of employees for applicability of the Act - State Government’s Notification dated 16.3.2011 and 6.12.2010 - Question whether the approval of the Central Government is necessary for re-fixing the minimum number of employees - Held, First Notification dated 31.1.2004 covering educational institution was issued after obtaining approval from the Central Government and after consulting ESI Corporation. For re-fixing the minimum number of employees of an institution for the purpose of applying the provisions of ESI Act, fresh consultation and fresh approval are not necessary. The non mention by the State Government in the impugned notification that it has consulted ESI Corporation and that it has obtained the approval of Central Government does not render the notification void or unsustainable.
        When the statute itself does not contain any restriction as to the time gap between the preliminary/intention notification and final notification, Court would not venture to prescribe any time limit.
        There is no legal impediment in bringing educational institutions within the purview of ESI Act.
        As to the question whether the petitioner institutions are offering better medical facilities was not answered as none of the employees or their representative bodies were not made parties to the writ petition.

Judgment :-

1. In all these petitions, the challenge is raised to the State Government’s notification, dated 16.3.2011 issued under Section 1(5) of the Employee’s State Insurance Act, 1948 (‘ESI Act’ for short) extending the operation of the ESI Act to the educational institutions in Karnataka.

2. Sri K.V.Dhananjay, the learned counsel for the petitioners in W.P.No.28326-28328/2011 submits that the State Government has not consulted the Employees State Insurance Corporation (‘ESI Corporation’ for short) and has not taken the prior approval of the Central Government before issuing the impugned notification. He submits that the Government of Karnataka has merely acted in concert with other States like Jharkhand, Bihar, Rajasthan, Punjab, West Bengal and Andhra Pradesh.

3. The learned counsel submits that there is an acute shortage of the infrastructure to cater to the needs of the existing insures under the ESI Act. In the city of Bangalore, there are only two ESI hospitals – one in Indiranagar and the other in Rajajinagar. The ESI Corporation’s infrastructure is so very inadequate that it is in no position to take care of the future insures under the ESI Act. More efficacious alternatives are put in place by the petitioner-institutions. The medicare facilities introduced by some of the educational institutions are better and higher than those being given to the insures under the ESI Act.

4. He pressed into service the doctrine of desuetude. He submits that if the preliminary or intention notification is not acted upon for 6 – 7 years, then it is to be treated as a spent notification. It stands repealed expressly or impliedly.

5. He submits that the culpability in issuing the impugned notification is not at all explained. In para 16 of the rejoinder filed on behalf of the petitioners, this is what is stated:

“As such, the justification presented by the respondents to this Hon’ble Court is in the nature of ratifying a criminal activity. Therefore, as a matter of law and in consideration of sound public policy, this Hon’ble Court cannot and should not accept such justification in support of the impugned notification.

6. He points out that in the second intention notification, there is no reference to the obtaining of the approval of the Central Government. When the intentment notification refers to the consultation with the ESI Corporation, nothing prevented the State Government from stating that the Central Government’s approval is obtained. He also takes exception to the two incompatible intention notifications that too with respect to the same final notification. The discretion vested in the State Government does not clothe it with an unfettered discretion. He submits that the principle that a welfare oriented legislation should be liberally construed is not a principle of universal application.

7. Sri S. Basavaraj, the learned counsel for the petitioners in W.P,Nos.31457-31460/2011, W.P.Nos.40388-40393/2011, W.P.No.42946/2011 submits that the impugned order is marked by total non-application of mind. He submits that there are no ESI hospitals in many districts of the State. He submits that the impugned notification does not specify that the educational institutions include the unaided institutions also. He submits that he would therefore be content, if a clarification is issued to the effect that the impugned notification has no application for the employees of the unaided institutions.

8. Sri B.M.Arun, the learned counsel for the petitioners in W.P.Nos.44578-44579/2011 submits that the appropriate Government is required to give six months’ prior notice in the official gazette of its intentions. In the instant case, the prescribed procedure is not followed. He also submits that the petitioners have comprehensive medi-claim policy. The impugned notification is also ultra vires of Section 1(5), as the approval of the Central Government is not obtained. Annexure-R1 has no application for the impugned notification, as the pre-requi

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