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1994 Supreme(Bom) 392
IN THE HIGH COURT OF BOMBAY
M.L. Pendse N.D. Vyas, JJ.
M/s. Associated Electrical Agencies.... Appellant.
Versus
Commissioner for Workmens Compensation and Judge 3rd Labour Court and another.... Respondents.
Appeal No. 676 in W.P. No. 1406 of 1993, decided on 4-8-1994.
Advocates appeared :
S.D. Puri, for the appellant.
T.R. Andhuarujina, Advocate General, amicus curie.
G.S. Hegde, for respondent No. 2.
M.I. Sethna with H.V. Mehta and H.D. Rathod, for Union of India and Attorney General.
Headnote:Section 53 & 61-Workmens Compensation Act, 1923, Section 22 (2) Scope.
A plain reading of Section 53 makes it clear that the right to se.uk compensation or damages by an insured person in respect of an employment injury under any law including Workmens Compensation Act is taken away the bar created under Section 53 is absolute. It is not in dispute that respondent No.2 is an insured person and has secured disablement benefic under Section 51 of the ESI Act in respect of the employment injury. The appellant claims that the application filed by respondent No.2 to seek compensation under the Workmens Compensation Act is clearly barred in view of Section 53 of the ESI Act.
The object of the Parliament in enacting ESI Act was to provide insurance cover to the employees of the establishments registered under the Act. The Act demands contribution both from the employer and the employee and contribution is not optional but compulsory. Once the establishment is covered by the provisions of the Act, then the employer is liable to contribution and the employees contribution by deduction from the wages payable. The object of the Parliament was to provide social security to an employee who suffers employment injury. The experience and the collective wisdom of the legislature may have indicated that the benefits available under the ESI Act are equal, if not better than those available under Workmens compensation Act or any other law. It is true that the Compensation or damages payable under the Workmens Compensation Act is paid in a Impose, but such a payment may not give long term benefits to the employee or to the dependants. The employee is also required to file application before the Commissioner of Workmens Compensation and often that leads to considerable litigation is also time consuming. The parliament, while creating bar under Section 53 of ESI Act, was entitled and justified in taking into consideration all these facts. The counsel for respondent No, 2 could not deny that the benefits available under ESI Act are substantial, but urged the benefits of receiving compensation under Workmens Compensation Act and the other under Workmens Compensation Act. Once insurance cover is available to an employee and when the insurance premium is contributed substantially by the employer and partly by the employee, then the legislature was justified in creating a bar for employees seeking benefit outside the benefits available under the ESI Act. Section 61 of ESI Act therefore, specifically provides that when a person is entitled to any of the benefits provided by the Act, then he shall not be entitled to receive any similar benefits admissible under the provisions of any other enactment.
It was submitted that as the Parliament had withdrawn the benefit of Workmens Compensation Act by substitution of Section 53 of ESI Act, the Parliament had transgressed the limits of legislative competence. It is impossible to accede to the submission. As mentioned hereinabove, the Workmens Compensation Act, 1923, provided benefits of a limited nature. The Parliament enacted ESI Act with object of conferring several more benefits and while conferring those benefits, the Parliament provided that the employees, who are entitled to the benefits under ESI Act, should not secure double benefit by reference to Workmens Compensation Act stand repealed qua the employers and the employees of the establishments which are covered by ESI Act. It is futile to suggest that the Parliament was not competent to repeal the provisions of the Workmens Compensation Act in respect of the employees covered under ESI Act.
It was then submitted that Section 53 of ESI Act should be struck down as violative of fundamental rights guaranteed under Article 14 of the Constitution of India. The counsel submitted that the provisions of ESI Act are applicable only to those employees whose monthly wages are not in excess of Rs. 3,000/- and, consequently, the employees who are drawing higher wages and working in the same establishment are entitled to take advantage of provisions of Workmens Compensation. The submission is merely required to be stated to be rejected. The employee drawing wages in excess of Rs. 3,000/- per month are not covered by the provisions of ESI Act and, consequently such employees form a class by themselves and are entitled to invoke Workmens Compensation Act for claiming compensation or damages. It was urged that there is no nexus to the object to be achieved for making such discrimination. There is no merit in this contention also. It is obvious that the insurance cover is made available to the employees whose wages are below Rs. 3,000/- per month and for whom insurance cover is absolutely necessary. The availability of the insurance cover to the small employees as distinct from the employees drawing higher emoluments cannot be faulted on the ground of discrimination. The object to be achieved is to provide insurance coverage to small employees in respect of employment injuries as well as maternity benefits, medical benefits and benefits to the dependants and such object is clearly sub served in respect of small employees who are in need of such cover. A faint attempt was made to urge that the employees of the establishments which are not covered by ESI Act are entitled to approach the authorities under Workmens Compensation Act for compensation and damages even though the monthly wages drawn by such employees are below Rs. 3,000/- per month. The counsel urged that discrimination is made even between employees drawing wages below Rs. 3,000/- per month. The submission is devoid of merit because the employees of the establishment covered by ESI Act cannot be compared with employees of the establishment not so covered. The two classes of employees are different and distinct and the grievance is without any substance. In our judgment, challenge to constitutional validity of Section 53 of ESI Act is require to be rejected.
Section 22 (2).
See Employees State Insurance Act, 1948 Sections 53 and 61.
2. The legislature enacted the Employees State Insurance Act, 1948 (for short the ESI Act) to provide for certain benefits to employees in case of sickness, maternity in case of female employees, employment injury and to make provision for certain other matters in relation thereto. The ESI Act came into force on April 19, 1948. The provisions of the Act apply to all the factories other than seasonal factories and the State Government, with the approval of the Central Government, is authorised to make the provisions of the Act applicable to any other establishment or class of establishments. Section 38 of the ESI Act provides that all employees in factories or establishments to which the Act applies shall be insured in the manner provided by the Act. Section 39 provides that the contribution payable in respect of an employee shall comprise contribution payable by the employer and contribution payable by the employee and it shall be paid to the corporation created under the Act. The employers are required to pay contribution at the rate of 4% of the total wages and the employees are required to pay at the rate of 1.5% of the total monthly wages. Failure to pay contribution leads to levy of damages and prosecution and once the establishment is covered by the provisions of the ESI Act, then there is no option either to the employer or to the employee to claim exemption from contribution. Chapter V of the Act deals with the benefits available to the insured persons or their dependents, as the case may be. Section 46(1)(c) of the Act provides for benefit of periodical payments to an insured person suffering from disablement as a result of an employment injury sustained. The expression employment injury is defined under section 2(8) and means a personal injury to an employee caused by accident or an occupational disease arising out of and in the course of his employment, being an insurable employment, whether the accident occurs or the occupational disease is contracted within or outside the territorial limits of India. The expression insured person is defined under section 2(14) and means a person who is or was an employee in respect of whom contributions are or were payable under the Act. Section 51 of the Act, inter alia, sets out that a person who sustains permanent disablement, whether total or partial, shall be entitled to periodical payment at such rate and for such period and subject to such conditions as may be prescribed by the Central Government.
In exercise of powers conferred under section 96 of the ESI Act, the Government has framed rules known as the Employees State Insurance (Central) Rules, 1950. Rule 54 classifies the employees into 11 categories depending upon the quantum of daily wages drawn by the employees. The workers covered by these categories are provided standard benefit in terms of rupees set out in the Rules. Second Schedule to the Act sets out description of various kinds of injuries and the percentages of loss or of incapacity. Item 31 in the Second Schedule refers to loss of one eye, without complications, the other being normal, and the percentage of loss of earning capacity is prescribed at 40%.
3. The establishment of the appellant is covered by the provisions of the ESI Act. Respondent No. 2, who is an insured person, approached the corporation for receipt of benefits on account of injury suffered on July 17, 1987. It is not in dispute that the corporation granted the benefit as claimed by respondent No.
