Exemptions under the Employees’ State Insurance Act cannot be granted retrospectively, as per Sections 87 and 91-A, which must be strictly adhered to.

Judgment :

(Nitin W. Sambre, J.)

1. Heard.

2. Rule. Rule returnable forthwith. Heard Rule finally with consent of counsel for the parties.

3. Impugned in the petition is the notification dated 18/12/2018 issued by the respondent No.1 thereby granting exemption in favour of the respondent No.2-Board from the provisions of the Employees’ State Insurance Act, 1948 (herein after referred as “the Act of 1948”).

4. The facts necessary for deciding the petition are as under :

The petitioner-Employees State Insurance Corporation, which was established under Section 3 of the Employees State Insurance Act, 1948 (hereinafter referred to as ‘the Act of 1948’ for the sake of brevity) is required to act for the benefit of the employees in cases of sickness, maternity, suffering injury while in employment and certain other matters in relation thereto. Same is a welfare piece of legislation and also extend insurance cover to employees. Pursuant to the provisions under Section 26 of the Act of 1948, the establishment of Employees State Insurance Fund through the contributions made under the Act of 1948 is provided. Section 28 of the Act of 1948 contemplates purpose for which the funds may be expanded. The respondent no.1 is the appropriate Government under sub-Section 1 of Section 2 of the Act of 1948 and is an authority for issuance of a notification granting exemption under Sections 87, 88, 90 and 91 of the Act of 1948. Similarly, the respondent no.2 is the statutory authority constituted under the Maharashtra Private Security Guards (Regulation of Employment and Welfare) Act, 1981. The said Act was enacted with an object of regulating the employment of private security guards employed in the factories and private establishments and also to provide better service conditions and welfare measures. The said Act provides for framing of a scheme for the registration of the employees and security guards in the factories or establishments and also to provide general terms and conditions with regard to the welfare of the security guards. The respondent no.2-Board came to be covered under the provisions of the Act of 1948 and a communication to that effect was issued on 01.04.2004 directing implementation of the provisions of the Act of 1948 by the respondent no.2. Accordingly, a code was allotted to the respondent no.2.

5. The provisions of Sections 87 and 91-A also contemplate grant of exemption from the provisions of the Act of 1948. Consequently, the respondent No.2 applied for grant of exemption for a period from 2016 onwards. Such prayer for exemption was considered and granted from time to time and last exemption prior to filing of the petition appears to be granted vide notification dated 18/12/2018. Vide said notification, exemption is granted with retrospective effect i.e. from 15/07/2017 to 14/07/2018 by taking recourse to provisions of Sections 87 and 91A of the Act of 1948. While questioning the same, counsel for the petitioner made two-fold submissions. (a) neither Section 87 nor 91-A of the Act of 1948 contemplates grant of retrospective exemption, (b) apart from above, it is claimed that already the State Government has taken a stand of not granting exemption on earlier point of time since the exemption is granted contrary to the statutory provisions.

6. As against above, Shri Ghodeswar, learned Assistant Government Pleader would invite our attention to the stand of the respondent State Government. According to him, the exemption is granted from the date of the application. He would claim that as the grant of exemption is in the interest of members of the respondent No.2-Board, the State Government is justified in exercising the statutory powers of grant of exemption. He would as such urge that since exemption is to be granted from the date of application, it cannot be inferred that the powers are exercised with retrospective effect. He would draw support from the pleadings in paragraph 13 of affidavit of respondent No.1 which read thus :

“13.