1986 Supreme(Pat) 143

PATNA HIGH COURT
S.S.Sandhawalia, Uday Sinha and S.Ali Ahmad JJ.
Rameshwar Jute Mills Ltd.
Versus
Union Of India
Civil Writ Jurisdiction Case No. 827 of 1981 ;
Decided On : APRIL 23, 1986

Section 94A of the Employees State Insurance Act, 1948 authorises the delegation of the powers conferred by S.85B of the Employees State Insurance Corporation to officers or authorities subordinate to the said Corporation, and the Resolution dated the 24th February, 1976 (published in the Government of India Gazette dated the 15th December, 1979), authorising the Director General or any other officer authorised by him to levy and recover damages from the employers under S.85B(1) of the Act is valid in its totality. The second proviso to Regulation 3 of the Employees State Insurance (General) Regulations, 1950, would not be attracted to the situation and would not bar further delegation by the Corporation. The Division Bench judgment of this Court in Rameshwar Jute Mills Limited V/s. Union of India (Civil Writ Jurn. Case No. 3815 of 1982 - decided on the 4th October, 1982), does not lay down the law correctly in this context.

Headnote:

DELEGATION OF POWERS - EMPLOYEES STATE INSURANCE ACT, 1948 - SECTIONS 94A, 85B - EMPLOYEES STATE INSURANCE (GENERAL) REGULATIONS, 1950 - REGULATION 3 - Whether Section 94A of the Act authorises the delegation of the powers conferred by S.85B of the Employees State Insurance Corporation to officers or authorities subordinate to the said Corporation? - Whether the Resolution dated the 24th February, 1976 (published in the Government of India Gazette dated the 15th December, 1979), authorising the Director General or any other officer authorised by him to levy and recover damages from the employers under S.85B(1) of the Act is valid in its totality? - Whether the second proviso to Regulation 3 of the Employees State Insurance (General) Regulations, 1950, would be attracted to the situation and would bar further delegation by the Corporation? - Whether the Division Bench judgment of this Court in Rameshwar Jute Mills Limited V/s. Union of India (Civil Writ Jurn. Case No. 3815 of 1982 - decided on the 4th October, 1982), lays down the law correctly in this context?

Fact of the Case:

The petitioner, Rameshwar Jute Mills, is undisputedly amenable to the provisions of the Employees State Insurance Act, 1948 (hereinafter referred to as the Act). It seeks to impugn and quash Annexures-1 to 4, the orders passed by the authorities under the said Act. It has been averred that by a notice dated the 25th October, 1977, the Assistant Regional Director informed the petitioner-Mills that damages amounting to Rs. 3,71,239.83 Paise had been levied against it for repeated failure to make payment of the contributions for different periods beginning from the 27th September, 1975, and ending with the 28th May, 1977. The petitioner-Mills, vide Annexure-5 sent a detailed explanation in pursuance of the notice aforesaid and, inter alia, stating therein that the delay in the submission of the contribution cards was due to the non-availability of the required stamps at the Samastipur Branch of the State Bank of India This explanation was duly considered by the Regional Director, who seriatim noticed the grounds raised by the petitioner, and, by a reasoned order, he granted substantial relief to the petitioner and reduced the damages to Rs.92,810.00, whilst observing that this was the first case of default (vide Annexure-3 dated the 7th October, 1978). It was further directed that the said amount of damages be paid within a period of thirty days from the date of that order. After the receipt of the said order, the petitioner, on the 16th January, 1980, sent another letter to the Regional Director, making a grievance about the imposition of damages. However, vide Annexure-2 dated the 7th October, 1980, the authority informed the petitioner that even after re-examining the matter in the light of the facts furnished by the petitioner, it was regretted that no further relief was possible and the petitioners were peremptorily directed to pay the assessed damages of Rs. 92,810.00, within ten days of the receipt of the communication. Later, vide Annexure-1, dated the 5th January, 1981, the petitioners were informed that the competent authority, namely, the Regional Director, Patna, had levied the damages after considering all the facts of the case and they were directed to pay the damages so levied. Aggrieved by the action of the respondents, the present writ petition was filed challenging the validity of the impugned orders.

Finding of the Court:

1. Section 94A of the Act authorises the delegation of the powers conferred by S.85B of the Employees State Insurance Corporation to officers or authorities subordinate to the said Corporation. 2. The Resolution dated the 24th February, 1976 (published in the Government of India Gazette dated the 15th December, 1979), authorising the Director General or any other officer authorised by him to levy and recover damages from the employers under S.85B(1) of the Act is valid in its totality. 3. The second proviso to Regulation 3 of the Employees State Insurance (General) Regulations, 1950, would not be attracted to the situation and would not bar further delegation by the Corporation. 4. The Division Bench judgment of this Court in Rameshwar Jute Mills Limited V/s. Union of India (Civil Writ Jurn. Case No. 3815 of 1982 - decided on the 4th October, 1982), does not lay down the law correctly in this context.

Issues: 1. Whether Section 94A of the Act authorises the delegation of the powers conferred by S.85B of the Employees State Insurance Corporation to officers or authorities subordinate to the said Corporation? 2. Whether the Resolution dated the 24th February, 1976 (published in the Government of India Gazette dated the 15th December, 1979), authorising the Director General or any other officer authorised by him to levy and recover damages from the employers under S.85B(1) of the Act is valid in its totality? 3. Whether the second proviso to Regulation 3 of the Employees State Insurance (General) Regulations, 1950, would be attracted to the situation and would bar further delegation by the Corporation? 4. Whether the Division Bench judgment of this Court in Rameshwar Jute Mills Limited V/s. Union of India (Civil Writ Jurn. Case No. 3815 of 1982 - decided on the 4th October, 1982), lays down the law correctly in this context?

Ratio Decidendi: 1. Section 94A of the Act vests the Corporation with a plenary power to delegate all or any of its powers and functions which may be exercised by it to any officer or authority subordinate to the Corporation. 2. The Corporation, when exercising this power of delegation for the whole of the country, was alive to the fact that it had to be done to innumerable other officers apart from the Director General and said so in terms in the resolution. 3. The Corporation, in its wisdom rightly left the authorisation and naming of these officers to its sole executive head, the Director General. 4. The maxim delegatus non potest delegare is merely a rule of construction and not an inflexible statutory bar. 5. The true test is whether the provision, either expressly or even by necessary implication, permits further delegation. 6. The language employed with regard to the confirment of the powers of delegation on the Corporation without any restriction, in my view, would either expressly or, in any case, by necessary implication, authorises a further delegation, where the Corporation in terms does so. 7. The second proviso to Regulation 3(1) of the Regulations would not be attracted to the situation, and, in any case, it does not bar or limit the delegation of power by the Corporation under Section 94-A of the Act.

Final Decision: Both the writ petitions are dismissed. However, in view of some intricacies involved and a conflict of precedent, we leave the parties to bear their own costs.