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IN THE HIGH COURT AT CALCUTTA
Raja Basu Chowdhury, J.
Belur Sramajibi Swasthya Prakalpa Samity & Anr. – Petitioners
Versus
The State of West Bengal & Ors. – Respondents
WPO/1484/2023
Decided On : 16-01-2024
Employees’ State Insurance Act - Exemption - Section 87, Section 91 - The court discussed the grant of exemption under Section 87 and Section 91 of the Employees’ State Insurance Act, 1948. The judgment highlighted the observations made by the Principal Secretary in 2012 and subsequent orders granting and rejecting exemptions. The court also emphasized the violation of principles of natural justice in the decision-making process.
Fact of the Case:
The petitioner, a registered society, sought exemption under the Employees’ State Insurance Act, 1948. The petitioners challenged the rejection of their exemption application, citing violation of natural justice and prejudice caused by non-disclosure of objections raised by the Corporation.
Finding of the Court:
The court found that the decision to reject the exemption was based on objections not disclosed to the petitioners, violating principles of natural justice. The court also noted the disregard of previous orders and directed a fresh decision by the Principal Secretary, Department of Labour, within eight weeks.
Issues: The issues included the violation of natural justice due to non-disclosure of objections, prejudice suffered by the petitioners, compliance with the rules of natural justice, and the validity of the impugned order.
Ratio Decidendi: The court held that the decision based on objections not disclosed to the petitioners violated natural justice and set aside the impugned order. The court directed a fresh decision by the Principal Secretary, Department of Labour, within eight weeks, emphasizing adherence to principles of natural justice.
Final Decision: The impugned order was set aside, and the Principal Secretary, Department of Labour, was directed to make a fresh decision within eight weeks. The Additional Chief Secretary involved in the decision-making process was excluded from the new decision. No costs were awarded, and urgent copies of the order were directed to be provided to the parties.
JUDGMENT :
RAJA BASU CHOWDHURY, J.
1. The instant writ petition has been filed, inter alia, challenging an order dated 9th June, 2023 and the communication letter dated 12th June, 2023, issued by the Additional Chief Secretary, Labour Department, Government of West Bengal.
2. Shorn of unnecessary details, the facts are that the petitioner no.1 is a society registered under the provisions of the Societies Registration Act, 1961 and is dedicated to provide health services to the marginalised section of the society who are in need of health services. In usual course, the petitioner no.1 had applied for exemption under Section 87 of the Employees’ State Insurance Act, 1948, sometimes in November, 2011. The said application was considered by the appropriate Government through the Principal Secretary, who by an order dated 1st November, 2012 while considering the grant of an exemption under Section 91 of the Employees’ State Insurance Act, 1948 (hereinafter referred to as the “said Act”) was, inter alia, pleased to observe as follows:-
Since a decision on exemption under Section 91 of the Act will take some time, exemption hereby is given to the Applicant Establishment under Section 87 of the Act for one year from 01.4.2012 to 31.3.2013.”
3. Since then, the appropriate Government had from time to time granted exemption to the petitioner no.1. Incidentally, by an order dated 17th November, 2016, the appropriate Government, had, inter alia, rejected the petitioner no.1’s application for grant of exemption, for the period from 1st April, 2016 to 31st March, 2017.
4. Although, the writ petitioners had challenged such order before this Court by filing a writ petition, which was registered as WPO. 1113 of 2016, notwithstanding such petition being entertained by this Court, the same was ultimately dismissed for default on 15th January, 2020.
5. Since then, the petitioners had made a representation dated 28th September, 2021, calling upon the Hon’ble Labour Minister to look into the matter, for grant of permanent exemption to the petitioner no.1. Simultaneously, since WPO. 1113 of 2016 was dismissed, without a decision on merit, the petitioners also filed a fresh writ petition challenging the order dated 17th November, 2016, which was registered as WPO. 917 of 2022.
6. It is, in connection with the aforesaid petition that a Coordinate Bench of this Hon’ble Court, by taking note of the order dated 1st November, 2012 passed by the Principal Secretary, Labour Department, whereunder the petitioner no. 1 was found to be eligible, for grant of exemption under Section 91 of the said Act, by an order dated 17th February, 2022, directed the Joint Secretary, Government of West Bengal, Labour Department, Directorate of ESI Branch, to consider and dispose of the representation filed by the petitioner no.1 on 28th September, 2021, within one month from the date of communication of the order, after giving reasonable opportunity of hearing to all the interested parties. The Hon’ble Court by the aforesaid order had also directed the concerned authority, in considering the representation to take into account the observations made by the Principal Secretary, Department of Labour, Government of West Bengal, in his order dated 1st November, 2012, without in any way, being influenced by the observation made in the order dated 17th November, 2016 as aforesaid.
7. Pursuant to the aforesaid o
The central legal point established in the judgment is the violation of principles of natural justice in the decision-making process, leading to the setting aside of the impugned order and the direct....
The main legal point established in the judgment is that the denial of exemption without providing an opportunity of hearing and reliance on undisclosed documents prejudiced the petitioner, violating....
A reading of Section 87 coupled with its proviso, makes it clear that an enquiry is to be done by the Government after hearing all the affected parties before passing orders in the exemption applicat....
A quasi-judicial authority must disclose all relevant materials relied upon in its decision-making process to ensure compliance with natural justice.
The cancellation of exemption without a hearing violates principles of natural justice, entitling affected parties to an opportunity to present their case.
An appeal against recovery proceedings under the E.S.I. Act is not maintainable without first challenging the correctness of the preceding order under Section 45-A.
The court established that proceedings under the EPF Act must adhere to natural justice, requiring identification of employees and contractors before imposing liabilities.
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