SupremeToday Landscape Ad
Back
Next
Judicial Analysis Court Copy Headnote Facts Arguments Court observation
Listen Article Pause Article
judgment-img

2016 Supreme(Gau) 26

IN THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
HRISHIKESH ROY, J.
All Assam English Medium Schools' Association & Ors. - Petitioners
Versus
The State of Assam & Ors. - Respondents
Writ Petition (C) Nos. 4121/2009, 6311/2010, 5183/2012, 4259/2012 & 352/2013
Decided On : 28-01-2016

Advocates:
Advocate Appeared:
For the Petitioners: Mr. S.C. Keyal, Mr. S.K. Ghosh, Mr. S.P. Choudhury
For the Respondents:Mr. N. Upadhyay, Govt. Advocate & Mr. K.K. Nandi

Headnote:

Employees State Insurance Act, 1948 - Section 1(5), 87 - Educational institutions – Event of sickness, pregnancy or employment injuries and at the first instance - Petitioners contend that the ESI Act was intended to cover the employees of only the industrial, commercial and agricultural establishments and application of the Act for the educational institutions is legally impermissible. According to the petitioners, the educational institutions are neither industrial nor commercial venture and therefore the extension of the Act to such establishments in the State, is not justified - All Assam English Medium Schools Association contend that some of the member schools are providing superior benefits to their staff than what is envisaged under the ESI Act and therefore such schools should be kept out of the purview of the ESI Act. The instance of the Modern English School is cited as a model employer providing better benefits to the school staff than those contemplated by the ESI Act - Held, multiple benefits are envisaged whereas coverage of the insured under mediclaim Policy opted by some schools, offer only limited relief in comparison. Apart from hospital treatment, the ESI Act provides for various contingencies as enumerated in Chapter-III and it is doubtful whether such contingencies are at all addressed by any of the writ petitioners for their school staff. But since a generous employer can always apply for exemption, this prima facie observation should not foreclose the option of the individual institution to apply for exemption under Section 87, when superior benefits than what is envisaged under the ESI Act, is provided by the concerned schools -- Backdrop of the above reasoning, extension of the ESI Act to cover the educational institutions through the impugned notification is found to be in order and accordingly the contention raised by the petitioners to the contrary, are rejected. However since the operation of the impugned notification was stayed by this Court, it should be applied prospectively to the educational institutions and no school should be forced to subjugate themselves retrospectively, under the ESI Act. It is ordered thus - Cases are disposed of without any order on cost – Petition is Disposed

JUDGMENT :

Heard Mr. S.P. Choudhury, the learned counsel appearing on behalf of the petitioners in the WP(C) No. 4124/2009 and WP(C) No. 4259/2012. The learned Advocate Mr. S. Banik appears for the petitioners in WP(C) No. 6311/2010, WP(C) No. 5183/2012 and WP(C) No. 352/2013. The respondent Employees' State Insurance Corporation and their Regional Director are represented by the learned counsel Mr. K.K. Nandi. The learned Govt. Advocate Mr. N. Upadhyay appears for the State respondents.

2. The petitioners espouses the interest of Private Schools and they challenge the notification dated 6.1.2009, issued under Section 1(5) of the Employees' State Insurance Act, 1948 (hereinafter referred to as ' the ESI Act’), whereby the Act was extended to the educational institutions. Since common arguments were advanced from both sides, this judgment will dispose of all the five cases.

3. The petitioners contend that the ESI Act was intended to cover the employees of only the industrial, commercial and agricultural establishments and application of the Act for the educational institutions is legally impermissible. According to the petitioners, the educational institutions are neither industrial nor commercial venture and therefore the extension of the Act to such establishments in the State, is not justified.

4. The counsel for the All Assam English Medium Schools' Association contend that some of the member schools are providing superior benefits to their staff than what is envisaged under the ESI Act and therefore such schools should be kept out of the purview of the ESI Act. The instance of the Modern English School, Kahilipara is cited as a model employer providing better benefits to the school staff than those contemplated by the ESI Act.

5. The statement of objects and reasons of the ESI Act are read by the Counsel to submit that the benefits under the Act is intended to be provided for the workers in the industrial sector and the explanation “other establishment”, appearing in Sub-Section (5) of Section 1 of the ESI Act should be read as ejusdem generis with the industrial, commercial and agricultural establishments and it should not be extended for educational institutions.

6. The ESI Act was intended to provide certain benefits to employees in the event of sickness, pregnancy or employment injuries and at the first instance, the Act was made applicable to all factories other than seasonal factories. But extension of the Act to cover other establishment was also envisaged under Sub-Section (5) of Section 1 provision of the ESI Act.

7. The Assam Government notified its intention to apply the ESI Act to educational institutions initially through the notification dated 1.8.2007. But this defective notification was cancelled subsequently as it was issued without approval of the Central Government. Thereafter the appropriate notification was issued on 3.12.2007 with the approval of the Central Government, whereby the Assam Government declared its intention to cover the educational institutions within the ambit of the ESI Act. This was followed by the final notification issued on 6.1.2009, which is the subject matter of challenge in the present proceedings.

8. In Bangalore Water Supply & Sewerage Board vs. A. Rajappa, reported in (1978) 2 SCC 213, the Supreme Court noticed that an educational institution satisfies the triple test of systematic activity, cooperation between the employer and the employee and production of services and thus the Court declared that education in its institutional format is an industry.

9. The expression “industry” is defined under Section 2(j) of the Industrial Disputes Act, 1947 and although the Government through the Amendment Act 46 of 1982 proposed to exclude the educational institutions from the purview of the definition of ‘industry’, the necessary amendments are yet to be incorporated during the last 34 years. On the proposed amendment to exclude the educational institutions from the purview of the definition o



























Click Here to Read the rest of this document

1
2
3
4
5
6
7
8
9
10
11
SupremeToday Portrait Ad
supreme today icon
whatsapp-icon Back to top