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1992 Supreme(Ker) 304

Judges : K.A.NAYAR
Tata Employees Union - Appellant
Versus
Union of India - Respondent
Case No : O.P. Nos. 5176, 5323, etc. of 1992
Decided On : 10/20/1992
Advocates Appeared :
M. Ramachandran, Thampan Thomas, P. Balagangadhara Menon, K. Balakrishnan, K. Balachandran, N. Sukumaran, M.V. Joseph, George Varghese Kannanthanam, MM. Abdul Aziz, T.M. Mohammed Yousef, M. Ramesh Chancier, KB. Suresh, K.A. AbdulSalam, B. Gopakumar, S. Gopakumar, M.V. Bose, M.V.S. Nampoothiry, K. Radhakrishnan, K.P. Haridas, T.J. Thomas, U.P. Kurikullaya, E. Vasantakumari, M.K. Damodaran, T.G. Rajendran, Tomy Sebastian, P.V. Narayanan Nambiar, M. Rajasekharan Nair, Pirappancode V. Sreedharan Nair, N. Nandakumara Menon, M.P. Prabhakaran & T.A. Ramadasan C.S. Rajsn, C.M. Devan, B.S. Krishnan, U.K. Ramakrishnan, T.P. Kelu Nambiar, M. Pathrose Mathai, Siby Mathew, T.D. Rajalekshmi, J P.M. Ibrahimkhan, N.N. Sugunapalan, P. .Sankarankutty Nair, K. Rarnakumar, V. Krishnakunar, K.A. Cherian, K.B. Subhagamani, George Joseph, M. Balagopalan, T.M. Balagopalan, Raghunandanan, V.V, Sidharthsn, MathewsJ, Nedumpara, S.V. Balakrishna Iyer, C.P. Sudhakara Prasad, Antony Domenic, V. Ajith Narayanan, ,I.K. Koshy, For Petitioners S. Vijayan Nair, S.K. Brahmanandan, C. Kochunni Nair, Markose Vellappally, George Philip, O.K. Abdul Rahim, S.M. Prem, A.A. Abdul Hassan, C.P. Damodaran Nayar & K. Gopalakrishna Kurup For Respondents

The main legal point established in the judgment is that the Employees State Insurance Act applies to all employers with employees drawing salary up to Rs.3,000/-, and the receipt of superior benefits by some employees does not justify denying the benefits of the Act to others.

Headnote:

Employees State Insurance Act - Amendment to Rules 50, 51 and 54 - Summary of Acts and Sections: The court discussed the Employees State Insurance Act, 1948, which provides benefits to employees in cases of sickness, maternity, employment injury, etc. and makes provisions for other matters. The court referred to various sections of the Act, including Section 26 establishing the Employees' State Insurance Fund, Section 46 specifying benefits for insured persons, and Sections 49, 50, 51, 51A to 51D, 52 to 73 and Rules 54 to 57 detailing various benefits received by employees under the Act.

Fact of the Case:

The petitioners challenged the amendment to the Employees State Insurance (Central) Rules, 1950, which enhanced the wage ceiling for coverage under the Employees State Insurance Act from Rs.1,600/- to Rs.3,000/- per month. They argued that the amendment was illegal and inoperative, contending that they were receiving better medical treatment and enjoying better medical facilities in the employer's establishments, and that the amendment would result in a change of service conditions violating S.9A of the Industrial Disputes Act.

Finding of the Court:

The court found that the Act applies to all employers with employees drawing salary up to Rs.3,000/-, and that the petitioners' receipt of superior benefits from their employers did not justify denying the benefits of the Act to other employees. The court also directed the Government and the Corporation to consider the petitioners' claims for exemption from coverage under the Act, and ordered the implementation of the impugned notification and circular against the petitioners and their respective employers with effect from 1-11-1992.

Issues: The issues included the legality of the amendment to the Rules, the applicability of the Act to employees receiving superior benefits, and the claims for exemption from coverage under the Act.

Ratio Decidendi: The court held that the Act applies to all employers with employees drawing salary up to Rs.3,000/-, and that the receipt of superior benefits by some employees did not justify denying the benefits of the Act to others. The court also directed the Government and the Corporation to consider the petitioners' claims for exemption from coverage under the Act.

Final Decision: All the Original Petitions were disposed of, and the impugned notification and circular were ordered to be implemented against the petitioners and their respective employers with effect from 1-11-1992.

Judgment :-

In these batches of Original Petitions, the points raised for consideration are the same. The grievances voiced in the petitions are also identical. All the petitioners are aggrieved by the amendment made to the Employees State Insurance (Central) Rules, 1950 amending Rules 50,51 and 54 with effect from 1-4-1992 by notification dated 27th March, 1992, by which the wage ceiling for coverage under the Employees State Insurance Act (for short 'the act ) is enhanced from Rs.1,600/- per month to Rs.3,000/- per month and the rate of employers contribution with effect from 1-4-1992 is reduced at 4 % of the wages payable to the employees instead of 5% and the employees' contribution is fixed at 11/2% of the wages payable instead of 21/4%. This amendment was given effect to from 1-4-1992. The Act and coverage were admittedly there even before the amendment was made. The effect of the amendment is, persons who were getting wages, excluding remuneration for overtime work, in the region of Rs.1,600/- and above upto Rs.3,000/- per month were also required to be covered. It is on behalf of these employees, who were receiving remuneration between Rs.1,600/- and Rs.3,-600/- per month, these writ petitions were filed. Admittedly, persons who were getting wages upto Rs.1,600/- were covered under the Act even before 1-4-1992 unless exemption was given to establishments in individual cases. The main ground for challenge in the writ petition is that these employees are getting better medical treatment and enjoying better medical facilities in the employer's establishments and, therefore, it is apprehended that those facilities will be lost to them if the Employees State Insurance Scheme is extended to them. Their further case is that they have to pay 1.5% of their salary by way of "contribution. Admittedly, no such recoveries were made earlier as they were not covered under the Act. In an attempt to see that the coverage under the Act is not extended to the employees coming under the wage bracket of Rs.1,600/- to Rs.3,000/-, counsel representing the petitioners, the employees or their unions, advanced all possible arguments. It is contended that the notification amending R.50 enhancing the wage ceiling for coverage under the Act from Rs.1,600/- to Rs.3,000/- per month and reducing the employer's contribution from 5% to 4% and employees contribution from 21/4% to 11/2% etc, are illegal as there is no quid pro quo for the levy and collection of contribution. It is contended that the petitioners are getting better facilities under negotiated settlements from their employers and those benefits will be lost to them by the amendment and consequential coverage. This, it is contended, will amount to change of service conditions violating S.9A of the Industrial Disputes Act. It was also contended that the rule is made in violation of S.95 without complying with the formalities. The Rule, it is stated, has not been placed before the Parliament. Petitioners contended that many of them have submitted representations before the State Insurance Corporation and the Regional Director for granting exemption from the coverage. But the rule is brought into force without disposing of their representations. The further contention is, if the rule is enforced, there will be two classes of employees under each management, one getting coverage under the Employees State Insurance Act and the other getting better facilities provided by the management, which, it is stated, will constitute violation of Art. 14 of the Constitution of India. The action of the respondent in bringing the petitioners within the coverage was also claimed to be arbitrary. It is submitted that the Act itself is not applicable to the petitioners as they are enjoying substantially similar or superior benefit than the facilities provided under the Act. The benefits such as sickness, medical, maternity, disablement and dependant benefits received by the petitioners under the respective manage




















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