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2014 Supreme(Ker) 407
High Court of Kerala
B. KEMAL PASHA, J.
Nirmala College, Chalakkudy Chalakudy, Trhssur, Represented by its Principal -Sajeev Vattoly
Versus
Employees State Insurance Corporation Represented By Its Regional Director, Round North Thrissur & Another
Ins. Appeal Nos. 109 of 2012 & 20 of 2014
Decided on : 16-07-2014
For the Appellant:N.N. Sugunapalan, Sr. Advocate, M.B. Prajith, K.K. Premalal, Advocates.
For the Respondents: P. Sankarankutty Nair, K. Sandesh Raja, Senior Counsels, ESI Corpn.
Headnote:
Employees State Insurance Act, 1948 - Sections 2(9), 1(5) - Industrial Dispute Act - Companies Act - Educational institution - Establishment to - Findings of - Held, It is evident that the teachers and other employees, to whom wages enabling them to be covered under the E.S.I. Act are payable, employed at the School/College being run by a Company incorporated under the Companies Act, are employees within the meaning of S.2(9) of the E.S.I. Act read with S.1(5) of the Act - when there cannot be any restriction to bring an educational institution as an establishment to which the provisions of this Act applies, the employees who are qualified therein to have coverage are, no doubt, employees within the meaning of S.2(9) of the E.S.I. Act - By the mere use of the term "work", at any stretch of imagination, the term "employee" can be equated with the term "workman" as defined under S.2(s) of the Industrial Disputes Act
(i) Whether an unaided School/College being run by a Company incorporated under the Companies Act, comes within the purview of the impugned notification?
(ii) Can the teachers and other employees of a School/College being run by such a Company incorporated under the Companies Act or by an individual, be 'employees' within the meaning of Section 2(9) of the ESI Act?
These are the questions of law to be answered in this appeal.
2. One of the appellants, a company incorporated under the Companies Act, running an unaided School following the State Syllabus, and the other appellant, an individual running an unaided college, have come up in appeal by challenging notification G.O. (P) No.135/2007/LBR dated 08.10.2007 issued by the Government of Kerala ('the impugned notification', for short), extending the provisions of the Employees' State Insurance Act, 1948 ('the ESI Act', for short) to educational institutions run by individuals, trustees, societies or other organisations, wherein 20 or more persons are employed or were employed on any day of the preceding twelve months. Challenging C11 and C18 notices issued by the Employees' State Insurance Corporation ('the ESI Corporation', for short), the said Company and the other appellant had approached the Employees' Insurance Court. The said cases stand dismissed through the impugned judgments.
3. Heard the learned Senior Counsel Sri.N.N.Sugunapalan and the learned counsel Sri.K.K.Premlal for the appellants and the learned Standing Counsel Sri.Sandesh Raja for the ESI Corporation.
4. Over and above the question whether the teachers of educational institutions can be brought within the category of employees within the meaning of Section 2(9) of the ESI Act, the other question raised by the learned counsel for the appellants is whether a Company, incorporated under the Companies Act, running an Educational Institution, can be brought within the purview of the impugned notification.
5. The learned counsel for the appellants have pointed out that the educational institutions run 'by individuals, trustees, societies or other organisations, wherein 20 or more persons are employed or were employed on any day of the preceding twelve months' are the educational institutions brought within the purview of the impugned notification.
6. The argument is that a Company incorporated under the Companies Act, cannot come within the categories of individuals, trustees, societies or other organizations coming within the meaning of the impugned notification. According to the learned counsel for the appellants an individual and a corporate body is totally different, and had there been an intention on the part of the Government of Kerala in including corporate bodies also within the purview of the notification, definitely such a term would have been used in the notification.
7. Reliance can be placed on the decision in Kerala Financial Corporation v. WTO[(1971)82 ITR 477] (Ker) (FB) wherein it was held that the expression 'individual' appearing in Section 3 of Wealth-tax Act includes a human being as well as a corporation.
8. Much discussion is not required in the matter to conclude that a Company which is a corporate body incorporated under the Companies Act can be treated as an individual. A Company, is no doubt, a separate legal entity, and is a legal person. Company being a legal person, can squarely be treated as an individual. When an educational institution is run by a Company, it has to be treated as an educational institution being run by an individual. Matters being so, the arguments that educational institutions being run by Companies cannot be brought within the purview of the impugned notification, seems to be too hyper technical. It has to be concluded that educational institutions being run by a Company can also be treated as an educational institution being run by an individual which comes within the purview of the impugned notification.
9. The learned counsel for the appellan
