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2004 Supreme(Raj) 490

High Court Of Rajasthan
Judgename : H.R. Panwar
Hindustan Zinc Ltd. - Appellant
Versus
Union of India - Respondent
D.B. Civil Writ Petition No. 1073 of 2004
Decided On : 05/13/2004

Advocates Appeared:
Rakesh Arora, Advocate for the Appellant
N.M. Lodha and R.K. Soni, Advocates for the Respondents

Headnote:

Employees’ State Insurance Act - Condition imposed Under/Section 75(2-B) - Sections 38, 39, 40, 42, 43, 44, 45, 45-A, 45-B, 45-C, 45-F - The court discussed the condition imposed under Section 75(2-B) of the Employees’ State Insurance Act, 1948 and the relevant provisions related to contribution, determination of amount payable, and the power of the Corporation to determine contributions. The court also highlighted the discretion vested in the ESI Court to stay the claim and the power to waive or reduce the amount to be deposited under Section 75(2-B). The judgment emphasized the need for judicious exercise of discretion by the ESI Court and the availability of remedies against non-exercise of judicious discretion.

Fact of the Case:

The petitioner, a Public Limited Company, filed a writ petition challenging the condition imposed under Section 75(2-B) of the Employees’ State Insurance Act, 1948, which required depositing 50% of the amount claimed by the Corporation to raise a dispute. The Union of India contended that the right to challenge the Corporation's order is akin to the right of appeal and must be accepted with such condition. The relevant provisions related to contribution, determination of amount payable, and the power of the Corporation to determine contributions were discussed by the court.

Finding of the Court:

The court found that the condition of pre-deposit for entertaining application under Section 75 is not absolute, and the ESI Court has the authority to mitigate the rigor of the condition in appropriate cases by reducing or waiving the requisite deposit. The judgment emphasized the need for judicious exercise of discretion by the ESI Court and the availability of remedies against non-exercise of judicious discretion.

Issues: The main issue was whether the condition imposed under Section 75(2-B) of the Employees’ State Insurance Act, 1948 was unreasonably onerous and violated Article 14 of the Constitution of India.

Ratio Decidendi: The court held that the condition of pre-deposit for entertaining application under Section 75 is not absolute, and the ESI Court has the authority to mitigate the rigor of the condition in appropriate cases by reducing or waiving the requisite deposit. The judgment emphasized the need for judicious exercise of discretion by the ESI Court and the availability of remedies against non-exercise of judicious discretion.

Final Decision: The court held that sub-section (2-B) of Section 75 is intra vires as the condition of pre-deposit for entertaining application under Section 75 is not absolute, and the ESI Court has the authority to mitigate the rigor of the condition in appropriate cases by reducing or waiving the requisite deposit.

Judgment

Rajesh Balia, J.-Heard learned counsel for the parties.

2. The petitioner, which is a Public Limited Company, has filed this writ petition apart from pursuing the regular remedy provided to it under the Employees’ State Insurance Act, 1948 (in short “the Act”) inter alia on the ground that the condition imposed Under/Section 75(2-B) of the the act of 1948 for availing the right of remedy against the claim laid by ESI Corporation is unreasonably onerous and renders the aggrieved party’s right seeking adjudication of its application illusory. The contention is that, even if , the the Corporation raises an unreasonably high-patched demand towards contribution to be made to it by the employer in breach of principles of natural justice or which is not otherwise sustainable in law against the entrepreneur, still the aggrieved party cannot avail the right, of making application unless it deposits 50% of illegal demand with the Corporation.

3. ShriN.M. Lodha, learned counsel for Union of India, states that right to challenge the order of Corporation before any forum for being reviewed is not an inherent right as a right to file suit, but is akin to right of appeal, which depends upon the scheme of the Statute. That being so, right if it is hedged with certain condition, such right has to be accepted with such condition.

4. It is also contended by Mr. N.M. Lodha, learned counsel for the Union of India that even otherwise the provisions of Section 75(2-B) cannot be held to be unreasonably onerous so as to render the right conferred on the aggrieved party illusory as it vests a discretion in the ESI Court either to stay the whole or part of the claim laid by the Corporation during the pendency of proceedings before it, which substantively and substantially mitigate the rigor of provision in appropriate and genuine cases.

5. We may take a brief view of the relevant provisions for the present purpose. The provisions relating to contribution are contained in Chapter IV of the Act of 1948.

6. Section 38 provides that subject to the provisions of the Act, all the employees in factories or establishments to which the Act applies shall be insured in the manner provided by the Act.

7. Section 39 provides that contribution payable under the Act in respect of an employee shall comprise contribution payable by the employer which is known as employer’s contribution as well as contribution payable by the employee known as employee’s contribution. The rates of such contributions are to be determined by the Central Government.

8. Section 40 obligates primarily the principal employer, in the first instance, to pay contributions of both of them; employer and employee, either by himself or through an immediate employer to the Corporation and employees’ contribution becomes recoverable from the employee by way of deduction from his wages. It also ordains that the recovery of employees’ contribution cannot be made otherwise than by deducting it from wages of such employees.

9. Section 42 provides the class of employees in respect of whom the contributions are not payable.

10. Section 43 deals with method of making payment of contribution with which we are not currently concerned.

11. So far as determination of amount payable by the employer’s contribution to the Corporation is concerned, Section 44 obligates the employers to furnish returns and to maintain registers containing such particulars relating to persons employed by him. It also enables the Corporation in cases where it has reason to believe that existence of any factory or establishment, a return should have been furnished, but has not been furnished to call upon the person incharge of such factory or establishment to furnish such particulars as it may be considered necessary for the purpose of enabling the Corporation to decide whether the factory or establishment is a factory or establishment to which this Act applies.

12. Section 45 empowers the Corporation to appoint Inspectors for th
















































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