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Madras High Court
KAILASAM
C.I.Kantian - Appellant
Versus
Employees State Insurance Corporation - Respondent
Decided On : 03/24/1967
EMPLOYEES STATE INSURANCE CORPORATION - EMPLOYEES - SERVICE CONDITIONS - REGULATIONS - VALIDITY - INDUSTRIAL DISPUTES ACT, 1947 (XIV OF 1947), SEC. 9-A - INDUSTRIAL EMPLOYMENT (STANDING ORDERS) ACT, 1946 (XX OF 1946) - APPLICABILITY - EMPLOYEES STATE INSURANCE CORPORATION (STAFF AND CONDITIONS OF SERVICE) REGULATIONS, 1959 - VALIDITY - CENTRAL CIVIL SERVICES (CONDUCT) RULES, 1964 - APPLICABILITY - WRIT PETITION BY FEDERATION ON BEHALF OF WORKERS - MAINTAINABILITY.
Fact of the Case:
The petitioner, an employee of the Employees State Insurance Corporation (ESIC), challenged the validity of the Employees State Insurance Corporation (Staff and Conditions of Service) Regulations, 1959, and the Central Civil Services (Conduct) Rules, 1964, as applied to ESIC employees. The petitioner argued that these regulations were not applicable to ESIC employees because the Industrial Disputes Act, 1947, and the Industrial Employment (Standing Orders) Act, 1946, were applicable to ESIC employees, and that any change in the conditions of service of ESIC employees required notice under Section 9-A of the Industrial Disputes Act. The petitioner also filed a writ petition on behalf of the employees of ESIC, challenging the validity of the regulations and seeking a writ of prohibition against the ESIC from taking action against employees for participating in an agitation.
Finding of the Court:
The court held that the Employees State Insurance Corporation (Staff and Conditions of Service) Regulations, 1959, were valid and applicable to ESIC employees. The court found that the Industrial Employment (Standing Orders) Act, 1946, was not applicable to ESIC because ESIC was not an 'industrial establishment' within the meaning of the Act. The court also held that Section 9-A of the Industrial Disputes Act did not apply to the regulations because they did not change the conditions of service of ESIC employees, but rather regulated the conditions of service for the first time. The court further held that the writ petition filed by the federation on behalf of the employees was not maintainable, as each aggrieved person should file a separate writ petition.
Issues: 1. Whether the Employees State Insurance Corporation (Staff and Conditions of Service) Regulations, 1959, and the Central Civil Services (Conduct) Rules, 1964, were applicable to ESIC employees. 2. Whether the Industrial Disputes Act, 1947, and the Industrial Employment (Standing Orders) Act, 1946, were applicable to ESIC employees. 3. Whether Section 9-A of the Industrial Disputes Act required notice before the regulations could be implemented. 4. Whether the writ petition filed by the federation on behalf of the employees was maintainable.
Ratio Decidendi: 1. The Employees State Insurance Corporation (Staff and Conditions of Service) Regulations, 1959, were valid and applicable to ESIC employees because they were made under the powers conferred on the ESIC by Section 97 of the Employees State Insurance Act, 1948, and had the effect of law under Section 97(3) of the Act. 2. The Industrial Employment (Standing Orders) Act, 1946, was not applicable to ESIC because ESIC was not an 'industrial establishment' within the meaning of the Act. 3. Section 9-A of the Industrial Disputes Act did not apply to the regulations because they did not change the conditions of service of ESIC employees, but rather regulated the conditions of service for the first time. 4. The writ petition filed by the federation on behalf of the employees was not maintainable, as each aggrieved person should file a separate writ petition.
Final Decision: The court dismissed both writ petitions. W.P. 2823 of 1966 was dismissed with no order as to costs. W.P. 162 of 1967 was dismissed with no order as to costs.
2. The two writ petitions relate to the same matter. W.P. No. 2823 of 1966 being by one of the employees, while W. P. 162 of 1967 being by the Employees Federation on behalf of the same question may be dealt with together.
3. The petitioner in W.P. 2823 of 1966 joined the service of the Employees State Insurance Corporation on 14-12-1954 and was promoted as Head clerk on 27-9-1963. The employees of the State Insurance Corporation staged demonstrations, hunger strike and work to work manual in response to the call by the Federation of employees. The Regional Director, Madras in his proceedings dated 12-7-1966 placed the petitioner under suspension with effect from 12-7-1966. Charges were framed against the petitioner and a charge sheet was given to him on 17-8-1966. The petitioner replied on 14-8-1966. In his reply the petitioner questioned the propriety and legality of the rules and regulations under which proceedings have been initiated. On 16-11-1966, the Regional Director, Employees State Insurance Corporation, Madras, appointed the Deputy Regional Director, Madras as the Enquiry Officer to enquire into the charges framed against the petitioner. The petitioner's contention is that the proceeding of the Regional Director, Employees State Insurance Corporation, Madras, is illegal and as such should be quashed by this Court. The contentions may be summarised as follows :
1. The Employees State Insurance Corporation (Staff and Conditions of Service) Regulations 1959, and the Civil Services Conduct Rules of the Central Government are not applicable to the employees of the Employees State Insurance Corporation;
2. The Industrial Disputes Act is applicable to the employees and no change of conditions of service could be made without due notice to the employees, and as the rules relied on are in contravention of Sec. 9-A of the Industrial Disputes Act, the rules are not valid; and
3. The employees are governed by the Industrial Disputes (Standing Orders) Act, 1946, and the Employees State Insurance Corporation (Staff and Conditions of Service) Regulations, 1959, and Central Civil Services Conduct Rules are not applicable".
The Employees State Insurance Act (Central Act 34 of 1948) was passed for providing certain benefits to employees in case of sickness, maternity and employment injury and making provision for certain other matters in relation thereto. BY Sec. 3, the Employees State Insurance Corporation was established. The Corporation is a body corporate having perpetual succession and a common seal. A standing Committee was also constituted by Sec. 8 of the Act, consisting of a Chairman nominated by the Central Government and members representing the various interests. Sec. 16 of the Act provided for the appointment of Principal Officers of the Corporation. Section 17 empowers the Corporation to employ staff and officers other than the Principal Officers as may be necessary for efficient transaction of its business, provided sanction of the Central Government was obtained for the creation of any post with a maximum salary of five hundred
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