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2020 Supreme(Mad) 1196

IN THE HIGH COURT OF MADRAS
PUSHPA SATHYANARAYANA, ANITA SUMANTH, P.T. ASHA, JJ.
All India Private Educational Institutions Association – Appellant
Versus
The State of Tamil Nadu and Others – Respondents
W.P. Nos. 34236 of 2019, 1370, 1371, 1382, 1387, 1389, 2422, 2491, 2764, 3342, 3344, 3348, 3741, 3743, 3745, 5165 of 2020, W.M.P. Nos. 3796 of 2017, 34866, 34868 of 2019, 1617 to 1620, 1625, 1627, 1632, 1633, 1637, 1638, 1971, 1973, 2824, 2889, 2891, 3219, 3220, 3873, 3877, 3883, 4420, 4424, 4426, 6100, 6954, 6955, 6962, 6963, 7221, 7223 of 2020, Contempt Petition No. 1960 of 2019, Sub Application Nos. 535 of 2019, 158 of 2020
Decided On : 29-07-2020

Advocates:
Advocate Appeared:
For the Appellants : K.M. Vijayan, E. Vijay Anand, Xavier Arulraj, Arul Mary, Shakespeare, Singaravelan for R. Jayaprakash.
For the Respondents: Vijay Narayan, A. Srijayanthi, Vignesh, S. Ravindran for G. Bharadwaj, G. Narmadha, Balan Haridoss.

Headnote:

Employees State Insurance Act, 1948 - Interpretation of a Notification under which the provisions of the Employees State Insurance Act, 1948 was extended to cover educational institutions - Notification, comprising of G.O. Labour and Employment (K1) Department (G.O.) was issued by the Government of Tamil Nadu, which extended the Employees State Insurance Act, 1948 to educational institutions, but excluding the Government and Government aided educational institutions – Held, by virtue of exercise of powers under Section 1(5) of the ESI Act, more and more educational institutions have been brought within the umbrella of the ESI Corporation to cater the needs of the subscribers. Therefore, it can no longer be stated that ESI dispensaries can be established only on the industrial belt catering the medical needs and allied services to the workers. As the nation itself is looking at 100% literacy, every town and village having sufficient number of schools and colleges, as per the norms fixed by the ESI Corporation, should, definitely, have ESI dispensaries or hospitals with all the facilities. It is mandatory on the part of the ESI Corporation to achieve the said milestone without any delay - A provision is, thus, made for the Corporation to sanction the writing off of the contribution, interest and damages due to it if the Corporation is of the opinion that such amounts are irrecoverable from the Educational Institutions concerned. The pandemic has resulted in a situation where several Educational Institutions are reportedly unable to even pay regular salaries to their employees. The financial crunch faced by them, at this juncture, is a matter of public knowledge. The impugned Notification no doubt mandates certain contributions to be made and we have upheld the validity of the same. The contributions to be made under the Notification enure to the coffers of the Corporation and it is not the Corporation’s case that there are claims that have been made by the employees of the Educational Institutions that remain unfulfilled on account of the failure of the Institutions to make the contributions in the first place. No prejudice has thus been caused to the employees per se for the periods till date on account of such failure by the Educational Institutions.

ORDER :

1. The genesis for the constitution of this Full Bench is the conflict of views arising from the interpretation of a Notification under which the provisions of the Employees State Insurance Act, 1948 was extended to cover educational institutions.

2. A notification dated 26.11.2010, comprising of G.O.Ms. No. 237, Labour and Employment (K1) Department (G.O.) was issued by the Government of Tamil Nadu, which extended the Employees' State Insurance Act, 1948 (in short ‘ESI Act’) to educational institutions, but excluding the Government and Government aided educational institutions. The said G.O. was challenged in a batch of writ petitions and was decided by a learned Single Judge in Maharaja College of Arts and Science and Others vs. State of Tamil Nadu Rep. by its Principal Secretary to Government and Others, 2011 Writ L.R. 332, dismissing those writ petitions upholding the G.O. The said judgment was put to challenge once again in batches of Writ Appeals, which were taken up by different Division Benches.

3. On 09.06.2015, a Division Bench of this Court disposed of a batch of writ appeals and petitions in Maharaja College of Arts and Science, Rep. by its Chairman vs. The State of Tamil Nadu [W.A. No. 1233 of 2011] observing as below:

    “1. Learned counsel for the parties state that as recorded in the order dated 05.05.2005 reported in State of U.P. vs. Jai Bir Singh, 2005 (5) SCC 1 the question of law has been referred to the Larger Bench of the Honourable Supreme Court, i.e. whether the Employees’ State Insurance Act, 1948, would apply to educational institutions. Interim orders have been operating in the present matter.

2. In view of the aforesaid position, the writ appeals and the writ petitions are disposed of by agreement that the interim orders would continue till the disposal of the matter by the Honourable Supreme Court and the parties would naturally remain bound by the legal position enunciated by the Honourable Supreme Court on such decision being rendered. No costs. Consequently, connected miscellaneous petitions are closed.”

(Emphasis ours)

4. Similarly, on 16.06.2015, another co-ordinate Division Bench in the case of Tamil Nadu Nursery Primary Matriculation and Higher Secondary Schools Managements Association, Rep. by its General Secretary, D. Christdass vs. State of Tamil Nadu, Rep. by its Principal Secretary to Government, Labour and Employment Department, Chennai and Others, passed a similar order.

5. In addition to the two writ petitions giving rise to the aforesaid orders dated 09.06.2015 and 16.06.2015 several other educational institutions had also moved this Court by way of writ petitions, that had been dealt with by different benches, both single and Division Benches at different times. In a few cases, not satisfied with the orders passed by this Court, certain aggrieved institutions went before the Hon’ble Supreme court and invited order of dismissal at the SLP stage itself.

6. To appreciate the reference order properly, the said orders and appellate orders, if any, are tabulated below:-

Table (I)

S. No.

Case No.

Order/Judgment dated

Parties/Citation

Remarks

1

W.P. No. 23109 of 2017

29.08.2017

Pioneer College of Arts and Science vs. State of Tamil Nadu

The very same impugned notification was questioned, writ petition was dismissed.

2

W.A. No. 1308 of 2017

26.10.2017

Pioneer College of Arts and Science vs. State of Tamil Nadu, 2018 LLR 382

Writ Appeal was disposed of, only giving time to the appellant institution to pay the ESI contribution arrears in installments.

Table (II)

S. No.

Case No.

Order/Judgment dated

Parties/Citation

Remarks

1

W.P. No. 22948 of 2007

06.09.2017

GRG Matriculation Higher Secondary School vs. State of Tamil Nadu

The very same impugned notification was questioned; writ petition was dismissed, placing r

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