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2020 Supreme(Mad) 1342
IN THE HIGH COURT OF JUDICATURE AT MADRAS
R. SURESH KUMAR, J.
Joshua Matriculation School, Rep. by its Correspondent – Appellant
Versus
The E.S.I. Corporation, Regional Office (T.N.), Rep. by its Regional Director & Another –Respondent
W.P. No. 15405 of 2020 & W.M.P. No. 19260 of 2020
Decided On : 29-10-2020
For the Petitioner:P. Ebenezer Paul, Advocate.
For the Respondents: Bharathwaj, Standing Counsel for ES.
The central legal point established in the judgment is the mandatory nature of ESI dispensaries in educational institutions, the provision for writing off losses under Section 91-C, and the need to consider the economic impact of COVID-19 in deciding on waiver or reduction of pending arrears.
Headnote:
Employees' State Insurance Corporation - Educational Charitable Trust - ESI Act 1948, Section 91-C - Summary: The court addressed the issue of whether private unaided educational institutions are liable to contribute under the ESI Act. The Full Bench of the Court pronounced an authoritative judgment in favor of the Employees' State Insurance Corporation, emphasizing the mandatory nature of ESI dispensaries in educational institutions and the provision for writing off losses under Section 91-C. The court directed the Corporation to consider the economic conditions and the impact of the COVID-19 pandemic in deciding on waiver or reduction of pending arrears.
Fact of the Case:
The petitioner, an educational institution, challenged the demand letter from the Employees' State Insurance Corporation, citing lack of contribution in the past, the impact of COVID-19, and the Fee Determination Committee's decision on tuition fees.
Finding of the Court:
The court set aside the impugned order and remitted the matter back to the Corporation for reconsideration, emphasizing the mandate of the Full Bench judgment and the economic impact of COVID-19. The Corporation was directed to provide an opportunity for the petitioner to be heard and to consider additional particulars or documents in support of the claim for waiver or write-off under Section 91-C.
Issues: The main issue was whether the demand for contribution under the ESI Act from the educational institution was justified, considering the past lack of contribution, the impact of COVID-19, and the Fee Determination Committee's decision on tuition fees.
Ratio Decidendi: The court emphasized the mandatory nature of ESI dispensaries in educational institutions, the provision for writing off losses under Section 91-C, and the need to consider the economic impact of COVID-19 in deciding on waiver or reduction of pending arrears.
Final Decision: The impugned order was set aside, and the matter was remitted back to the Corporation for reconsideration, with specific directions to consider the mandate of the Full Bench judgment, the economic impact of COVID-19, and the lack of contribution in the past. The Corporation was directed to provide an opportunity for the petitioner to be heard and to consider additional particulars or documents in support of the claim for waiver or write-off under Section 91-C.
JUDGMENT :
(Prayer:- Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, calling for the records relating to the order of the second respondent passed in No. 51000923670001301/Ins-8 dated 08.10.2020 and quash the same and direct the respondents to write-off the amount demanded under Section 91-C of the ESI Act 1948.)
1. The prayer sought for herein is for a Writ of Certiorarified Mandamus calling for the records relating to the order of the second respondent passed in No. 51000923670001301/Ins-8 dated 08.10.2020 and quash the same and direct the respondents to write-off the amount demanded under Section 91-C of the ESI Act, 1948.
2. With the consent of the learned Counsel appearing for both sides, this Writ Petition is taken up for final disposal and accordingly, is disposed of at the admission stage itself.
3. The short facts which are required to be noticed for the disposal of this Writ Petition are as follows:
(i) That the Petitioner / School was established and being administered by an Educational Charitable Trust from its own funds. In the year 1999-2000, the School was started with Standards I to VII and thereafter, permission was granted to open VIII Standard as well as IX and X Standards. The School is a recognized private unaided School under the minority Management. Therefore, for the entire expenses to be incurred, for running the School, is borne out of the funds from the Educational Charitable Trust, as no aid is given from the State or Central Governments.
(ii) In this context, the State Government issued a notification sometime in the year 2010, whereby, they wanted to extend the provisions of Employees' State Insurance Act 1948 (in short "The Act") to self financing recognized educational institutions also. Aggrieved over the same, the said notification dated 26.11.2010, was accordingly challenged by number of Private Educational institutions, where, originally, a learned Judge of this Court / Writ Court decided the issue in favour of Employee's State Insurance Corporation (E.S.I.), ultimately, appeals have been filed before Division Bench, where, in the year 2015, two batch of Writ Appeals were decided and disposed of stating that, in this regard, since the issue was pending before the Hon'ble Supreme Court to be decided in one way or the other in the matter of “State of Uttar Pradesh -vs- Jai Bir Singh” reported in “2005 (5) SCC 1”, the parties can act accordingly as per the ultimate decision of the Hon'ble Supreme Court. Therefore, the said issue was given a quietus temporarily for sometime from 2015 onwards.
(iii) Thereafter, still the respondents / Employee's State Insurance Corporation started issuing notices to various private unaided educational institutions, seeking to contribute under the provisions of the Act. Ultimately, in view of the divergent opinions of separate Division Benches of this Court, the matter has been referred to for an authoritative pronouncement before a Full Bench of this Court, where among other things, whether the notification impugned therein dated 26.11.2010 issued by the State Government extending the provisions of Employees' State Insurance Act to private unaided educational institutions is valid or not was sought to be decided.
(iv) Based on the said references, a Full Bench of this Court, after hearing the parties concerned, has passed an order giving authoritative pronouncement in the matter of “All India Private Educational Institutions Association, represented by its State General Secretary -vs- State of Tamil Nadu represented by Principal Secretary to Government, Labour and Employment Department, Chennai - 9 and other” reported in “2020 (5) CTC 93”. In the said Full Bench Judgment of this Court, the question was answered in favour of Employees' State Insurance Corporation and against the private unaided educational institutions. While making the said authoritative pronouncement, among other things, the Full Be
