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(1994) IIILLJ 643 MP, 1991 (0) MPLJ 914
T.N. Singh, J.
Employees‘ State Insurance
vs
Swadesh Daily Newspaper
Decided On : 26 April, 1991
EMPLOYEES' STATE INSURANCE ACT, 1948 - SECTION 75(1)(VIII) - REGULATION 40 - REFUND OF CONTRIBUTIONS - JURISDICTION OF EMPLOYEES' INSURANCE COURT - STANDING OF EMPLOYER TO RAISE DISPUTE - SECTION 70, CONTRACT ACT - SECTION 72, CONTRACT ACT - LIMITATION UNDER SECTION 77 - INTERPRETATION AND APPLICATION.
Fact of the Case:
Two employers, respondents in the appeals, had earlier raised disputes in the Employees' Insurance Court (E.I. Court) challenging the coverage of their factories under the Employees' State Insurance Act, 1948 (the Act). The E.I. Court had decided in their favor, quashing the demand for contributions made by the Employees' State Insurance Corporation (the Corporation). Subsequently, the employers filed claims for refund of the contributions they had already paid. The E.I. Court allowed their claims, prompting the Corporation to file appeals.
Finding of the Court:
The High Court held that the E.I. Court lacked jurisdiction to decide the disputes regarding refund of contributions. It interpreted Section 75(1)(viii) of the Act, which deals with the jurisdiction of the E.I. Court, and Regulation 40 of the Employees' State Insurance (General) Regulations, 1950, which provides for refund of contributions, to conclude that only the Corporation had the authority to grant refunds under Regulation 40. The Court further held that the employers did not have standing to raise the dispute regarding refund, as the right to refund belonged primarily to the employees, who were the insured persons under the Act. The Court also rejected the employers' arguments based on Section 70 and Section 72 of the Contract Act, holding that those provisions did not apply in the present case due to the existence of the special law contained in Regulation 40.
Issues: 1. Whether the E.I. Court had jurisdiction to decide the disputes regarding refund of contributions. 2. Whether the employers had standing to raise the dispute regarding refund. 3. Whether Section 70 and Section 72 of the Contract Act applied to the present case.
Ratio Decidendi: 1. The E.I. Court's jurisdiction under Section 75(1)(viii) of the Act is limited to disputes between certain parties and in respect of specific matters, including contributions, benefits, and other dues payable or recoverable under the Act. The Court held that the dispute regarding refund of contributions did not fall within the ambit of Section 75(1)(viii) and that the E.I. Court lacked jurisdiction to decide such disputes. 2. The Court held that the employers did not have standing to raise the dispute regarding refund because the right to refund belonged primarily to the employees, who were the insured persons under the Act. The employers' contribution was deemed to have been entrusted to them by the employees for the purpose of paying the contribution, and once the contribution was paid, the employers ceased to have any authority to act in respect of that amount. 3. The Court held that Section 70 and Section 72 of the Contract Act did not apply to the present case because there was a special law, namely Regulation 40, which governed the issue of refund of contributions. The Court further held that the Corporation did not enjoy any "benefit" out of the payment of contributions by the employers, as the contributions became part of the Common Fund of the Corporation to be spent for specified purposes related to the welfare of employees.
Final Decision: The High Court allowed both appeals filed by the Corporation, set aside the impugned orders passed by the E.I. Court, and held that the E.I. Court lacked jurisdiction to decide the disputes regarding refund of contributions.
T.N. Singh, J.
1. Two appeals are linked up as the crucial question of law agitated in both appeals is a common question of general importance and indeed, the appellant in both appeals is also common. Counsel made oral submissions and written arguments are also filed. By this common order, both appeals are being disposed of.
2. Facts in two appeals being little disparate those are being stated first clearly to avoid confusion. Respondent in M.A. No. 67 of 1984 is a vernacular Daily, published from Gwalior. The management of the Newspaper, hereinafter, the "Employer' has raised a "Dispute" in case No. 48/79 in Employees' Insurance Court, Gwalior, for short, E.I. Court, alleging that to the factory in which the newspaper was printed, the provisions of Employees' State Insurance Act, 1948, for short, the Act, did not apply inasmuch as power was not used in the manufacturing process and the number of workers employed on wages in the factory did not exceed the prescribed minimum of 20. That was decided against the appellant Corporation, for short, the 'Corporation' on 29.1.1982 by the said Court holding the factory not liable to be covered under the Act and the demand of the Corporation made under the Act against the employer in the sum of Rs. 2,030.50 was quashed. Subsequently, the said employer instituted in the same Court Case No. 47/82, seeking now the relief of refund of Rs. 18,481.05/- which he had deposited pursuant to Corporation's demand during May, 1977 to December, 1981. That "Dispute" being also decided on 24.10.1983 against the Corporation and order for refund being made by the Court below, the instant appeal is preferred. In the other appeal, the story is almost the same except that respondent Vijay Laxmi Steel Ltd. running a factory at Baraghat Industrial Area, Jhansi Road,Gwalior, had contended in Case No. 12/82 in E.I. Court that their factory could not be covered under the Act, being situated beyond the "municipal area". The Demand Notice and recovery proceeding initiated by the Corporation in respect of Rs. 16,280/-were quashed. Subsequently, Case No. 7/83 was filed in the same Court claiming refund of Rs. 34,410.65/-, deposited during the period 16.4.1980 to 23.10.1982. The subsequent "dispute" was decided on 30.5.1984, allowing employer's claim. Hence, Corporation's instant appeal challenging that order in M.A. No. 68 of 1984.
3. Let it be made clear that the question regarding the nature of original liability of the respondents in the two appeals though variously contested by them earlier in the two "dispute" raised by them are not germane to the decision of these two appeals. Corporation's counsel Shri Johri has raised two substantial contentions assailing the orders passed by E.I. Court in the two cases allowing refund claimed by the employers. Firstly, he submits, although the Court below purported to act under Section 75(1)(viii), as contended by respondents, in passing the impugned order, neither the employers had due standing to raise the dispute" nor did Court have jurisdiction thereunder to decide that. Secondly, the provisions enacted in Regulation 40 of the Employees' State Insurance (General) Regulations, 1950, were in the nature of "Special Law" and the Court below was bound as much by it as was the employer and that refund could be ordered only in terms thereof, but the case of neither employer was covered by the said Regulation. On behalf of respondent/employers, Shri Dubey endeavoured to sustain the impugned order, invoking Section 70 Contract Act. He also cited I.T.C. Ltd. v. George Joseph Fernandes : AIR 1989 SC 839. The thrust of the argument of Shri Mittal, who appeared for respondent in M.A. No. 68 of 1984, on the other hand, was on the limitation of this Court's jurisdiction in deciding these appeals and he submitted that no question of fact and even no finding of fact reached by the Court below can be reagitated in appeal in this Court.
4. As earlier alluded, I reiterate that in these ap
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