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2025 Supreme(Online)(Mad) 31819
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Honourable Mr Justice M.DHANDAPANI
The petitioners – Appellant
Versus
Government of Tamil Nadu – Respondent
For the Appellants/Petitioners:
For the Respondents:
Exemption from Employees' State Insurance Act requires employees to receive benefits substantially similar or superior to ESI benefits; absence of such benefits justifies denial of exemption to protect worker welfare.
Headnote:(A) Employees' State Insurance Act, 1948 - Sections 87 to 90 read with Section 91-A - Exemption from provisions - Granted only if benefits received by employees are substantially similar or superior to ESI benefits - Government rejected exemption request as benefits provided by petitioners found inferior - Exemption not allowed prospectively for beedi manufacturers - Welfare and safety of workers paramount.
Facts of the case:
Petitioners engaged in beedi manufacture challenged rejection of exemption from Employees' State Insurance Act claimed on basis of prior exemptions and existence of their own welfare funds. Government had earlier granted retrospective exemptions but after 2010 amendment allowed only prospective exemptions. Inspection revealed petitioners' benefits were neither similar nor superior to ESI benefits, and workers operated under hazardous conditions without safety measures.
Issues: Whether petitioners were eligible for exemption from ESI Act provisions despite prior exemptions and claimed benefits. Whether benefits provided were comparable or superior to ESI Scheme benefits.
Findings of Court:
Court found that benefits provided by petitioners were not substantially similar or superior to ESI benefits; exemption requirements under Section 87 not met. Government's rejection justified on grounds of worker welfare and safety. Court emphasized the comprehensive nature of ESI benefits and need to protect vulnerable worker categories.
Ratio Decidendi: Exemption under Employees' State Insurance Act can be granted only if employees receive benefits substantially similar or superior to ESI benefits. Mere prior exemption or existence of some welfare funds insufficient. Welfare of workers and adherence to statutory scheme paramount, hence exemption denied.
Result: Writ petitions dismissed with no order as to costs.
| Table of Content |
|---|
| 1. background and factual matrix concerning exemption request and prior government orders. (Para 1 , 2 , 3 , 4 , 5 , 7 , 8) |
| 2. petitioners' contentions on entitlement to exemption and allegations of government bias. (Para 9 , 10 , 11) |
| 3. government's defense and justification for rejection highlighting welfare concerns. (Para 12 , 13) |
| 4. court's detailed scrutiny of law and comparative benefits under esi act versus petitioners' schemes. (Para 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22) |
| 5. court's reasoning applying statute and deciding that exemption is not justified. (Para 23 , 24 , 25) |
COMMON ORDER
Questioning the correctness of the rejection of their request for grant of exemption from the provisions of the Employees' State Insurance Act, 1948 under Section 87 to 90 read with Section 91-A, the present writ petitions have been filed.
2. As the issue involved in both the writ petitions are the one and same, all the writ petitions are disposed of vide this common order.
Brief Facts:
3. The petitioners, who are engaged in the manufacture of beedi has filed this petition aggrieved by the rejection of the request to grant exemption to the beedi manufacturers from the provisions of Employees State Insurance Act. In the affidavit filed in support of the writ petition, the petitioners have narrated the history of beedi production in India and the earliest laws concerning beedi workers, which culminated in the passing of Employees State Insurance Act in the year 1948 and how various types of cottage industries were brought under one umbrella of Employees State Insurance Act. The petitioners have also stated the challenge made to the inclusion of beedi workers under the Employees State Insurance Act before this Court in the year 1982 in W.P.No.9196 of 1982 etc. and batch and the dismissal of those writ petitions. In short as of today, the beedi workers are brought under the ambit of Employees State Insurance Act.
4. While so, the petitioners approached the Government of Tamil Nadu in the year 2002 seeking for exemption from the provisions of the Act for various members. The Government also considering the request made by the petitioners, granted exemption from the year 1999 onwards. The petitioners have stated the various periods when they enjoyed exemption from Employees State Insurance Act. It is seen that from 01.04.2010 and 31.03.2011 by way of eight Government Orders, the petitioners were granted exemption.
5. While so, the Government introduced Employees State Insurance Amendment Act, 2010 by which it was provided that any exemption shall be made only prospectively. Hitherto the Government was in the habit of granting exemption retrospectively. The petitioners sought exemption from 25.11.2019 and 24.11.2020, the same was rejected by the Government vide the impugned order. Challenging the same, the present writ petitions has been filed.
7. The Government of Tamil Nadu through the first respondent had filed a common counter affidavit in the above writ petitions. The long and short of the contents in the counter affidavit is that the owners of beedi / factories were exploiting the innocence of beedi workers and the beedi workers were working under a very shaddy and pathetic environment without any safety gear or health precautions.
8. Keeping in view the contention of the beedi workers and after getting necessary reports from the authorities concerned, the Government had thought it fit to reject the requests made by the petitioners. The Government had taken the stand that just because the petitioners enjoyed exemption for certain period in the past, they cannot expect exemption for the future period also. The counter further stated that there is no automatic renewal of exemption retrospectively. The company justified the rejection of the request made by the petitioners.
9. The learned counsel for the petitioners contended that the workers were taken care of by the beedi manufacturers and they have their own corpus fund to meet t
