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2025 Supreme(Online)(Mad) 47130
IN THE HIGH COURT OF JUDICATURE AT MADRAS
R.VIJAYAKUMAR, J
The Proprietor, T.N.Kamaludeen Noor Said Beedi – Appellant
Versus
The Government of Tamil Nadu – Respondent
W.P(MD)No.207 of 2025 | W.M.P(MD) No.181 of 2025
For the Appellants/Petitioners: Mr.M.Jerin Mathew
For the Respondents: Mrs.D.Farjana Ghoushia, Mr.R.Ravikumar
Exemptions from the Employees' State Insurance Act require demonstrable proof of superior benefits annually, not just previous approvals.
Headnote:(A) Employees' State Insurance Act, 1948 - Section 87 - Exemption from ESI provisions - The petitioner sought exemption for the period 23.09.2024 to 22.09.2025, which was rejected by the authorities on grounds of insufficient justification for the benefits provided. The petitioner argued for similar benefits previously granted but was deemed not sufficient without current verification. (Paras 2-11)
(B) Exemptions under the Act - Exemptions may only be granted if employees receive benefits better than those provided under the ESI Act, and not as a matter of right, must be re-evaluated annually. The court observed existing regulations and decisions, indicating renewal requires established superior benefits each year. (Paras 7-10)
Facts of the case:
The petitioner challenged an order rejecting their exemption request from the ESI Act, asserting similar benefits were provided to employees in previous years, which constituted a basis for exemption. The authorities stated differing benefit standards necessitated renewed applications each year.
Findings of Court:
The petitioner did not adequately demonstrate ongoing provision of superior benefits, leading to a valid rejection of the exemption request based on established legal standards.
Issues: The core issue was whether past exemptions could justify the renewed request without proof of continuous equivalent benefits for the current period.
Ratio Decidendi: The court ruled that exemptions from the ESI Act must be supported by current, demonstrable employee benefits, rejecting reliance on prior exemptions as a singular justification.
Result: Writ Petition dismissed.
| Table of Content |
|---|
| 1. writ petition challenges rejection of exemption under esi act. (Para 1 , 2) |
| 2. petitioner claims ongoing superior benefits for exemptions. (Para 3 , 4 , 5) |
| 3. respondents argue exemption claims must meet specific requirements annually. (Para 7 , 8) |
| 4. court emphasizes necessity for current evidence of benefits for exemption. (Para 10) |
| 5. court dismisses petition due to lack of merit in exemption claim. (Para 11) |
O R D E R
The present Writ Petition has been filed by the Beedi Company challenging the order passed by the first respondent herein on 30.09.2024 rejecting the request of the petitioner/Company to grant exemption from the provisions of the Employees' State Insurance Act , 1948 for the period between 23.09.2024 and 22.09.2025.
2. Section 87 of the Employees' State Insurance Act , 1948 provides for granting exemption to factories or establishment from the purview of the ESI Act, subject to certain conditions as may be specified in the notification. As per the first proviso such exemptions may be granted only if the employees in such factories or establishments are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act. The exemption application for renewal has to be made three months before the date of expiry of the exemption period and a decision on the same shall be taken by the appropriate Government within two months of receipt of such application.
3. It is not in dispute that the petitioner/Management was enjoying exemption benefits from the year 2007 onwards, on year to year basis based upon the order passed by the authority under the Act. The petitioner Management has made an application on 07.06.2024 seeking exemption for the period between 23.09.2024 and 22.09.2025. This application came to be rejected under the impugned order dated 30.09.2024. This order is put to challenge in the present Writ Petition.
4. According to the learned counsel appearing for the writ petitioner, the petitioner/Management provides similar as well as the better benefits to the employees of the Beedi Company. Therefore, they were granted exemption from the purview of the Act for various years. In fact, the exemption was granted in the next year, covering the period between 23.09.2025 and 22.09.2026. In such circumstances, the authorities should not have rejected the request for exemption for the period between 23.09.2024 and 22.09.2025.
5. The learned counsel appearing for the petitioner had relied upon the decision of a learned Single Judge of the this Court in W.P.Nos.17572 of 2010, 5186, 5187 and 10143 of 2011, dated 21.06.2011 wherein, the learned Single Judge has held that if the exemption is granted for a particular year, the same cannot be rejected for a different year without assigning any specific reasons and there cannot be any discrimination between the employees. 6. The learned counsel appearing for the petitioner has also relied upon the judgment of the Hon'ble Supreme Court reported in(2006) 3LW 771 ( Employees State Insurance Corporation and others Vs.Jardine Henderson Staff Association and others ), wherein in paragraph Nos.34 and 35 of the Judgment, the Hon'ble Supreme Court has held that tremendous hardship will be caused if arrears are sought to be paid and nobody stands to gain, neither the employer nor the employee. Therefore, directing the Management to pay E.S.I contribution at a belated point of time would cause prejudice. The learned counsel appearing for the petitioner has also relied upon the judgment of Jharkhand High Court reported in(2008) 117 FLR 781 ( Tata-Yodogawa Limited and Tayo Workers union and another Vs.State of Bihar and others )
in support of the contentions.
7. Per contra, the learned counsel appearing for the respondent ESI Corporation relied upon the judgment of Hon'ble Division Bench of this Court in W.A.(MD) No.204 of 2019, dated 29.09.2023, wherein the Hon'ble Division Bench was pleased to hold that the exemption can be claime
