@JUDGMENTTAG-ORDER
K. Chandru, J.@mdashThe first writ petition is filed by the Madras Fertilizers Limited, seeking to challenge the order of the first respondent ESI Corporation, dated 4.8.2000 and the order, dated 24.8.2000 issued by the second respondent Recovery officer.
2. By order dated 4.8.2000, the petitioner company was informed that they have not submitted Returns from April, 1992 to July, 1999 and they owe an accumulated dues of Rs. 82,72,656/-. Hence notice was issued, informing the petitioner that if amounts were not paid, then recovery will be made in terms of Section 45B of the ESI Act. Consequent upon the said order, the Recovery Officer, i.e. second respondent issued notice stating that total amount due from the petitioner company worked out to Rs. 1,21,14,581. Therefore, he was asked to inform the State Bank of India, Manali MFL Branch to withhold any amount due to the company and credited it to the ESI Corporation.
3. When the writ petition came up on 29.8.2000, notice was directed to be issued and it was posted on 31.8.2000. On that day, notice of motion was ordered. Pending notice of motion, it was directed that the entire principal amount will be paid in six equal monthly installments starting from 1.11.2000. Subsequently, on 14.1.2003, the writ petition was admitted and it was recorded that if the condition was complied with, there will be an interim stay, otherwise interim stay will be vacated.
4. Notwithstanding the writ petition filed by the management, the Madras Fertilizers Staff Union, which is a trade union functioning in the petitioner company, filed an another writ petition being W.P. No. 16122 of 2000, challenging the order of the Government of India, dated 15.12.1999 and for a direction to forbear respondents 3 and 4 from in any manner insisting payment of or recovering ESI contribution retrospectively from April 1992 to September 1995, January 1997 to July 1999 and from October, 1999 to August 2000 from the members of the petitioner union. Notice of motion was ordered on 22.9.2000 and it was directed to be posted along with the writ petition filed by the management. The application for interim stay was merely adjourned and subsequently, it was dismissed on 10.9.2003. In view of the interconnectivity between these two writ petitions, they were heard together and a common order is passed.
5. It is stated by the petitioner company that from the year 1972, the petitioner company was paying benefit to its employees substantially better than the benefits granted under the ESI Act. Total non supervisory strength of employees will work out to 150 employees, who are likely to cover by the ESI Act. If any salary revision was made with effect from 1.1.1997, all the employees will be taken outside the purview of the Act since minimum salary for each employee will be above Rs. 6500/-. A decision for revision of salary was at the final stage. The trade union filed W.P. No. 14892 of 1999 against the increase in the coverage of ESI Act. When they failed in their attempt, they preferred W.A. No. 2139 of 1999. A division bench of this Court directed the respondents to consider the representation made by the trade union dated 7.5.1999 and to pass an appropriate order within one month and that till final orders are passed, the ESI Corporation was directed not to recover contributions from the employees of the petitioner company. They also stated that because of this, they could not deduct amounts. They further contended that from April, 1992 till date of filing of the writ petition, employees are not availed any benefits under ESI scheme. Therefore, they should not mulct with any liability.
6. In the writ petition filed by the trade union, it was contended that pursuant to the directions given by the division bench, the Government of India, Ministry of Labour, by order, dated 15.12.1999 informed the union that the company has got no scheme like payment of disablement/dependent pension payable at the rate of 70% of pay per month and the benefits given by the ESI Corporation were superior than the benefits given by the company. Therefore, their request for exclusion was rejected. The union has come forward to challenge the said order on the ground that no notice was given and that an opportunity was also not given. The decision of the Central Government was contrary to the judgment of the division bench of the Orissa High Court in
7. In the counter affidavit filed in the writ petition filed by the trade union on behalf of the ESI Corporation, it was stated that at the time of exemption, Section 89 requires only consultation with the ESI Corporation. The Act do not contemplate any hearing to the party seeking for exemption. The notification issued by the ESI has been upheld by the division bench. Pursuant to the interim order passed in the writ petition filed by the company, the company started paying amounts as per the order.
8. In the counter affidavit filed in the other writ petition, the ESI Corporation stated that since the Government of India had not granted any exemption, the question of the petitioner refusing to comply with the provisions of the Act does not arise. It is in the light of the rival contentions, the claim of the petitioners will have to be considered.
9. Mr. K.M. Ramesh, learned Counsel appearing for the trade union agreed that it is too late to challenge the refusal to grant exemption and also the increase in the coverage and consequent upon the ceiling limit also cannot be challenged. They are confining themselves only from waiving the payment in the light of the judgments of the Supreme Court in
10. The Supreme Court in Jardine Henderson Staff Assn. (cited supra) granted certain reliefs as found in paragraph 57 of its order, which is as follows:
57. In our opinion, the High Court was fully justified in passing the judicious order after considering the equities by directing the employer and the employees to make ESIC contribution for the future and should not bear with the liability for the past inasmuch as the employees of the respondents have not availed any medical facilities from ESIC and at the same time the employer was providing the medical facilities due to interim orders of the High Court. The order passed by the High Court, in our considered opinion, 601 meets the ends of justice and does not require interference by this Court under Article 136 of the Constitution of India.
11. Similarly, the Supreme Court in Distilleries & Chemical Mazdoor Union''s case (cited supra) granted certain reliefs as found in paragraphs 27, 29 and 30, which is as follows:
27. This apart it is important to note that in the past 17 years when the interim order passed by the High Court was enforced, several employees have left/retired and were paid the entire salary without any deduction and, therefore, it will be impossible for the employer to recover the part of the employees'' contribution in respect of ESIC from the employees.
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29. As regards the question of law raised by the learned Counsel for ESIC regarding the view taken by the High Court, we are of the opinion that the view taken by the High Court was on account of the peculiar facts and circumstances of the case. As already noticed, the deduction of contribution of the members of the Union had been specifically stayed by the High Court and the same continued for a period of 18 years till the disposal of the petition and that none of the members of the Union had availed the facilities of ESI. In our view, passing of the final order by the High Court directing the payment of ESI contribution from the date of the said judgment does not amount to postponing the enforcement of the notification and the same is also not in violation of the principles laid down by this Court in the various judgments referred to above. There has been no postponement of the enforcement of the notification in view of the peculiar circumstances of the case, namely, the non-availability of the facilities, non-deduction of contribution from the members of the Union for 18 long years, provision of medical relief by the management. The High Court had directed deduction of contribution with effect from the date of the judgment, which, in our opinion, is perfectly justified.
30. This apart, the members of the Union included casual, temporary, contractual, badli workmen and it will be practically impossible to find each and every member of the Union to recover their contribution for the last 18 years and in fact some of the workmen who would have been the employees during all these years would have left, expired, etc. and on account thereof also their contribution cannot be recovered. The judgments relied on by the counsel for the appellant are distinguishable on facts and on law. The order passed by the High Court, in our opinion, is perfectly justified in view of the facts and circumstances of the case and it has been repeatedly held by this Court that such a relief can be granted in the peculiar facts and circumstances of the case and that there can be an exception as in the present case and, therefore, it cannot be said that the directions issued by the High Court are not correct or that they are contrary to the power under Article 226 of the Constitution of India.
12. Therefore, they wanted reliefs to be granted on the basis of the orders passed by the Supreme Court.
13. This Court is not inclined to accept the stand taken by the petitioners. It is the petitioners who came to this Court and got permission to approach the Central Government for exemption. When the order of refusal for exemption was challenged, there was no interim order in their favour except for one month. Therefore, they ought to have implemented the provisions of the Act. Amounts deducted and kept with the ESI Corporation were pursuant to the statutory enactment. It cannot be kept in the hands of either the management or refunded to the workmen as demanded by them as it is the property of the ESI Corporation and it would be made available to all the workmen. Though the learned Counsel cited some orders of the division bench, the facts and circumstances in those cases are not available to the petitioners.
14. Both in the Jardine Henderson Staff Assn. case (cited supra) and the Distilleries & Chemical Mazdoor Union''s case (cited supra), reliefs were granted under Article 142 though it is claimed that the said power is available to Article 226 to this Court. But, the reliefs were granted because recoveries will not be possible on account of workers leaving the factory and also the fact that more than 17 years have elapsed.
15. It will not be out of place to refer to the judgment of the Supreme Court in
2. The Employees State Insurance (Central) Rules, 1950 were amended by the notification dated March 27, 1992 with effect from April 1, 1992. By the amendment the wage-ceiling for coverage under the Employees State Insurance Act, 1948 (the Act) was enhanced from Rs 1600 to Rs 3000 per month. The amendment was challenged before the High Court on various grounds. While upholding the validity of the amendment a learned Single Judge of the High Court directed that the notification should be enforced with effect from November 1, 1992 instead of April 1, 1992. The judgment of the learned Single Judge was upheld by the Division Bench of the High Court.
3. We have heard learned Counsel for the parties. We are of the view that the High Court fell into patent error in postponing the date of the operation of the notification. The notification, amending the Rules, was a legislative act. The amendment of the Rules being a delegated legislation, the High Court could not have interfered with the date of operation of the notification.
4. We set aside the direction given by the High Court regarding the postponement of the enforcement of the notification and we direct that the notification dated March 27, 1992 shall be operative from April 1, 1992.
(Emphasis added)
16. The said decision in Kerala State Handloom Development Corporation Employees Union''s case was quoted with approval in the subsequent Supreme Court judgments. However reiterating the said ratio after making certain distinctions reliefs were granted. Otherwise, the law laid down by the Supreme Court in Kerala State Handloom Development Corporation Employees Union''s case is squarely against the petitioner.
17. Even on the question of exemption from the ESI, it is necessary to refer to the judgment of this Court in
10. ...submitted that the order of the State Government is bereft of any reason and no opportunity was given to the petitioner Club before passing the orders. In this context, he relied upon a judgment of the Allahabad High Court in
11. In that case, the State Government on a policy consideration refused to grant exemption, which was found fault with by the Allahabad High Court. But, in the present case, it is not as if on any policy consideration the State Government had refused. But, on the contrary, it was found that the medical and cash benefits provided by the petitioner Club were neither comparable nor superior to the benefits provided under the ESI Act. Further, as stated in the counter affidavit, the petitioner Club is not providing the various benefits given under one umbrella under the ESI Act. It includes, Sickness Benefits, Maternity Benefits, Disablement Benefits, Death Benefit and Funeral Benefit. Such benefits are not provided by the Club. Even in the application sent by the petitioner club dated 06.04.1997 the Annexure appended shows that many of the benefits covered by the ESI Act were not extended.
12. In any event, Courts have repeatedly held that an exemption from the operation of a labour legislation is not automatic and there is no vested right on any employer to seek for an exemption. Only the benefits are superior compared to the ESI Act. The ESI Act is a social welfare legislation and the subscription paid by the employer and employees only covers a fraction of the expenditure involved by the Corporation. In the present case, the first respondent State has categorically held that it was not satisfied that the petitioner Corporation deserves an exemption and it had rejected the same on specific grounds.
18. The Supreme Court in
12. But it is really unnecessary to go into the said question because the order of the High Court really did not give a positive direction. Relevant portion of the learned Single Judge''s order which has been extracted above, clearly goes to show that the learned Single Judge left the matter to be decided by the Corporation. The direction was to "consider" and in that sense there was no positive direction.
13. "14". We may, in this context, examine the significance and meaning of a direction given by the court to ''consider'' a case. When a court directs an authority to ''consider'', it requires the authority to apply its mind to the facts and circumstances of the case and then take a decision thereon in accordance with law. There is a reason for a large number of writ petitions filed in the High Courts being disposed of with a direction to ''consider'' the claim/case/representation of the petitioner(s) in the writ petitions.
15. Where an order or action of the State or an authority is found to be illegal, or in contravention of the prescribed procedure, or in breach of the rules of natural justice, or arbitrary/unreasonable/irrational, or prompted by mala fides or extraneous consideration, or the result of abuse of power, such action is open to judicial review. When the High Court finds that the order or action requires interference and exercises the power of judicial review, thereby resulting in the action/order of the State or authority being quashed, the High Court will not proceed to substitute its own decision in the matter, as that will amount to exercising appellate power, but require the authority to ''consider'' and decide the matter again. The power of judicial review under Article 226 concentrates and lays emphasis on the decision-making process, rather than the decision itself.
16. The High Courts also direct the authorities to ''consider'', in a different category of cases. Where an authority vested with the power to decide a matter, fails to do so in spite of a request, the person aggrieved approaches the High Court, which in exercise of the power of judicial review, directs the authority to ''consider'' and decide the matter. In such cases, while exercising the power of judicial review, the High Court directs consideration without examining the facts or the legal question(s) involved and without recording any findings on the issues. The High Court may also direct the authority to ''consider'' afresh, where the authority had decided a matter without considering the relevant facts and circumstances, or by taking extraneous or irrelevant matters into consideration. In such cases also, the High Court may not examine the validity or tenability of the claim on merits, but require the authority to do so.
17. Where the High Court finds the decision-making process erroneous and records its findings as to the manner in which the decision should be made, and then directs the authority to ''consider'' the matter, the authority will have to consider and decide the matter in the light of the findings or observations of the Court. But where the High Court without recording any findings, or without expressing any view, merely directs the authority to ''consider'' the matter, the authority will have to consider the matter in accordance with law, with reference to the facts and circumstances of the case, its power not being circumscribed by any observations or findings of the Court.
18. We may also note that sometimes the High Courts dispose of the matter merely with a direction to the authority to ''consider'' the matter without examining the issue raised even though the facts necessary to decide the correctness of the order are available. Neither pressure of work nor the complexity of the issue can be a reason for the Court to avoid deciding the issue which requires to be decided, and disposing of the matter with a direction to ''consider'' the matter afresh.
19. There are also several instances where unscrupulous petitioners with the connivance of pliable authorities have misused the direction ''to consider'' issued by Court. We may illustrate by an example. A claim, which is stale, time-barred or untenable, is put forth in the form of a representation. On the ground that the authority has not disposed of the representation within a reasonable time, the person making the representation approaches the High Court with an innocuous prayer to direct the authority to ''consider'' and dispose of the representation. When the court disposes of the petition with a direction to ''consider'', the authority grants the relief, taking shelter under the order of the Court directing him to ''consider'' the grant of relief. Instances are also not wanting where authorities, unfamiliar with the process and practice relating to writ proceedings and the nuances of judicial review, have interpreted or understood the order ''to consider'' as directing grant of relief sought in the representation and consequently granting reliefs which otherwise could not have been granted. Thus, action of the authorities granting undeserving relief, in pursuance of orders to ''consider'', may be on account of ignorance, or on account of bona fide belief that they should grant relief in view of the Court''s direction to consider the claim, or on account of collusion/connivance between the person making the representation and the authority deciding it.
20. Therefore, while disposing of the writ petitions with a direction to ''consider'', there is a need for the High Court to make the direction clear and specific. The order should clearly indicate whether the High Court is recording any finding about the entitlement of the petitioner to the relief or whether the petition is being disposed of without examining the claim on merits....
(Emphasis added)
19. Further it must be noted that the Calcutta High Court in
25. Regarding the interpretation on the joint reading of Sections 87 and 91A, in my opinion, the submission of the ESI authorities has to be accepted. In my opinion, such notification can issue for a period of one year at a time only be it prospective or be it retrospective. When one considers the effect of such notification, which is the total effective abrogation or a Central Statute from its application to an establishment altogether. The salutary rule of keeping such abrogation limited to instalments of one year at a time is easy to understand and support.
26. In my opinion, therefore, on facts the writ petitioner deserves no relief having shown reckless disregard of the ESI Act for 12 years altogether. On law also the prayer to the State Government of granting a one time retrospective exemption for 12 years is not permissible.
Therefore, not only the impugned order of the Central Government cannot suffer from any infirmities, but the relief based upon the two Supreme Court orders also cannot be granted. The petitioners on their own volition got a stay order, but it was on a condition. The petitioner must abide by the condition.
20. In the light of the above, both writ petitions will stand dismissed. However, there will be no order as to costs. Consequently, connected miscellaneous petition stands closed.
