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1980 DIGILAW 1193 (ALL)

Modi Steel Units-A, Modinagar v. Employees State Insurance Court (S. D. M. ), Ghaziabad

1980-12-08

N.N.MITHAL

body1980
JUDGMENT N N. Mithal, J. 1. These two F. A. F. Os are directed against an order passed by the Employees Insurance Court refusing to grant an ad-interim injunction to the appellant restraining the respondents from releasing certain amounts imposed by it as damages for delay in depositing contribution money. The appellant company is engaged in the manufacture of steel and is duly registered as a Factory under the Employees State Insurance Act, hereinafter 'the Act', for short. According to the Employees State Insurance Corporation (hereinafter referred to as the 'Corporation') was of the view that the appellant had failed to deposit certain contribution as required under the law and therefore after giving a show cause notice damages amounting to Rs. 4,518/- in one case and Rs. 19,788/-for a different period in the other case, were imposed on the appellant. When recovery proceedings were issued the appellant initiated proceedings before the Employees Insurance Court (Referred to as the Insurance Court hereinafter). In those proceedings an application was also moved for issue of an injunction to restrain the corporation from realising the amount of damages imposed by it. The aforesaid application having been dismissed the present appeals have been filed. 2. A preliminary objection about maintainability of this appeal has been taken by Sri B. N. Asthana learned counsel appearing for the Corporation. According to him neither any proceeding under Sec. 76 could lie for challenging the recovery proceedings in respect of damages consequent to the delay in depositing the employees contribution, nor the Insurance Court had any jurisdiction to entertain an application for ad-interim injunction and that an order refusing the injunction was not appealable under Sec. 82 of the Act. Of the three objections that have been raised, I will leave the first as that matter has yet to be considered by the court below and is left to be decided by it in due course. The answer to the second question will depend on the fact whether the Insurance Court is a Court or a tribunal and had inherent powers to issue an injunction. 3. In order to appreciate this aspect, it will be better to first examine the scheme of Ch. VI of the Act consisting of Sees. 74 to 82 dealing with establishment and power of the Insurance Court. Section 74 empowers the State Govt. 3. In order to appreciate this aspect, it will be better to first examine the scheme of Ch. VI of the Act consisting of Sees. 74 to 82 dealing with establishment and power of the Insurance Court. Section 74 empowers the State Govt. to establish Employees insurance Court for a specified local area and appoint a person having certain qualification to be the Judge of such court. Section 75 enumerates matters that may be decided by it and excludes the jurisdiction of the Civil courts in matters covered by this section. Section 77 provides for the mode of such proceedings while Sec. 78 invests the Insurance Court with powers of the Civil court in certain matters, such as summoning and endorsing the attendance of witness etc. and within the meaning of Sec. 195 of Ch, XXXV of the Cr. P. C. also it shall be deemed to be a Civil court. The procedure to be followed by the Insurance Court would be such as may be prescribed by the rules framed by the State Govt. Section 79 permits appearance in the court through legal practitioner. 4. Thus from a perusal of the above scheme of the Act, it will be apparent that the Insurance Court is a tribunal established under a statute with powers to adjudicate certain matters finally in a judicial manner. Its presiding officers are persons having judicial training. Such a Tribunal thus possessed all the trappings of a 'Court' as understood in common parlance. Even the procedure before it in certain respects is the same as provided in the Code of Civil Procedure Yet all this cannot impress it with the status of a court of ordinary civil jurisdiction which also derive their authority from the State to discharge its judicial functions. The powers and jurisdiction of the Tribunal must normally be discovered from within the provisions of the Act which created or established it. With the advancement of society and the developing complexities of social and economic life of the people has become increasingly necessary to establish courts or tribunals for specific purposes under various statutes. By a slow process of legislative activity of the State the tribunals, though initially established for carrying out only non judicial and purely administrative functions, with the passage of time have come to be bestowed with the power to carry out judicial functions of the State in limited spheres. By a slow process of legislative activity of the State the tribunals, though initially established for carrying out only non judicial and purely administrative functions, with the passage of time have come to be bestowed with the power to carry out judicial functions of the State in limited spheres. Thus, at present there is not much of a difference between the powers exercised by the ordinary courts of civil jurisdiction and some of the tribunals established under specific statutes, which to a large extent are invested with powers to exercise judicial functions of the State. Though such tribunals may not as yet have earned the status of a court exercising civil jurisdiction, but to a large measure, they also perform like functions. The distinctions between the court and tribunal is even decreasing and even some of the tribunals are sometimes loosely called Courts. Mere nomenclature of a "Court" however cannot make the tribunal a 'court' of ordinary civil jurisdiction. This will largely depend upon the nature of the function performed by it and the powers that may be conferred upon it. When these tribunals are invested with powers to decide certain disputes in a fair and even handed manner and derive their authority from the State, I see no reason why such tribunals be not deemed to be Courts possessing inherent powers like an ordinary civil court ? After all tribunal of this nature also carries out the same functions as courts of ordinary civil jurisdiction, though in respect of limited class of cases falling within its jurisdiction. 5. What is meant by a court or a tribunal also came up for consideration before Supreme Court in Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala, 1961 SC 1969. After referring to the term "Court" as ; "An assembly of judges or other persons legally appointed and acting as a tribunal to hear and determine any cause, civil, ecclesi-as-tical, military or naval". 6. The Supreme Court proceeded to observe per Hidayatullah, J. (as he then was), as under : "All tribunals are not Courts, though all courts are tribunals. The word 'Courts' is used to designate those tribunals which are set up in an organised State for the administration of justice. By administration of justice is meant the exercise of judicial powers of the State to maintain and uphold rights and to punish "wrongs". The word 'Courts' is used to designate those tribunals which are set up in an organised State for the administration of justice. By administration of justice is meant the exercise of judicial powers of the State to maintain and uphold rights and to punish "wrongs". Whenever there is an infringement of a right or an injury, the Courts are there to restore the vinculum juris, which is disturbed. "Judicial power, according to Griffith, C. J. in Huddarat, Parkar and Co. Proprietory Ltd. v. Moorehead, (1909) 8 CLR 330 (357) means : " The power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty, or property. The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision "(whether subject to appeal or not) is called upon to take action." "When rights are infringed or invaded, the aggrieved party can go and commence a quarrel before the ordinary civil courts. These Courts which are instrumentalities of Govt., are invested with the judicial power of the State, and their authority is derived from the Constitution or some Act of Legislature constituting them. Their number is ordinarily fixed and they are ordinarily permanent, and can try any suit or cause within their jurisdiction. Their numbers may be increased or decreased but they are almost always permanent and go under the compendious name of "Courts of Civil Judicature". There can thus be no doubt that the Central Govt. does not come within this class. With the growth of civilisation and the problems of modern life, large number of administrative tribunals have come into existence. These tribunals have the authority of law to pronounce upon valuable rights : they act in a judicial manner and even on evidence on oath, but they are not part of the ordinary courts of Civil Judicature. They share the exercise of the judicial power of the State but they are bought into existence to implement some administrative policy or to determine controversies arising out of some administrative law. They are, very similar to Courts, but are not Courts. When the Constitution speaks of 'Courts' in Arts. 136, 22? or 228 or in Arts. They share the exercise of the judicial power of the State but they are bought into existence to implement some administrative policy or to determine controversies arising out of some administrative law. They are, very similar to Courts, but are not Courts. When the Constitution speaks of 'Courts' in Arts. 136, 22? or 228 or in Arts. 233 to 237 or in the Lists, it contemplates 'Courts of Civil Judicature, but not tribunals other than such courts. This is the reason for using both the expression in Arts. 136 and 227. By "Courts" is meant "Courts of Civil Judicature and by "tribunal", those bodies of men who are appointed to decide controversies arising under certain special laws. Among the powers of the State is included the power to decide such controversies. This is undoubtedly one of the attributes of the State, and is aptly called the judicial power of the State. In the exercise of this power, a clear division is thus noticeable. Broadly speaking, certain special matters go before tribunals, and the residue goes before the ordinary courts of Civil judicature. Their procedures may differ, but the functions are not essentially different. What distinguishes them has never been successfully established. Lord Stamp said that the real distinction is that courts have "an air of detachment". But this is more a matter of age and tradition and not of essence. Many tribunals, in recent years, have acquitted themselves so well and with such detachment as to make this test insufficient. Lord Sankey, L. C. in Shell Co. of Austriallia v. Federal. Commissioner of Taxation, (1931) A.C. 275 (296) observed : "The authorities are clear to show that there are tribunals with many of the trappings of a court, which, nevertheless, are not courts in the strict sense of exercising judicial power......in that connection it may be useful to enumerate some negative propositions on this subject:- 1. A tribunal is not necessarily a court in this strict sense because it gives a final decision, 2. Nor because it hears witnesses on oath, 3. Nor because two or more contending parties appear before it between whom it has to decide, 4. Nor because it gives decisions which affect the right of subject, 5. Nor because it is a body to which a matter is referred by another body. See Rex v. Electricity Commrs.Xl924) 1 L.B. 171. Nor because it hears witnesses on oath, 3. Nor because two or more contending parties appear before it between whom it has to decide, 4. Nor because it gives decisions which affect the right of subject, 5. Nor because it is a body to which a matter is referred by another body. See Rex v. Electricity Commrs.Xl924) 1 L.B. 171. In my opinion, a court in the strict sense is a tribunal which is a part of the ordinary hierarchy of Courts of Civil Judicature maintained by the State under its constitution to exercise the judicial power of the State. These courts perform all the judicial functions of the State except those that are excluded by law from their jurisdiction. The word "judicial", be it noted, is itself capable of two meanings. They were admirably stated by Lopes L. J. in Royal Aquarium and Summer and Winter Garden Society v. Parkinson, (1892) 1 QB 431 (452) in these words : "The word 'judicial' has two meanings. It may refer to the discharge of duties exerciseable by a Judge or by justices in court, or to administrative duties which need not be performed in court, but in respect of which it is necessary to bring to bear a judicial mind that is, a mind to determine what is fair and just in respect of the matters under consideration." That an officer is required to decide matters before him 'judicially" in the second sense does not make him a court or even a tribunal because that only establishes that he is following a standard of conduct, and is free from bias or interest. Court and tribunals act "judicially" in both senses and in the term "court" are included the ordinary and permanent tribunals and in the term "tribunal" are included all others, which are hot so included." It is not disputed before me that the Tribunal has the jurisdiction to correct mistakes or even to set aside ex-parte orders. If no such power has been conferred either by the Act or the Rules from where does this power spring ? These powers must necessarily inhere in the tribunal from the very nature of the functions it has to perform. It must have the authority to do so otherwise no tribunal exercising its judicial or even quasi judicial functions can perform its duty properly. These powers must necessarily inhere in the tribunal from the very nature of the functions it has to perform. It must have the authority to do so otherwise no tribunal exercising its judicial or even quasi judicial functions can perform its duty properly. Even though the Insurance Court may only be a Tribunal yet it must be held to possess inherent powers that may be necessary for performing such functions as may be essential for advancing the cause of justice. 7. from what has been said above it would be obvious that to constitute a Court it must derive its authority from the State and its function is to adjudicate the dispute before it finally in a judicious manner. Where any tribunal is invested with these attributes to carry out the functions which were originally assigned to court of ordinary civil jurisdictions by carving out a separate forum, even though it may be technically called a "tribunal" yet, in substance, it functions as a court. Such a tribunal may adopt such procedure in proceedings before it as may be laid down in the Act or the rules framed thereunder. It is true that civil courts established under Bengal, Agra and Assam Civil Courts Act, 1887 are governed by the procedure given in the Code of Civil Procedure but if a part of the functions originally assigned to such a courts has been taken away from its jurisdiction and is vested within the exclusive jurisdiction of the Insurance Court established under the Insurance Act then the procedure before the Insurance Court would normally be regulated by the provisions of that Act or the Rules framed thereunder. Such rules to some extent may be different from the provisions of the Code of Civil Procedure. However, since the Insurance Court discharges some of the functions earlier falling within the jurisdiction of civil courts it would be appropriate to hold that the courts must be possessed of inherent powers. The courts must always have such powers whenever any need arises to utilise it for advancing the cause of justice although, I must hasten to strike a note of caution that the powers must always be exercised with greatest care and circuispection. This power would include the power to issue an injunction in an appropriate case. 8. The courts must always have such powers whenever any need arises to utilise it for advancing the cause of justice although, I must hasten to strike a note of caution that the powers must always be exercised with greatest care and circuispection. This power would include the power to issue an injunction in an appropriate case. 8. This leads us to examine whether an appeal shall lie under Sec. 82 of the Act if in exercise of this power the Insurance Court passes an order on an application for grant of temporary injunction ? On the language of Sec. 82 there appears to be only two pre-conditions i.e. the order appealed against must have been passed by the Insurance Court and that the appeal if moved substantial question of law. If these conditions stand satisfied there can be no reason why an appeal would not lie ? Under Sec. 75 certain matters enumerated therein are to be decided only by the Insurance Court. Sub-clause (1) speaks of certain questions or disputes while sub-section (2) speaks of claims that arises under the Act. All these matters are required to be adjudicated upon by the Court in accordance with the procedure laid down in the Act and in each case the order finally passed would be appealable under Sec. 82 provided a substantial question of law arises for determination. These cases may present no difficulty. However, where the order does not finally dispose of any matter arising under Sec. 75 but is merely in the nature of an interlocutory order, such an order of stay, injunction, an order passed ex parte or for restoration of an application dismissed for default, the question arises whether in such cases also an appeal shall lie ? Considering the nature of the proceedings and the powers and mode of exercise of those powers I have no doubt that an appeal would lie against such an order of the Insurance Court. There is nothing in the language of Sec. 82 to limit the right of appeal in any way only to an order finally disposing of any matter under Sec. 75. The words an order of an Employees Insurance Court in Sec. 82 are much too wide to admit of any narrower interpretation. The appeal against such an order must no doubt raise a substantial question of law. The words an order of an Employees Insurance Court in Sec. 82 are much too wide to admit of any narrower interpretation. The appeal against such an order must no doubt raise a substantial question of law. Subject to the above conditions an order passed by the Insurance Court would be appealable. In my view, therefore, the present appeal is legally maintainable. 9. Coming now to the merits. The question arises whether the order refusing the injunction was incorrect or invalid ? According to the appellant a certain demand raised against it by the respondent was wrong, recovery of which was sought to be stayed. General principles governing the issue of temporary injunction require that the party seeking ad-interim injunction must make out a strong prima facie case, should show that balance of convenience was in its favour and if no injunction was granted it was likely to suffer irreparable injury. All these conditions must be satisfied before any court would issue temporary injunction. In the circumstances of the present case no such order could have been passed in favour of the plaintiff. Even if any semblance of a prima facie case be present in appellant's favour, though it is yet to be decided by the Insurance court, there is a total absence of the two other ingredients. Even if the disputed amount was realised and its recovery was ultimately found to be illegal the appellant's company could always claim it back from the Insurance Corporation, which could not be said to be incapable of refunding the amounts raised by it. Since the appellant had failed to satisfy these conditions the order under appeal cannot be said to be illegal. Thus even though an appeal may be maintainable yet it must fail both on merits as well as on the ground that it does not raise any substantial question of law. 10. The appeal fails and is dismissed with costs. All interim orders shall stand discharged. Appeal dismissed.