INDIRAKUITY v. EMPLOYEE S STATE INSURANCE CORPORATION
1980-03-06
K.BASKARAN
body1980
DigiLaw.ai
Judgment :- 1. The sole question that falls for decision in this second appeal is whether the civil court's jurisdiction to interfere with the decision of the Employees' insurance Court is barred by the provision contained in S.75(3) of the Employees' State Insurance Act, Act XXXIV of 1948, shortly stated the Act, read with S.9 of the Code of Civil Procedure. 2. On an application under S.75(2) of the Act. dated 30 91966, a copy of which is Ext. A-6, filed by the Employees' State Insurance Corporation of India (the respondent-defendant), hereinafter referred to as the Corporation, the Employees' Insurance Court, Alleppey, in Insurance Case No. 113 of 1966 passed judgment dated 23 5 1967, a copy of which is Ext. A-4, where under the opposite parties therein were ordered to pay to the Corporation a sum of Rs. 2005.98 with interest and costs. In Ext A-6 application it has been stated interalia that Swaraj Printing Works, Kottayam, was a factory as defined in S.2(12) of the Act; being the occupier and the manager respectively of the said factory, one Sri M. K. Kunjukutty Asan and one Sri P. K. Sivaraman Nair were liable to pay to the Corporation the employee's contribution as required under S.40(1) of the Act for the relevant period; opposite party Nos.1 to 7 were the legal heirs of the said Kunjukutty Asan, and opposite party No. 8 was the said Sri P. K. Sivaraman Nair; calculated on an ad hoc basis a sum of Rs. 2005 98 approximately was due as employee's contribution from the opposite parties. 3. All the opposite parties including the appellant herein, who was opposite party No 6 before that court, had remained exparte, though opposite party Nos.1 and 3 had initially entered appearance and filed a statement disowning their liability. In execution of the decree in pursuance of Ext. A-4 judgment, the plaint schedule property which originally belonged to the said Kunjukutty Asan, and, after his death, had come into the hands of the appellant under the family partition, was attached; and this gave rise to the present suit praying for a declaration that Ext. A-4 was null and void, and so also was the order, if any, issued for initiation of the revenue recovery proceedings for realisation of the amount alleged to be due under Ext. A-4. There were other incidental reliefs also sought in the suit.
A-4 was null and void, and so also was the order, if any, issued for initiation of the revenue recovery proceedings for realisation of the amount alleged to be due under Ext. A-4. There were other incidental reliefs also sought in the suit. The trial court accepted the main contention of the Corporation that by virtue of the provisions contained in S.75 (3) of the Act and S.9 of the Code of Civil Procedure the validity of Ext. A-4 could not be canvassed in a civil court; it, however granted a decree for permanent injunction restraining the Corporation from realising the said amount by resort to revenue recovery proceedings until an opportunity of being heard was given to the legal heirs of deceased Kujukutty Asan. 4. Aggrieved by the decision touching the validity of Ext. A-4, the appellant-plaintiff preferred an appeal which was dismissed by the 1st appellate court; hence this second appeal at the instance of the plaintiff against the Corporation. 5. We may, before proceeding further, notice some of the relevant provisions of the Act as it stood prior to its amendment by the 1966 Act (parties being at agreement that the amended provisions were not applicable during the material time). Sub-section (1) of S.40 of the Act provides that the principal employer shall pay in respect of every employee, whether directly employed by him or by or through an immediate employer, both the employer's contribution and the employee's contribution. 'Principal employer' in terms of S.2 (17) means the owner or occupier of a factory, and includes the legal representatives of a deceased owner or occupier, and any person named as the manager of a factory under the Factories Act, 1948 (It is not necessary to look into the definition of the word 'factory' in the Factories Act, as no contention was advanced before me that Swaraj Printing Works was not a factory during the material time). By virtue of the provisions contained in sub-section (1) or S.73 of the Act, in terms of clause (d) thereof, if any question or dispute arises as to the person who is or was the principal employer in respect of any employee, such question or dispute shall be decided by the Employees' Insurance Court in accordance with the provisions of the Act.
The Employees' Insurance Court under sub-section (2) of S.75, in terms of clause (a) thereof, is empowered to decide claims for the recovery of the contribution from the principal employer. Sub-s. (3) of the said section with which we are more directly concerned in this second appeal reads as follows: "No Civil Court shall have jurisdiction to decide or deal with any question or dispute as aforesaid or to adjudicate on any liability which by or under this Act is to be decided by the Employees' Insurance Court." S. 9 of the Code of Civil Procedure reads as follows: "The courts shall (subject to the provisions herein contained) have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred. Explanation I A suit in which the right to property or to an office is contested is a suit of a civil nature, notwithstanding that such right may depend entirely on the decision of questions as to religious rites or ceremonies. Explanation II For the purpose of this section, it is immaterial whether or not any fees are attached to the office referred to in Explanation I or whether or not such office is attached to a particular place." 6. The counsel for the appellant submitted that Ext. A-4 was passed in violation of all fundamental principles of judicial procedure, without complying with the relevant provisions of the Act, and was, as such, null and void, without jurisdiction, liable to be set aside by a civil court. This line of reasoning obviously is based on the observation of Lord Thankerton who delivered the opinion of the Court in the Privy Council case in Secretary of State v. Mass & Co. (AIR. 1940 PC. 105: 67 Indian Appeals 222): "It is well settled that even if jurisdiction is so excluded the civil courts have jurisdiction to examine the cases where the provisions of the Act have not been complied with or the statutory Tribunal has not acted in conformity with the fundamental principles of judicial procedure." The decisions of the Privy Council in the above case, and in a subsequent case Kamakkshya Narain Singh v. Commr, of Income-tax, Bihar (AIR. 1947 FC. 78) had come up for consideration of our Supreme Court in a number of cases (Firm Radha Kishan v. Ludhiana Municipality AIR. 1963 SC.
1947 FC. 78) had come up for consideration of our Supreme Court in a number of cases (Firm Radha Kishan v. Ludhiana Municipality AIR. 1963 SC. 1547); S. Chetty & Sons v. State of A. P. AIR. 1964 SC 322; State of Kerala v.. Ramaswami Iyer & Sons AIR. 1966 SC. 1738; Dhulabhai v. State of M. P. AIR. 1969 SC. 78 and Premier Automobiles v. K. S. Wadke AIR. 1975 SC. 2238). While the broad principle underlying the observations of Lord Thankerton seems to have received the approval of the Supreme Court, Gajendragadker J., has in S. Chetty & Sons' Case (AIR. 1964 SC. 322) cautioned that "those observations were made in somewhat wide terms", and laid down that it is only where the defect or the infirmity in the order goes to the root of the order and makes it in law invalid and void that these observations could be invoked in support of the plea that the civil court can exercise its jurisdiction notwithstanding a provision to the contrary contained in the relevant statute.
On a careful consideration of the decisions of the Supreme Court on the point, it appears to be well settled that if a statute gives a finality to the order of the special tribunals, the civil court's jurisdiction must be held excluded if there is adequate remedy to do what the civil court would normally do in a suit; such provision, however, does not exclude those cases where the provisions of the Act have not been complied with or the statutory tribunal has not acted in conformity with the fundamental principles of judicial procedure; where there is no express exclusion of the civil court's jurisdiction, it may be necessary to examine whether the statute creates special right or a liability and provides for the determination of the right or liability, and further lays down that all questions about such right shall be determined by the tribunals so constituted and whether remedies so associated in civil courts are prescribed by the said statute or not; where there is an express bar of the jurisdiction of the court, the examination of the scheme of the particular Act to find the adequacy or sufficiency of the remedies provided may be relevant though not decisive to sustain the jurisdiction of the said court; and an exclusion of jurisdiction of the civil court is not readily to be inferred unless the conditions like those mentioned above would apply. 7. One significant fact we have to notice is that where the Act creates an obligation and enforces the performance in a specific manner, the general rule is that such performance cannot be enforced in any other manner. It is not the case of the appellant that at common law the principal employer is under an obligation to pay employee's contribution to the Corporation; it is a creation of the statute which also provides detailed procedure for the purpose of challenging the correctness of the decision taken by the authority. The question whether the civil court's jurisdiction is barred to challenge a decision of the Insurance Court in the nature of Ext. A-4 has to be considered in this background. The appellant's main contention, as already noticed, is that Ext. A-4 is passed without complying with the provisions of the Act and in violation of the fundamental principles of judicial procedure.
A-4 has to be considered in this background. The appellant's main contention, as already noticed, is that Ext. A-4 is passed without complying with the provisions of the Act and in violation of the fundamental principles of judicial procedure. We will recapitulate that the appellant and the other opposite parties had remained ex parte in the proceedings before the Insurance Court. The submission of the counsel for the appellant is that Ext. A-4 is bound to be set aside by the civil court as it was passed by the Insurance Court assuming jurisdiction erroneously by wrongly deciding a collateral fact; according to him, what conferred jurisdiction on the Insurance Court to decide the liability was the assumption that the opposite parties were the principal employers. This argument cannot be accepted inasmuch as the Act (vide clause (d) of sub-section (1) of S.75 of the Act), as already noticed, confers jurisdiction on the Insurance Court to decide the question or dispute as to who the principal employer in respect of an employee is or was, in accordance with the provisions of the Act. In other words, the jurisdiction of the Insurance Court does not depend upon the decision on the question as to who the principal employer is or was, as the statute has conferred on the Insurance Court power to decide such a question. The distinction between total absence of jurisdiction on the one hand and erroneous exercise of jurisdiction on misconstruction of the provisions of the statute on the other has also to be borne in mind; while the former might constitute an error of jurisdiction, the latter would only be an error in law. 8. The counsel for the appellant then submitted that it is without following the procedure prescribed in R.24 of the Kerala Employees' Insurance Courts Rules, 1958, that Ext. A-4 was passed and, therefore, in consonance with the decision of the Privy Council in Secretary of State v. Mass & Co (AIR. 1940 P. C. 105 67 Indian Appeals 222), civil court's jurisdiction is attracted. R.24 of the Rules reads as follows: "24. Framing of issues.
A-4 was passed and, therefore, in consonance with the decision of the Privy Council in Secretary of State v. Mass & Co (AIR. 1940 P. C. 105 67 Indian Appeals 222), civil court's jurisdiction is attracted. R.24 of the Rules reads as follows: "24. Framing of issues. (1) At the first hearing of the application, after the summons is served, the Court shall, after considering the application and the written statement, if any, or after such examination of the parties or any person or any document as may appear necessary, ascertain upon what material proposition of fact or of law the parties are at variance, and shall thereupon proceed to frame and record the issues upon which the right decision appears to depend. (2) In recording the issues, the Court shall distinguish between those issues which in its opinion concern points of fact and those which concern points of law. (3) The Court may, in like manner, at any time before passing its final order add to, strike out from or in any way amend the issues on such terms as it may think fit." What is urged in support of this contention is that inasmuch as opposite parties Nos.1 and 3 are stated to have filed a statement that the deceased Kunjukutty Asan himself was not liable to pay the contribution, and therefore, as his legal heirs, they too were not liable to pay it. It is a debatable question whether after opposite party Nos.1 and 3 filed the statement all of them remained ex parte, and the Corporation had filed affidavit in support of the claim, it was strictly necessary for the court to consider the case of the opposite parties who filed the statement. Assuming that the procedure prescribed enjoins the court to do so, the further question is, whether the failure to do so was so fatal as to go to the very root of the matter as to render the decision void to attract civil court's jurisdiction as pointed out by Gajandragadker J. in S. Chetty & Sons' Case (AIR. 1964 SC. 322). In my view it would amount only to a procedural irregularity which is not so fatal as to render the decision a nullity in law.
1964 SC. 322). In my view it would amount only to a procedural irregularity which is not so fatal as to render the decision a nullity in law. The Insurance Court has passed the judgment in exercise of its jurisdiction, and the technical defect, if any, in the matter of procedure would not render it null and void to attract the civil court's jurisdiction. For the same reason I am not persuaded to accept the contention of the counsel for the appellant that in and by Ext. A-4 a decree for a specific amount has been granted, whereas the Corporation's claim was only approximate on an ad hoc basis. The claim on ad hoc basis was based on the data available with the. Corporation, and need for altering it would have arisen only it it is found to be wrong on the information, if any, within the exclusive knowledge of the opposite parties furnished by them. If the opposite parties did not choose to do so, they have to thank themselves. 9. I also find force in the contention of the counsel for the Corporation that if the grievance of the appellant is that a substantial question of law was involved in the matter, what the appellant ought to have done was to prefer as appeal to the High Court under S.83 (2) of the Act. R.33 of the Kerala Employees' Insurance Courts Rules, 1958, also provides that save as provided in S.82 of the Act the order of a Court shall be final and binding the parties. The appellant having failed to exhaust the statutory remedy of appeal available under S.82 of the Act if her case was that the matter involves any substantial question of law, and having failed to establish that Ext. A-4 was vitiated by such jurisdictional error as to render it null and void to attract civil court's jurisdiction, I am of the view that the courts below have correctly decided the matter against the appellant. The second appeal fails and is dismissed; however, in the circumstances of the case, I direct the parties to bear their respective costs in this second appeal. Dismissed.