Calcutta Electric Supply Corporation (India) Ltd. v. Employees State Insurance
1986-12-11
Umesh C.Banerjee
body1986
DigiLaw.ai
ORDER: A short but an interesting question of law viz, whether the employees of the contractors engaged by the Calcutta Electric Supply Corporation can be termed to be covered under the provisions of the Employee's State Insurance Act 1948, falls for determination in this writ petition. 2. In order to appreciate the contentions a brief reference to facts would be convenient at this stage Calcutta Electric Supply Corporation is a licensee within the meaning of the Indian Electric Act 1910. As a licensee there are certain obligations on the part of the Calcutta electric Supply Corporation for the purpose of supply of electrical energy to its consumers. In order to effectively discharge its obligation under the Statute, maintenance of overhead lines is in the normal process a bounden duty of the Calcutta Electric Supply Corporation. The licensee, being the Calcutta Electric Supply Corporation, instead of doing it departmentally engages various contractors for maintenance of the overhead lines as also for excavation and laying of underground cables. This bas been the standard practice of the Calcutta Electric Supply Corporation From about 19-5-76 the Employees' State Insurance Authority, however, started discussions for the purpose of having the employees of the contractors covered under the Act. The Calcutta Electric Supply Corporation in its turn, however, though by reason of come orders of this Court commenced deduction of certain sums of money from the contractors' bills for the purpose of fulfilling its obligations under the Employees' State Insurance Act. The contractors, however, moved this writ application challenging such deduction on the ground that the Employees' State Insurance Act has no manner of application in so far as the contractors' employees are concerned. The Calcutta Electric Supply Corporation has also filed another writ petition in the Appellate Side of this Court challenging inter alia the power of the Employees' State Insurance Authority to raise any demand for its contractors' labourers. 3. By consent of the parties, both the petitions are heard together since the self same issues are involved in both the writ applications. 4. Mr.
3. By consent of the parties, both the petitions are heard together since the self same issues are involved in both the writ applications. 4. Mr. P. K. Dutt appearing for the petitioners, being the contractors engaged by the Calcutta Electric Supply Corporation, submitted that the employees of the contractors engaged by the Calcutta Electric Supply Corporation do not come within the ambit of the Act of 1948 and as such, neither the Calcutta Electric Supply Corporation has had any right or authority to raise any demand or ask for deposit or to deduct from the contractors' bills any sum on account of the Employees' State Insurance Mr. Dutt placed strong reliance on the definition of "Employee" under s. 2(9) of the Employees' State Insurance Act 1948 Section 2(9) reads as follows: "employee" means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and- (i) who is directly employed by the principal employer on any work, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or (ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or (iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire bas entered into a contract of service"; 5. Me. Dutt submitted that the language used in s. 2(9)(i) and 2(9)(ii) mikes the position very clear that it is only where the contractors' labourers are working inside the factory premises or inside the Establishment, s. 2(9)(ii) has its application. In this context the expression "elsewhere" appearing in 2(9)(ii) is, Mr. Dutt submitted, significantly absent s. 2(9)(ii) which meant, it was submitted, that the legislature intentionally and deliberately omitted the expression "elsewhere" and In accordance with the ordinary rules of construction of statutory instruments or provisions.
In this context the expression "elsewhere" appearing in 2(9)(ii) is, Mr. Dutt submitted, significantly absent s. 2(9)(ii) which meant, it was submitted, that the legislature intentionally and deliberately omitted the expression "elsewhere" and In accordance with the ordinary rules of construction of statutory instruments or provisions. The law Courts would not be justified to add to or supplement any word which bas been left out, since such an omission would be deemed to be deliberate. 6. The other contention or Mr. Dutt is that since Calcutta Electric Supply Corporation has entered into an agreement with its contractors and the terms of the agreement suggest that there is no element of supervision by the Calcutta Electric Supply Corporation for the purpose of maintenance of the overhead lines or for the purpose of excavation and laying of underground electric cables. As such, question of applicability of s. 2(9)(ii) does not and cannot arise. 7. Mr. A. N. Ray appearing for Calcutta Electric Supply Corporation also supported the contention of Mr. Dutt and submitted that the agreement between the parties ought to be given effect to in the matter of interpretation of the provisions of s. 2(9)(ii). 8. Turning on to the second contention of Mr. Dutt first, the question obviously arises as to whether by reason of the agreement between the parties, viz, the contractors, and the Calcutta Electric Supply Corporation, the concept of 'supervision' bas been completely obliterated or not? At this juncture it would be worthwhile to look lit the clause in the agreement which has been very strongly relied upon by Mr. Dutt. The agreement leads as follows: "Please note that you will have to provide competent supervision while carrying on with the work in accordance with the provisions of Indian Electricity Rules 1956. You will also have to provide adequate watch and ward arrangement for the safe custody of the materials till such time the complete installation is handed over to us. You will be required to ensure against theft and pilferage of all materials while held in your Site godown". 9. Though the agreement provides that the contractor is to provide an adequate supervision but the issue arises as to whether the Calcutta Electric Supply Corporation can shirk of its responsibility in the event something goes wrong somewhere, either in the maintenance or in the laying of the cables under the Statute.
9. Though the agreement provides that the contractor is to provide an adequate supervision but the issue arises as to whether the Calcutta Electric Supply Corporation can shirk of its responsibility in the event something goes wrong somewhere, either in the maintenance or in the laying of the cables under the Statute. It is to be noted in this context that the statute creates an obligation in so far as the Licencee is concerned to take all safety measures in regard to laying of underground cables as also maintenance of overhead transmission lines. There is no dispute, however, that after laying of cables or after the maintenance work, proper checks are effected by the Calcutta Electric Supply Corporation in order to fulfil its obligations under the statute. As such, question of there being no supervision does not and cannot arise. The ultimate supervision is invariably affected by the Calcutta Electric Supply Engineers prior to energising the transmission line. It is to be noted that the contractors are being asked to lay the cables of 6000 volts and it cannot be said that Electric Supply Corporation has no duty whatsoever to check and re-check before the high voltage Current. In the premises, I am of the view that even though the agreement specifies that the work would have to be dune under the supervision of the contractors, but in, Calcutta Electric Supply Corporation retains the ultimate power of supervision and in fact effect such a supervision of the work executed by the contractors. In the premises, contention of Mr. Dutt in this regard fails. 10. As regards the first contention of Mr. Dutt, viz, the omission of the Legislature of the words "or elsewhere" in 9(ii) goes to indicate that the Legislature intended the applicability of the word only for inside and not meant for outside work. 11. Employees' State Insurance Act 1948 has been engrafted in the Statute Book as a beneficial legislation. The Law Courts would be loath to Interpret or construe the section in the strictest forms.
11. Employees' State Insurance Act 1948 has been engrafted in the Statute Book as a beneficial legislation. The Law Courts would be loath to Interpret or construe the section in the strictest forms. In my view, the intent of the Legislature ought to be given a priority rather than embarking on to construe the provisions strictly Narrow and pedantic approach in regard to the construction of statutory instruments or provisions ought not to be allowed in the case of interpretation of a statute, which has been engrafted in the Statute Book as a beneficial piece of legislation. The Preamble to the Act 1948 suggests that it is an Act to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provisions for certain other matters in relation thereto Social security Is one of the fundamental needs of the day and the Assistance Scheme under the Act provides benefit for persons of small means as of right in amounts which combined the contributory effort of the Insured with subsidies from the employer and the State (Approaches to social security, ILO Montreal). 12. In a developing country, like that of ours and with the concept of welfare State, the State is no longer passive spectator to enforce new principles of social welfare and common good and in this context, the functions of the State are day by day assuming very great importance. The introduction of the Act of 1948 is positive step towards such a direction. The question, therefore, is whether the Law Courts would be right in interpreting strictly the provisions of such a beneficial piece of legislation. In my view, the answer ought to be in the negative, even though the Legislature thought it fit in its wisdom to omit the expression "or elsewhere", in my view, the position would not really differ as regards the applicability of the Act. 13. Considering the entire gamut of this legislation read with the provision of the Indian Electricity Act, 1910, the question arises as to whether the principal employer can escape the liability for the works of his contractor. The answer is invariably 'no' even though a contractor is to do the job and the contractor was acting as an agent of the principal employer.
The answer is invariably 'no' even though a contractor is to do the job and the contractor was acting as an agent of the principal employer. The beneficial legislation for the weaker section of the people as noted above cannot be given a narrow and strict interpretation, which would lead to deprivation of the benefits to the weaker section for which this legislation has been engrafted in the Statute Book. This view finds support from the decision of the Supreme Court in the case of M. G. Beedi Works v. Union of India reported in AIR 1974 SC 1832 . The Supreme Court observed: "The present legislation is intended to achieve welfare benefits and amenities for the labour. That is why the manufacturer or trade mark holder becomes the principal employer though he engages contract labour through the contractor. He cannot escape liability imposed on him by the statute by stating that he has engaged the labour through a contractor to do the work and therefore he is not responsible for the labour. The contractor in such a case employs the labour only for and on behalf of the principal employer. The contractor being an agent of the principal employer for manufacturing beedis is amenable to the control of principal employer. That is why the statute says that even if the contractor engages labour without the knowledge of the employer the principal employer is answerable for such labour because the labour is engaged for or on his behalf. The Act and the rules thereunder prescribe maintenance of log books and registers. Where the manufacturer or the trade mark holder engages labour directly, the manufacturers maintain registers and log books. Where the manufacturers engage contract labour through a contractor the manufacturer will require the contractor to maintain such log books of the contract labour and through such books and registers will keep control over not only the contractors but also the labour". 14. Mr. Dutt strongly relied on the decision of the Supreme Court in the case of Superintendent of Post Officers v. P. K. Rajamma reported in AIR 1977 SC 1677 . The said decision however does not in any way lend assistance to Mr. Dutt's contention and in any event is clearly distinguishable on facts. The other decision of the Supreme Court relied upon by Mr.
The said decision however does not in any way lend assistance to Mr. Dutt's contention and in any event is clearly distinguishable on facts. The other decision of the Supreme Court relied upon by Mr. Dutt is the case of Messrs Hurihar Polyfibres v. The Regional Director, E S. I. Corporation reported in AIR 1984 SC 1680 . That decision also, in my view, does not have any manner of application in the facts of this case, since the Supreme Court was considering the definition of the term "wages" within the meaning of s. 2(22) of the Employees' State Insurance Act. Reliance on other decisions by Mr. Dutt also does not lend any assistance to him. 15. In that view of the matter, in my view there is no merit in this writ application. As such the writ petition fails and is dismissed. There shall, however, be no order as to costs. 16. The amount of money already in the hands of C. E S. C. by way of deduction out of the contractors bills shall be remitted to the Employees' State Insurance Fund and the Employees State Insurance Authorities are directed to effect adjustment in accordance with law as regards the Fund which is maintained by them. It is however made clear that the benefits accrued to such seduction be also remitted to E. S. I. Authority Remittance in terms of this order be effected within four weeks from date. 17. In the view I have taken, the writ petition filed by the Calcutta Electric Supply Corporation being Matter No. 1650 of 1985 also falls and is dismissed There shall, however, be no order as to costs. Prayer for stay by Mr. Deb is refused. Writ petition dismissed.