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Madhya Pradesh High Court · body

1995 DIGILAW 672 (MP)

Khemchand Motilal Tobacco Products Ltd. v. Union of India

1995-08-28

A.K.MATHUR, D.K.JAIN

body1995
ORDER A.K. Mathur Ag. CJ. -- 1. All these three cases involve common question of law, therefore, they are disposed of by common order. For convenient disposal of the cases, the facts given in M.P. No. 805/92 are taken into consideration. 2. The petitioner by this petition has prayed that the notification issued in M.P. Rajpatra dated 8.8.1986 (Annexure' A') purporting to apply the provisions of Employees State Insurance Act, 1948 to Bidi Industry may be declared as ultra vires and unconstitutional and also prayed that the memo of the Deputy Regional Director, Employees State Insurance Corporation, Indore seeking compliance of the provisions of the Employees State Insurance Act, 1948 by the petitioners, may be quashed. 3. That, the petitioners are engaged in the business of manufacturing bidis and are carrying on their business in the State of Madhya Pradesh and outside Madhya Pradesh. The petitioners are having various branches, offices in the State of Madhya Pradesh and various other States in India. In the process of manufacture of Bidis, the manufacturer entrusts raw material i.e. tobacco, tendu leaves and thread to the petty contractors commonly known as Sattedar, who in their turn, distribute the raw material to the labourers who carry on the bidi rolling in their homes, and give back the manufactured bidi to the Sattedar and then in turn give it to the factory of the petitioners, where labelling, packing is done for supply in the market. It is submitted that so far as regulating the conditions of service of employees engaged in manufacturing of Beedi and Cigar is concerned, there is already sufficient legislation on the subject to take care of their welfare. Entry 24 of the concurrent list (List III) of Seventh Schedule of the Constitution of India reads as under :- "24.Welfare of labour, condition of work, provident find, employer's liability, workman's compensation, invalidity and old age pension and maternity benefits." In exercise of the power under entry 24 aforesaid, the Parliament has enacted the Beedi and Cigar Workers (Condition of Employment) Act, 1966 (hereinafter referred to as the Act, 1966). There is another Act known as Beedi Workers Welfare Cess Act, 1975 (Act No. 56/76) (hereinafter referred to Cess Act) for the purpose of providing for levy and collection by way of cess a duty of Excise on tobocco issued for the manufacture of bidi. There is another Act known as Beedi Workers Welfare Cess Act, 1975 (Act No. 56/76) (hereinafter referred to Cess Act) for the purpose of providing for levy and collection by way of cess a duty of Excise on tobocco issued for the manufacture of bidi. The Parliament also enacted the Bidi Workers Fund Act, 1976 (hereinafter referred to as the Act of 1976) to provide for the findings of measure to promote the welfare of persons engaged in Bidi establishment. The Parliament also earlier enacted the Employees State Insurance Act, 1948 (hereinafter referred to Act of 1948). This Act provided certain benefits to the employees in the case of sickness, maternity and employment injury and to make provision for certain other matters in relation thereto. The Employees State Insurance Act empowers the State Government by issue of notification in official Gazette to bring into force the provisions thereof in the manner prescribed by sub-section (5) of section 1. The appropriate State Government by notification can enforce the provisions of Employees State Insurance Act in the State. The State Government of M.P. has issued a notification in M.P. Rajpatra dated 8.8.1986 for applying the provisions of the Employees State Insurance Act to the Bidi Industry in the area of Katni, Sugar and Sanawad, a copy of this notification has been placed on record as Annexure-A. It is this notification which is sought to be challenged by this petition. It is alleged that the then member of the Parliament Shri Dal Chand Jain, Sagar submitted a memorandum to the Chief Secretary of the State stating that under the Labour laws beneficial provisions have already been enacted for the workers, engaged in Bidi Industry under the various legislations and in view of those, the Government should exempt the Bidi Industry from application of the employees State Insurance Act, 1948. But it was without any result, therefore, the petitioners have filed this petition. 4. A reply has been filed by the respondents and the respondents, in their turn, submitted that it is a welfare legislation and the circulars have been issued for the welfare of the employees working in the Bidi and Cigar manufacturing industry and the State Government is competent to issue this notification. It is pointed out that at present it is introduced at selective places and thereafter, the area will be expanded. It is pointed out that at present it is introduced at selective places and thereafter, the area will be expanded. A rejoinder has been filed by the petitioners and it is submitted that the manufacturing of bidi is not confined to Katni, Sagar and Sanawad but the bidis are manufactured in the various places in the State, and the details have been given in Document No.3 showing that the bidis are manufactured at Jabalpur, Narsinghpur, Raipur, etc. but these areas have not been brought under the provisions of the Act. 5. We have heard the learned counsel and perused the record. 6. That, the Employees' State Insurance Act, 1948 was brought with a view to provide the benefits to the employees in case of sickness, maternity and employment injury and to make provision for certain other matters in relation thereto. Therefore, the Parliament has enacted this Act to provide such benefits to the workers. Under sub-section (5) of section 1 of the Employees' State Insurance Act, 1948, appropriate State Government can enforce it by a notification issued in Gazette. Section 1 (5) of the Act reads as under :-- "1 (5).-The appropriate Government may, in consultation with the Corporation and where the appropriate Government is a State Government with the approval of the Central Government, after giving six months' notice of its intention of so doing by notification in the official Gazette, extend the provisions of this Act, or any of them, to any other establishment or class of establishment, industrial, commercial, agricultural or otherwise: Provided that where the provisions of this Act have been brought into force in any part of a State, the said provisions shall stand extended to any such establishment or class of establishment within that part if the provisions have already been extended to similar establishment or class establishment in another part of that State." In pursuance of the aforesaid provisions, the State Government after giving six months' notice, issued notification in the official gazette dated 8.8.1986 (Annexure-A) applying this Act in various places of Katni, Sagar and Sanawad. 7. Mr. Dabir learned counsel for the petitioners submitted that this notification is ultra vires because there is already sufficient legislation on this subject which provides welfare to the employees of the Bidi and Cigar Workers by the Act known as Beedi and Cigar Workers (Conditions of Employment) Act, 1966. 7. Mr. Dabir learned counsel for the petitioners submitted that this notification is ultra vires because there is already sufficient legislation on this subject which provides welfare to the employees of the Bidi and Cigar Workers by the Act known as Beedi and Cigar Workers (Conditions of Employment) Act, 1966. Learned counsel submitted that there is another Act known as Beedi Workers Welfare Fund Act, 1976 to provide for the financing of measures to promote the welfare of persons engaged in Beedi establishment. Therefore, learned counsel submitted that by virtue of theory of occupied legislation, the provisions of Act of 1948 cannot be applied. Shri Dabir has invited our attention to section 40 of the Beedi and Cigar Workers (C.E.) Act, 1966 which deals with "effect of law and agreements inconsistent with this Act". Sub-section (1) of section 40 reads as under :- "40. Effect of laws and agreements inconsistent with this Act.-(1) The provision of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in the terms of any award, agreement, or contract of service whether made before or after the commencement of this Act." This non-obstante clause only lays that any other law which is inconsistent with provisions of this Act shall not prevail. But the service conditions has nothing to do with the medical benefits which is being sought to be given by the Employees Insurance Act. The service conditions is one part and the benefit of medical facilities are different thing. The employees State Insurance Act deals with the medical facilities which is being given to the workers. Therefore, section 40 will not come in the way of enforcing the provisions of this Act. The learned counsel also invited our attention to section 4 of the Beedi Workers Welfare Fund Act, 1976, which reads as under :- "4. Application of Fund -- (1) The fund shall be applied by the Central Govt. Therefore, section 40 will not come in the way of enforcing the provisions of this Act. The learned counsel also invited our attention to section 4 of the Beedi Workers Welfare Fund Act, 1976, which reads as under :- "4. Application of Fund -- (1) The fund shall be applied by the Central Govt. to meet the expenditure incurred in connection with measures and facilities which, in the opinion of that government are necessary or expedient to promote the welfare of persons engaged in beedi establishment, and in particular :-(a) to defray the cost of measures for the benefit of such persons directed towards -- (b) the improvement of public health and sanitation, the prevention of disease and the provision and improvement of medical facilities; (ii) the provision and improvement of water supplies and facilities for washing; (iii) the provision and improvement of educational facilities; (iv) the provision and improvement of housing and recreational facilities including standards of living nutrition and amelioration of social conditions; (iv-a) the provision of family welfare, including family planning education and services; (v) the provision and improvement of such other welfare measures and facilities as may be prescribed: . (b) to grant loan or subsidy to a State Govt. a local authority or an employer in aid of any scheme approved by the Central Govt. for the purpose connected with the welfare of persons engaged in beedi establishment: (c) to pay annually grants-in-paid to a State Govt. (or to a local authority or to an agency which satisfied the prescribed criteria (hereinafter referred to as the agency) or to an employer who provides to the satisfaction of the Central Government Welfare measures and facilities of the prescribed standard for the benefit of persons engaged in bidi establishment, so however, that the amount payable as grants-inaid to any such State Govt. (local authority, agency) or employer shall not exceed (i) the amount spent in providing welfare measures and facilities as determined by the Central Govt. (local authority, agency) or employer shall not exceed (i) the amount spent in providing welfare measures and facilities as determined by the Central Govt. or any person specified by in this behalf, or (ii) such amount as may be prescribed, whichever is less : Provided that no grant-in-aid shall be payable in respect of any such welfare measures and facilities where the amount spent thereon determined as aforesaid is less than the amount prescribed in this behalf: (d) to meet the allowances, if any, if the members of the Advisory Committees and the Central Advisory Committee constituted under section 5 and 6 respectively and the salaries and allowances, if any, of persons appointed under section 8: (e) any other expenditure which the Central Govt. may direct to be defrayed from the Fund. (2) The Central Govt. shall have power to decide whether any expenditure is or is not debitable to the Fund, and its decision shall be final. But, the question is whether all these benefits which are being given by this Act are inconsistent with the benefits which are sought to be given by the Employees' State Insurance Act, 1948. Chapter V of the Act of 1948, deals with the benefits, which reads as under :- "46. But, the question is whether all these benefits which are being given by this Act are inconsistent with the benefits which are sought to be given by the Employees' State Insurance Act, 1948. Chapter V of the Act of 1948, deals with the benefits, which reads as under :- "46. Benefits -- (1) Subject to the provisions of this Act, the insured persons or, (their dependents or the persons hereinafter mentioned, as the case may be) shall be entitled to the following benefits, namely :- (a) periodical payments to any insured person in case of his sickness certified by a duly appointed medical practitioner (or by any other person possessing such qualifications - and experience as the Corporation may, by regulations, specify in this behalf) (hereinafter referred to as sickness benefit); (b) periodical payments to an insured woman in case of confinement or miscarriage, or sickness arising out of pregnancy, confinement, premature birth of child or miscarriage, such woman being certified to be eligible for such payments by an authority specified in this behalf by the regulations (hereinafter referred to as maternity benefit); (c) periodical payments to an insured person suffering from disablement as a result of an employment injury sustained as an employee under this Act and certified to be eligible for such payments by any authority specified in this behalf by the regulations (hereinafter referred to as disablement benefit); (d) periodical payments to such dependents of an insured person who dies as a result of an employment injury sustained as an employee under this Act, as are entitled to compensation under this Act (hereinafter referred to as dependent's benefit); (e) medical treatment for an attendance on insured persons (hereinafter referred to as medical benefit) and (f) Payment to the eldest surviving member of the family of an insured person who has died, towards the expenditure on the funeral of the deceased insured person or, where the insured person did not have a family or was not living with his family at the time of his death, to the person who actually incurs the expenditure on the funeral of the deceased insured person (to be known as (funeral expenses); Provided that the amount of such payment shall not exceed (such amount as may be prescribed by the Central Govt.) and the claim for such payment shall be made within three months of the death of the insured person or within such extended period as the Corporation or any officer or authority authorised by it in this behalf may allow.) (2) The Corporation may, at the request of the appropriate Govt., and subject to such conditions as may be laid down in the regulations, extend the medical benefit to the family of an insured person. Section 49 deals with "sickness benefit", which reads as under :- "49. Sickness benefit:-- The qualification of a person to claim sickness benefit, the conditions subject to which such benefit may be given, the rates and period thereof shall be such as may be prescribed by the Central Govt. Section 50 deals with "maternity benefit", which reads as under :- "50. Maternity benefit:-- The qualification of an insured woman to claim maternity benefit, the conditions subject to which such benefit may be given, the rates and period thereof shall be such as may be prescribed by the Central Govt.) (a) Substituted for Ss. 49 and 50 by E.S.I (Amendment) Act (29 of 1989), S. 19 (1.2.1991)." Section 51 deals with "disablement benefit"; section 51A provides for "presumption as to accident arising in course of employment, "Sec. 51-B provides for "accidents happening while acting in breach of regulations, etc."; Section 51-C deals with "accidents happening while travelling in employer's transport", section 51-D provides for "Accidents happening while meeting emergency", likewise section 52 deals with "Dependents' benefit" and section 52-A provides for "occupational disease". Section 53 deals with "Bar against receiving or recovery or compensation or damages under any other law"; section 54 deals with determination of question of disablement"; Section 54-A provides for "Reference to medical boards and appeals to Medical Appeal Tribunals and Employees' Insurance Courts"; Section 56 deals with "Medical benefit"; section 57 deals with' 'scale of medical benefit"; section 59 lays down "establishment and maintenance of hospitals, etc. by Corporation" and section 60 deals with "benefit not assignable or attachable." Therefore, this chapter deals with the benefit of different types to the workers, which are not covered by the provisions of the Beedi and Cigar Workers Act or by the Beedi Workers Welfare Fund Act. The benefits in great details have been worked out in this chapter, and such benefits have not been made available under the Act of 1976 or Act of 1966 as referred by Shri Dabir. 8. A comperative chart has been prepared by the Department- E.S.1. Corporation which reads as under :-- Health Planning for Bidi Labour Facilities under E.S.I. Acts and Rules Welfare Fund 1. Free Treatment by the Labour Full medical facilities to workers and Welfare Organisation through its their family members. Additional dispensaries to Bidi Workers and their dependents. facility of treatment and consultation with specialist in distt. Corporation which reads as under :-- Health Planning for Bidi Labour Facilities under E.S.I. Acts and Rules Welfare Fund 1. Free Treatment by the Labour Full medical facilities to workers and Welfare Organisation through its their family members. Additional dispensaries to Bidi Workers and their dependents. facility of treatment and consultation with specialist in distt. and Medical College Hospitals. No limit of treatment expenses. 2. Maternity facilities: By Corporation before and after To lady Bidi Labours at the time of delivery, the cash payment of 84 delivery and entitlement of Rs. 250/- days wages. No limit in number of This benefit up to two children. children. 3. Family planning Operation scheme: Rs. 50/- to the concerned Bidi By Corporation 7 days wages to Labour undergoing the operation Male Labour and 14 days to Female apart from the other sources. Labour apart from other sources in this head. 4. Amount for opticals : Total medical facilities for treatment Rs. 70/- for opticals plus Rs. 20/- for eye sight and total reimbursement for lampses. on expenses on opticals. In case of accident during the course of employment as per the compensation fixed by the Medical Council, entit- lement for whole life other than wages. 5. Group Insurance Scheme: In case of normal death 3000 rupees In case of normal death Rs. 1,000/- by Labour Welfare Association for funeral and in the employment through LIC whereas Rs. 6,000 injury and death Rs. 1,000/- funeral in cases of accident. expenses and wages for every month to the widow till her death. 6. Ear/kindey treatment 50% of total expenses or Rs. 10,000 Total expenses are bared by the Cor- which ever is lesser + Rs. 200 to Rs. 250 poration. Provision for advance pay- per month as subsistence allowance to ment during the treatment Labour is the dependents till nine months. entitled for 50% of wages till 91 days and for further 309 days entitled for 70% wages. Facility is available to the member of labour's family. 7. Treatment of T.B. at home Rs. 50 per month for treatment and Rs. As shown in No.6 above. 200 to Rs. 250 subsistence allowance for nine months. 8. Treatment of cancer Total facility of treatment and subsistence As shown in No.6 above allowance of Rs. 200-250 till nine months 9. Leprosy treatment Treatment expenses Rs. 7. Treatment of T.B. at home Rs. 50 per month for treatment and Rs. As shown in No.6 above. 200 to Rs. 250 subsistence allowance for nine months. 8. Treatment of cancer Total facility of treatment and subsistence As shown in No.6 above allowance of Rs. 200-250 till nine months 9. Leprosy treatment Treatment expenses Rs. 15 per day + As shown in No.6 above subsistence allowance of Rs. 100 to 150 per month. 10. Mental diseases- To Bidi Labourers and their dependents As shown in No.6 above the total grant by the Organisation for treatment, recognized Mental Hospital. 11. Reservation in T.B. Hospitals To Labourers and their dependents As shown in No.6 above provisions of Reservation of Bed in T.B. Santorium + Rs. 200-250 subsistence allowances. A perusal of this treatment and the benefits which are extended to the employees under the Employees' State Insurance Act show that these benefits are of far reaching the consequences than the benefits which are being given under the Bidi and Cigar Workers Act and under the Bidi Workers Welfare Fund Act. E.S.I. has also given a list of the diseases where the full benefits is given to the workers. Perusal of this document shows that the benefit under the E.S.I. Act, 1948 pertaining to medical care are of far reaching consequences and it will ameliorate the working condition of these employees. Section 40 of the Beedi and Cigar Workers (C.E.) Act, 1966 though states non-obstante clause does not lay down that if some more benefits are being extended, then the said benefits will not be applicable to these employees rather than it only says that they are only inconsistent with the provisions of the Act, 1976, then they will not be extended. Meaning thereby, if the provisions under the Act provides better benefits to the employees and are not covered by these provisions under the Act, then those provisions will be made applicable to these employees. Therefore, section 40 will not come in the way of enforcing the provisions of this Act. Similarly, the argument of Shri Dabir, learned counsel for the petitioner that the theory of occupied legislation will be applicable does not impress us because areas on which Act of 1948 legislate is not occupied by both. the Acts i.e. 1976 and 1966. Therefore, section 40 will not come in the way of enforcing the provisions of this Act. Similarly, the argument of Shri Dabir, learned counsel for the petitioner that the theory of occupied legislation will be applicable does not impress us because areas on which Act of 1948 legislate is not occupied by both. the Acts i.e. 1976 and 1966. Rather Act of 1948 supplement the areas which are not covered by both the Acts i.e. 1966 and 1976. 9. Learned Counsel for the petitioner Shri Dabir invited our attention to M.G. Beedi Works v. Union of India ( AIR 1974 SC 1832 ). This is a case in which validity of Beedi and Cigar Workers (Conditions of Employment) Act, 1966 was challenged, and their Lordships upheld the validity of those provisions and held that it is not violative of Article 19 (1) (t) and (g). Therefore, this case is of no relevance. Our attention was also invited to Sarwan Singh v. Kasturi Lal ( AIR 1977 SC 265 ). This was a case of Delhi Rent Control Act. Their lordships held that by virtue of the first part of section 25-A, the provisions of Chapter III-A (Containing section 25-A, 25-B, 25-C as inserted in 1975) must prevail over the provisions of section 54 of the Delhi Rent Control Act. So far as non-obstante clause is concerned, section 40 of the Beedi and Cigar Act, it does not come in the way of applicability of Act, 1948 because the provisions of Act, 1948 are not inconsistent with the provisions of Bidi and Cigar Workers Act Therefore, this case has no relevance. 10. Learned counsel next submitted that this Act, 1948 has been made applicable only at three places i.e. Katni, Sagar and Sanawad whereas the same work is being done in various other places. Therefore, there is discrimination in applicability of provision of this Act, which is violative of Article 14 of the Constitution. 11. Learned counsel for the respondents, Shri R.K. Gupta submitted that it is true that this kind of work is spread up all over the State of M.P. but the provisions of this Act has been made applicable to selective places where the Corporation has better medical facilities for the employees and it will further extend benefit of this Act wherever E.S.I. could provide medical facilities. Learned counsel submitted that piecemeal extention of the provisions of this Act has been endorsed by the Lordships of the Hon'ble Supreme Court in Basant Kumar v. Eggle Rolling Mills ( AIR 1965 SC 1260 ). Similar question came up before their Lordships, and they observed as under :- "In the very nature of things, it would have been impossible for the legislature to decide in what area and in respect of which factories the Employees' State Insurance Corporation should be established. It is obvious that a scheme of this kind, though very beneficant, could not be introduced in the whole of the country all at once. Such beneficial measures which need careful experimentation have some times to be adopted by stages and in different phases, and so, inevitably, the question of extending the statutory benefits contemplated by the Act has to be left to the discretion of the appropriate Government. "Appropriate Government" under S. 2 (1) means in respect of establishments under the control of the Central Government or a railway administration or a major port or a mine or oilfield, the Central Government, and in all other cases, the State Government. Thus, it is clear that when extending the Act to different establishments, the relevant Government is given the power to constitute a Corporation for the administration of the scheme of Employees' State Insurance. The course adopted by modern legislatures in dealing with welfare scheme has uniformly conformed to the same pattern. The legislature evolves a scheme of socio-economic welfare, makes elaborate provisions in respect of it and leaves it to the Government concerned to decide when, how and in what manner the scheme should be introduced. That, in our opinion, cannot amount to excessive delegation." Therefore, simply because the provisions of this Act has been made applicable to the three places of M.P., it will be discriminatory as the provisions of this Act has been extended in piecemeal and Shri Gupta submitted that this has been extended to those places where there are E.S.I. hospitals by which the workers can be benefitted, therefore, there is nothing wrong in welfare legislation being introduced in piecemeal manner by the State. Therefore, the implementation of this Act on the selective places cannot be said to suffer from vice of discrimination so as to be violative of Article 14 of the Constitution. Therefore, the implementation of this Act on the selective places cannot be said to suffer from vice of discrimination so as to be violative of Article 14 of the Constitution. Shri Gupta, learned counsel for the respondents submitted that similar extension of this Act of 1948 to Bidi and Cigar employees has been held in Gaffar Jahangir Beedi Works v. Union of India by Karnataka High Court [1991 (62) F.I.R. 611]. In this case also, the similar question arose and the Division Bench of this Court held that Act of 1948 can be extended to the Beedi and Cigar workers notwithstanding the provisions of Beedi and Cigar Workers Act and the Beedi Workers Welfare Fund Act, or the provisions of the Beedi Workers Welfare Cess Act, 1976. Similarly, the Bombay High Court took the same view in the case of E.S.I. Corporation v. Fariyas Hotels Pvt. Ltd. (1988 Lab. I.C. 754). 12. Hence, in the result, we do not find any merit in these petitions, they are dismissed.