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1997 DIGILAW 160 (GAU)

North East Gases (P) Ltd. v. Employees State Insurance Corporation

1997-08-12

M.RAMAKRISHNA, W.A.SHISHAK

body1997
M.Ramakrishna, C.J.— The North East Gases (P) Ltd, the appellant herein, was the petitioner in Civil Rule No.3348 of 1994.-In that petition, an application had been filed by the Employees State Insurance Corporation, respondent herein, to set aside or modify the order dated 31st August, 1994, passed by the learned Single Judge in Civil Rule No.3348 of 1994, by which the learned Single Judge directed the Employees State Insurance Corporation to follow the procedure as contained under sections 44 and 45 of the Employees State Insurance Act, 1948, hereinafter referred to as the Act before any order was passed under section 45A of the Act. The learned Single Judge after hearing the learned counsel on both the sides, by another order made on 1.6.95, held as follows : "In view of the provision of section 75 (i) (g) and the law laid down by the Apex Court filing a writ petition before this Court is misplaced. The order dated 31.8.94 passed by this Court is therefore, set aside. The party aggrieved is directed to approach the ESI Court in terms of section 75 (i) (g) of the Act." Thus the application presented by the Employees State Insurance Corporation, the respondent, was allowed. Being aggrieved by this order, the North East Gases Pvt Ltd has come up before this Court in this writ appeal challenging the correctness and legality of that order of the learned Single Judge. 2. We have heard the learned counsel for the appellant who having taken us e through the grounds of appeal, the order of the learned Single Judge under appeal and the other documents produced, firstly urged : That though there is no dispute that according to the provisions of section 75 of the Act, in the event of every dispute between the employer and employees in respect of the rate of contribution payable "by the employer in respect of the employees, one can approach the Employees' Insurance Court to resolve that dispute, however, by virtue of the provisions of section 45 A of the Act which deals with determination of contributions in certain cases, the Apex Court had the occasion to deal with the power conferred upon the competent authority under section 45 A of the Act. He has further pointed out that the power conferred upon the State Insurance Corporation having been delegated to the Director General, the same cannot be sub-delegated to some other person. This question of law has been clearly considered and the law has been declared by the Supreme Court against the Insurance Corporation, therefore, no useful purpose will be served in going to the Employees' Insurance Court as the order made by the authority in the instant case not being proper the order is ab initio void and is without jurisdiction. Therefore, it is submitted that the order of the learned Single Judge directing the appellant to go to the Employees' Insurance Court will not serve any purpose. 3. Contrary' to this argument of the learned counsel for the appellant, the learned counsel for the respondent/Employees State Insurance Corporation argued on two points : (1) Though it is true that the law is declared by the Supreme Court in connection with section 45 A of the Act with regard to delegation of the power which is under the General Clauses Act. but still the law enunciated by the Supreme Court in the Sahni Silk Mills (P) Ltd & another vs. ESI Corporation, reported in (1994) 5 SCC 346 in paragraph 16, is in contravention of the statute. (2) Presuming for the purpose of argument that this Court holds in the instant case that the order of competent authority passed in the instant case is by virtue of the delegated power and that the same cannot be sustained in law, still with a view to maintain equity, referring to the provisions of section 85 of the Act, this Court need not interfere with the order of the learned Single Judge. To say so, the learned counsel for the respondents, placed reliance on the decision of the Supreme Court in Employees' State Insurance Corporation vs. F. Fibre Bangalore (P) Ltd as reported in (1997) 1 SCC 625 . We will refer to this decision later on. 4. We will first consider the argument referred by the learned counsel for the appellant dealing with the power under section 45A of the Act with regard to delegation. We will refer to this decision later on. 4. We will first consider the argument referred by the learned counsel for the appellant dealing with the power under section 45A of the Act with regard to delegation. Regard being had to be language employed in section 45A of the Act regarding the power of the Employees' State Insurance Corporation (ESI Corporation, in short), it is seen that under section 45 A (1) of the Act: "45 A (l)The Corporation may, on the basis of information available to it, by order, determine the amount of contribution payable in respect of the employees of that factory or establishment." The Hon'ble Supreme Court in dealing with the very question of delegation of power under section 45A of the Act and the power conferred upon the ESI Corporation, in the Sahni Silk Mills (P) Ltd (supra) case, a Bench of three e Judges held as follows : "From section 94A it does not appear that Parliament vested power in the Corporation to delegate its power in any officer or authority subordinate to the Corporation, and also vested power in the Corporation to empower such officer or authority, to authorise any other officer to exercise the said power undersection 85B (1). If section 94 A had a provision enabling the Corporation not only to delegate its power to any other officer or authority subordinate to the Corporation, I but also to empower such officer or authority in its own turn to authorise any other officer to exercise that power, the resolution could have been sustained. As such it has to be held that the part of resolution dated 28.2.1976, which authorises the Director General to permit any other officer to exercise the power under section 85B (1) of the Act is ultra vires section 94A." (emphasis supplied) Please see paragraphs 10 and 13 of the judgment. Thus we find that the Jaw declared section 94A ultra vires the provisions of section 8 5B (1) of the Act and it is undoubtedly made clear that the Corporation was not competent by virtue of the resolution dated 28.2.76, the Corporation haying authorised the Director General of the ESI Corporation, to exercise the power under section 94A in regard to determination of contribution payable by the employer and such power cannot further be delegated to any person by the Director General. 5. 5. In the instant case, admittedly, the order impugned in the writ petition has been passed by the Deputy Regional Director, Guwahati, as per Annexure IV dated 20.5.94. By virtue of the power exercised by the Deputy Regional Director under section 45 A of the Act, the contribution payable by the employer was determined by him and, therefore, there is no doubt in our mind that the order passed by the Deputy Regional Director is one without jurisdiction which is ab initio void: Therefore, the order impugned in the writ petition, and annexed as Annexure IV to this appeal, is required to be declared as null and void. 6. We will now come to the argument advanced by the learned counsel for the ESI Corporation. At the outset the submission of the learned counsel is that by virtue of the order made by the learned Single Judge of this Court, it is pointed out that it is always open to the aggrieved person, particularly an employer, to take a dispute, if any, before the ESI Court instead of invoking the provisions of Article 226 of the Constitution of India, and the appellate Court need not interfere with the order as it is always open to the aggrieved person/party to avail the benefit of the order made by the writ Court. 7. Another submission of the learned counsel for the respondent/ESI Corporation is that regard being had to the view taken by a Full Bench, of the Karnataka High Court and which has been reconsidered by the Apex Court in the case of ESI Corporation vs. F. Fibre Bangalore (P) Ltd, as reported in (1997) 1SCC 625 (supra), since the contribution determined by the competent authority and paid by the employer in a large number of cases, earlier to delegation of power, was held to be maintainable, it need not be disturbed. In that view of the matter, the learned counsel submitted that regard being had to the provisions of section 85 of the Act and to maintain the equity of law, since it is a welfare statute, this Court need not interfere. 8. We are afraid it is not possible to accept these submissions, firstly because the Supreme court in F. Fibre Bangalore (P) Ltd (supra)'s case obcc: vcd in the course of the order that the view taken by the Full Bench of the Karnataka High Court was incorrect. 8. We are afraid it is not possible to accept these submissions, firstly because the Supreme court in F. Fibre Bangalore (P) Ltd (supra)'s case obcc: vcd in the course of the order that the view taken by the Full Bench of the Karnataka High Court was incorrect. Secondly, regard being had to the provisions of section 45A of the Act, which came to be interpreted and the law which came to be declared by the Supreme Court in the Sahni Silk Mills (supra)'s case, the Supreme Court had the occasion to deal with the power of delegation. In the F. Fibre Bangalore (supra)'s case, on the other hand, the Supreme Court was dealing with the question as to the disputes between the ESI Corporation and the employer in matters other than those covered by section 45 A of the Act, and was dealing with the question as to who has to go to the ESI Court. The answer given by the Supreme Court was it was the employer who was to approach the ESI Court. There is no quarrel about this principle. But we are not concerned with that principle in the instant case. We are concerned with the power of delegation. As laready stated above, this question has been clearly considered by the Supreme Court. Therefore, in following the law as declared by the Supreme court, we have no alternative but to hold that it is the writ petitioner/appellant, the employer, who has to go the ESI Court. 9. In the result, the appeal stands allowed. The order made by the learned Single Judge, under appeal, stands set aside. Indeed the order passed by the Deputy Regional Director under Annexure IV dated 20.5.94, stands quashed. Parties to bear their own costs. This order will not come in the way of the Corporation to reconsider and pass appropriate orders in terms of the provisions of section 45A of the Act which shall be binding on the employer. In the instant case, the amount of money to be deposited in the ESI Corporation amounting to 5 0% of the contribution payable by the employer, shall be determined only after determination of the total amount to be deposited with the ESI Corporation. The money deposited, since we had directed depositing of 50% of the total amount of Rs.19,058/-, shall be subject to final adjudication/determination by the ESI Corporation on reconsideration.