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2005 DIGILAW 1493 (RAJ)

Bhopalwala Arya Higher Secondary Managing Committee, Sriganganagar v. State of Rajasthan

2005-05-18

GOVIND MATHUR

body2005
Judgment Govind Mathur, J.-Heard the Counsel for the petitioner. 2. In exercise of powers conferred by Section 1 (5) of the Employees State Insurance Act, 1948 (Act No. 34 of 1948) (hereinafter referred to as “the Act of 1948”), the Government of Rajasthan issued a notification dated 210.2004 extending the provisions of the Act to Educational institutions (including public, private, aided or partially aided) run by individuals, trustees, societies or other organisations wherein 20 or more persons are employed or were employed for wages on any day of the preceding twelve months. 3. A challenge is given to the aforesaid notification by the petitioner on the ground that educational institutions cannot be classified as establishment or a class of establishments, industrial, commercial, agricultural or otherwise, therefore, cannot be covered under Section 1(5) of the Act of 1948. It is urged that establishment under Section 1(5) of the Act of 1948 related to establishments carrying on business, trade or profession or any work in connection with or incidental or ancillary to any business, trade or profession as it is clarified by the words “industrial”, “commercial”, “agricultural” or otherwise under Section 1(5) of the Act of 1948. 4. According to the Counsel for the petitioner the educational institutions are neither industrial nor commercial or professional establishments, therefore, the State Government lack jurisdiction to issue notification under Section 1(5) of the Act of 1948 to apply provisions of the Act on these institutions. 5. No doubt remains from reading of preamble of the Act of 1948 and by examination of provisions of the said Act that it is a welfare legislation intended to provide for insurance in case of illness, disablement, maternity or employment injury. The Act of 1948 is made applicable in the first instance to all the factories including factories belonging to Government other than seasonal factories in view of Section 1(4) of the said Act. Section 1(5) of the Act of 1948 empowers Government to apply the Act to other establishments also. The Act of 1948 is made applicable in the first instance to all the factories including factories belonging to Government other than seasonal factories in view of Section 1(4) of the said Act. Section 1(5) of the Act of 1948 empowers Government to apply the Act to other establishments also. The provision referred above reads as under: - “Section 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 establishments, 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 establishments within the part if the provisions have already been extended to similar establishment or class of establishments in another part of that State].” 6. From reading of Section 1(5) of the Act of 1948 it is apparent that beside the primary application to factories the application of the Act may subsequently be extended in part or wholly to any establishment or class of establishments. The impugned notification has been issued by the Government of Rajasthan by strength of Section 1(5) of the Act of 1948. The term “establishment” has not been defined in the Act of 1948. As such the expressions “establishment” and the “class of establishments”, “industrial”, “commercial”, “agricultural” or otherwise is required to be interpreted in consonance to the objects of the Act of 1948. 7. TheAct of 1948 provides medical benefits, sickness benefits, maternity benefits, disablement benefits and dependent benefits to the employees. The Act of 1948 provides for grant of cash benefits to the employees in recognised contingencies of sickness, maternity and employment injury. It also provides for medical benefit in kind to the employees and their families. The provisions of the Act of 1948 are being extended by the Government time to time, area-wise in a phased manner. The area of application and operation of the Act of 1948 is quite wide. It also provides for medical benefit in kind to the employees and their families. The provisions of the Act of 1948 are being extended by the Government time to time, area-wise in a phased manner. The area of application and operation of the Act of 1948 is quite wide. Primarily it is having application on all factories other than the seasonal factories and it may be extended in part or wholly to any establishment or establishments or class of establishments. No exclusion is provided under the Act with regard to its application except to the member of Indian Naval, Military or Air Force or to any person employed whose wages excluding remuneration for over time work exceed such wages as may be prescribed by the Central Government. 8. From reading of the Act of 1948 and its scheme it is quite clear that the legislature intended to have application of the Act of 1948 for grant of medical, sickness, maternity, disablement and dependent benefits to the employees at large working in factories and other establishments irrespective of their nature. It is pertinent to note that exclusion with regard to application of the Act of 1948 is given under Section 2(9) of the Act of 1948 while giving definition to term “employee”. This fact clearly shows that intention of legislature is to cover all kind of factories (except seasonal) and establishments irrespective of their nature. The exclusion is made for some employees those are the members of Armed Forces and the person having wages exceeding to ceiling prescribed by the Government. According to the provisions referred above it is clear that the provisions of Employees State Insurance Act, 1948 can be applied even for the establishments related to Naval, Military or Air Force but shall not apply to the members of these forces. Meaning thereby, that civil servants working in Indian Naval, Military or Air Force can also be covered under the Act of 1948. 9. The question required to be adjudicated in view of discussion made above is as to whether educational institutions can be termed and treated as class of establishments for application of the Act of 1948. Meaning thereby, that civil servants working in Indian Naval, Military or Air Force can also be covered under the Act of 1948. 9. The question required to be adjudicated in view of discussion made above is as to whether educational institutions can be termed and treated as class of establishments for application of the Act of 1948. The term “industrial establishments” is defined under Section 2(ka) of the Industrial Disputes Act, 1947 which reads as under: - “2(ka) “industrial establishment or undertaking” means an establishment or undertaking in which any industry is carried on: Provided that where several activities are carried on in an establishment or undertaking and only one or some of such activities is or are an industry or industries, then.- .(a) if any unit of such establishment or undertaking carrying on any activity, being an industry, is severable from the other unit or units of such establishment or undertaking, such unit shall be deemed to be a separate industrial establishment or undertaking; .(b) if the predominant activity or each of the predominant activities carried on in such establishment or undertaking or any unit thereof is an industry and the other activity or each of the other activities carried on in such establishment or undertaking or unit thereof is not severable from and is, for the purpose of carrying on, or aiding the carrying on of , such predominant activity or activities, the entire establishment or undertaking or, as the case may be, unit thereof shall be deemed to be an industrial establishment or undertaking.” 10. According to the definition referred above “industrial establishments” means an establishment in which any industry is carried on. The educational institution is an industry as defined under Section 2 (j) of the Industrial Disputes Act, 1947 as held by the Apex Court in the case of Bangalore Water Supply and Sewerage Board vs. A. Rajappa & Ors., reported in AIR 1978 SC 548 . Honble Supreme Court while analysing the nature of educational institutions in the aforesaid case held that educational institutions are having all the ingredients to constitute them as an industry. Honble Supreme Court also taken into consideration the fact with regard to involvement of educational institution in profession or trade or business. Honble Supreme Court while analysing the nature of educational institutions in the aforesaid case held that educational institutions are having all the ingredients to constitute them as an industry. Honble Supreme Court also taken into consideration the fact with regard to involvement of educational institution in profession or trade or business. The Apex Court in the case of Bangalore Water Supply and Sewerage Board (Supra), with regard to educational institutions held as under: - “121.-The final ground accepted by the Court is that education is a mission and vocation, rather than a profession or trade or business. The most that one can say is that this is an assertion which does not prove itself . Indeed, all life is a mission and a man without a mission is spiritually stillborn. The high mission of life is the manifestation of the divinity already in man. To christen education as a mission even if true, is not to negate its being an industry. We have to look at educational activity from the angle of the Act, and so viewed the ingredients of education are fulfilled. Education is, therefore, an industry and nothing can stand in the way of that conclusion. 122.-It may well be said by realists in the cultural field that educational managements depend so much on governmental support and some of them charge such high fees that schools have become trade and managers merchants. Whether this will apply to universities or not, schools and colleges have been accused, at least in the private sector, of being tarnished with trade motives. 123.-Let us trade romantics for realities and see. With evening classes, correspondence courses, admissions unlimited, fees and Government grants escalating, and certificates and degrees for prices, education-legal, medical, technological, school level or collegiate education-is riskless trade for cultural entrepreneurs and hapless nests of campus (industrial) unrest. Imaginary assumptions are experiments with untruth. 124.-Our conclusion is that the University of Delhi ( AIR 1963 SC 1873 ) case was wrongly decided and that education can be and is, in its institutional form, an industry.” 11. In view of law laid down by Honble Supreme Court in the case of Bangalore Water Supply and Sewerage Board (Supra) there is no doubt that educational institutions are industries. In view of law laid down by Honble Supreme Court in the case of Bangalore Water Supply and Sewerage Board (Supra) there is no doubt that educational institutions are industries. The educational institution being an industry is certainly an industrial establishment and as such is covered in the term “class of establishments” as provided in Section 1(5) of the Act of 1948. 12. Much reliance has been placed by the Counsel for the petitioner upon the law laid down by Honble Supreme Court in the case of Ram Kumar Misra vs. State of Bihar & Ors., reported in 1984 (2) SCC451, wherein Honble Apex Court held that Bhagalpur and Sultanganj ferries are establishments which carry on business or trade of plying ferries across the Ganges and they clearly come within the meaning of the word “establishment”. 13. The contention of the Counsel for the petitioner is that to treat a body as an establishment the ingredients required to be in existence are that the body must be carrying on business, trade or profession. 14. In my considered opinion the law laid down by Honble Supreme Court in the case of Ram Kumar Misra (Supra), is having no application in present controversy. In the aforesaid case the controversy was with regard to application of Minimum Wages Act, 1948 upon the Bhagalpur and Sultanganj ferries. Honble Supreme Court while considering the provisions of Minimum Wages Act, 1948 and Bihar Shops and Establishments Act, 1952 held that Bhagalpur and Sultanganj ferries are establishments as defined under Section 2(6) of Bihar Shops and Establishments Act, 1953. 15. In the case of Ram Kumar Misra (Supra), Honble Supreme Court held that in view of State Amendment under a notification dated 20.01.1979 the term “establishment” under Minimum Wages Act, 1948 has the same meaning which is assigned to it in Bihar Shops and Establishments Act, 1953. Accordingly the Court in light of definition of term “establishment” given under Bihar Shops and Commercial Establishments Act, 1953 treated Bhagalpur and Sultanganj ferries as establishments. It is pertinent to note that under Bihar Shops and Commercial Establishments Act, 1953 the term “establishment” is defined to mean an establishment which carries on any business, trade or profession or any work in connection with or exceptional or ancillary to or business, trade or profession. It is pertinent to note that under Bihar Shops and Commercial Establishments Act, 1953 the term “establishment” is defined to mean an establishment which carries on any business, trade or profession or any work in connection with or exceptional or ancillary to or business, trade or profession. This is not the position in the present case, therefore, while dealing with the term “establishment” under the Act of 1948 the ingredients business, trade or profession cannot be imported. .16. The educational institutions are certainly a class of establishments of industrial nature and, therefore, the State Government is empowered to apply the Act of 1948 as done by impugned notification. Beside the above it is also pertinent to note that the term “otherwise” in Section 1(5) of the Act of 1948 empowers the Government to include the establishments which are not even industrial, commercial or agricultural. The Act of 1948 is having very large amptitude with view to provide social security to the employees. No restricted meaning as advised by the petitioner can be given to it. 17. In view of it I do not find any illegality in the notification impugned. 18. The writ petition, accordingly, stands dismissed. 19. No order as to costs.