Thiruvepathi Mills Labour Union (Intuc), Represented By Its Secretary v. Employees State Insurance Corporation, Represented By Its Director General
2012-06-05
P.N.RAVINDRAN
body2012
DigiLaw.ai
Judgment:- P.N. RAVINDRAN, J. 1. The petitioners are registered trade unions representing 531 workers of Thiruvepathi Mills Private Ltd, Kannur, presently under liquidation. They have filed this writ petition claiming unemployment allowance under the Rajiv Gandhi Shramik Kalyan Yojana Scheme, a copy of which is produced as Ext.P3 along with the writ petition. The brief facts of the case are as follows: 2. Thiruvepathi Mills Private Ltd, Kannur had 531 workers on its rolls as on 16.2.1998. The management of the company stopped work with effect from 17.2.1998 and thereafter closed the factory with effect from 15.4.1998. The workmen thereupon raised a dispute and it was referred for adjudication to Industrial Tribunal, Kozhikode by the State Government as per G.O.(Rt) No. 1643/99/LBR dated 1/6/1999. The issue referred for adjudication was: "Whether the work stoppage with effect from 17.2.1998 and closure with effect from 15.4.1998 of Thiruvepathi Mill is justifiable or not. If not, what are the reliefs the workers entitled to." 3. The trade unions representing the workers, who are the petitioners in this writ petition contended that stoppage of work and closure are illegal and were effected in violation of the mandatory provisions contained in Chapter VB of the Industrial Disputes Act, 1947 and therefore, the workers are entitled to full wages as if there was no lay off from 17.2.1998 to 15.4.1998 and as if there was no closure with effect from 15.4.1998. The management contended that the establishment is a sick unit, that it was temporarily closed for 18 months on account of financial difficulties and other problems, that the management has not closed down the factory as contended by the unions and there is no illegality in the impugned actions. 4. By Ext.P1 award passed on 29.4.2002, the Industrial Tribunal held that stoppage of work from 17.2.1998 as well as closure with effect from 15.4.1998 are illegal. It was held that the workers are entitled to full wages as if there was no closure. An award was accordingly passed holding that stoppage of work from 17.2.1998 and closure with effect from 15.4.1998 are illegal and unjustified and the workers are eligible to wages and attendant benefits as if there was no work stoppage or closure. Paragraphs 7 and 8 of Ext.P1 award which are relevant for the purpose of this case, are extracted below: "7.
Paragraphs 7 and 8 of Ext.P1 award which are relevant for the purpose of this case, are extracted below: "7. Above evidence of the WW1 is not controverted in any manner the management in their written statement has not controverted the point that their employment strength exceeded 700 and their establishment will come within the purview of Chapter VII of the Industrial Disputes Act. The management has not placed any material to make out that their action is legal and justified. Consequently, their action has to be declared as illegal and unjustified. The lay off from 17.2.1998 to 15.4.1998 is effected without obtaining prior permission from the Government. Hence the workers will be eligible to full wages as if there was no lay off as per Section 25 M of the Industrial Disputes Act. The closure is effected without obtaining prior permission from the Government and hence the same is violative of Section 25 (O) of the Industrial Disputes Act. Hence the workers are eligible to full wages as if there was no closure. It follows that the workers will be eligible to full wages and attendant benefits as if there was no work stoppage from 17.2.1998 to 15.4.1998 and any closure subsequent to 15.4.1998 onwards. 8. In the result, an award is passed holding that the work stoppage from 17.2.1998 as well as the closure with effect from 15.4.1998 are illegal and unjustified and the workers are eligible to wages and attendant benefits as if there was no work stoppage or closure." Ext.P1 award has attained finality. 5. Long before the stoppage of work and closure, which were the subject matter of Ext.P1 award, a reference was made to the Board for Industrial and Financial Reconstruction under section 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985. Ultimately, by order passed on 21.5.2001, the Board for Industrial and Financial Reconstruction held that there is no scope for revival of the company, that all attempts for revival were without success, that the sick industrial company is not likely to make profits exceeding its accumulated loss within a reasonable time by meeting all its financial obligations, that as a result thereof, it is not likely to recover in future and therefore, it is just and equitable and in public interest that it is wound up under section 20(1) of the Act.
Pursuant thereto, C.P.No.33 of 2001 was registered in this Court and in C.P.No.33 of 2001, Ext.P2 order for winding up Thiruvepathi Mills Private Ltd. was passed on 10.1.2008. The Employees State Insurance Corporation had, in the meanwhile, decided to provide unemployment allowance to insured persons who have been rendered unemployed due to closure of the establishment/retrenchment/permanent invalidity arising out of non-employment and a scheme known as the Rajiv Gandhi Shramik Kalyan Yojana Scheme was framed to provide for payment of unemployment allowance. Ext.P3 is a copy thereof. 6. After Ext.P2 winding up order was passed, 419 workers of Thiruvepathi Mills, Kannur filed separate applications in the prescribed form for unemployment allowance under Ext.P3 scheme. The applications were forwarded by the Convenor of a Joint Action Council to the Manager of the Employees State Insurance Corporation at Kannur along with Ext.P4 letter dated 9.7.2008. When no action was taken on the applications for unemployment allowance, he sent Ext.P5 letter dated 25.9.2008 to the Manager of the Employees State Insurance Corporation at Kannur followed by Ext.P6 letter dated 13.11.2008 to the Deputy Director, Employees State Insurance Corporation, Thrissur. Still later the petitioners sought the intervention of the Member of Parliament representing Kannur who took up the grievances of workers with the Hon'ble Minister for Labour and Employment. Later, the Convenor of the Joint Action Council took up the issue before the Employees State Insurance Corporation itself through the Member of Parliament. The Assistant Director in the office of the Employee State Insurance Corporation at New Delhi thereupon sent Ext.P8 letter dated 28.3.2010 to the Hon'ble Member of Parliament, who had taken up the cause of the workers, stating that employees of Thiruvepathi Mills are not entitled to unemployment allowance under the Rajiv Gandhi Shramik Kalyan Yojana Scheme since the unit was closed on 16.2.1998, while the unemployment allowance scheme came into force only on 1.4.2005. Hence this writ petition challenging Ext.P8 and seeking the following reliefs: "(i) to issue a writ of certiorari or any other writ, direction or order and set aside the decision of the respondents 1 and 2 communicated in Ext.P8. (ii) to declare that 419 workers in Thiruvepathi Mills Pvt. Ltd. represented by the petitioners who have submitted applications are entitled to Unemployment Allowance under Ext.P3 Rajiv Gandhi Shramik Kalyan Yojana Scheme for the period from 10.02.2008 to 09.02.2009.
(ii) to declare that 419 workers in Thiruvepathi Mills Pvt. Ltd. represented by the petitioners who have submitted applications are entitled to Unemployment Allowance under Ext.P3 Rajiv Gandhi Shramik Kalyan Yojana Scheme for the period from 10.02.2008 to 09.02.2009. (iii) to issue a writ of mandamus or any other writ, order or order commanding the respondents 1 and 2 to disburse Unemployment Allowance under Ext.P3 Rajiv Gandhi Shramik Kalyan Yojana Scheme to the 419 applicants from Thiruvepathi Mills Pvt. Ltd. forthwith." 7. It is contended that as the petitioners were admittedly unemployed on 1.4.2005 and in any case after Thiruvepathi Mills Private Ltd., was ordered to be wound up by Ext.P2 judgment in C.P.No.33 of 2001, delivered on 10.1.2008 and the 419 workers who had applied for unemployment allowance were insured persons as defined in the Employees State Insurance Act, 1948, they are entitled to unemployment allowance under the Rajiv Gandhi Shramik Kalyan Yojana Scheme. In paragraph 9 of the writ petition it is stated that after the winding up order was passed, the workers had submitted affidavits of proof of debt before the Official Liquidator who has accepted the claim of workmen for wages for the period ending with 10.1.2008, and in such circumstances, as the workers are unemployed on or after 1.4.2005 and the winding up order passed by this Court has the effect of closure of the establishment, the respondents ought to have extended to the workers, unemployment allowance under Ext.P3 scheme. 8. A counter affidavit dated 9.11.2010 has been filed on behalf of respondents 1 and 2. In paragraph 3 it is stated that the workmen have got an effective and alternative remedy under section 75 (3) of the Employees State Insurance Act, 1948 and therefore, the writ petition is not maintainable. In paragraph 5 of the counter affidavit it is stated that the workmen whom the petitioners represent are not entitled to benefits under Ext.P3 scheme for the reason that they were not insured persons on the date of closure of the establishment and had not contributed to the scheme for a minimum period of 5 years prior to loss of employment.
It is also contended that as the factory was closed with effect from 17.2.1998, it cannot be said that the workmen became unemployed on or after 1.4.2005 and therefore for that reason also, the workmen are not entitled for any benefit under the scheme. It is contended that if the date on which Ext.P2 winding up order was passed, namely 10.1.2008, is treated as the date of closure, then also the workmen are not entitled for unemployment allowance for the reason that they were not insured persons on the date of closure and had not contributed for a period of 5 years prior to the loss of employment to the Employees State Insurance Scheme. It is further contended that as the petitioners themselves admit that the workmen were not paid wages from 17.2.1998, it cannot be said that they were unemployed on or after 1.4.2005 so as to entitle them to seek benefits under Ext.P3 scheme. 9. The third petitioner has sworn to an affidavit dated 21.11.2010 in reply to the counter affidavit filed on behalf of respondents 1 and 2. It is contended that the workmen concerned were insured persons with distinctive ESI registration numbers, that contribution was payable for more than 5 years prior to the loss of employment and that merely because the employer defaulted remittance of Employees State Insurance Contribution or payment of wages, it cannot be said that the workers were not insured persons. Reiterating the averments in the writ petition it is contended that though respondents 1 and 2 have accepted the application submitted by 419 workers for unemployment allowance, till date orders have not been passed thereon. 10. I heard Sri. N. Nagaresh, learned counsel appearing for the petitioners, Sri.K.Sandesh Raja, learned counsel appearing for the Employees State Insurance Corporation and Sri. K. Mani, learned counsel appearing for the Official Liquidator. Sri. N. Nagaresh, the learned counsel appearing for the petitioners contended relying on the decision of a Division Bench of this Court in General Secretary, Palai Central Bank Employees Union v. Official Liquidator, Palai Central Bank Ltd. [(1965) 35 Company Cases 279] that as the passing of Ext.P2 winding up order on 10.1.2008 resulted in closing down of the undertaking and a closure due to unavoidable circumstances, the workers of Thiruvepathi Mills who became unemployed on or after 1.4.2005 are entitled to unemployment allowance under Ext.P3 Scheme.
Relying on the definition of the term "insured person" occurring in clause (14) of section 2 of the Employees State Insurance Act, learned counsel appearing for the petitioners contended that as the 416 workers were employees of the company in respect of whom contribution was payable under the Act for a minimum period of 5 years prior to the loss of employment and the workmen also satisfy the eligibility conditions stipulated in Ext.P3, they are entitled to have their applications for unemployment allowance granted in terms of Ext.P3 Scheme. 11. Per contra, Sri. K. Sandesh Raja, learned counsel appearing for respondents 1 and 2 contended that the question whether 419 workers who have applied for unemployment allowance were in fact workers of Thiruvepathi Mills and whether they are unemployed on or after 1.4.2005 is a matter to be proved by evidence and therefore the petitioners or the workers should move the Employees State Insurance Court under sub-section (3) of section 75 of the Employees State Insurance Act, 1948 instead of straight away invoking the jurisdiction of this Court under Article 226 of the Constitution of India. The learned counsel appearing for respondents 1 and 2 also contended that there was stoppage of work in Thiruvepathi Mills on 17.2.1998, that it was closed on 15.4.1998, that it did not reopen thereafter and therefore, the workmen became unemployed with effect from 17.2.1998 itself and not on or after 1.4.2005 and cannot therefore apply for unemployment allowance under Ext.P3 scheme. The learned counsel appearing for respondents 1 and 2 also contended that in order to get benefits under Ext.P3 scheme, apart from the fact that unemployment should have been on or after 1.4.2005, the applicants should have been insured persons under the Employees State Insurance Act on the date of loss of employment on account of retrenchment or closure of the factory or establishment, that contribution in respect of him or her should have been paid or payable for a minimum period of five years prior to the loss of employment, that as the factory was closed on 15.4.1998 and there was cessation of employment, contribution was not payable in respect of the workmen and therefore for that reason also, the workmen are not entitled to any relief.
The learned counsel appearing for respondents 1 and 2 also contended that even assuming that the workmen whom the petitioners represent are entitled to apply for unemployment allowance, the applications in the instant case were made belatedly after the expiry of three months from the date of retrenchment/unemployment and therefore, for that reason also unemployment allowance cannot be given. Sri. K. Mani, learned counsel appearing for the Official Liquidator submitted that the Official Liquidator has admitted the claims of workmen for wages for the period ending with 10.1.2008, but payment has not so far been effected, that in view of sub-section (3) of section 445 of the Companies Act, 1956, on the filing of a certified copy of Ext.P3 order by the Registrar of Companies, the winding up order has to be deemed to be a notice of discharge to officers and employees of the company except when the business of the company is continued, that in the instant case the business of the company did not continue after the winding up order, and therefore in law, the workers stood discharged with the passing of the winding up order. 12. I have considered the submissions made at the Bar by the learned counsel on either sides. I have also gone through the pleadings and the materials on record. The question that arises for consideration in this case is whether the workmen whom the petitioners represent, are eligible to apply for unemployment allowance under Ext.P3 scheme. The relevant portions of Ext.P3 scheme are extracted below: The ESI Corporation has decided to provide Unemployment Allowance to the Insured Persons who have been rendered unemployed involuntarily due to closure of the factory/establishment retrenchment or permanent invalidity arising out of nonemployment injury. The scheme has been named as "Rajiv Gandhi Shramik Kalyan Yojana". It shall apply to an Insured Person who becomes unemployed on or after 1st April, 2005. Kinds of Unemployment covered under the Scheme Unemployment which arises due to following reasons shall be covered under the Scheme:- a) Retrenchment as defined in the Industrial Disputes Act, 1947. b) Closure of the factory/establishment as defined in the Industrial Disputes Act, 1947. c) Permanent invalidity not less than 50% arising out of non-employment injury. The invalidity should be duly certified by a Medical Board constituted by the Central or State Government.
b) Closure of the factory/establishment as defined in the Industrial Disputes Act, 1947. c) Permanent invalidity not less than 50% arising out of non-employment injury. The invalidity should be duly certified by a Medical Board constituted by the Central or State Government. Eligibility Conditions a) The applicant should have been an Insured Person under the ESI Act on the date of loss of insurable employment on account of retrenchment, closure of the factory/establishment or permanent invalidity arising out of non-employment injury, as defined above. b) Contribution in respect of him/her should have been paid/payable for a minimum period of five years prior to the loss of employment. The duration of a year in this context, would mean a period of 156 days or more. An Insured Person who has lost employment and in respect of whom the contribution was paid/payable for 156 days or more in any two consecutive contribution periods in this reckoning will be deemed as having worked for one full year. Similarly, those who have paid contribution for 78 days or more in a contribution period will be deemed as having served for a half year. c) The period of service of an Insured Person need not be continuous with one employer. The Insured Person shall be entitled to this allowance irrespective of the fact whether part of his/her service as employee was rendered in the insurable employment with any other employer in the same or in any other region. d) The Insured Person need not satisfy any qualifying conditions afresh for claiming unemployment allowance for any subsequent spells provided to him/her but he/she should be an Insured Person on the subsequent dates of unemployment. The unemployment allowance in the subsequent spells shall be at the same rate as has already been decided/paid. e) Unemployment Allowance simultaneously for the same period. However, he/she may opt for either of the two, i.e., cash benefit or unemployment allowance. The term 'cash benefit' excludes periodical payments of Permanent Disablement Benefit under ESI Act and Regulations. f) As specified under Section 61 of the ESI Act, an Insured Person who is in receipt of unemployment allowance shall not be entitled to receive any similar benefit admissible under the provisions of any other enactment. g) There will be one month waiting period after the retrenchment. Disqualification/termination of unemployment allowances Unemployment allowance shall not be admissible in the following circumstances: 1.
g) There will be one month waiting period after the retrenchment. Disqualification/termination of unemployment allowances Unemployment allowance shall not be admissible in the following circumstances: 1. During lock out. 2. Lay off/temporary closure of factory/estt. 3. Strike resorted to by the employees. 4. Voluntary abandonment of employment/voluntary retirement/ premature retirement. 5. Less than five years contributory service. 6. On attaining the age of superannuation or 60 (sixty) years whichever is earlier. 7. Convicted (i.e. punished for false statement) under the provisions of Section 84 of the ESI Act read with Rule 62 of the ESI (Central) Rules, 1950. 8. On being re-employed elsewhere during the period he/she is in receipt of unemployment allowance. 9. Dismissal/termination under disciplinary action. 10. On death of Insured Person Submission of claim for Unemployment Allowance The Claim for Unemployment Allowance shall be submitted by the claimant at any time but not later than three moths from the date of retrenchment/unemployment to the appropriate Branch Office in prescribed form (UA-1) supported by the documentary evidence (in form UA-2) proving his/her retrenchment/unemployment/invalidity. This certificate is to be issued by Inspector of Factories/Assistant/Dy.Labour Commissioner/Workmen Compensation Commissioner or any other authority specified in this regard. Certificate of Invalidity will be issued by the Medical Board constituted by the Central/State Govt. The Branch Office will furnish information to Regional Office/Sub-Regional Office/Divisional Office where the case will be examined thoroughly and after ascertaining all the facts, the Regional Office/Sub-Regional Office/Divisional Office will communicate its decision to the Insured Person & the Branch Manager not later than one month from the date of receipt of claim from retrenched/unemployed Insured Person. The payment of unemployment allowance will be made on monthly basis on receipt of Claim Form in Form UA-9. For this purpose 'month' means a period of 30 days. On receipt of sanction from Regional Office/Sub-Regional Office/Divisional Office, the Branch Manager shall be simultaneously communicate to the concerned IMO Incharge to provide Medical facilities to Insured Person and his/her family. 13. The claim of the workmen for unemployment allowance is resisted mainly on three grounds. The first ground is that the unemployment occurred long prior to 1.4.2005 to be exact on 17.2.1998 and in any case on 15.4.1998 and therefore, on the terms of Ext.P3 scheme, the workmen whom the petitioners represent are not eligible for benefits thereunder.
13. The claim of the workmen for unemployment allowance is resisted mainly on three grounds. The first ground is that the unemployment occurred long prior to 1.4.2005 to be exact on 17.2.1998 and in any case on 15.4.1998 and therefore, on the terms of Ext.P3 scheme, the workmen whom the petitioners represent are not eligible for benefits thereunder. The second ground put forward is that the workmen were not insured persons in respect of whom contribution was paid or payable for a minimum period of five years prior to loss of employment. The third ground raised is that the applications were belatedly made and therefore, unemployment allowance cannot be granted. Yet another contention raised is that the workmen or the petitioners should invoke the alternate remedy available to them by moving the Employees State Insurance Court. By Ext.P1 award passed on 29.4.2002, the Industrial Tribunal, Kozhikkode held that stoppage of work on 17.2.1998 and closure of the factory on 15.4.1998 are illegal and therefore the workmen are entitled to full wages and attendant benefits as if there was no stoppage of work on 17.2.1998 and closure on 15.4.1998. The award has attained finality. The effect of Ext.P1 award is that though defacto there was stoppage of work and closure thereby leading to unemployment, there was no dejure closure of the factory or stoppage of work. The workmen therefore continued to be workmen on the rolls of the company with entitlement for wages and all other benefits. The situation however underwent a change with the passing of Ext.P2 winding up order on 10.1.2008 pursuant to the recommendation made by the Board for Industrial and Financial Reconstruction. The question whether a winding up order will result in closure of an undertaking within the meaning of section 25 FFF of the Industrial Disputes Act, 1947 was considered by a Division Bench of this Court in General Secretary, Palai Central Bank Employees Union v. Official Liquidator, Palai Central Bank Ltd. ((1965) 35 Company Cases 279). The Division Bench held that the passing of a winding up order resulting in the closure of the undertaking, is an unavoidable circumstance beyond the control of the employer, thereby attracting the proviso to subsection (1) of section 25 FFF of the Industrial Disputes Act.
The Division Bench held that the passing of a winding up order resulting in the closure of the undertaking, is an unavoidable circumstance beyond the control of the employer, thereby attracting the proviso to subsection (1) of section 25 FFF of the Industrial Disputes Act. Therefore, though by virtue of Ext.P1 award passed by the Industrial Tribunal, there was no closure in the eyes of law, the passing of Ext.P2 order winding up the company, led to the closure of the establishment for the purpose of section 25 FFF of the Industrial Disputes Act. In view of Ext.P1 award wherein it was held that there was no valid closure on 15.4.1998, it cannot be said that during the period from 15.4.1998 to 10.1.2008 there was a valid closure of the factory resulting in denial of employment to the workmen. Such being the situation, I am of the opinion that the workmen in the instant case are entitled to claim that they became unemployed after 1.4.2005 on account of Ext.P2 winding up order passed on 10.1.2008, which resulted in closure of the undertaking, in view of the fact that the business of the company did not continue after the winding up. 14. The other questions that remain to be considered are whether the workmen are otherwise eligible to apply for employment allowance and whether the applications which were not made within a period of three months from the date of retrenchment or unemployment are liable to be entertained and disposed of on the merits and whether the workmen and the petitioners should be relegated to the alternate remedy available to them. In Ext.P3 scheme it is stipulated that if the unemployment arises as a result of closure of the factory or establishment, it will be covered under the scheme. One of the eligibility conditions stipulated therein is that the applicant should have been an insured person under the Employees State Insurance Act as on the date of loss of employment on account of retrenchment or closure of the factory or establishment or permanent invalidity as a result of non-employment injury. It is also stipulated that the contribution in respect of the applicant should have been paid or payable for a minimum period of 5 years prior to loss of employment. The petitioners have in the writ petition stated in categorical terms that the workmen were insured persons.
It is also stipulated that the contribution in respect of the applicant should have been paid or payable for a minimum period of 5 years prior to loss of employment. The petitioners have in the writ petition stated in categorical terms that the workmen were insured persons. The said averment is not denied in the counter affidavit filed on behalf of the respondents. In fact the code number allotted to each workman is set out in Ext.P4. The objection raised is that the workmen were not insured persons on the date of closure and contribution had not been paid or was not payable in respect of each workman for a minimum period of five years prior to loss of employment. Clause (14) of section 2 of the Employees State Insurance Act, 1948, defines the term "insured person" as follows: (14) "insured person" means a person who is or was an employee in respect of whom contributions are or were payable under this Act and who is by reason thereof, entitled to any of the benefits provided by this Act. 15. To attract the definition of the term 'insured person' it is enough that a person is or was an employee in respect of whom contributions are or were payable under the Act. Since the workmen whom the petitioners represent were employees of Thiruvepathi Mills in respect of whom contributions were payable under the Act as on the date of closure of the establishment, namely the date of passing of the winding up order, and the contribution in respect of them was payable for a minimum period of five years prior to that date, it cannot be said that the workmen do not satisfy the eligibility condition set out in Ext.P3. All that is stipulated in Ext.P3 is that the applicant should have been an insured person under the Employees State Insurance Act on the date of loss of insurable employment on account of retrenchment, closure of the factory/establishment and contribution in respect of him or her should have been paid or should have been payable for a minimum period of five years prior to the loss of employment. In the instant case, both the conditions are satisfied.
In the instant case, both the conditions are satisfied. As a matter of fact, contribution was payable for more than the prescribed minimum period of five years as on the date of passing of the order winding up the company, which resulted in closure of the establishment. I accordingly overrule the contention of the respondents that the workmen whom the petitioners represent are ineligible to apply for unemployment allowance under Ext.P3 Scheme. 16. The only other surviving questions are whether the workmen or the petitioners should be relegated to the alternate remedy available to them and whether the applications filed by the workmen in uly 2008 are within time. As regards the first contention, I am of the pinion that having regard to the issue that arises for consideration nd the fact that the rights of a large number of workmen who are ow aged more than 60 years are invoked, it would not be just or quitable to relegate them to the alterate remedy. If the decision were to go against either of the parties, they will move this Court in appeal thereby necessitating a decision by this Court as regards the applicability of the Scheme. In such circumstances, I do not find it just or proper to relegate the petitioners to the alternate remedy available to them. That takes me to the question whether the application submitted by the workmen whom the petitioners represent are liable to be rejected on the ground that they were belatedly made. In Ext.P3 it is stipulated that the claim for unemployment allowance may be submitted by the claimant at any time but not later than three months from the date of retrenchment or unemployment to the C appropriate branch office. In the instant case, there is a dispute between the parties as regards the date of retrenchment or unemployment. The stand taken by the respondents is that on 17.2.1998 there was shortage of work and in any case unemployment took place on 15.4.1998. Ext.P3 scheme does not stipulate that belated applications will be rejected without scrutiny.
In the instant case, there is a dispute between the parties as regards the date of retrenchment or unemployment. The stand taken by the respondents is that on 17.2.1998 there was shortage of work and in any case unemployment took place on 15.4.1998. Ext.P3 scheme does not stipulate that belated applications will be rejected without scrutiny. As the Scheme was introduced to provide unemployment allowance, I am of the opinion that the period prescribed for submitting an application namely three months from the date of retrenchment or unemployment can be said to be only directory and not mandatory, resulting in rejection of an application for unemployment allowance made after three months from the date of retrenchment or unemployment. The purpose of the scheme is to provide unemployment allowance to insured persons who have been rendered unemployed involuntarily due to closure of the factory/establishment, retrenchment or permanent invalidity arising out of non-employment injury. In the case of persons claiming unemployment allowance on account of permanent invalidity arising out of non-employment, no period is prescribed for submission of the application. It would vary from individual to individual. In such circumstances, I find no reason why the applications submitted by the workmen whom the petitioners represent should not be disposed of on the merits by treating them as applications which are in order. I accordingly allow the writ petition, quash Ext.P8 and direct the competent authority in the Employees State Insurance Corporation to consider the applications submitted by the 419 workers whom the petitioners represent for unemployment allowance under Ext.P3 Scheme and grant them allowance for the maximum period permitted under the Scheme. Needful in the matter shall be done and unemployment allowance disbursed expeditiously and in any event within four months from the date on which the petitioners produce a certified copy of this judgment before the Director General of the Employees State Insurance Corporation.