Bindu Radhakrishnan v. Employees State Insurance Corporation
2017-07-24
ANTONY DOMINIC, DAMA SESHADRI NAIDU
body2017
DigiLaw.ai
JUDGMENT : Dama Seshadri Naidu, J. Introduction: 1. The Employees’ State Insurance Corporation (“ESI”) manages a few medical colleges. To have his or her child admitted into the medical college, a person must be an “Insured Person.” And the insured person has a quota. To have this quota, the person must fulfil three conditions: (1) He or she must be an “employee” as defined under the ESI Act; (2) the employee should have been in “continuous insurable employment” for a “minimum” period of five/four/three years as on “1st January of the year of admission”; (3) the employee must have paid at least 78 days’ contribution in each contribution year. 2. Many employees have claimed the benefit under the quota, and those claims have thrown open two issues: (1) Should an employee’s “continuous insurable” service of five/four/three years be coterminous with 1st January 2107? In other words, should those who completed the period earlier than 1st January 2017 remain out of reckoning? (2) Should the contribution be continuous and without a break even in the face of a statutory intervention? 3. We shall endeavour to answer these questions, for the Corporation, supposed to stand by the workmen, takes a stand that excludes many employees from a benefit. Background: 4. All these writ appeals arise out of the judgment dated 17th July 2017 in WPC No.20558 of 2017 and other connected writ petitions. The judgment in Writ Petition No.20558 of 2017 being the lead one, the rest of the writ petitions were also dismissed based on that judgment. Aggrieved, all the writ petitioners have filed these writ appeals. 5. Since the lead judgment was rendered in WPC No.20558 of 2017, we narrate the facts from WA No.1520 of 2017, the appeal arising from that writ petition. But as the petitioners’ grievances in all the writ appeals are identical, and the respondents common, we dispose of all the writ appeals through a common judgment. Facts: 6. The facts of each case fall in a very narrow compass. As to WA No.1520 of 2017, appellant Bindhu Radhakrishnan is an employee of a private residential school, an establishment covered by the ESI Scheme. So she is an “insured person.” Bindhu’s daughter, after her plus-two course, appeared for the National Eligibility-cum-Entrance Test (NEET) conducted by the Central Board of Secondary Education in 2016 and secured a rank. She aspired to join the undergraduate medical course. 7.
So she is an “insured person.” Bindhu’s daughter, after her plus-two course, appeared for the National Eligibility-cum-Entrance Test (NEET) conducted by the Central Board of Secondary Education in 2016 and secured a rank. She aspired to join the undergraduate medical course. 7. Soon after the publication of NEET results, the first respondent—the ESI Corporation—published its pre-admission notification for the academic year 2017-18 to admit eligible students into the U.G. Course (MBBS/BDS) in ESIC medical colleges managed by it, under the Insured Persons (IPs) quota. 8. Bindhu wanted the ‘Ward of Insured Person’ certificate for securing admission to her daughter in an ESIC Medical Education Institution under the ‘Insured Persons Quota’ for the academic session 2017-2018. She is said to have approached the Joint Director, ESI Corporation. The certificate had to be obtained in form Annexure-2(A) as required under clause-5.2.3 of the notification. But the Joint Director did not issue the certificate on the premise that Bindhu’s contribution was not continuous: there was a break because Bindhu’s wage limit crossed the prescribed mark for her to contribute uninterruptedly. Despite Bindhu’s coming back into the scheme and contributing once the wage limit was increased, she was denied the certificate. Aggrieved, Bindhu filed WPC No.20558 of 2017. 9. Similarly, all the other appellants, too, raised a common grievance. In some writ petitions, not only the employees but also their children were arrayed as petitioners. A learned Single Judge dismissed all the writ petitions. The Holding: 10. The holding of the impugned judgment seems to be that the admission policy is to be strictly construed and when so done, “the requirement of having the prescribed length of continuous insurable employment, together with payment of contributions must be seen as established between the date of registration under the scheme [and] 1.1.2017.” The impugned judgment has also held that “there cannot be any extrapolation of these termini when the mandate of the policy is unambiguously clear.” 11. Before we could appreciate the rival submissions, we may examine the statutory scheme and the admission policy governing the issue. The Law & Procedure: (a) The Law Employees’ State Insurance Act, 1948: 12. Section 2 (9) defines an “employee.” An employee is any person employed for wages in or relating to the work of a factory or establishment to which this Act applies.
The Law & Procedure: (a) The Law Employees’ State Insurance Act, 1948: 12. Section 2 (9) defines an “employee.” An employee is any person employed for wages in or relating to the work of a factory or establishment to which this Act applies. Clauses (i), (ii), and (iii) and the proviso attached to the definition describe the nuances of a person getting employed by the principal employer, or through an immediate employer, or getting hired by the principal employer. But here none disputes the status of the appellants, all of whom are admitted to be employees. The only bone of contention is their eligibility. So we need not labour on the lexical nicety of the term “employee.” 13. Section 2 (13A) defines an “insurable employment” to mean an employment in a factory or establishment to which the ESI Act applies. All the appellants, admittedly, are in insurable employment. 14. Section 39 defines “contribution.” The contribution to be paid to the ESI Corporation comprises the employer’s contribution and the employee’s. The Central Government prescribes the rate of contribution. Sub-section (3) mandates that the wage period in relation to an employee “shall be the unit in respect of which all contributions shall be payable under this Act.” Further, as per subsection (4), the contributions payable for each wage period shall ordinarily fall due on the last day of the wage period. Where an employee is employed for a part of the wage period or is employed by two or more employers during the same wage period, the contributions shall fall due on such days as may be specified in the regulations. 15. We may pay attention to sub-section (5)(a) of Section 39, which says if “any contribution payable under this Act is not paid by the principal employer on the date on which such contribution has become due, he must pay simple interest” at 12% per annum or at such higher rate as specified, until the date of its actual payment. Remedially, the Corporation can recover from the defaulting employer by invoking the Revenue Recovery Act. 16. We may also examine Section 40 of the Act. Sub-section (1) is loud and clear: the principal employer shall pay for every employee, whether directly employed by him or through an immediate employer, both the employer’s and the employee’s contribution.
Remedially, the Corporation can recover from the defaulting employer by invoking the Revenue Recovery Act. 16. We may also examine Section 40 of the Act. Sub-section (1) is loud and clear: the principal employer shall pay for every employee, whether directly employed by him or through an immediate employer, both the employer’s and the employee’s contribution. As per sub-section (2), the principal employer will, in the case of an employee directly employed by him (not being an exempted employee), be entitled to deduct from the employee’s wages her contribution, but not otherwise. The employer’s contribution cannot be deducted from the employee’s wages, though. 17. Section 42 of the Act deals with the general provisions for paying the contributions. Sub-section (2) mandates that the employer must pay both its contribution and the employee’s, too. ESI (Central) Rules, 1950: 18. We may examine Rule 50, which prescribes the wage limit for an employee to be covered under the Act. First, we must note that this wage limit has been fluctuating and has, mostly, seen upward revision periodically. This has led to an employee going briefly out of the coverage and then, again, coming back into the coverage. 19. To appreciate the Rule 50, we may briefly recollect that Section 2 (9) defines an “employee.” Sub-clauses (a) and (b) Section 2 (9) deal with the exclusions. That is, who are not the employees: (a) any member of the Indian naval, military or air forces; or (b) any person so employed whose wages (excluding remuneration for overtime work) exceed such wages as prescribed by the Central Government a month. 20. That prescription of wage limit by the Central Government is through Rule 59. It was Rs.15,000/- per month. If an employee’s wages did not exceed Rs.15,000/- “after the beginning of the contribution period,” the employee continued to be covered until the end of that contribution period, even if his wages were raised before the period ends. To the employees with disabilities, the limit was Rs.25,000/-. The Periodic Raise: 21. Here, most employees initially had their wages within the prescribed limit. Confining our discussion to the last decade, we may note that, first, the limit was Rs.10,000/-. Once an employee’s wages crossed Rs.10,000/-, she went out of coverage. From 01.05.2010, the limit was raised to Rs.15,000/-. So the employees with wages between Rs.10,000/- and Rs.15,000/- were covered.
Here, most employees initially had their wages within the prescribed limit. Confining our discussion to the last decade, we may note that, first, the limit was Rs.10,000/-. Once an employee’s wages crossed Rs.10,000/-, she went out of coverage. From 01.05.2010, the limit was raised to Rs.15,000/-. So the employees with wages between Rs.10,000/- and Rs.15,000/- were covered. But once the employee’s wages crossed Rs.15,000/-, she again went out of the coverage. Later, from 01.01.2017, the limit was raised to Rs.21,000/-. That means, again, the employees with the wage band between Rs.15,000/- and Rs.21,000/- were brought back into the coverage. 22. Thus, without any fault or default on the employee’s part, she might have gone out of the coverage for brief periods whenever her wages crossed the limit and been brought back into the coverage whenever the wage-limit was raised. Yet, all along, once the employee was brought back into the coverage, she and her employer contributed retrospectively. So the continuity has been maintained. Regulations: 23. The Employees’ State Insurance (General) Regulations, 1950, deals, among other things, with time for paying the contribution, interest on the contribution due, but not paid in time, and also damages on the contributions due but not paid on time. ‘‘31. Time for payment of contribution.- An employer who is liable to pay contributions in respect of any employee shall pay those contributions within 21 days of the last day of the calendar month in which the contributions fall due; Provided that where factory/ establishment is permanently closed, the employer shall pay contribution on the last day of its closure: 31:-A. Interest on contribution due, but not paid in time. – An employer who is liable to pay contribution within the periods specific in Regulation 3, shall be liable to pay simple interest at the rate of 2 per cent. per annum in respect of each day of default or delay in payment of contribution 31:B. Recovery of interest.- Any interest payable under regulation 31-A may be recovered as an arrear of land revenue or under section 45- C to section 45-I of the Act. 31-C. Damages on contributions or any other amount due, but not paid in time.
per annum in respect of each day of default or delay in payment of contribution 31:B. Recovery of interest.- Any interest payable under regulation 31-A may be recovered as an arrear of land revenue or under section 45- C to section 45-I of the Act. 31-C. Damages on contributions or any other amount due, but not paid in time. -If an employer fails to pay contribution within the periods specified under Regulation 31, or any other amount payable under the Act, the Corporation may recover damages, not exceeding the rates mentioned below, by way of penalty:- Period of delay Maximum rate of damages in % per annum of the amount due (i) less than 2 months (ii) 2 months and above less than 4 months 10% (iii) 4 months and above but less than 6 months 15% (iv) 6 months and above 25 (b) The Procedure: 24. Clause 8 of the Ext. R1(a) admission policy defines ‘insured person’: The Insured Person’ shall be an ‘employee’ as defined in the ESI Act; and he/she should have been in continuous insurable employment for a minimum period of five/four/three years as on 1st January of the year of admission and should have paid at least 78 days of contribution each Contribution Period, during this five/four/three-year period. The Insured persons for the said purpose shall be grouped as Group- I/II/III respectively. The 05/04/03 year would be counted from the date of entry into the ESI Scheme. For employee who entered the Scheme prior to 9th June 2011, the date of entry into the Scheme for the purpose of availing benefit of Insured Persons (IPs) Quota for his/ her wards would be the date of submission of ‘Declaration Form/ by the employer in respect of the employee concerned at the Branch Office or another appropriate office of the ESIC. For employees who entered the Scheme after 9th June, 2011 the date of entry into the Scheme for the above purpose would be the date of registration available in the IP database of the ESIC, in case there is default or delay on the part of the employer in getting itself or the concerned employee covered under the Scheme, the ESIC will not be responsible for the said default or delay.
Any period prior to the date of entry described above would not be counted towards the 05.04.03 year period of eligibility for the purpose of availing benefit of Insured Persons (IPs) Quota’’. 25. Clause (9) defines “Ward of Insured Person’: to be a ward of an insured person, a child must be a legitimate natural born child who is wholly dependent on the earnings of the insured person and who is (i) receiving education, till he or she attains the age of twenty-one years, (ii) or an unmarried legitimate natural born daughter. Submissions: W.A. No.1512 of 2017: 26. For the appellants, Sri Deepak, the learned counsel for the appellant in WA No.1512 of 2017, has led the arguments. The other counsel supplemented his submissions. 27. Sri Deepak submits that appellant Ponnachan could not get the ‘ward of insured person’ certificate on the premise that for the contribution period from April 2016 to September 2016, he paid only for 75 days, instead of the stipulated 78 days. But he contends that Ponnachan worked for 90 days during that contribution period before he went out of the ceiling because of the rise in his wages. Ponnachan, asserts Sri Deepak, contributed for the additional period of 15 days as early as on 02.06.2017, whereas the Corporation issued the admission notice only on 28.06.2017. And Ponnachan’s son registered himself for the course on 05.07.2017. In other words, Ponnachan paid the balance contribution much before the Corporation issued the admission notice. 28. In this regard, Sri Deepak reiterates that delay in contributing, especially when the delay was occasioned because of statutory changes, cannot be fatal. He draws our attention to Section 42 (5) (a) of the Act to hammer home his contention that the delayed payments entail interest on the amount but no disqualification. He has also relied on Regulation 31-C to contend that on delayed payment, the Corporation could recover damages from the employer. 29. Sri Deepak strenuously contends that the cut-off date—1st January 2017—was prescribed only to grade the insured employees’ services into 5/4/3 years: the longer the service, the more preferred an employee is. He has also submitted that the learned Single Judge, as well as the authorities, has been swayed by the Annexure 2(A), which, according to him, is no part of the policy or scheme.
He has also submitted that the learned Single Judge, as well as the authorities, has been swayed by the Annexure 2(A), which, according to him, is no part of the policy or scheme. In that context, Sri Deepak stresses that the contribution periods mentioned in the ‘form’ are only illustrative. If they are taken literally, they negate the scheme and, therefore, fall foul of the very scheme. 30. If there is a conflict between the policy, as has been articulated in the scheme, and the form, which only procedurally guides, the form cannot, according to Sri Deepak, prevail. WA No.1520 of 2017: 31. Sri Sreekumar, the learned counsel, has submitted that the ‘insured employees’ are a homogenous class. Carving out groups in that homogenous class by introducing artificial criteria offends Article 14 of the Constitution. He relied, in this regard, on CSIR v. Ramesh Chandra Agarwal ((2009) 3 SCC 35) and State of Kerala v. N. M. Thomas ( (1976) 2 SCC 310 ). WA No.1529 of 2017: 32. Sri P. Ramakrishnan, the learned counsel for the appellant, has once again taken us through the definition of ‘insured person,’ and stressed that to reckon the eligibility, date of entry is vital. He has relied on Geetha N v. ESI Corporation (2016 (4) KLT 203). WA No.1532 of 2017: 33. Sri M. Sasindran, the learned counsel for the appellant, has submitted that the proforma cannot be taken literally. If taken, it conflicts with the definition. According to him, a provision extending a benefit needs an expansive interpretation: more people should be brought under the beneficial umbrella than exclude them on a hyper-technical approach. He has also contended that practice should conform to policy, but not the other way round. 34. Sri M. Sasindran has drawn our attention to the Ext.P5 clarification issued by the Corporation to support his contention that any interruption in the contributions affects no insured person’s right or eligibility. WA Nos.1516 & 1524 of 2017: 35. Sri K. P. Rajeevan, the learned counsel, has submitted that the letter, dt.24.05.2017, issued by the Corporation’s Deputy Medical Commissioner (ME-II) contains Clause (3), and it militates against the Corporation’s very policy declared on 15.12.2016 in its 170th meeting. According to him, the stipulation in Clause 3 is ‘unjust, illegal, and liable to be quashed.’ 36. All the other learned counsel in other writ appeals have adopted the above arguments.
According to him, the stipulation in Clause 3 is ‘unjust, illegal, and liable to be quashed.’ 36. All the other learned counsel in other writ appeals have adopted the above arguments. For ESI: 37. Sri Sandesh Raja, the learned Standing Counsel for ESI, has submitted that Bindhu Radhakrishnan does not have five years continuous insurable employment as stipulated in Ext. P5 as on 01.07.2015. According to him, Bindhu’s name was registered under the ESUI Scheme on 13.8.2010; she was left out of the scheme from 1/7/2015, when her wages exceeded the prescribed limit: Rs.15,000/-. So, Bindhu’s daughter cannot be a ward of an insured person to secure admission in the academic year 2017-18. To support his contention, he has relied on Employees State Insurance Corporation Vs. Jemin Elizabeth Mathew. ((2015) (1) KLT 328). 38. The learned Standing Counsel has also contended that the admissions to MBBS course are not undertaken under the Act; they are under a policy decision of the Board. Referring to clause 8, he submits that if anyone desires to get the benefit under the scheme, she must fulfil the conditions stipulated. To elaborate, Sri Raja has submitted that absent a statutory stipulation, the Corporation could choose any yardstick for processing the applications of the wards of insured persons. In this regard, he asserts that the Ex.P5 and P6 proceedings are neither derogatory of nor in conflict with the Ext. R1 (a) admission scheme—but agree with it. 39. The Insured Person, according to Sri Sandesh Raja, ought to have completed 5 years/4 years /3 years as on 1st January 2017, the admission year, and should have paid at least 78 days’ contribution in each contribution period, during this period of five/four/three years. Sri Raja asserts that the condition unambiguously and categorically stipulates that there should be not only continuous employment but also regular payment of contribution up to 1st January 2017. Sri Raja has emphasized the expression “as on 1st January”, which, according to him, contradistinguishes “by 1st January.” Because of Bindhu’s remaining out of coverage from 01.07.2015 to 31.12.2016—that is, one and half years—she does not fulfil both these essential conditions: (a) continuous employment as on 1st January, and (b) regular payment of contribution. This Court, according to Sri Raja, upheld the Corporation’s admission policy in Geetha N v. ESI Corporation, the same decision relied on by one of the appellants. 40.
This Court, according to Sri Raja, upheld the Corporation’s admission policy in Geetha N v. ESI Corporation, the same decision relied on by one of the appellants. 40. As to the rest of writ appeals, the learned Standing Counsel advances similar contentions. Eventually, summing up his submissions, he urges this Court to dismiss the writ appeals. Discussion: 41. ESI Corporation, a statutory body established under the ESI Act, 1948, is under the administrative control of Ministry of Labour & Employment, Govt, of India. It has started Medical Education Institutions across the country. The Central Government has approved the Corporation’s admission policy and procedure for under graduate (MBBS/BDS) Course in ESIC Medical Education Institutions. The policy provides for ‘Insured Persons (IPs) Quota’ after completing the ‘‘All India Quota’’ and the ‘‘State Government Quota.’’ Under the ESI Scheme, the ‘‘Wards of Insured Persons” who meet the eligibility criteria and who have been qualified in NEET (UG)-2017 will be eligible under the ‘Insured Persons Quota’ for academic session 2017-18. What are the Criteria for Admission? 42. To put the issue in perspective, we will refer to the documents filed by the Corporation in WA No.1520 of 2017. Ext.R1, dt.13.01.2017, is the Memorandum issued by the Deputy Medical Commissioner (ME-II). Styled as a ‘memorandum,’ it refers to the policy decision the Corporation took in its 170th meeting held on 15.12.2016. In that meeting the Corporation approved the revised admission policy. The memorandum defines an ‘insured person.’ An insured (a) must be an ‘employee’ as defined in the ESI Act, (b) should have been in “continuous insurable employment” (c) for “a minimum period” of five or four or three years (d) “as on 1st January of the year of admission, and (e) should have paid at least 78 days of contribution each Contribution Period, (f) during this five/four/three-year period. (g) the period would be counted from the date of entry into the ESI Scheme. (h) If entered before 09.06.2011, the date of the employer’s submitting the ‘declaration form’ should be the reckoning point, (i) if entered after 09.06.2016, the date of registration as available in the Corporation’s IP database should be the reckoning point. (j) Any period before the date of entry as shown in (h) and (i) would not be counted towards the five-or four-or three-year period. 43.
(j) Any period before the date of entry as shown in (h) and (i) would not be counted towards the five-or four-or three-year period. 43. Without much ado, we can affirm that all the appellants, excluding their wards, are employees; it has not been disputed. They have been, as defined in Section 2 (13A), in continuous insurable employment. This too has not been disputed. The appellants have a “minimum” period of service as on 1st January 2017—the reckoning date for this academic year. What is ‘minimum’ service? 44. The appellant must have a minimum service of five or four or three years as on 1st January 2017. If a person has more than the ‘minimum’ service by or as on 1st January 2017, does it amount to any disqualification? Black’s Law Dictionary defines ‘minimum,’ an adjective: of, relating to, or constituting the smallest acceptable or possible quantity in a given case. The Oxford English Dictionary defines ‘minimum,’ a noun, as the least or smallest amount or quantity possible, attainable, or required. The American Heritage Dictionary defines the same expression as the least possible quantity or degree. The lowest degree or amount reached or recorded; the lower limit of variation. A lower limit permitted by law or other authority. 45. It needs no much cogitation to understand that ‘minimum’ emphasizes a threshold barrier and it welcomes anything more. If a person should have a minimum of five years’ service, that person’s having, say, six years’ service is no disqualification. This minimum period, here, is to be reckoned taking a cutoff date: 1st January 2017. If somebody completes the minimum period before that date and is well on his way to a longer period by or as on 1st January 2017, he suffers no disqualification on the count of his possessing more than the minimum service. The expression ‘minimum’ in our view is not without a purpose: Among many qualified candidates, the ‘minimum’ emphasizes that somebody with more may stand in a better position; even if she does not gain, certainly she cannot suffer—and suffer an exclusion, at that. 46. So we hold that “as on 1st January” only marks a terminus to count whether an employee has minimum service. But the length of service need not be coterminous with 1st January. If that date were to be treated as coterminous with five-/four-/three-year period, it would render ‘minimum’ nugatory.
46. So we hold that “as on 1st January” only marks a terminus to count whether an employee has minimum service. But the length of service need not be coterminous with 1st January. If that date were to be treated as coterminous with five-/four-/three-year period, it would render ‘minimum’ nugatory. It amounts to imposing a condition that a person must complete her length of service on that date—more a fortuitous circumstance and, in almost all cases, an impossibility. What is Contribution Period? 47. Contribution, as per Section 2 (4) of the Act, is the money payable to the Corporation by the principal employer regarding an employee. And it includes any amount payable by or on behalf of the employee. ‘Contribution Period’, according to Rule 2A of the Rules, is the period not exceeding six consecutive months, as may be prescribed in the regulations. Regulation 4 of the Regulations, as we shall see, gives the contribution period and the corresponding benefit period: Contribution Period Benefit Period 1st April to 30th September 1st January of the following year to 30th June 1st Oct to 31st March of the year 1st July to 31st December following 48. As we have already noted, Regulations 31, 31A, 31B, and 31C deal with time for contributing, interest on contribution due, recovery of interest, and damages on contributions or any other amount due, but not paid, respectively. During the period of five/four/three years, the employee must have contributed at least for 78 days of each contribution period. 49. Rule 50 of the Rules prescribes the wage limit for an employee to be covered under the Act. And this wage limit has seen periodic upward revision. So all the appellants, at one stage or another, went out of the scheme. That is, for a brief period their employer did not contribute. Later, when the limit had been raised, they again were brought back into the fold. Then the employer paid. First, we must appreciate that an employee had occasionally gone out of the coverage not of her own volition but because of statutory compulsion. Later, the limit revised and enhanced, the employer contributed. Default, if any, was temporary. And it was under unavoidable circumstance—not attributable to the employee. We have already seen how the revision of wage limit has taken place. Clarification: 50.
Later, the limit revised and enhanced, the employer contributed. Default, if any, was temporary. And it was under unavoidable circumstance—not attributable to the employee. We have already seen how the revision of wage limit has taken place. Clarification: 50. As many employees have been dogged by the uncertainty because of this periodic rise in wage limit and the employees’ going out of the reckoning for a limited period, the Corporation has clarified. Ext.P5 in WA No.1532 of 2017 is the clarification issued by the Corporation. The Head Quarters acknowledges that “instances have come to notice that the Insured Persons who had gone out of coverage due to crossing the earlier wage ceiling of Rs.15000/- and have subsequently re-entered into Insurable Employment due to enhancement of wage ceiling w.e.f. 01.01.2017 have been facing difficulties in getting the benefits because of doubt over reckoning of interruption period.” The letter, then, refers to Branch Office Manual, Chapter VIII, para L.8.15.2.C containing the Corporation’s Resolution dt. 05.12.1999: “A Person in insurable employment may go out of coverage due to enhancement of wages and may be brought under coverage subsequently. The period of interruption should also be taken as insurable employment for the purpose of the Term ‘‘Continuous Service.’’ 51. In the light of the above clarification issued by the Corporation, we need not hold ourselves back on the issue whether the break because of wage revision and the limit crossing should prove fatal to the insured employee’s claim that she has continuously contributed as per the statutory mandate. No. Not fatal. As on 1st January 2017, what does it denote? 52. To contextualize the controversy, we will have a concrete case referred to so that we can well appreciate how the Corporation’s objection fares. The Corporation, taking Bindhu’s case as an example, contends that she ought to have completed, say, five years “as on 1st January 2017,” and paid at least “78 days’ contribution in each contribution period” during that five-year period. The conditions, according to the Corporation, are unambiguous and categoric; there should be not only continuous employment but also regular payment of contribution “up to 1st January 2017.” Here Bindhu, by Corporation’s reckoning, remained out of coverage from 01.07.2015 to 31.12.2016—that is, one and half years. 53. The Corporation further contends that this Court in Geetha and Jemin Elizabeth Mathew has accepted its interpretation.
53. The Corporation further contends that this Court in Geetha and Jemin Elizabeth Mathew has accepted its interpretation. A learned Single Judge in Geetha examined paragraph 8, which defines an “insured person.” The issue, according to Geetha, was how to reckon five-year period. On reading paragraph 8, we can gather that what is material is not the petitioner’s five-year employment, but the date of his enrolling into the Scheme, as held by the learned Single Judge. To count the five-year period as on 1st January of the admission year, we should reckon the period from the date of entry into the ESI Scheme. In Geetha, on facts, it was held that the petitioner was registered only on 03.08.2012 based on an interim direction by the Court, and he did not complete five years by 1st January. It is not, as we see, a case of the period getting completed before 1st January; on the converse, it is a case where the period was not completed even by 1st January. We reckon it supports, if at all, the appellants here. Or, at least, it does not support the Corporation’s stand. 54. An employee’s application was processed and was rejected because he did not complete five years of employment as on 1.1.2014. When challenged, a learned Single Judge allowed the writ petition holding that there is no mention in the prospectus that the year must be understood “with reference to completion of 365 days.” On appeal, a learned Division Bench in Jemin Elizabeth Mathew has held that the words “five years continuous insurable employment” is prefixed by “a period of five years as on 1st January of the year.” The plain and simple meaning of the words shall be completion of five years continuous period as on 1st January of the year. So, it is a case of not completing the minimum period by a particular date, not crossing the period—a converse case. The Impugned Judgment: 55. The Corporation’s stand finds favour with the impugned judgment. It holds that the intention seems to be to confer the benefit on the wards of those employees who are and “have been in continuous insurable employment under the ESI Act, as on 01.01.2017.” Among those found eligible, a preferential allotment takes place based on the length of continuous insurable employment the employee concerned has, as on 01.01.2017. 56.
It holds that the intention seems to be to confer the benefit on the wards of those employees who are and “have been in continuous insurable employment under the ESI Act, as on 01.01.2017.” Among those found eligible, a preferential allotment takes place based on the length of continuous insurable employment the employee concerned has, as on 01.01.2017. 56. If we examine the above observation, on facts, no one could dispute that all the appellants have been in continuous insurable employment. True, preferential allotment should be granted based on the length of service. That means, the more service an employee has, the more preferred she should be. 57. Of vital importance is the observation in the judgment that “it is not just any continuous insurable employment of 5/4/3 years, prior to 01.01.2017, that qualifies the employee for the benefit.” The employee concerned, further holds the judgment, should have also “effected contributions during the contribution periods in the said prescribed continuous period”. 58. In this regard, we may recollect that the very Corporation has clarified that if an employee goes out of coverage because of the statutory change and is later brought back into the fold, again because of the statutory change, the employee’s service remains unaffected and the contributions are deemed to have been made continuously. 59. Regrettably, the impugned judgment reads more than warranted into the phrases “continuous’’ and ‘‘as on 01.01.2017,” which the judgment asks us to read “in conjunction.” The judgment concludes so on the premise that if there had been any other intention, the expression could have been “prior to 01.01.2017” rather than “as on 01.01.2017.” We regret our inability to subscribe to that view. 60. A “minimum period as on 01.01.2017” inexorably translates into an employee completing, for example, five years “prior to 01.01.2017” or at least “by 01.01.2017.” An employee’s completing the period before that date should not earn her a disqualification; the continuity remains unaffected on any count. Otherwise, the emphasis on “minimum” disappears, and the very expression renders itself otiose. 61. If we examine the definition “the Insured Person” once again, it mentions a water-mark of a date as an entry point: first, the period would be counted from the date of entry into the ESI Scheme. If an employee entered the service before 09.06.2011, the date of the employer’s submitting the ‘declaration form’ should be the reckoning point.
61. If we examine the definition “the Insured Person” once again, it mentions a water-mark of a date as an entry point: first, the period would be counted from the date of entry into the ESI Scheme. If an employee entered the service before 09.06.2011, the date of the employer’s submitting the ‘declaration form’ should be the reckoning point. On the other hand, if the employee entered after 09.06.2011, the date of registration as available in the Corporation’s IP database should be the reckoning point. Any period before the date of entry as shown in (h) and (i) of para 42 above would not be counted towards the five/four/three-year period. 62. If we adopt the interpretation proposed by the Corporation, as found approved in the impugned judgment, not only the expression “minimum” but also the entry dates before and after 09.06.2011 lose their significance: any admission, however farther in time, beyond five years, reckoned backwards from 1.1.2017, goes out of consideration—the seniority getting no benefit. A whole class of employees stands excluded, not an intended consequence. A Word on Interpretation: 63. Every application of a text to particular circumstances entails interpretation. “Those who apply the rule to particular cases must of necessity expound and interpret that rule,” observes Chief Justice John Marshall in Marbury v. Madison (U.S. (1 Cranch) 137, 177 (1803)). Of course, we cannot travel, in our search for the meaning of the lawmakers, beyond the borders of the statute. Trite it is to observe that surplusage is not a readily acceptable excuse of a cannon to ignore express words in a statute—be they of subordinate legislation, too. If possible, every word and every provision is to be given effect. None should be ignored, and none should needlessly be given an interpretation that causes it to duplicate another provision or to have no consequence. Here, if we make “as on 1st January” coterminous with the period to be completed, that is, the minimum period, it militates against the principal part of the provision: the emphasis on the length of service and the importance of the date of 55 an employee’s admission. As a supposition, we can as well say that the definition could have simply reckoned the date, that is, the length of service backward from 1st January. But it was reckoned forward. 64. Indeed, there is always a presumption against ineffectiveness.
As a supposition, we can as well say that the definition could have simply reckoned the date, that is, the length of service backward from 1st January. But it was reckoned forward. 64. Indeed, there is always a presumption against ineffectiveness. A textually permissible interpretation furthers rather than obstructs the policy prerogative or purpose. Even in the face of the golden rule of interpretation—the literal rule—we must acknowledge that interpretation always depends on context, the context always includes evident purpose, and the evident purpose always includes effectiveness. By the same token, neither interpolation nor evisceration is permissible. We need to conclude that the interpretative spin sought to be put by the Corporation eviscerates “minimum” and “09.06.2011”—the demarcated date for entry into service. These words, we reiterate, cannot be meaningless, else they would not have been used. It is too well established to bear any reiteration that the provisions of a text should be interpreted in a way that renders them compatible, not contradictory. One part is not to be allowed to defeat another, if by any reasonable construction the two can be made to stand together. 65. The form is designed to conform to, reflect, and even complement the policy, but it cannot supplant or subsume it: playing Frankenstein. The form, say, of an application is no substantive legislative or policy prerogative to occupy the same pedestal. It is a ministerial method of providing order to a scheme —for a predictable, orderly execution of a scheme. 66. Sri Sreekumar has argued that if the Corporation’s interpretation is lent support, it creates a class within a class, and this classification militates against Article 14 of the Constitution. We have told the learned counsel that we cannot countenance this plea because there was neither a pleading to that effect nor an argument seems to have been advanced in the writ petition. The Corporation, in our view, cannot be taken by surprise. But all the same, “where a statute is susceptible of two constructions, by one of which grave and doubtful constitutional questions arise and by the other of which such questions are avoided, our duty is to adopt the latter.” That is what Constitutional-Doubt Cannon propagates. Cut to the chase, a statute should be interpreted in a way that avoids placing its constitutionality in doubt. An Alternative View: 67.
Cut to the chase, a statute should be interpreted in a way that avoids placing its constitutionality in doubt. An Alternative View: 67. The appellants in WA No.1516 & 1524 of 2017 have taken a specific plea in the writ petitions that the letter, dt.24.05.2017, issued by the Corporation’s Deputy Medical Commissioner (ME-II) contains Clause (3), and it militates against the Corporation’s very policy declared on 15.12.2016 in its 170th meeting. According to them, the stipulation in Clause 3 is ‘unjust, illegal, and liable to be quashed.’ 68. To elaborate, Sri K. P. Rajeevan, the appellants’ counsel, has contended that Form 2A, which has set out the contribution periods stretching up to 30th September 2016, is no part of the Corporation’s policy. If it conflicts with the policy or the scheme, it should perish. The specific plea taken by the appellants in the writ petitions stands unrebutted. The Corporation has not met that plea, at least, by traversal. 69. Annexure-2(A) supplies a proforma or form of the “ward of the insured person” certificate. It mentions: [H]as been in continuous insurable Employment of (full address of the shop/establishment with Employers Code No.)---------- for a period of FIVE (05) years, as on 01/01/2017, and contributions have been paid for at least 78 days in each contribution period mentioned below, during this five year period as per record, with details as under: S.NO. Contribution periods for academic session 2017-18 Contribution paid for No. of days 1 1st April 2012-20th September, 2012 2 1st October 2012-31st March, 2013 3 1st April 2013-30th September, 2013 4 1st October 2013-31st March, 2014 5 1st April 2014-30th September, 2014 6 1st October 2014-31st March, 2015 7 1st April 2015-30th September, 2015 8 1st October 2015-31st March, 2016 9 1st April 2016-30th September, 2016 70. Latching on to the above proforma or format, the Corporation contends that the contributions should be reckoned only from 1st April 2012 to 30th September 2016; so, the contributions before 1st April 2012 should be ignored. We regret this contention is fallacious. 71. We may examine the precedential position in this regard. The basic principle, according to the Supreme Court in Aphali Pharmaceuticals Ltd. v. State of Maharashtra ( AIR 1989 SC 2227 ), is that if a conflict occurs between the body of the Act and the Schedule, the former prevails. 72.
We regret this contention is fallacious. 71. We may examine the precedential position in this regard. The basic principle, according to the Supreme Court in Aphali Pharmaceuticals Ltd. v. State of Maharashtra ( AIR 1989 SC 2227 ), is that if a conflict occurs between the body of the Act and the Schedule, the former prevails. 72. In another case, a prescribed form was to be used by the registered dealers for declaring goods purchased from another registered dealer. It was to claim exemption of tax. The Act and the Rules were amended, but the statutory form was not; the old form continued. The appellant company held a certificate of registration in the old format not reflecting the words as inserted through the amendment of the Act and the Rules. 73. The appellant company, in Modi Spinning & Weaving Mills Co. Ltd. vs. Commissioner of Income Tax, Punjab ( AIR 1965 SC 957 (paras 6 & 10)), advanced an argument that the charging section is incomplete without the prescription of the proper Form. A Constitution Bench of the Supreme Court has held that “the old Form must be deemed to have been modified, and even otherwise the section and the Rules did not depend on the new Form. They were complete and effective.” 74. Surely, the Form cannot control the Act, the Rules or the directions. As one learned judge of the Madras High Court, observes another Constitution Bench of the Supreme Court in Life Insurance Corporation of India vs. Escorts Ltd. ( AIR 1986 SC 1370 ), was fond of saying ‘it is the dog that wags the tail and not the tail that wags the dog.’ The Court, in that context, has quoted with approval what it said earlier in Vasudev Ranchandra Shelat v. Pranlal Jayanand Thakkar ([1975]1SCR534): The subservience of substance of a transaction to some rigidly prescribed form required to be meticulously observed, savours of archaic and outmoded jurisprudence. 75. First, the appellants’ contention in WA Nos.1516 & 1524 of 2017 that the Form is no part of the policy or scheme has not been denied. Second, what could have been provided in the proforma or form illustratively cannot be placed in an exalted position of policy prerogative. If it were to be so, as we have earlier observed, the advantage of longer service stands nullified.
Second, what could have been provided in the proforma or form illustratively cannot be placed in an exalted position of policy prerogative. If it were to be so, as we have earlier observed, the advantage of longer service stands nullified. An employee, despite fulfilling all the eligibility criteria, stands excluded just because she has longer service, which, in fact, ought to be an incentive. Further, all the employees who have joined and contributed before 1st April 2012 stand to lose for no reason. A policy that excludes people from a benefit should have a compelling reason. A fanciful date or a nebulous notion should not reduce the selection process to a form of procrustean justice— cutting the man to fit the size of the cot. 76. A Constitution Bench in Sukhdev Singh v. Bhagathram Sardar Singh ( (1975) 1 SCC 421 ) and a three-Judge Bench of the Supreme Court in Ramana Dayaram Shetty v. Union of India ( (1979) 3 SCC 489 ) have invoked Justice Frankfurter’s aphoristic judicial assertion in Vitarelli v. Seaton (359 U.S. 535 (1959)): It is a well settled rule of administrative law that an executive authority must be rigorously held to the standards by which it professes its actions to be judged and it must scrupulously observe those standards on pain of invalidation of an act in violation of them. So, if at all the admission policy has to be strictly interpreted, it must be done so to hold the policy framers, not the beneficiaries, to a vigorous standard. Conclusion: 77. We hold that the appellants are entitled to the “Ward of Insured Person” as they have fulfilled the criteria prescribed in the scheme formulated by the Corporation. So, we set aside the impugned judgments. As a consequence, we allow the writ petitions. No order on costs.