Employees State Insurance Corporation v. GNRC Medishop
2018-05-16
SUMAN SHYAM
body2018
DigiLaw.ai
JUDGMENT : Heard Mr. K.K. Nandi, learned counsel for the petitioners. Also heard Mr. M. Choudhury, learned Sr. counsel assisted by Mr. P. Hazarika, learned counsel for the respondent. 2. The judgment and order dated 30-10-2008 passed by the learned Employees Insurance Court at Guwahati in ESI Case No. 11/2005 allowing the objection raised by the respondent No. 1 against the notice dated 18-11-2004 and other connected notices calling upon the respondent to register its Medishop under the Employees State Insurance Act, 1948 is under challenge in the present proceeding. 3. The respondent had approached the learned court below assailing the impugned notices issued by the petitioner No. 1, inter alia, contending that the drug license issued for running the Medishops were in the name of M/s Guwahati Neurological Research Centre Limited, which is a company registered under the Companies Act, 1956 represented by its Chairperson Dr. Numal Bora and therefore, the various establishments operated by the company cannot be treated as separate entities or shops so as to bring them within the purview of Shops and Establishment Act, 1976 and Rules framed thereunder. It was the further contention of the respondent before the court below that the company has taken good care of the medical needs of all its employees and therefore, the question of any default on the part of the respondent company on account of alleged non-registration of the Medishops under the provision of the Act of 1948 cannot arise in the facts and circumstances of the case. It was also the plea of the respondent that the procedure prescribed under Section 45(A) of the Act of 1948 has not been followed in this case inasmuch as no pre-decisional hearing as required under Section 45(A) was given to the respondent before issuance of the impugned notices. 4. After hearing the parties, the learned court below had passed the impugned judgment and order dated 30-10-2008, inter alia, holding that the Medishops of the respondent are pharmacies and not 'shop' within the meaning of Assam Shops & Establishment Act, 1976. It was further held that the action initiated on the basis of impugned notices was in clear violation of Section 45(A) of the Act of 1948 and hence, the proceedings were unsustainable in the eye of law. Accordingly, the impugned notices and the connected proceeding were held to be illegal. 5.
It was further held that the action initiated on the basis of impugned notices was in clear violation of Section 45(A) of the Act of 1948 and hence, the proceedings were unsustainable in the eye of law. Accordingly, the impugned notices and the connected proceeding were held to be illegal. 5. It is the admitted position of fact that since the year 2012 the Medishops Division of the respondent company had been segregated forming a separate company, whereafter, all the employees working in the Medishops had been registered under the ESI Act, 1948. However, according to the respondent, during the period between 2004 to 2012, there was no necessity for the respondent company to register its establishments under the ESI Act, 1948, since, the provisions of the Act of 1948 were not applicable to such organization. 6. As noted above, the learned court below has recorded a categorical finding of fact that the procedure prescribed under Section 45(A) of the Act of 1948 has been violated in this case. Learned counsel for the petitioner has not been able to deny before this Court that proper pre-decisional hearing was not given to the respondent company before issuance of the impugned notices. Mr. Choudhury has referred to a decision of the Hon'ble Supreme Court in the case of Srinivasa Rice Mills & Ors. Vs. ESI Corpn. reported in (2007) 1 SCC 705 to contend that a pre-decisional hearing permitting the employer to raise all questions regarding validity and jurisdiction of the corporation was mandatory requirement under the law and the failure to adhere to such procedure would render the proceeding untenable in law as has been rightly held by the learned trial court. 7. A bare reading of the provision of Section 45(A) goes to show that the said provision is meant to afford certain procedural safeguard to the factories or the establishments as the case may be, and therefore, violation of the same for all practical purposes, would also amount to violation of the principles of natural justice. It is, therefore, axiomatic that any proceeding initiated by the petitioner corporation in contravention of Section 45(A) of the Act of 1948 cannot stand the scrutiny of law. 8.
It is, therefore, axiomatic that any proceeding initiated by the petitioner corporation in contravention of Section 45(A) of the Act of 1948 cannot stand the scrutiny of law. 8. Since the petitioners counsel has not denied that the requirement of Section 45(A) of the Act of 1948 has not been complied with in this case, having regard to the ratio of the decision of the Supreme Court in the case of Srinivasa Rice Mills & Ors. (Supra) the impugned notices and the proceedings initiated on the basis of of such notices cannot be held to be valid in the eye of law. As such, the learned court below has rightly held that the proceeding initiated in violation of Section 45(A) would have a vitiating effect on entire proceeding. 9. In view of what has been observed above, it will not be necessary to go into the other aspect of the matter. It is, accordingly, held that the impugned judgment and order dated 31-10-2008 does not call for any interference by this Court. 10. It is, however, clarified that notwithstanding this order, it would be open for the petitioners to initiate fresh proceeding against the respondent, if so advised, for the period pertaining to the year 2004 to 2012, after complying with the requirement of Section 45(A) of the Act of 1948. With the above observation, this appeal stands disposed of. Send back the LCR.