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ZUARI CEMENT LTD. Versus REGIONAL DIRECTOR, E.S.I CORP. & ORS.

2015 (8) TMI 546 - SUPREME COURT

Jurisdiction of ESI Court - exemption under Employees State Insurance Act, 1948 - Held that:- Employees Insurance Court is a tribunal specially constituted for the purpose of deciding any controversy that may arise on the matters enumerated in Section 75 of the Act. A reading of Section 75 of the Act would show that the ESI Court has full jurisdiction to decide all the matters arising between the employer and the Corporation under the Act. Section 75 of the Act sets out the matters to be decided .....

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ESI Court did not have the jurisdiction to consider the question of grant of exemption, order passed by the ESI Court granting exemption and consequently setting aside the demand notices is non-est. The High Court, in our view, rightly set aside the order of ESI Court and the impugned judgment does not suffer from any infirmity warranting interference. - Decided against appellant. - Civil Appeal Nos. 5138-40/2007 - Dated:- 2-7-2015 - T.S. Thakur and R. Banumathi, JJ. JUDGMENT These appeals are .....

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as brought under the purview of ESI Scheme with effect from 1.03.1986. The Government of Andhra Pradesh granted exemption to the appellant-cement factory from the operation of the Act by various orders for the period from 1.03.1986 to 31.03.1993. The State Government rejected appellant s application for exemption for the period from 1.04.1993 to 31.03.2001. Following rejection of claim for exemption, the Regional Director, ESI Corporation, issued various demand notices cumulatively demanding a s .....

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lia, praying to remit the matter back to the government to rehear the representation of the appellant-company pertaining to its exemption of ESI Scheme under Section 87 of the Act for the period from 01.04.1993 to 31.03.1999 by affording personal hearing to the appellant. The review petition was dismissed observing that the appellant has an alternative remedy before the ESI Court constituted under Section 74 of the Act and therefore the question of remanding the matter back to the State Governme .....

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o decide the issue and all questions including the applicability of the Act can be raised before the ESI Court. The appellant then approached the ESI Court, Hyderabad under Section 75(1)(g) of the Act challenging the demand notice. The ESI Court appointed an Advocate Commissioner to submit a report as to the medical benefits made available to the workmen in the industry. An affirmative report was filed by the Court Commissioner stating that appellant is providing all the due benefits. On the bas .....

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ct and it is only the appropriate government which has got the power under Section 87 of the Act to exempt anyone from the application of the Act. By the impugned judgment dated 21.09.2007, the High Court allowed the appeals of the Corporation holding that ESI Court does not have the power to grant exemption under Section 75(1)(g) of the Act. In these appeals, the appellant assails the correctness of the above judgment. 4. Mr. Debal Kumar Banerji, learned Senior Counsel for the appellant contend .....

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ipal employer and the Corporation in respect of any contribution or benefit or other dues payable or recoverable under the Act and thus ESI Court has been conferred wide jurisdiction under Section 75(1)(g) of the Act to adjudicate any dispute under the Act and while so, the High Court erred in observing that ESI Court has no jurisdiction. It was interalia urged that the appellant has a full-fledged hospital with medical officers and para medical staffs and has spent around 4.09 crores towards es .....

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the Act and under Section 75 of the Act, ESI Court has no jurisdiction to grant exemption and since ESI Court has acted beyond its jurisdiction, High Court rightly reversed the said order of ESI Court. It was contended that the jurisdiction can be conferred only in accordance with the statute and neither the order of the High Court nor the consent of the parties can confer the jurisdiction in the ESI Court. 6. We have carefully considered the rival contentions and perused the impugned judgment a .....

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power to grant exemption is specifically dealt with under Section 87 of the Act. Section 87 of the Act reads as follows:- 87. Exemption of a factory or establishment or class of factories or establishments.-The appropriate Government may by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt any factory or establishment or class of factories or establishment in any specified area from the operation of this Act for a period not excee .....

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period not exceeding one year at a time. Under Section 89, the appropriate Government shall not grant exemption under Section 87 or Section 88 unless a reasonable opportunity has been given to the Corporation to make any representation it may wish to make in this regard. A combined reading of Sections 87, 88 and 89 would go to show that it is a two tier consideration, namely, a factory or establishment as the case may be, submits an application seeking exemption and the appropriate government wo .....

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hich is in dispute between a principal employer and the Corporation, or between a principal employer and an immediate employer, or between a person and the Corporation or between an employee and a principal or immediate employer, in respect of any contribution or benefit or other dues payable or recoverable under this Act, or any other matter required to be or which may be decided by the Employees Insurance Court under this Act. Such question or dispute subject to the provisions of sub- section .....

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y it. Section 75(1)(g) of the Act does not speak of a dispute between the employer and the appropriate government which only has got the plenary power to consider the question of grant of exemption. 9. As per the scheme of the Act, the power to grant exemption is a plenary power given to an appropriate government. It follows that the ESI Court constituted under Section 74 of the Act has no jurisdiction to take up the question of grant of exemption. The Court constituted under Section 74 of the A .....

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r the appellant vehemently contended that grant of exemption to a factory or establishment from the operation of the Act falls within the jurisdiction of ESI Court under Section 75(1)(g) of the Act which specifically empowers the ESI Court to decide any matter which is in dispute between a principal employer and the Corporation in respect of any contribution or benefit or other dues payable or recoverable under the Act. It was submitted that only pursuant to the orders of the High Court, the app .....

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& Ors. vs. G.M. Ordnance Factory & Ors., (1984) Supp. SCC 661. 11. While disposing the writ petitions, of course, the High Court directed the appellant to approach the ESI Court constituted under Section 74 of the Act for the relief which the appellant had claimed in the writ petitions. Notably, both the appellant as well as the ESI Corporation did not challenge the order of the High Court but subjected themselves to the jurisdiction of the ESI Court. In our view, neither the order of th .....

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of factories or establishments from the operation of the Act. In fact, the appellant-factory itself has obtained exemption from the appropriate Government-State Government under Section 87 of the Act for the period from 1986 to 1993. Likewise, the rejection of exemption was also under Section 87 of the Act. While so, seeking the relief of declaration from the ESI Court that the appellant is entitled to exemption from the operation of the Act is misconceived. Contrary to the scheme of the statute .....

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ose of deciding any controversy that may arise on the matters enumerated in Section 75 of the Act. A reading of Section 75 of the Act would show that the ESI Court has full jurisdiction to decide all the matters arising between the employer and the Corporation under the Act. Section 75 of the Act sets out the matters to be decided by the ESI Court. As per Section 75(1)(g) of the Act, ESI Court is empowered to decide any matter which is in dispute between the employer and the Corporation in respe .....

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ute between an employer and corporation or a person and Corporation pertaining to the contribution or benefit or other dues payable under the Act or any other matter required to be decided by ESI Court under the provisions of the Act. Grant or refusal of exemption by the appropriate government cannot be said to be a dispute between the employer and the Corporation. For grant or refusal of exemption, a specific provision is prescribed under the Act, it cannot be brought within the ambit of any ot .....

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statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way . In Babu Verghese and Others vs. Bar Council of Kerala and Others, (1999) 3 SCC 422, it was held as under: 31. It is the basic principle of law long settled that if the manner of doing a particular act is prescribed under any statute, the act must be done in that manner or not at all. The origin of this rule is traceable to the decision in Taylor v. Taylor, (45 LJCH 373) .....

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