TMI Blog2012 (11) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... he settlement, the Management of NALCO entered into a settlement with the Contractors Association representing the Contractors working and the Alumina Mazdoor Sangh representing such workmen on 26.02.2007. Under Clause-3 of the said settlement the NALCO Management has agreed to provide medical allowance @ 4.75% of the earned wages to the contract labourers w.e.f. 01.02.2007 and to continue such facilities till the workmen are covered under the E.S.I. Scheme. The said settlement even though was operative up to 25.02.2008, but the condition as narrated above is allowed to continue as on date and all the contractors workers are being paid by their employer the aforesaid benefits every month and their employer used to get the same reimbursed from NALCO. HELD THAT:- The petitioner-employer has not paid his own contribution and the employee's contribution. This is a clear case of violation of statutory provision. The plea of the management that the ESI authorities have not established the ESI Hospital providing facilities to the contractor labourers cannot exonerate the employer from discharging its statutory obligation of payment of the employer's contribution and employee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Contract Labourers. Annexure-11 is a show-cause notice dated 25.7.2012 issued by opp. party no. 2 to the petitioner to show-cause within ten days from the date of that show-cause notice as to why the petitioner as one of the factory of M/s. Nalco (Project) should not be prosecuted for non-compliance with the provisions of the ESI Act, 1948 and Regulations framed thereunder. Annexure-12 is also a show-cause notice dated 25.7.2012 issued by opp. party no. 2 to the petitioner to show-cause within fifteen days as to why assessment should not be made as proposed in the said letter with further opportunity to file statement showing full particulars of contribution and for personal hearing. Annexure-17 is also a show-cause notice dated 6.8.2012 issued by opp. party no. 2 to the petitioner-Company to show-cause within ten days from the date of that show-cause notice as to why the petitioner as one of the Principal Employer of their factory M/s. Nalco (Project) should not be prosecuted for non-compliance with the provisions of the ESI Act, 1948 and Regulations framed thereunder. Since the issues involved and the relief sought for in both the writ petitions are identical, they a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontractors' workers raising several grounds. The opp. parties without considering the same, issued two letters dated 22.7.2010 asking the petitioner to show-cause as to why the assessment so made will not be recovered and simultaneously also issued the other notice to show-cause as to why the petitioners shall not be prosecuted for non-compliance with the provisions of the ESI Act, 1948 and Regulations framed therein. In response to the said notices dated 22.7.2010, the petitioner submitted its reply on 5.8.2010. In spite of the objection of the petitioner, the opp. parties raised a demand of ₹ 62,96,648/- as ESI contribution for the period from 01.07.2010 to 30.09.2010 and further asked the NALCO authority to show-cause within fifteen days as to why the proposed assessment should not be made and further asked to produce all relevant records for arriving at actual assessment. Vide letter dated 13/15.11.2010, the petitioner indicated the reason not to apply the provisions of ESI Act requested the ESI Authority to treat the show-cause notice as withdrawn and waive the demand under assessment. However, the ESI Authority made the final assessment raising ₹ 60,92,873/- f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Medicine/Medical Staff so that its workmen can be motivated. At this juncture, the ESI Authorities issued a show-cause dated 6.8.2012 (Annexure-17). 6. Mr. B. Rath, learned counsel appearing on behalf of NALCO Authority submitted that there is no ESI Dispensary at Damanjodi and therefore, the ESI authority is not entitled to apply the provisions of the ESI Act on the petitioner's establishment. In view of the settlement between the contractors' union and the workers' representatives dated 26.2.2007, the provisions of ESI Act should not have been enforced on the petitioner's establishment. As there was no Dispensary of the ESI Corporation, the immediate employer i.e. the Contractor has not made the necessary deduction from the Contractor's employee. Rather it goes on paying its employees engaged in NALCO, the ESI benefits of 4.75% of the earned wages subject to reimbursement of the same from NALCO, the Principal Employer. Deduction in this regard in absence of ESI Hospital in the locality may not be practical and will face resentment amongst the workers leading to industrial unrest. Being insisted by ESI authorities, NALCO Authority immediately provided th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Supreme Court as well as the High Court. 8. On the rival contentions of the parties, the questions that arise for consideration by this Court are as follows: (i) Whether in order to discharge statutory obligation, the petitioner-management can impose any condition which is not provided under the statute? (ii) Whether there is any relation between the contribution made by the employer and employee and the benefit availed by the employees ? (iii) Whether the operation of the statutory provisions can be suspended in view of any settlement entered into between the petitioner-management and the representatives of the union of contractor labourers? (iv) Whether any writ of mandamus can be issued directing opp. party nos. 1 and 2 not to insist implementation of the provisions of ESI Act and scheme framed therein until the ESI Dispensary functions effectively and starts parallel service to such contractor labourers ? 9. Since the question Nos. (i) and (ii) are interlinked, they are dealt with together. The Employees State Insurance Act, 1948 provides for certain benefits to industrial employees in case of sickness, maternity, employment injury. Under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the factory/establishment. The obligation to make contribution does not depend upon whether any particular employee or employees cease to be employee/employees after expiry of the contribution period and the benefit period. 12. Needless to say that it is the statutory duty of the employer to deposit its own contribution and employees' contribution once the factory or establishment is covered by the Act. 13. The Punjab and Haryana High Court in the case of Employees' State Insurance Corporation, Chandigarh V. T.C. Vermani, 1984 LAB I.C. 1406, held that there is no provision under the Act which enjoins a duty on the Corporation to keep on informing the factory owners that they are covered by the Act. The Corporation is not their advisor. On the contrary, the duty is enjoined on the principal employer of the factory to discharge statutory obligation the moment it stands covered by the provisions of the Act. If the employer fails to deduct the employees' contribution, no fault can be found with the Corporation. Section 40 of the Act fixes the responsibility on the Principal employer to pay the contributions. 14. Similar view has also been taken by the Madras H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. It does not appear that show cause notices have been issued by opposite parties without having authority of law or without having jurisdiction. 21. In A.V. Venkateswaran Collector of Customs, Bombay vs. Ramchand Sobhraj Wadhwani Anr., AIR 1961 SC 1506, the Constitution Bench of the Hon'ble Supreme Court held that where there is a complete lack of jurisdiction of any officer or authority who takes the action impugned, the writ jurisdiction should be exercised. 22. The Hon'ble Supreme Court in the case of State of Uttar Pradesh vs. Shri Brahm Datt Sharma and another, AIR 1987 SC 943, held as under: 9. The High Court was not justified in quashing the show cause notice. When a show cause notice is issued to a government servant under a statutory provision calling upon him to show cause, ordinarily the government servant must place his case before the authority concerned by showing cause and the courts should be reluctant to interfere with the notice at that stage unless the notice is shown to have been issued palpably without any authority of law. The purpose of issuing show cause notice is to afford opportunity of hearing to the government servant and once cause ..... X X X X Extracts X X X X X X X X Extracts X X X X
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