Tripura High Court
Shri Ratan Paul vs The Employees' State Insurance ... on 13 January, 2022
Author: Arindam Lodh
Bench: Arindam Lodh
Page - 1
HIGH COURT OF TRIPURA
AGARTALA
MFA 04 OF 2019
Shri Ratan Paul,
son of late Anil Baran Paul, Proprietor of M/s Nabarupa Food Products,
Golchakkar, near Border Check Gate, P.O. Agartala-799001, P.S. West
Agartala, District- West Tripura.
---- Appellant.
Versus
1. The Employees' State Insurance Corporation,
Regional Office, North East Region, Panchadeep Bhawan, Bamuni maidan,
Guwahati-780021, Assam
2. The Regional Director,
Regional Office, North East Region, Panchadeep Bhawan, Bamuni maidan,
Guwahati-780021, Assam
3. The Assistant Director (INS),
Regional Office, North East Region, Panchadeep Bhawan, Bamuni maidan,
Guwahati-780021, Assam
4. The Social Security Officer,
Employees‟ State Insurance Corporation, Regional Office, North East
Region, Panchadeep Bhawan, Bamuni maidan, Guwahati-780021, Assam
5. The Assistant Director,
Regional Office, Employees‟ State Insurance Corporation, Shyamali Bazar,
P.O. Kunjaban-799006, P.S. East Agartala, District- West Tripura
6. The Employees' State Insurance Corporation,
Branch Office, Shyamali Bazar, Agartala, P.O. Kunjaban-799006, P.S. East
Agartala, District- West Tripura, represented by its Branch Office
---Respondents.
For Appellant(s) : Mr. BN Majumder, Sr. Advocate.
Mr. DJ Saha, Advocate
For Respondent(s) : Mr. KK Pal, Advocate
Date of hearing & delivery
of Judgment and order : 13.01.2022
Whether fit for reporting : No
HON'BLE MR JUSTICE ARINDAM LODH
Judgment & Order (Oral)
By means of filing this appeal under Section 82 of Employees‟ State Insurance Act, 1948, the appellant has challenged the judgment and order dated 28.05.2019 passed by the learned District Judge, West Tripura, Page - 2 Agartala in connection with case Nos. Misc. (ESI) 05 of 2014, whereby and whereunder the learned Judge dismissed the petition filed by the petitioner under Section 75 (1)(g) and Section 2(a) of the Employees‟ State Insurance Act, 1948 (for short, „ESI‟ Act) against the demand of ESI authority for payment of Rs. 6,22,765/- by notices dated 29.01.2014, 03.02.2014 and 06.05.2014.
2. To appreciate the controversy raised in the present appeal, few relevant facts may be noted:
2.1. The petitioner is the owner of one business establishment namely, Nabarupa Food Products situated at Gol Chakkar, Agartala, dealing in backery, sweets and confectionary items having 13 employees employed therein and his work is carried with the aid of electricity. Suddenly, he received one summons from the Court of Chief Judicial Magistrate, Kamrup (M), Guwahati in connection with case no. 1313/C/ 2014 asking him to appear in that Ld. Court on 6.8.2014. After he appeared there, it was found that the Social Security Officer of ESI authority had lodged the said complaint and after receiving copies of relevant documents filed in that case, it appeared that present O.P.no.2 issued a memorandum dated 6.5.2014 according sanction to prosecute against him under section 85(a) of ESI Act as he failed to pay contribution of Rs.6,22,765/- as ESI contribution for his said establishment. From the documents of said case, the petitioner also came to know that the Assistant Director, ESI Corporation, Guwahati had issued one show cause notice dated 29.1.2014 asking the petitioner to show cause as to why he should not be prosecuted under section 85 of the Act, though practically he did not receive any such notice. It also came to his knowledge from documents of said criminal case that he was also served with another notice
3.2.2014 by said Assistant Director proposing to determine and recover ESI contribution from him under section 45A of the Act claiming outstanding dues to be Rs.6,22,765/- though actually no such notice was served upon him on any occasion. It also further came to his knowledge at that time that a preliminary survey was shown to be conducted on 12.2.2009 by Inspector/Branch Manager of ESI Corporation giving list of names of employees therein without mentioning their father's name, designation etc. and even signatures of said persons were also not taken in the said report. So, according to the petitioner, said document is a Page - 3 manipulated and imaginary one. According to him, practically no enquiry atall was done by the ESI authority in his establishment and even no abstract copies of relevant registers of the establishment was taken by enquiring officer. Even no notice was also issued to the petitioner before taking any action against him. The petitioner was never asked by ESI authority to submit any return of his establishment. Thus, ultimately whole process initiated by the ESI authority was illegal. After receipt of summons from Ld. Chief Judicial Magistrate of Kamrup in said criminal case, he preferred WP (C) 484 of 2014 in Hon'ble High Court of Tripura which was lateron withdrawn by him with liberty to approach the proper Forum and thereafter, the present case was filed him with prayer to declare that the establishment of the petitioner does not come under the purview of ESI Act and that the petitioner is not liable to pay any amount to ESI authority and as such with further prayer to quash the notices dated 29.1.2014, 3.2.2014 and 6.5.2014 of ESI authority asking him to deposit said amount of Rs.6,22,765/-.
2.2. The Opposite parties in their written statement stated that the notice dated 3.2.2014 was duly received by one Smti Soma Paul on 15.2.2014 and moreso, the observation slip attached with survey report was signed by one of the employee of the petitioner namely Sri Alak Nani. According to them, despite attempts made by Social Security Officer to make survey of the unit of the petitioner 10.2.2009 and 11.2.2009, the employer failed to produce any record as such the visiting ESI officer collected the names of employees based on head count available at the factory premise on 12.2.2009. According to them, as the employer failed to produce record of the establishment on 10.2.2009 and 11.2.2009, again on 23.7.2010, 6.8.2010 and finally on 13.8.2010, Agartala based Manager of ESI authority visited the establishment with prior intimation and the observation of inspection dated 23.7.2010 was handed over to the In charge employer namely Sri Sajal Ch. Das on 23.7.2010, and again observation of inspection dated 6.8.2010 was handed over to him on the same date and finally observation inspection dated 13.8.2010 was refused by the representatives of the employer. The employer also duly received the notice the notice dated 3.2.2014 notifying him the scope of personal hearing fixed on 26.2.2014. According to the O.P.s, there were 26 nos. of workers found in the establishment of the petitioner. Finally it has been stated by them that as Page - 4 the petitioner did not comply with the mandatory procedure under ESI Act, action was taken against him in accordance with provisions of said Act and as such the petition is liable to be rejected.
2.3. The respondents on receipt of summon filed joint written statement stating inter alia that as per record and preliminary enquiry report dated 16.2.2009, 10 nos. of employees were found on the date of survey/enquiry and the list of employees was handed over to the Social Security Officer during his visit by the wife of the petitioner namely Smti Anjana Dam. Thus, ESI Act was applicable in the business unit of the petitioner w.e.f 01.01.2009. Accordingly notice dated 2.9.2014 was issued to the petitioner. According to them, by notice dated 3.2.2014 the petitioner was afforded with the scope of personal hearing on 3.3.2014 with all necessary documents but the petitioner did not turn up. It is further plea of the respondent-OPs that they also vide their office letter dated 5.6.2014 advised the petitioner to prefer appeal before the appropriate authority within 60 days from the date of passing order under section 45A of the Act on 9.4.2014 by depositing 25% of the demanded amount and as such they did not feel any necessity to give reply of the letter of the petitioner dated 18.6.2014. The respondent-OPs finally prayed for rejection of the claim of the petitioner. 2.4. On the basis of the pleadings, the learned Insurance Court had framed the following issues:
(I) Whether this court has jurisdiction to entertain the suit ? (II) Whether the present suit is maintainable?
(III) Whether the orders dated 13-10-2011, and 01-04-2014 of respondent no.3 and his letters dated 29-01-2014, 03-02-2014 and 02-09- 2014 are liable to be cancelled and quashed ?
(IV) Whether the industry of the petitioner comes under the purview of ESI Act, 1948 and consequently the petitioner is liable to make any contribution in the account of ESI ?
(V) Any other relief/reliefs the parties are entitled to?
2.5. In course of recording evidences, the petitioner examined himself as PW.1 During hearing the petitioner examined himself as PW.1 and proved certain documents into evidence which were marked as Exbt.1 to Page - 5 Exbt.6. From the side of opposite party one Bjeet Kumar Pegu was examined as OPW.1 and he proved certain documents which were marked as Exbt.A to Exbt.M/2.
3. After closure of recording evidences, the learned Court heard arguments advanced by the learned counsel appearing for the parties to the lis and finally dismissed the petition of the petitioner by the judgments, as aforestated. Being aggrieved by and dis-satisfied with the said judgment of dismissal of the petition, the petitioner has preferred the instant appeal before this court.
4. At the time of admission of the appeal, this court had formulated the following question of law by order dated 01.02.2020:
"(I) Whether ESI Act is applicable in the establishment of the applicant?
5. However, learned counsels have urged to formulate the following additional substantial questions of law for adjudication of the above noted appeal. Accordingly, the following substantial questions of law have been formulated for the purpose of hearing of the appeal:-
(i) Whether the petition filed by the petitioner before the Insurance Court was maintainable for not depositing fifty percent of the claimed amount, as raised by the respondents-ESI Corporation ?
(II) Whether the provisions as envisaged in Section 45 AA and Section 75(2B) are mandatory in nature?
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6. Learned counsel of both the parties to the lis have proceeded to argue the case on the basis of above substantial questions of law.
7. I have perused the judgment passed by the learned District Judge, here-in-after referred to as Insurance Court, for convenience. From the judgment of the learned Insurance Court, it is revealed that the learned Judge had examined and verified the records submitted by the parties to the lis. He had observed that the petitioner had not produce any attendance registers of the establishment of the petitioner which were required to be submitted, he became satisfied that the opposite party had proved one preliminary survey report dated 12.02.2009 which was marked as Exbt. A alongwith one physical verification report, which was marked as Exbt. B, and the survey report i.e. Exbt.A clearly shows that the establishment of the petitioner was being run by 24 numbers of employees plus 2 numbers of guards. Learned Judge has further observed that 'As per said preliminary survey report, Mr. Hek found total 24 nos. of employees plus 2 nos. of guard in the said establishment and he has given the list (Ext.B) containing names of such employees but in said list details of father' names and respective addresses of such employees are not mentioned. In said preliminary survey report (Ext.A), it is mentioned that he had interviewed one person namely Sri Sajal Das (Manager) to collect such information but signature of Sajal Das was not taken therein. Moreover, in the list of employees prepared by Mr. Hek (Ext.B) name of said Sajal Das is missing.
Page - 7 Even the signatures of the employees mentioned in the said list were also not taken therein."
8. Referring to Section 2(12) of the ESI Act, the learned Insurance Court observed that "when it is the case of the petitioner that his manufacturing unit is run by electricity, automatically, it will come within the purview of ESI Act if number of employees therein are 10 or more". Thereafter, the learned Insurance Court held that "the petitioner has categorically stated that as per return submitted by the petitioner before Regional Provident Fund Commissioner, number of his employees is 13 which means he had more than 10 number of employees. Thus, as per admission of the petitioner himself, ESI Act is applicable in his establishment. In such a situation, he is not entitled to get the notices issued by ESI authority quashed".
9. Answering to the issues regarding maintainability of the petition filed by the petitioner, the learned Insurance Court held that since the petitioner never deposited fifty percent of the sum due, as claimed by the ESI Corporation nor filed any petition for waiving of such deposit or for reduction of amount of such deposit, the petitions filed by the petitioner under Section 75 of the ESIC Act, 1948 were not maintainable. The petition filed by the appellant before the learned Insurance Court was dismissed on the ground of maintainability since fifty percent of the Page - 8 amount due from the petitioner by the Corporation was not deposited in compliance of Section 75(2-B) of the ESI Act.
10. At the threshold of hearing of the present appeal, learned senior counsel Mr. BN Majumder, appearing on behalf of the appellant, has invited my attention that during pendency of the present appeal, the appellant had submitted petition for allowing them to deposit fifty percent of the claimed amount. Learned senior counsel has further submitted that the petitioner-appellant may be allowed to deposit fifty percent of the claimed amount in this appellate court.
11. Mr. Majumder, learned senior counsel has emphatically submitted that the procedure for preferring appeal as contemplated under sub-section (2B) of Section 75 of the ESI Act, 1948, is a mere technicality and for this the appellant should not be prevented in pursuing the petition as well as the present appeal. Learned senior counsel has further argued that the pre- conditions for depositing fifty percent of the claimed amount at the time of filing petition under Sections 75(2)(g) and (2B) of the ESI Act went un- noticed out of inadvertence, and according to learned senior counsel, non- depositing of fifty percent of the sum due as demanded by the Employees State Insurance Corporation, cannot be the ground to hold the petition filed by the petitioner as not maintainable. Learned senior counsel has further argued that the pre-condition of depositing fifty percent of the amount claimed by the respondent-Corporation is not mandatory, rather, optional as Page - 9 contemplated under sub-section (2B) of Section 75 of the ESI Act. Mr. Majumder, learned senior counsel has further argued that the establishment of the petitioner-appellant does not come within the purview of the definition as contemplated under Section 2(12) of the ESI Act since the respondent-Corporation has failed to establish that the establishment of the petitioner had ever exceeded ten numbers of employees.
12. Reacting sharply to the said submissions of Mr. Majumder, learned senior counsel, Mr. KK Pal, learned counsel appearing on behalf of the respondent-Corporation has contended that the statements made before this court that the provision of sub-section (2B) of Section 75 went un-noticed to the petitioner-appellant is totally misconceived and misleading to this court. Learned counsel has argued that the said provision was well within the knowledge of learned senior counsel as well to the petitioner for the reason that the question of maintainability was raised before the learned Insurance Court when Mr. Majumder, learned senior counsel had defended the action of the petitioner for non-depositing fifty percent of the claimed amount since he filed application under Section 75(1)(g) and 2A of the ESI Act, 1948, and further, the establishment of the petitioner does not come within the purview of definition of „Factory‟ as contemplated under Section 2(12) of the ESI Act. Learned counsel for the respondent-Corporation has further urged that sub-section (2B) of Section 75 of the Act, should not be taken lightly since it carries statutory mandate. It is further argued that Page - 10 learned Insurance Court after examination and verification of records meticulously came to a finding in the case Misc. (ESI) 05 of 2014 is assailed before this court, as held that the establishment of the petitioner- appellant being a single Unit were working with more than ten numbers of staffs. Mr. Pal, learned counsel has further submitted that the petition of the petitioner-appellant bearing no. Misc. (ESI) 5 of 2014 was dismissed on the ground of maintainability due to non-compliance of the provision of sub- section (2B) of Section 75 of the ESI Act. Mr. Pal, learned counsel had tried to persuade this court that even the applications filed by the petitioner before the Insurance Court were not maintainable and were liable to be dismissed at the very threshold on the sole ground that the petitioner does not exhaust the remedy by way of intra-departmental appeal as contemplated under section 45AA of the ESI Act, which, according to learned counsel, is mandatory.
13. I have given my thoughtful consideration to the submissions as advanced by learned counsel appearing for the parties.
14. Having given a glimpse to the preamble, I find that the Employees‟ State Insurance Act became law on 19th April, 1948 with a definite purpose and object to provide for certain benefit to the employees in case of sickness, maternity, employment injury and to make provision for certain other matters in relation thereto. From a plain reading of the scheme, it appears that the act is a „Social Security Legislation‟. As such, needless to Page - 11 say, any provision of which two interpretations may be possible would deserve such construction as would be beneficial to the working class, but, at the same time, the court cannot give a go-by to the plain language of a provision. In other words, where the language „employee‟ in the provision is plain and unambiguous, the same should not be ignored. [Whirlpool of India Ltd. vs. Employees' State Insurance Corporation, reported in (2000) 3 SCC 185.
15. Now, keeping in view the challenge made by the petitioner- appellant, where his establishment falls within the scope of definition of „Factory‟, it would be apposite to quote Section 2(12) of the ESI Act, which reads as under:-
"2(12) "Factory"" means any premises including the precincts thereof whereon ten or more persons are employed or were employed on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on or is ordinarily so carried on, but does not include a mine subject to the operation of the Mines Act, 1952 (35 of 1952) or a railway running shed;"
16. The relevant provisions which are necessary to adjudicate the disputes raised in this appeal also should be reproduced, for convenience:-
"75. Matters to be decided by Employees' Insurance Court.- (1) If any question or dispute arises as to---
(a) whether any person is an employee within the meaning of this Act or whether he is liable to pay the employee's contribution, or
(b) the rate of wages or average daily wages of an employee for the purposes of this Act, or
(c) the rate of contribution payable by a principal employer in respect of any employee, or Page - 12
(d) the person who is or was the principal employer in respect of any employee, or
(e) the right of any person to any benefit and as to the amount and duration thereof, or [(ee) any direction issued by the Corporation under section 55A on a review of any payment of dependants' benefit, or] (ff) [omitted], or
(g) any other matter which 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 (2A)] shall be decided by the Employees' Insurance Court in accordance with the provisions of this Act.
(2) [Subject to the provisions of sub-section (2-A), the following claims] shall be decided by the Employees' Insurance Court, namely:---
(a) claim for the recovery of contributions from the principal employer;
(b) claim by a principal employer to recover contributions from any immediate employer;
(c) [omitted]
(d) claim against a principal employer under section 68;
(e) claim under section 70 for the recovery of the value or amount of the benefits received by a person when he is not lawfully entitled thereto; and
(f) any claim for the recovery of any benefit admissible under this Act.
[(2A) If in any proceedings before the Employees' Insurance Court a disablement question arises and the decision of a medical board or a medical appeal tribunal has not been obtained on the same and the decision of such question is necessary for the determination of the claim or question before the Employees' Insurance Court, that Court shall direct the Corporation to have the question decided by this Act and shall thereafter proceed with the determination of the claim or question before it in accordance with the decision of the medical board or the medical appeal tribunal, as the case may be, except where an appeal has been filed before the Employees' Insurance Court under sub- section (2) of section 54-A in which case the Employees' Insurance Court may itself determine all the issues arising before it.] [(2B) No matter which is in dispute between a principal employer and the Corporation in respect of any contribution or any other dues shall Page - 13 be raised by the principal employer in the Employees' Insurance Court unless he has deposited with the Court fifty per cent. of the amount due from him as claimed by the Corporation:
Provided that the Court may, for reasons to be recorded in writ- ing, waive or reduce the amount to be deposited under this sub- section.]
82. Appeal.- (1) Save as expressly provided in this section, no appeal shall lie from an order of an Employees' Insurance Court.
(2) An appeal shall lie to the High Court from an order of an Employees' Insurance Court if it involves a substantial question of law. (3) The period of limitation for an appeal under this section shall be sixty days.
(4) The provisions of sections 5 and 12 of the [Limitation Act, 1963 (36 of 1963)], shall apply to appeals under this section."
17. Dealing with the submission of Mr. Majumder, learned senior counsel for the appellant that the provisions of sub-section (2B) of Section 75 of the ESI Act went un-noticed, qua the submission of Mr. KK Pal, learned counsel for the respondent that question of maintainability was raised before the ESI Court and necessary arguments were placed before the Insurance court by learned senior counsel, I find that the issue was dealt by the Insurance Court on the basis of submissions advanced by learned counsel for the parties. For convenience, respective submissions of learned counsel appearing for the parties may be reproduced hereunder, in extenso:-
"6) During argument Ld. Counsel Mr. A Gon Choudhury for the petitioner submitted that the petition was filed under section 75(1)(g) of the ESI Act and as such it was maintainable. According to him, there were only 06 employees in the establishment of the petitioner, so ESI Act was not applicable in the establishment of the petitoiner. While challenging the validity of verification report submitted from the side of the O.P.s., he argued that name of the employees is not mentioned therein, moreso, the author of said report was also examined and as per OPW.1, he had no personal knowledge about said verification report as he didnot visit the establishment of the petitioner.
Page - 14 According to him, names, father's names, length of service etc. should specifically be mentioned in the verification report. He also argued that no report was collected by the O.P.s from Labour Department about actual nos. of employees working in the establishment of the petitioner and signatures of the employees were also not taken in the verification report. Thus, such verification report is not reliable. Regarding deposit of 50% of the amount claimed by the ESI authority before filing of the case in this Court, he submitted that in this regard, he filed one petition bearing no. Misc.(ESI) 04 of 2014 which was ultimately not pressed by the petitioner. Still it will have no bearing in the case, as, when the ESI Act itself is not applicable in the establishment of the petitioner, there is no legal requirement to deposit 50% of the amount so claimed by the O.P.s.
7) Ld. Counsel, Mr. K.K. Paul argued that the present petition was not maintainable as despite having scope to file appeal, the petitioner did not file any appeal. He also argued that the petition was bad for non-joinder of necessary parties as all the employees were not made party in the proceeding as required under section 75 of the Act. Referring to section 44 of the Act, he argued that it was the duty of the petitioner to submit return in prescribed form to the ESI authority giving particulars of employees employed and necessary registers or records of the establishment under the regulations of ESI Act, but nothing was maintained or submitted before the ESI authority by the petitioner, so adverse inference may be taken against the petitioner. Ld. Counsel Mr. Paul also referred one decision of Hon'ble Supreme Court rendered in ESI Corpn. v. Bhakra Beas Management Board, (2009) 10 SCC 671, wherein the followings were held :
"8. In our opinion, wherever any petition is filed by an employer under Section 75 of the Act, the employer has not only to implead ESIC but has also to implead at least some of the workers concerned (in a representative capacity if there are a large number of workers) or the trade union representing the said workers. If that is not done, and a decision is given in favour of the employer, the same will be in violation of the rules of natural justice. After all, the real parties concerned in labour matters are the employer and the workers. ESI Corporation will not be in any way affected if the demand notice sent by it under Sections 45-A/45-B is quashed."
He also argued that there are 3 seperate establishment running under Nabarupa Food Products and thus, all the employees of said three separate unit/establishment will be taken into consideration. In this regard, he referred section 45(A) of the Act. Referring to the cross examination of the petitioner that he would maintain attendance register of his establishment but did not submit said register before the Court, Ld. Counsel Mr. K.K.Paul argued that intentionally same was withheld by the petitioner to suppress the actual nos. of employee of his establishment. Finally he argued that what was done by the ESI officer, was done in discharge of their official duties and thus, there is nothing to disbelieve them, so the petition may be rejected."
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18. In view of the aforesaid observations and discussions made by learned Insurance Court, I find that the issue of depositing fifty percent of the sum due, as claimed by the Corporation were taken into account extensively both by Mr. Majumder, learned senior counsel for the petitioner-appellant, which were properly dealt with by the learned Insurance Court. In view of this, I find no force in the submission of learned senior counsel that the provision as contemplated under sub-section (2-B) of Section 75 of the ESI Act, went un-noticed to the petitioner and the same appears to be contrary to the records, and accordingly, is repelled.
19. From a plain reading of Section 82 of the ESI Act, it appears that to file an appeal before the High Court against the judgment passed by the Insurance Court, there must involve substantial question of law, as envisaged in sub-section (2) of Section 82 of the said Act.
20. Here, I deem it imperative to mention that in exercise of powers conferred under Section 96 of the ESI Act, the Labour Department, Government of Tripura, had framed Rules, which is called as „The Tripura Employees‟ Insurance Court, Rules, 2008‟ (for short "Rules"). Rule 38 of the said Rules provides that the order of a court shall be final and binding upon the parties. Rule 38 reads thus:-
"38. Finality of order:- Save as provided in section -82, the order of a court shall be final and binding upon the parties.
NOTES.
Section-82 of the Act provides for Appeal."
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21. A bare perusal of Rule 38 of the said Rules, it is aptly clear that to file an appeal there must be compliance of Section 82 of the ESI Act. Sub- section (1) of Section 82 contemplates that no appeal shall lie from an order of an Employees' Insurance Court, save and expressly provided in this section making it implicit that the filing of appeal against the judgment passed by the Insurance court is not automatic rather conditional. The condition is encrypted in sub-section (2) of Section 82, which mandates that there must be substantial question of law to file an appeal to the High Court from an order of the Insurance Court. So, existence of substantial question of law is a condition precedent to prefer appeal before the High Court against the judgment and decree passed by the Insurance court.
22. Chapter IV of the said Rules dealing with „Miscellaneous provisions‟ has engrafted Rule 47, which prescribes that when there is no specific provision in the Rules, the provision of Code of Civil Procedure, 1908 shall be applicable. Rule 47 reads thus:-
"47. Provisions in the code of civil procedure, 1908 (V of 1908) to apply:- In respect of matters relating to procedure or admission, or evidence for which no specific provision is made in these rules, the provisions of the code of civil procedure, 1908 (V of 1908) including the rules made thereunder and the Indian evidence Act, 1872 (I of 1872), shall, so far as may be apply to proceedings under the Act."
23. Now, from a conjoint reading of Section 82(2) and Rule 47 of the Rules, it can easily be said that to file an appeal, the appellant has to Page - 17 comply the essentialities of Section 100 of the Code of Civil Procedure, 1908 (for short, "CPC"), which provides that:-
"100. Second appeal.-(1) Save as otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie to the High Court from every decree passed in appeal by any court subordinate to the High Court, if the High Court is satisfied that the case involves a substantial question of law. (2) An appeal may lie under this section from an appellate decree passed ex parte.
(3) In an appeal under this section, the memorandum of appeal shall precisely state the substantial question of law involved in the appeal. (4) Where the High Court is satisfied that a substantial question of law is involved in any case, it shall formulate that question. (5) The appeal shall be heard on the question so formulated and the respondent shall, at the hearing of the appeal, be allowed to argue that the case does not involve such question:
Provided that nothing in this sub-section shall be deemed to take away or abridge the power of the court to hear, for reasons to be recorded, the appeal on any other substantial question of law, not formulated by it, if it is satisfied that the case involves such question."
24. So, for hearing an appeal against the judgment and decree passed by the Insurance Court existence of substantial question of law is a sine qua non for exercise of jurisdiction under Section 82(2) and the procedure is mandatory as provided under Section 100 CPC. It is settled proposition of law that second appeal does not lie on the erroneous findings of facts based on appreciation of relevant evidences. Further, the scope of exercise of jurisdiction by the High Court in second appeal under Section 100 CPC is limited to the substantial question of law. To be a substantial question of law, it must be debatable, not previously settled by law of the land or a binding precedent and answer to the same will have a material bearing as to the rights of parties before the court.
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25. However, factual findings based on no evidence can be agitated in the second appeal, that is to say, in an appeal under Section 82(2) of the ESI Act. In the instant appeal, it is observed that the learned Insurance Court has elaborately discussed the evidence and after comparing the registers of the establishment, he came to a finding that the establishment, namely Nabarupa Food Products was manned by 13 (thirteen) employees. No register was produced by the petitioner. In view of this, the above findings of the learned Insurance Court regarding the establishment of the petitioner having thirteen employees, and constitute one unit came within the purview of the definition of "factory" as provided under Section 2(12) of the ESI Act and the said findings on fact do not call for any interference by this Court since such findings do not suffer from perversity. Rather, the findings are based on the materials, which were proved in accordance with law in course of trial.
26. In the instant case, learned Insurance Court held that the petition filed by the petitioner raising the dispute whether his establishment was manned by ten or more employees was not maintainable for non- compliance of Section 75 of the ESI Act. I have gone through the said findings of the learned Insurance Court, and am of the opinion that the said findings on fact cannot be said to be perverse.
Thus, the substantial question of law as formulated in the appeal has been answered accordingly.
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27. Now, the additional substantial questions of law remain to be answered are whether the petition/application filed by the petitioner before the Insurance Court were maintainable or not in the light of the provisions under Section 45 AA and Section 75 of the ESI Act, and whether the said provisions are mandatory or directory in nature.
28. On meticulous reading of Section 45-AA of the ESI Act, it is apt to say that if an employer is not satisfied with the order referred to in Section 45-A, he may prefer an appeal to an appellate authority as may be provided by regulation, within sixty days of the date of such order after depositing twenty-five per cent of the claimed amount. The language of the provision is clear and unambiguous. The legislature while inserting this provision by way of amendment of the Act, 18 of 2010 (w.e.f. 01.06.2010) had employed the word, "may" in Section 45-AA of the Act. Before the amendment was carried out, this provision was not in the original ESI Act. The object of making provision for appeal in the Act by way of amendment, only in the year 2010, in my opinion, was to enable the employer to redress his grievances against the order passed by the assessing officer, which was simply aimed at to reducing the litigation in the Court.
I have noticed that the Amendment Act, 18 of 2010, which followed the report of the Standing Committee on Labour, inserted many provisions and also made amendments with the existing provisions. Many provisions used the expression "shall", which shows that it was mandatory and Page - 20 provisions which used the expression "may" shows that it was discretionary. The use of the word "may", in my considered view, makes Section 45-AA, optional, i.e. it is the choice of the employer whether he would prefer appeal or approach the Insurance Court directly without exhausting his remedy as provided under Section 45-AA of the ESI Act. What crystallizes is that even after introduction of Section 45-AA of the Act, the right of the employer to challenge an assessment before the ESI Court, at the first instance under Section 75 of the Act, remains intact. To summarize, Section 45-AA speaks about the appellate authority, which is a choice, granted to the employer being it an option only, can be exercised at the choice of the employer. The ESI Court cannot compel an employer to exhaust the appeal remedy as contemplated under Section 45-AA to entertain an application filed before it by the employer challenging the assessment of the ESI authority concerned. If such interpretation is adapted by the ESI Court, then, in my considered view, it will be contrary to the intention of the legislature. In my opinion, had it be the intention of the legislatures to make the provision for appeal under Section 45-AA as mandatory, then, they would have carried out necessary amendment in Section 75 of the Act also.
29. In the case of Union of India vs. A.K. Pandey, reported in (2009) 10 SCC 552, the Hon‟ble Supreme Court in para 10 of judgment referring People v. Sutcliffe, 7 NYS(2) 431 held as under:
Page - 21 ".........The construction of mandatory words as directory and directory words as mandatory should not be lightly adopted. The opposite meaning should be unequivocally evidenced before it is accepted as the true meaning; otherwise, there is considerable danger that the legislative intent will be wholly or partially defeated."
In para 15 of A.K. Pandey(supra), it was held thus:
"15. The principle seems to be fairly well settled that prohibitive or negative words are ordinarily indicative of mandatory nature of the provision; although not conclusive. The Court has to examine carefully the purpose of such provision and the consequences that may follow from non-observance thereof..............."
30. It is now well settled that cardinal principles of interpretation of statute is that the word, „statute' must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless such construction leads to some absurdity or unless there is something in the context or in object of the statute to suggest to the contrary. The golden rule is that the words of a 'statute' must prima facie be given their ordinary meaning. It is yet another rule of construction that when the words of a „statute' are clear, plain and unambiguous, then the courts are bound to give effect to that meaning, irrespective of the consequences. It is said that the words themselves best declare the intention of the law giver. It is also well settled that the courts must interpret the provisions of the statute upon ascertaining the object of the legislation through the medium or authoritative forms in which it is expressed. It is settled that the Court should, while interpreting the provisions of the statute, assigns it ordinary literal meaning. As a corollary, no provision either in the Act or in the Rules framed by the State Government makes it Page - 22 mandatory for an employer to exhaust the appeal provision under Section 45-AA prior to filing of an application under Section 75/76 of the ESI Act, 1948. To reiterate, had it been the legislative intent it would have specifically been provided in the Act or Rules. In absence thereof, the arguments if any made that only after exhausting the option under Section 45-AA, can any application be filed in the Insurance Court shall be hard to digest.
31. Next, I have given my conscious consideration to the substantial question of law formulated as to whether Section 75(2-B) is mandatory or not. The Sub-Section 2-B starts with prohibitive or negative words, when it provides, "no matter which is in dispute between a principal employer and the Corporation in respect of any contribution......................"
Following the principles laid down in A.K. Pandey as cited supra, it appears that the provision is mandatory in nature. The discretion or relaxation given to an employer is in-built in the provision itself. Firstly, Sub-Section (2-B) stipulates that no dispute shall be raised by the principal employer in the Employees‟ Insurance Court unless he deposits with the Court fifty per cent of the amount due from him as claimed by the Corporation. Thereafter, the legislature has incorporated a proviso which gives a discretion to the Insurance Court, or in other words, a kind of relaxation given to an employer to file an application to the Court on the basis of which the Insurance Court has been given the power to waive or Page - 23 reduce the amount to be deposited under this Sub-Section. So, in my opinion, the provision of Sub-Section (2-B), inclusive of including its proviso as a whole in the sense, is mandatory. The inclusion of proviso in Sub-Section (2-B) makes the first part of the provision as directory because the proviso empowers the employer to file an application to waive or reduce the claimed amount to be deposited with the Insurance Court, but, it is aptly clear that to file an application under Section 75 of the ESI Act before the Insurance Court, the employer is mandatorily to deposit fifty percent of the claimed amount; however, a relaxation has been given to such applicant-employer of establishment to file an application under the proviso as contemplated under sub-section (2-B) asking the court to waive or reduce the claimed amount to be deposited in the court.
32. Furthermore, it is to be borne in mind that the ESI Act is a social security legislation, as I have stated here-in-above. There is clear statutory mandate for depositing fifty percent of the claimed amount for filing an application by the employer who opts to take recourse of Section 75 of the Act. Only escape remains with the aggrieved employer to urge before the Insurance Court to waive or reduce the said amount. Again the language of the proviso of sub-section (2-B) crystalises that discretion or relaxation as given to the employer under the said proviso is not to be exercised in a routine manner or as a matter of course. Only when a strong prima facie case is made out, then the Insurance Court after recording reasons in Page - 24 writing may waive or reduce the claimed amount considering the legislative intent and the purpose for which this Sub-section has been incorporated in the ESI Act, 1948 by the Act 29, 1989(w.e.f. 20.10.1989). Accordingly, the substantial question of law as formulated here-in-above has been answered by this Court.
33. In view of the above discussions, I do not accept the submission of learned counsel appearing for the respondents-Corporation that the application filed by the petitioner before the Insurance Court without exhausting the remedy as provided under Section 45-AA of the ESI Act is bad in law.
34. Further, in the instant appeal, it comes to fore that the petitioner neither had deposited fifty percent of the claimed amount nor filed any application for waiving or reducing the claimed amount before the Insurance Court. In this situation, Sub-Section (2-B) of Section 75 as a whole being held to be mandatory, non-compliance of such mandatory provision made their petitions raising a dispute before the Insurance Court not maintainable.
35. In the light of the above discussions, I find no merit in the appeal, and accordingly, the appeal stand dismissed. Consequently, the judgment and order dated 28.05.2019 passed by the learned District Judge (Employees‟ Insurance Court), West Tripura, Agartala in connection with case Nos. Misc. (ESI) 05 of 2014 stand upheld and affirmed.
Page - 25 Accordingly, the interlocutory applications filed by the petitioner i.e. appellants herein, are also dismissed and disposed of.
Pending application(s), if any, also stands disposed. However, there shall be no order as to costs. Send down the LCRs.
JUDGE Saikat