Madras High Court
M/S. Nlc India Limited vs S.Amirtham on 25 April, 2022
Author: P.D. Audikesavalu
Bench: P.D. Audikesavalu
W.P. No. 24030 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 25.04.2022
CORAM
THE HON'BLE MR. JUSTICE P.D. AUDIKESAVALU
W.P. No. 24030 of 2018
and
W.M.P. No. 27995 of 2018
M/s. NLC India Limited,
Represented by its Chief General Manager,
Thermal Power Station – II,
Neyveli. … Petitioner
-vs-
1. S.Amirtham
2. M/s. TMP Constructions,
No. C-23, Thiruvallur Road, Block – 12,
Neyveli.
3. The Deputy Labour Commissioner – 2,
DMS Campus,
Teynampet,
Chennai – 600 006.
4. The Branch Manager,
ESI Corporation,
No. 2/9, Bhadrachalam Street,
Manjakuppam,
Cuddalore – 607 001. ... Respondents
(R4 suo-motu impleaded vide order dated 01.10.2018)
Prayer:- Writ Petitions filed under Article 226 of the Constitution of India,
1950, praying to issue a Writ of Certiorari, calling for the records of the Third
Respondent pertaining to the impugned order in Aa1/887/18 (W.C.
No. 109/2018) dated 12.04.2018 and quash the same as illegal.
https://www.mhc.tn.gov.in/judis
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W.P. No. 24030 of 2018
For Petitioner : Mr. N.Nithianandam
For Respondents : Mr. R.Rajasundaram (for R1)
Mr. V.Rajeshbabu (for R2)
Mr. Vadivelu Deendayalan,
Additional Government Pleader
(for R3)
Mr. S.P.Srinivasan (for R4)
ORDER
Heard Mr. N.Nithianandam, Learned Counsel for the Petitioner, Mr. R.Rajasundaram, Learned Counsel for the First Respondent, Mr. V.Rajeshbabu, Learned Counsel for the Second Respondent, Mr. Vadivelu Deenadayalan, Learned Additional Government Pleader appearing for the Third Respondent and Mr. S.P.Srinivasan, Learned Counsel for the Fourth Respondent and perused the materials placed on record, apart from the pleadings of the parties.
2. One K.Shankar had been engaged as contract labour through the Second Respondent in the establishment of the Petitioner and he had died on 16.06.2017 in its premises. It is the case of the Petitioner that in view of the coverage of its establishment under the Employees' State Insurance Act, 1948 (hereinafter https://www.mhc.tn.gov.in/judis 2/12 W.P. No. 24030 of 2018 referred to as 'the ESI Act' for short), it stands excluded from the purview of the Employee's Compensation Act, 1923 (hereinafter referred to as 'the EC Act' for short) as per Section 53 of the ESI Act, which reads as follows:-
“53. Bar against receiving or recovery of compensation or damages under any other law.- An insured person or his dependants shall not be entitled to receive or recover, whether from the employer of the insured person or from any other person, any compensation or damages under the Workmen’s Compensation Act, 1923 (8 of 1923), or any other law for the time being in force or otherwise, in respect of an employment injury sustained by the insured person as an employee under this Act.” The First Respondent had made a representation dated 12.12.2017 to the District Collector, Cuddalore seeking an enquiry into the death of her husband, the said K.Shankar and on receipt of its copy by the Third Respondent, it was treated as if it was a claim for compensation made under the EC Act and a notice for appearance for the hearing on 19.02.2018 was issued to the Petitioner and the First and Seconds Respondents. After the matter was adjourned by the Third Respondent to 08.03.2018 and 23.03.2018 for filing counter, the Petitioner claims that it had not been intimated of any subsequent date of hearing and surprisingly, an order dated 12.04.2018 was received on 03.08.2018 https://www.mhc.tn.gov.in/judis 3/12 W.P. No. 24030 of 2018 stating that in the enquiry conducted on 12.04.2018, the First Respondent had proved the claim for compensation of Rs. 8,02,600/- with the documents produced and the Petitioner was directed to remit that amount with interest at the rate of 12% per annum from 16.07.2017 till actual payment by way of demand draft in favour of the Third Respondent. Aggrieved thereby, the Petitioner has filed this Writ Petition.
3. This Court during the hearing on 01.10.2018 had suo motu impleaded the Branch Manager, ESI Corporation, Cuddalore as the Fourth Respondent in this Writ Petition taking into account the contention of the Petitioner that the First Respondent would be entitled only to the benefits under the ESI Act from the Fourth Respondent, and the Petitioner cannot be fastened with any liability to pay compensation under the EC Act.
4. Having due regard to the express mandate of Section 53 of the ESI Act, it is now beyond cavil that the provisions of the EC Act could not have been invoked in the present case, which is fortified by the decision of the Hon'ble Supreme Court of India in Bharagath Engineering -vs- R.Ranganayaki [(2003) 2 SCC 138], where the legal position has been explained as follows:-
“7. ....What is contemplated under Section 38 of the Act, which https://www.mhc.tn.gov.in/judis 4/12 W.P. No. 24030 of 2018 is a statutory requirement, is to insure all the employees.
8. Section 2(14) of the Act, which is the pivotal provision, reads as follows:
“ ‘Insured person’ means a person who is or was an employee in respect of whom contributions are or were payable under this Act and who is, by reason thereof, entitled to any of the benefits provided by this Act.”
9. It is to be noted that the crucial expression in Section 2(14) of the Act is “are or were payable”. It is the obligation of the employer to pay the contribution from the date the Act applies to the factory or the establishment. In ESI Corpn. -vs- Harrison Malayalam (P) Ltd. [(1993) 4 SCC 361 : 1994 SCC (L&S) 1] the stand of the employer that employees are not traceable or that there is dispute about their whereabouts does not do away with the employer's obligation to pay the contribution. In ESI Corpn. -vs-
Hotel Kalpaka International [(1993) 2 SCC 9 : 1993 SCC (L&S) 305] it was held that the employer cannot be heard to contend that since he had not deducted the employee's contribution on the https://www.mhc.tn.gov.in/judis 5/12 W.P. No. 24030 of 2018 wages of the employees or that the business had been closed, he could not be made liable. The said view was reiterated in ESI Corpn. -vs- Harrisons Malayalam Ltd. [(1998) 9 SCC 74 : 1998 SCC (L&S) 1174]. That being the position, the date of payment of contribution is really not very material. In fact, Section 38 of the Act casts a statutory obligation on the employer to insure its employees. That being a statutory obligation, the date of commencement has to be from the date of employment of the employee concerned.
10. The scheme of the Act, the Rules and the Regulations clearly spell out that the insurance covered under the Act is distinct and different from the contract of insurance in general. Under the Act, the contributions go into a fund under Section 26 for disbursal of benefits in case of accident, disablement, sickness, maternity etc. The contribution required to be made is not paid back even if an employee does not avail any benefit. It is to be noted that under Regulation 17-A, if medical care is needed before the issuance of temporary identification certificate, the employer is required to issue a certificate of employment so that the employee can avail https://www.mhc.tn.gov.in/judis 6/12 W.P. No. 24030 of 2018 the facilities available. “Wage period”, “benefit period” and “contribution period” are defined in Section 2(23) of the Act, Rule 2(1-C) and Rule 2(2-A) of the Rules. Rule 58(2)(b) is a very significant provision. For a person who becomes an employee for the first time within the meaning of the Act, the contribution period under Regulation 4 commences from the date of such employment from the contribution period current on that day and the corresponding benefit period shall commence on the expiry of the period of nine months from the date of such employment. In cases where employment injuries result in death before the commencement of the first benefit period, Rule 58(2)(b)(ii) provides the method of computation of dependant's benefits. It provides for computation of dependant's benefits in the case of an employee dying as a result of employment injuries sustained before the first benefit period and before the expiry of the first wage period.
11. Rule 58(2)(b)(ii), insofar as it is relevant, reads as follows:
“58. Dependant's benefits.—(1) * * * https://www.mhc.tn.gov.in/judis 7/12 W.P. No. 24030 of 2018 2(b) Where an employment injury occurs before the commencement of the first benefit period in respect of a person, the daily rate of dependant's benefit shall be—
(i) * * *
(ii) where a person sustains employment injury before the expiry of the first wage period in the contribution period in which the injury occurs, the rate, forty per cent more than the standard benefit rate, rounded to the next higher multiple of five paise corresponding to the group in which wages actually earned or which would have been earned had he worked for a full day on the date of accident fall.”
12. When considered in the background of statutory provisions, noted above, the payment or non-payment of contributions and action or non-action prior to or subsequent to the date of accident is really inconsequential. The deceased employee was clearly an “insured person”, as defined in the Act. As the deceased employee has suffered an employment injury as defined under Section 2(8) of the Act and there is no dispute that he was in employment of the https://www.mhc.tn.gov.in/judis 8/12 W.P. No. 24030 of 2018 employer, by operation of Section 53 of the Act, proceedings under the Compensation Act were excluded statutorily....” It is borne out from the materials placed on the record that necessary contributions under the ESI Act have been paid by the Petitioner in respect of the said K.Shankar and there cannot be any impediment for the First Respondent to claim the eligible benefits from the Fourth Respondent under the ESI Act.
5. The Fourth Respondent has filed Counter-Affidavit dated 08.04.2022 repudiating liability on the plea that the said K.Shankar had committed suicide. Apart from the fact that no provision of law has been quoted to deprive the benevolent provisions of the ESI Act to the dependents of a deceased employee if he had committed suicide, there is nothing to show that the decision taken by the Fourth Respondent entailing adverse civil consequence to the First Respondent had been made after affording an opportunity of hearing in consonance with the principles of natural justice, which would vitiate it as a nullity. In other words, while considering the claim of the First Respondent for the benefits under the ESI Act, the Fourth Respondent shall not be influenced or inhibited by the earlier orders said to have been passed denying liability in the matter.
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6. Learned Counsel for the First Respondent has raised an objection that the Writ Petition challenging the Order No. Aa1/887/18 (W.C. No. 109/2018) dated 12.04.2018 passed by the Third Respondent ought not to be entertained when an appeal against the said order could be preferred under Section 30 of the EC Act before this Court. It has been observed by the Hon’ble Supreme Court of India in Whirlpool Corporation -vs- Registrar of Trade Marks, Mumbai [(1998) 8 SCC 1] that the rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion and that in an appropriate case, inspite of availability of alternative remedy, the High Court may still exercise its discretionary powers in some contingencies, one of which is where the impugned proceedings are wholly without jurisdiction, as in this case.
7. In that view of the matter, the impugned Order No. Aa1/887/18 (W.C. No. 109/2018) dated 12.04.2018 passed by the Third Respondent, which cannot be sustained, is quashed. The First Respondent shall be at liberty to work out her rights to claim the benefits under the ESI Act in accordance with law. https://www.mhc.tn.gov.in/judis 10/12 W.P. No. 24030 of 2018 In fine, the Writ Petition is ordered on the aforesaid terms. Consequently, the connected Miscellaneous Petition is closed. No costs.
25.04.2022 vjt Index: Yes/No Note: Issue order copy by 26.05.2022.
To
1. The Deputy Labour Commissioner – 2, DMS Campus, Teynampet, Chennai – 600 006.
2. The Branch Manager, ESI Corporation, No. 2/9, Bhadrachalam Street, Manjakuppam, Cuddalore – 607 001.
https://www.mhc.tn.gov.in/judis 11/12 W.P. No. 24030 of 2018 P.D. AUDIKESAVALU, J.
vjt W.P. No. 24030 of 2018 25.04.2022 https://www.mhc.tn.gov.in/judis 12/12