Tripura High Court
Shri Debananda Dam vs The Employees' State Insurance ... on 13 January, 2022
Author: Arindam Lodh
Bench: Arindam Lodh
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HIGH COURT OF TRIPURA
AGARTALA
MFA 02 OF 2019
Shri Debananda Dam,
Proprietor of M/s Jnan Bichitra Press, Vidyasagar Palli, Mahasakti Road,
P.O. Jogendranagar-799004, P.S. East Agartala, District- West Tripura.
---- Petitioner-Appellant.
Versus
1. The Employees' State Insurance Corporation,
Regional Office, N.E. Region, P.O. Bamunimaidan, Guwahati-21
2. The Assistant Director,
The Employees‟ State Insurance Corporation, Regional Office, N.E. Region,
P.O. Bamunimaidan, Guwahati-21
3. The Recovery Officer,
The Employees‟ State Insurance Corporation, Regional Office, N.E. Region,
P.O. Bamunimaidan, Guwahati-21
---Respondents.
MFA 02 OF 2020
1. Smt. Pramila Sutradhar, Partner M/s Laxmi Saw Mill, Amtali Wood Based Industrial Estate, P.O. Amtali, P.S. Amtali, A.B. Road, District- West Tripura.
2. Smt. Namita Choudhury, Partner M/s Laxmi Saw Mill, Amtali Wood Based Industrial Estate, P.O. Amtali, P.S. Amtali, A.B. Road, District- West Tripura.
---- Petitioner-Appellants.
Versus
1. The Employees' State Insurance Corporation, Regional Office, N.E. Region, P.O. Bamunimaidan, Guwahati-21
2. The Assistant Director, The Employees‟ State Insurance Corporation, Regional Office, N.E. Region, P.O. Bamunimaidan, Guwahati-21
3. The Recovery Officer, The Employees‟ State Insurance Corporation, Regional Office, N.E. Region, P.O. Bamunimaidan, Guwahati-21
---Respondents.
For Appellant(s) : Mr. SM Chakraborty, Sr. Advocate.
Ms. P. Sen, Advocate
For Respondent(s) : Mr. KK Pal, Advocate
Date of hearing & delivery
of Judgment and order : 13.01.2022
Whether fit for reporting : Yes
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HON'BLE MR JUSTICE ARINDAM LODH
Judgment & Order (Oral)
The above appeals have been taken up and heard together for final disposal by this common judgment since common questions of law and facts are involved.
2. In these appeals under Section 82 of Employees‟ State Insurance Act, 1948, the appellants have challenged the judgments and orders dated 16.08.2019 passed by the learned Employees‟ Insurance Court (District Judge), West Tripura, Agartala in connection with case Nos. Civil Misc. (ESI) 02 of 2014 and Civil Misc. (ESI) 01 of 2014, whereby and whereunder the learned Insurance Court dismissed the petitions filed by the petitioners 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. 2,93,150/- by one notice and again Rs. 3,95,427/- by another notice in case no. Civil Misc. (ESI) 02 of 2014 and for payment of Rs. 2,93,690/- by a notice in case no. Civil Misc. (ESI) 01of 2014.
3. To appreciate the controversy raised in the present appeals, few relevant facts may be noted:
In Civil Misc. ((ESI) 02 of 2014:-
3.1. The petitioner is proprietor of one press namely M/S Jnan Bichitra Press wherein according to the petitioner, numbers of employees never exceeded Page - 3 six and the number of employees in the Press was four. He has also another business unit under name and style "Jnan Bichitra Patrika" wherein he has total 3 employees. There are also other two business units namely "Jnan Bichitra Book world" and "Jnan Bichitra Children Book World" and proprietor of the same is his wife, Smti Anjana Dam and not the petitioner. 3.2. The Petitioner further stated that without any prior enquiry, the authorised officer of ESI authority issued one letter on 3.2.2014 (Ext.3 cum Ext.D) alleging that the petitioner did not pay any ESI contribution w.e.f.
January, 2009 to December, 2013 and asked him to show cause as to why the arrear of ESI contribution for that period amounting to Rs.2,93,150/- should not be realised from him. Then the O.P.no.2 also issued one notice u/s 45A of the Act on 9.4.2014 informing the petitioner about the total dues to be 2,86,000/-.Being aggrieved by the said notice, the petitioner has sent a reply vide communication dated 23.5.2014 asserting that his press did not come under the purview of ESI Act. The respondent, who was the original O.P.no.2 had sent a reply dated 5.6.2014 stating inter alia that the unit of the petitioner did come within the coverage of said Act which came to fore on the basis of a preliminary survey report dated 16.2.2009 done by the Social Security Officer of the ESI authority. In response to such communication, the petitioner submitted another representation on 18.6.2014 to O.P.no.2 requesting for re-inspection of his unit. When the petitioner was waiting for reply of the same, he received another letter dated 5.9.2014 from the Recovery Officer i.e. respondent-O.P.no.3 (here-in- after referred to as OP No. 3) who raised the demand of Rs.3,91,571/- and simultaneously, the O.P.no.2 sent him another notice asking him to appear before him on 31.10.2014 wherein dues was shown to be Rs.3,95,427/-. Thereafter, the petitioner had approached the Insurance Court. With such background history, praying for declaration that ESI Act is not application in his business concern and as such the demand notices issued by the ESI Page - 4 authority dated 3.2.2014, 14.10.2014 and other correspondence made by the ESI authority are liable to be quashed.
3.3. 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.
3.4. On the basis of the pleadings, the learned Insurance Court had framed the following issues:
(i) Is the case maintainable ?
(ii) Whether M/S. Jnan Bichitra Press comes under the purview of the definition of factory as defined in the ESI Act, 1948 and is thus liable to pay any compensation as ESI contribution ?
(iii) Is the petitioner entitled to get the declaration that the letters dated 03.02.2014 and 14.10.2014 of the opposite parties are void and illegal and thus liable to be set aside ?
(iv) Is the petitioner entitled to get any other relief/reliefs ?
3.5. In course of recording evidences, the petitioner examined himself as PW.1 and introduced certain documents into evidence which were marked as Exbt.1 to Exbt.3 and Attendance Register books as Exbt.4 and 5 as Page - 5 a whole. He also examined Smti. Anjana Dam as PW2 and Sri Krishna Sankar Chakraborty as PW3. The opposite party examined one witness, namely, Bijeet Kumar Pegu as OPW.1 and he also proved certain documents which were marked as Exbt.A to Exbt.F. In Civil Misc. ((ESI) 01 of 2014:-
3.6. The petitioners are the partners of M/S. Laxmi Saw Mill and as per the licence there may be maximum nine numbers of employees in their establishment on any day and thus ESI Act was not applicable in their establishment. However, they received a show cause notice dated 22.9.2012 from respondent-OP No. 2 (here-in-after referred to as O.P. No.2) asking them to pay Rs.2,01,988/- for covering the period of January, 2009 to July, 2012. thereafter, also respondent-O.P. No.3 (here-in-after referred to as OP No. 3) served notice dated 11.11.2013 asking payment of Rs.2,74,106/- and for recovery of the same from petitioners. Then the petitioners on 6.1.2014 by a communication informed the O.P. No.2 that only seven numbers of workers were employed in the said Saw Mill.
Despite the same, O.P. No.2 again sent another letter dated 3.2.2014 to the petitioners stating that ESI Act was applicable in their establishment w.e.f. 1.1.2009 as the report of Social Security Officer dated 18.12.2008 reflected ten numbers of employees in said establishment. The petitioners thereafter gave another reply on 21.6.2014 stating that the husband of petitioner no.2 was seriously ill being a cardiac patient and as such they were not able to give reply in time and simultaneously reiterated that number of employees were only seven and also requested for fresh investigation in this regard. Then Respondent No.3 sent another notice dated 2.7.2014 for recovery of Rs. 2,89,577/- from them to which the petitioners again replied vide their letter dated 17.7.2014 that they had already approached the competent authority by their representation dated 21.6.2014 which was pending but despite such pendency of their representation, they again received another demand notice from O.P. No.3 Page - 6 to deposit Rs.2,93,960/- within fifteen days. It is also further asserted that as per return submitted by the petitioners under the Factories Act, there were below ten numbers of employees in their establishment. Thus, finally the petition has been filed for declaration that their saw mill does not come within the purview of ESI Act and also to quash the demand notice dated 8.9.2014 issued by respondent OP No. 3.
3.7. The respondents on receipt of summons filed joint written statement stating that Social Security Officer visited the establishment of the petitioners on 18.12.2008 and found ten numbers of employees were there and the list of employees was handed over to him by one Tapan Sarkar, the Manager of the establishment. According to the respondents one letter of the petitioners dated nil was received by them on 17.1.2014 and it was properly replied vide letter dated 3.2.2014. It is further plea of the respondents that all the necessary steps were taken by them based on available records and as per provision of ESI Act.
3.8. On the basis of the pleadings, the learned Insurance Court had framed the following issues:
(i) Whether the petition is maintainable in its present form and nature ?
(ii) Whether notice to the respondent No.3 dated 8.9.2014 is liable to be set aside and quashed ?
(iii) Any other order or orders the parties are entitled thereto ?
3.9. In course of recording evidences, the petitioner Pramila Sutradhar examined herself as PW.1 and also introduced certain documents into evidence which were marked as Exbt.1 to Exbt.11. She also examined one Sri Pradip Choudhury as PW2 and another Sri Pijush Roy as PW3. The opposite party examined one Bijeet Kumar Pegu as OPW.1 and proved certain documents which were marked as Exbt.A to Exbt.D.
4. After closure of recording evidences, the learned Insurance Court heard arguments advanced by the learned counsel appearing for the Page - 7 parties to the lis and finally dismissed the petitions of the petitioners by the judgments, as aforestated. Being aggrieved by and dis-satisfied with the said judgments of dismissal of the petitions, the petitioners have preferred the instant appeals before this court.
5. At the time of admission of MFA 02 of 2019 filed by Sri Debananda Dam, upon hearing submissions of Mr. SM Chakraborty, learned senior counsel assisted by Ms. P. Sen, learned counsel appearing on behalf of the appellants and Mr. KK Pal, learned counsel appearing on behalf of the respondents, this court had formulated the following questions of law by order dated 11.02.2020:
"(I) Whether the firm/business organization of the appellant came within the purview of the definition of Section-2(12) of the ESI Act, 1948? (II) Whether the findings of the learned District Judge are perverse because of non-appreciation of evidence?"
6. It is noticed that in MFA 02 of 2020 filed by Smt. Pramila Sutradhar and another, as appellants, no substantial question of law was formulated at the time of admission of the appeal. Today, as proposed and consent being given, this court has adopted the substantial questions of law as formulated in MFA 02 of 2019. However, learned counsels have urged to formulate the following additional substantial questions of law for adjudication of the above noted two appeals. Accordingly, the following substantial questions of law have been formulated for the purpose of hearing of both the appeals:-
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(i) Whether the petitions filed by the petitioners before the Insurance Court were 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?
7. Learned counsel of both the parties to the lis have proceeded to argue the case on the basis of above substantial questions of law.
8. I have perused the judgment passed by the learned District Judge i.e. the Employees‟ Insurance Court [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 petitioners in MFA 2 of 2019 had produced two attendance registers of the establishment of the petitioner which were proved as Exhibit 4 and 5 wherefrom, from the attendance register of „Jnan Bichitra Press‟ one of the establishments of the petitioner, he became satisfied that the two establishments of the petitioner, namely, „Jnan Bichitra Press‟ and „Jnan Bichitra Patrika‟ were being run by ten numbers of employees w.e.f. 01.01.2009. While observed thus, the learned Judge had noticed that the attendance register of Jnan Bichitra Press (Exbt. 4) covering period from January, 2009 to December, 2009 Page - 9 reveals that in the month of January one Dipankar Mallik worked there on three dates i.e. on 01.01.2009 to 03.01.2009, and thereafter, he was absent continuously in that month and from February, 2009 his name was not reflected in the attendance register. Learned Judge has further observed that 'As per said register, there were total seven employees including said Dipankar Mallik for said three days and thereafter there were only six employees'. The petitioner in his petition stated that he has his another establishment, namely, 'Jnan Bichitra Patrika', wherein three numbers of employees were working'.
9. Considering these attendance registers and the nature of construction of the two Units, the learned Insurance Court had treated both the Units as one establishment. Learned Insurance Court has observed that "Here if said three numbers of employees of Jnan Bichitra Patrika are added with seven numbers of employees of Jnan Bichitra press as was in January, 2009 treating the same as single unit, the total employees appears to be ten for at least three days in said month". Referring to Section 1(6) of the ESI Act, the learned Insurance Court observed that "if on any occasion number of person falls below the prescribed limit, ESI Act will continue to be applied in said establishment". Thereafter, the learned Insurance Court held that "Situated thus, it is held that even if the observation slip and the preliminary survey report of Social Security Officer are ignored, still as per documents and assertion of the petitioner, the plea of petitioner that in Page - 10 no occasion number of employees exceeded nine in his establishment is negative".
10. Answering to the issues regarding maintainability of the petition filed by the petitioners, the learned Insurance Court held that since the petitioners 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 petitioners under Section 75 of the ESIC Act, 1948 were not maintainable. The petition filed by the appellant in MFA 2 of 2020 before the learned Insurance Court was dismissed on the ground of maintainability since fifty percent of the amount due from the petitioner by the Corporation was not deposited in compliance of Section 75(2-B) of the ESI Act.
11. At the threshold of hearing of the present appeals, learned senior counsel Mr. SM Chakraborty, appearing on behalf of the appellants, has invited my attention that during pendency of the present appeals, the appellants had submitted two petitions for allowing them to deposit fifty percent of the claimed amount, and thus, both the petitions are still pending for decision. Learned senior counsel has further submitted that the petitioner-appellants may be allowed to deposit fifty percent of the claimed amount in this appellate court.
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12. I have noticed that these interim applications were never seriously pressed by the learned senior counsel appearing for the appellants nor the court was inclined to give enough importance to the said interim applications, rather, from the order dated 04.10.2021, it appears that the court proceeded to hear and dispose of the case finally. From the order dated 05.10.2021, it appears that the said appeals were released from part- heard. As such, I have decided to dispose of the said interlocutory applications filed by the appellants alongwith these main appeals, and accordingly, I have proceeded.
13. Mr. SM Chakraborty, 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 appellants should not be prevented in pursuing the petitions as well as the present appeals. Learned senior counsel has further argued that the pre-conditions for depositing fifty percent of the claimed amount at the time of filing petitions 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 petitions filed by the petitioners 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, Page - 12 rather, optional as contemplated under sub-section (2B) of Section 75 of the ESI Act. Mr. Chakraborty, learned senior counsel has further argued that the establishments of the above petitioner-appellants do 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 establishments of the petitioners had ever exceeded nine numbers of employees (in MFA 2 of 2019) and seven numbers of employees (in MFA 2 of 2020).
14. Reacting sharply to the said submissions of Mr. Chakraborty, 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-appellants 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 petitioners for the reason that the question of maintainability was raised before the learned Insurance Court when Mr. Chakraborty, learned senior counsel had defended the action of the petitioners 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 establishments of the petitioners do not come within the purview of definition of „Factory‟ as contemplated under Section 2(12) of the ESI Act. Learned counsel for the respondent-
Page - 13 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 learned Insurance Court after examination and verification of records meticulously came to a finding in the case Civil Misc. (ESI) 2 of 2014 from which the present appeal being MFA 2 of 2019 is assailed before this court, as held that the establishments of the petitioner-appellants being a single Unit were working with ten numbers of staffs for the year covering from January, 2009 to December, 2009. Referring to appeal being no. MFA 2 of 2020, Mr. Pal, learned counsel has submitted that the petition of the petitioner-appellants bearing no. Civil Misc. (ESI) 1 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 petitioners before the Insurance Court were not maintainable and were liable to be dismissed at the very threshold on the sole ground that the petitioners do 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.
15. I have given my thoughtful consideration to the submissions as advanced by learned counsel appearing for the parties.
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16. 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 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.
17. Now, keeping in view the challenge made by the petitioner- appellants, where their establishments fall 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;"
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18. The relevant provisions which are necessary to adjudicate the disputes raised in these appeals 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
(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 Page - 16
(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 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."
19. Dealing with the submission of Mr. Chakraborty, learned senior counsel for the appellants 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 Page - 17 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:-
"7. During hearing, Ld. Sr. Advocate Mr. S.M. Chakraborty for the petitioner argued that the petition was filed under section 75(1)(g) of the ESI Act and as such it was maintainable. He also argued that even without resorting to the provision of appeal, the petitioner could approach the ESI Court directly as there is no prohibition in the Act that before approaching the Court, one shall have to exhaust the provision of appeal. In the regard, Ld. Sr. Advocate also referred section 45 (AA) of the Act wherein the words 'may prefer an appeal' have been used which means it is optional. He also argued that the very foundation of the demand of ESI contribution by the authority was the observation slip which was not properly proved into evidence. According to him, when a document is disputed, the author of the document must come to prove the same.
8. Ld. Counsel, Mr. K.K. Paul argued that the present petition was not maintainable as despite having scope to file appeal, the petitioner didnot 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 is the duty of the petitioner to submit return in prescribed from 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. 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."
Page - 18 Mr. K.K. Paul also argued that the petitioner didnot deposit 50% of the disputed amount in the Court as required under section 75 (2B) of the Act, so the petition was not maintainable. In reply to Mr. Paul, Ld. Sr. Advocate, Mr. Chakraborty submitted that said case under the referred citation was in respect of a petition filed under section 75(1)(a) of the Act and his case was filed under section 75(1)(g) of the Act, so said citation cannot be applied in the case. Regarding non-deposit of 50% of the amount due in the Court, Ld. Sr. Advocate submitted that no such deposit was made as his case is not related to any dispute concerning the quantum of the dues, rather it was filed under section 75(1)(g) of the Act challenging the applicability of the Act itself and not under section 75(1)(b) or (c) of the Act."
20. 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. Chakraborty, learned senior counsel for the petitioner-appellants, 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 petitioners and the same appears to be contrary to the records, and accordingly, is repelled.
21. 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.
22. Here, I deem it imperative to mention that in exercise of powers conferred under Section 96 of the ESI Act, the Labour Department, Page - 19 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."
23. 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.
24. 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:-
Page - 20 "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."
25. 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 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."
26. 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 Page - 21 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.
27. 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 MFA No.2 of 2019[Debananda Dam vs. ESI Corporation], it is observed that the learned Insurance Court has elaborately discussed the evidence and after comparing the registers of the establishments, he came to a finding that the establishments, namely Jnan Bichitra Press & Jnan Bichitra Patrika should be considered as one single unit, which was manned by 10(ten) employees. The registers were produced by the wife of the petitioner herself. In view of this, the above findings of the learned Insurance Court regarding the establishments of the petitioner having ten 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 Page - 22 on the materials, which were proved in accordance with law in course of trial.
28. In MFA 02 of 2020, learned Insurance Court came to a finding that the respondents could not establish that the concerned establishment was run by ten or more employees, but, held that the petitioner 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 questions of law as formulated in both the appeals have been answered accordingly.
29. Now, the additional substantial questions of law remain to be answered are whether the petitions/applications filed by the petitioners 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.
30. 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 Page - 23 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 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 Page - 24 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.
31. 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:
".........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..............."
32. It is now well settled that cardinal principles of interpretation of statute is that the word, „statute' must be understood in their natural, Page - 25 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 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.
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33. 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 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 Page - 27 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.
34. 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 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.
35. In view of the above discussions, I do not accept the submission of learned counsel appearing for the respondents-Corporation Page - 28 that the application filed by the petitioners before the Insurance Court without exhausting the remedy as provided under Section 45-AA of the ESI Act is bad in law.
36. Further, in the instant appeals, it comes to fore that the petitioners 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.
37. In the light of the above discussions, I find no merit in the appeals, and accordingly, the appeals stand dismissed. Consequently, the judgments and orders dated 16.08.2019 passed by the learned Employees‟ Insurance Court (District Judge), West Tripura, Agartala in connection with case Nos. Civil Misc. (ESI) 02 of 2014 and Civil Misc. (ESI) 01 of 2014 stand upheld and affirmed.
Accordingly, the interlocutory applications filed by the petitioners i.e. appellants herein, are also dismissed and disposed of.
However, there shall be no order as to costs.
Send down the LCRs.
JUDGE Saikat