Kerala High Court
M/S.Sreebala T.V.R. Cone House vs State Of Kerala on 31 March, 1994
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT:
THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN
MONDAY, THE 23RD DAY OF JANUARY 2012/3RD MAGHA 1933
WP(C).No. 17612 of 2010 (B)
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PETITIONER:
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M/S.SREEBALA T.V.R. CONE HOUSE
ATTKULANGARA,TRIVANDRUM A PARTNER SHIP FIRM HAVING
ITS REGISTERED OFFICE AT ATTAKULANGARA, REP BY
ITS PARTNER V.RAMASWAMY, S/O.T.VELAYUDHAN ASSARI
RESIDING AT T.C.20/914,OPP JUDGE ROAD, KARAMANA
TR
BY ADVS.SRI.R.S.KALKURA
SRI.M.S.KALESH
SRI.HARISH GOPINATH
SRI.V.VINAY MENON
SMT.KVP.JAYALEKSHMY
RESPONDENTS:
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1. STATE OF KERALA, REP BY THE SECRETARY
LABOUR AND REHABILITATION, DEPARTMENT OF LABOUR
SECRETARIAT, TRIVANDRUM.
2. THE ESI CORPORATION, REP BY THE
REGIONAL DIRECTOR, ESI CORPORATION, REGIONAL OFFICE
TRICHUR.
3. THE RECOVERY OFFICER, RECOVERY OFFICE
ESI CORPORATION, TRICHUR.
4. THE SECRETARY, LABOUR AND REHABILITATION
GOVERNMENT OF KERALA, SECRETARIAT, TRIVANDRUM.
5. THE JOINT SECRETARY TO GOVERNMENT
LABOUR AND REHABILITATION, DEPARTMENT OF LABOUR
SECRETARIAT, TRIVANDRUM.
R1, R4 & R5 BY GOVERNMENT PLEADER SMT. ANITHA RAVINDRAN
R2 & R3 BY ADV. SRI.P.SANKARANKUTTY NAIR, SC, ESI CORPN
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON
23-01-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
WP(C).No. 17612 of 2010 (B)
APPENDIX
PETITIONER'S EXHIBITS:
P1: TRUE COPY OF THE DEED OF PARTNERSHIP OF M/S. SREEBALA TVR CINE
HOUSE DATED 31.3.1994.
P2: TRUE COPY OF THE NOTICE OF DEMAND DATED 16.9.2004
P3: TRUE COPY OF THE VISIT NOTE DATED 22.9.2004.
P4: TRUE COPY OF THE REPLIES DATED 29.9.2004 TO EXT.P2.
P5: TRUE COPY OF THE REPLY TO EXT.P3 DATED 29.9.2004.
P6: TRUE COPY OF THE APPLICATION FOR GRANT OF EXEMPTION FILED
BY THE PETITIONER BEFORE THE GOVERNMENT OF KERALA DATED 3.12.2004.
P7: TRUE COPY OF THE LETTER DATED 6.11.2004 ISSUED BY THE FIRST
RESPONDENT TO THE PETITIONER.
P8: TRUE COPY OF THE ORDER OF ATTACHMENT OF IMMOVABLE PROPERTY
DATED 2.1.2006.
P9: TRUE COPY OF THE MAHAZER DATED 25.1.2006.
P10: TRUE COPY OF THE JUDGMENT IN W.P.(C) NO. 3333/2006 DATED 6.3.2006.
P11: TRUE COPY OF THE NOTICE DATED 25.6.2009.
P12: TRUE COPY OF THE ORDER DATED 11.2.2010 ISSUED BY THE FIRST
RESPONDENT.
RESPONDENTS' EXHIBITS: NIL
//TRUE COPY//
PA TO JUDGE
Scl.
P.N. RAVINDRAN, J.
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W.P.(C) No. 17612 of 2010
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Dated this the 23rd day of January, 2012.
JUDGMENT
The petitioner is a partnership firm represented by its Managing Partner. It is running a movie theatre under the name and style "Sreebala TVR Cine House" at Thirvuananthapuram. The petitioner firm purchased the movie theatre from the erstwhile owner M/s. M.P. Cinema in the year 1986 and commenced business in January 1988. Later, when steps were taken to cover the movie theatre under the Employees' State Insurance Act, 1948, (hereinafter referred to as 'the Act' for short), the petitioner firm moved the Employees Insurance Court, Kollam by filing Insurance Case No.26 of 1997. The petitioner firm contended that it had only 9 employees except during the period from June 1990 to January 1992, when the strength of employees was 21, that the movie theatre was taken over by the Official Receiver on 18-9-1991 and he was running it till 5-2-1997 and therefore, during the said period, the petitioner firm is not liable to pay contribution under the Act. Various other contentions W.P.(C) No. 17612 of 2010 2 were also raised. By order passed on 23-11-1999, the Employees Insurance Court, Kollam held that the petitioner's establishment is liable to be covered under the Act and that except during the period from 18-9-1991 to 5-2-1997, the petitioner firm is liable to pay the contribution. The order passed by the Employees State Insurance Court was upheld by this Court on appeal filed by the petitioner and the Special Leave Petition filed by the petitioner was dismissed by the Apex Court. The order passed by the Employees State Insurance Court, Kollam in Insurance Case No. 26 of 1997 has thus become final.
2. After the order passed by the Employees Insurance Court, Kollam in Insurance Case No. 26 of 1997 attained finality, the third respondent issued Ext.P2 demand notice dated 16-9-2004 under section 45 of the Act, calling upon the petitioner to pay the sum of Rs.29,260/- being the arrears of contribution payable during the period from October 2000 to September 2003 and the interest thereon for the period ending with 31-8-2004. The petitioner was also called upon to pay future interest from 1-9-2004 onwards. A week later, the third respondent visited the petitioner's establishment in connection with the recovery of the W.P.(C) No. 17612 of 2010 3 amount outstanding and issued Ext.P3 visit note dated 22-9-2004, calling upon the petitioner to remit the sum of Rs.2,95,806/- by 29-9-2004 and to appear before him on 30-9-2004 with proof of such remittance, failing which the petitioner was informed that coercive steps will be taken to recover the said amount.
3. The petitioner thereupon filed Ext.P6 application dated 3-12-2004 seeking exemption of the petitioner's establishment from the provisions of sections 88 and 91 A of the Act during the period from 1-6-1990 to 31-12-2003. The petitioner stated in that application that it is regularly paying the contribution from January 2004. Part III of the application form which was required to be filled up if the employees are in receipt of benefits which are substantially similar or superior to those provided under the Act was left blank and in that part, the petitioner had stated as follows. "Benefits not received by employees". Along with the application, petitioner had also enclosed a joint submission from the employees. The Government did not consider Ext.P6 representation and kept it pending. In the meanwhile, the Recovery Officer attached the movie theatre with all its fittings W.P.(C) No. 17612 of 2010 4 and fixtures as per Ext.P8 order dated 2-8-2006 and the attachment was effected on 25-1-2006. The petitioner firm thereupon filed W.P.(C) No.3333 of 2006 in this Court. By Ext.P10 judgment delivered on 6-3-2006, this Court disposed of the said writ petition with a direction to the Government to take a final decision on Ext.P6 application expeditiously. This Court also directed that until such time as Ext.P6 application is disposed of, the recovery proceedings shall be kept in abeyance.
4. The Government thereafter issued Ext.P11 notice dated 25-6-2009 calling upon the Managing Partner of the petitioner firm to be present for a hearing on 4-7-2009. The Managing Partner of the petitioner firm appeared and he was heard on 4-7-2009 in the presence of representatives of the Employees State Insurance Corporation, who contended that exemption from the provisions of the Act can be given for a period not exceeding 12 months at a time as per section 87 of the Act, only if the benefits provided by the establishment to its employees are substantially similar or superior to those provided under the Act, that the petitioner is not providing any medical or cash benefits to its employees and therefore, the Employees' W.P.(C) No. 17612 of 2010 5 State Insurance Corporation is not in favour of the grant of exemption. The Government thereafter placed the matter before the sub committee of the Regional Board of the Employees State Insurance Corporation which met on 6-11-2010. The sub committee decided that the petitioner cannot be given exemption for the reason that the benefits provided by the petitioner's firm are not substantially similar or superior to the benefits provided under the Act. The Government thereupon rejected the petitioner's application for exemption by Ext.P12 order dated 11-2-2010. Ext.P12 order is under challenge in this writ petition.
5. The main contention raised by the petitioner is that Ext.P12 order does not reflect the decision of the Government, but the decision of the Regional Board of the Employees State Insurance Corporation and therefore on that short ground, it is liable to be set aside. It is also contended that the petitioner was not afforded an opportunity of being heard by the Regional Board or its sub committee and therefore for that reason also, the impugned order is liable to be set aside. The petitioner also challenges the stand taken by the Employees State Insurance Corporation that exemption can be granted only if employees are W.P.(C) No. 17612 of 2010 6 provided benefits which are substantially similar or superior to the benefits under the Act, on the ground that the petitioner had not sought exemption under section 88 of the Act, but only under section 87, which did not at the relevant time contain a stipulation to the effect that exemption can be granted only if the employer is providing benefits which are substantially similar or superior to the benefits provided under the Act.
6. The State of Kerala has filed a counter affidavit contenting inter alia that the application for exemption was wrongly styled as one filed under section 88 of the Act, that section 88 applies only if exemption of persons or class of persons employed in any factory or establishment or classes of factories or establishments to which the Act applies is sought, that exemption under section 87 is exemption of a factory or establishment or class of factory or establishment and that the question to be considered while granting exemption either under sections 87 or 88 of the Act, is whether the employees are in receipt of benefits substantially similar or superior to the benefits provided under the Act. Respondents 1 and 2 have filed a counter affidavit contending that the grant of exemption is in the W.P.(C) No. 17612 of 2010 7 discretion of the Government and exemption is granted only if the employees are in receipt of benefits, substantially similar or superior to the benefits provided under the Act.
7. I heard Sri. R.S. Kalkura, learned counsel appearing for the petitioner, Smt. Anitha Ravindran, learned Senior Government Pleader for respondents 1, 4 & 5 and Sri. Sandesh Raja, learned counsel for the respondents 2 and 3. Sri. R.S.Kalkura, learned counsel appearing for the petitioner contended that the Government have not treated Ext.P6 application for exemption as an application under section 88 of the Act and that the impugned order has been passed by treating the application for exemption as one filed under section 87 of the Act, which has no application to the instant case. The learned counsel for the petitioner also contended that the petitioner was not given an opportunity to address the sub committee of the Regional Board and that as the Government have virtually accepted the decision of the sub committee of the Regional Board of the Employees State Insurance Corporation, the impugned order is liable to be set aside on that short ground. The learned counsel lastly contended that the decision reflected in Ext.P12 is W.P.(C) No. 17612 of 2010 8 not the decision of the Government, but of the Regional Board of the Employees State Insurance Corporation, that sections 87 or 88 of the Act do not stipulate that exemption can be given only if the employees are in receipt of benefits substantially similar or superior to the benefits provided under the Act and therefore on that score also, the impugned order is liable to be set aside. Per contra, the learned Government Pleader appearing for the State of Kerala and the learned standing counsel appearing for the Employees State Insurance Corporation contended that with effect from 1-6-2010, it is necessary for an employer seeking exemption under section 87 of the Act to show that his employees are in receipt of benefits substantially similar or superior to the benefits provided under the Act. The learned counsel for the respondents also contended that section 88 of the Act has no application to the instant case, that section 88 of the Act applies only when the application is to exempt any person or class of persons employed in any factory or establishment or class of factories or establishments to which the Act applies from the operation of the Act, that the application made by the petitioner was to exempt all its employees from the provisions of W.P.(C) No. 17612 of 2010 9 the Act and therefore the relevant provision which applies is section 87 of the Act. The learned counsel for the respondents contended that the petitioner's establishment is a covered establishment and that for the period prior to 18-9-1991 and subsequent to 5-2-1997, the petitioner is liable to pay contribution under the Act in respect of his employees, that the petitioner did not move for exemption till he filed Ext.P6 application dated 3-12-2004, that he had in the application sought exemption for the period from 1-6-1990 to 31-12-2003 in respect of the entire establishment, which at that point of time had 10 employees on the rolls, that exemption under section 87 of the Act can be granted only for a period not exceeding one year at a time and that in view of the stipulations in section 87, an order of exemption could not have been granted for the period from 1-6-1990 to 31-12-2003.
8. I have considered the submissions made at the Bar by the learned counsel appearing on either side. I have also gone through the pleadings and the materials on record. The impugned order was passed on an application filed by the petitioner seeking exemption of its establishment from the W.P.(C) No. 17612 of 2010 10 provisions of the Act. The petitioner had not sought exemption of any person or persons or class of persons employed in its establishment. Therefore, the relevant provision which applies is section 87 of the Act. Section 87 of the Act reads as follows.
"87. Exemption of a factory or establishment or class of factories or establishments. --- The appropriate Government may, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt any factory or establishment or class of factories or establishments in any specified area from the operation of this Act for a period not exceeding one year and may from time to time by like notification renew any such exemption for periods not exceeding one year at a time".
[Provided that such exemptions may be granted only if the employees in such factories or establishments are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act:
Provided further that an application for renewal shall be made three months before the date of expiry of the exemption period and a decision on the same shall be taken by the appropriate Government within two months of receipt of such application.]
9. A mere reading of section 87 of the Act discloses that exemption can be granted only for a period not exceeding one year at at time and an order of exemption can be renewed only for a period not exceeding one year at a time. In instant case, the petitioner had applied for exemption for the period from 1-6-1990 to 31-12-2003. Such an exemption order could not have been granted on the terms of section 87 of the Act. That apart, the petitioner has no case that he is providing benefits W.P.(C) No. 17612 of 2010 11 which are substantially similar or superior to those provided under the Act. Section 87 of the Act as amended with effect from 1-6-2010, stipulates that exemption can be granted only if the employees are in receipt of benefits substantially similar or superior to the benefits provided under the Act. Therefore, the mere fact that when the petitioner submitted the application, such a stipulation was not in existence is not a reason to hold that the Government ought to have granted the exemption even though the employees were not in receipt of benefits substantially similar or superior to the benefits provided under the Act. Even before section 87 of the Act was amended, an establishment seeking exemption was bound to satisfy the Government that the employees are in receipt of benefits substantially similar or superior to those provided under the Act. Therefore, the mere fact that the yardstick that was being followed by the Government for granting exemption, was incorporated in the statute only later, is not a reason to hold that the statutory amendment can govern only applications for exemption filed thereafter.
For the reason stated above, I hold that there is no merit in W.P.(C) No. 17612 of 2010 12 the writ petition. The writ petition fails and is accordingly dismissed. However, having regard to the fact that the arrears relates to the period prior to 1-1-2004, I am inclined to grant the petitioner an opportunity to pay the balance amount demanded in Ext.P8 together with future interest thereon in monthly instalments, the first of which shall be paid within one month from the date of receipt of a certified copy of this judgment and the balance in six equal monthly installments. Needless to say, if the petitioner commits default in remitting any two consecutive instalments, it will open to the respondents to realize the entire amount due from the petitioner in lump.
Sd/-
P.N. RAVINDRAN, JUDGE Scl.
True Copy PA to Judge