Punjab-Haryana High Court
Ideal Private Schools Association ... vs State Of Haryana And Others on 17 August, 2010
Author: Ranjit Singh
Bench: Ranjit Singh
CIVIL WRIT PETITION NO.10743 OF 2009 :{ 1 }:
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
DATE OF DECISION: AUGUST 17, 2010
Ideal Private Schools Association (Regd.), Faridabad
.....Petitioner
VERSUS
State of Haryana and others
....Respondents
CORAM:- HON'BLE MR.JUSTICE RANJIT SINGH
1. Whether Reporters of local papers may be allowed to see the judgement?
2. To be referred to the Reporters or not?
3. Whether the judgment should be reported in the Digest?
PRESENT: Mr. S. P. Jain, Sr.Advocate with
Mr. Dheeraj Jain & Mr.Davesh Moudgil, Advocates,
for the petitioner.
Mr. Sunil Nehra, Sr.DAG, Haryana,
for the State.
Mr. Vikas Suri, Advocate,
Sr.Standing counsel for respondent No.2.
****
RANJIT SINGH, J.
This order will dispose of Civil Writ Petition Nos.10743 of 2009 (Ideal Private Schools Association (regd.), Faridabad Vs. State of Haryana and another), 13939 of 2009 (Digamber Jain and another Vs. State of Haryana and others), 15077 of 2009 (Haryana Progressive School's Conference (regd.), Faridabad Vs. State of Haryana and others), 15910 of 2009 (Haryana Engineering College, Jagadhri, Distt. Yamuna Nagar Vs. State of CIVIL WRIT PETITION NO.10743 OF 2009 :{ 2 }:
Haryana and others), 18004 of 2009 (Seth Nand Lal Bajaj Education Charitable Society, Chandigarh Vs. State of Punjab and another), 18965 of 2009 (New Daffodil Public School, Patiala Vs. State of Punjab and another), 5302 of 2010 (Association of the PSEB affiliated Schools (Pb.) (Regd.), Ludhiana Vs. State of Punjab and another), 6135 of 2010 (Sarvhitkari Educational Society (Regd.), Chandigarh Vs. State of Punjab and another), 8798 of 2010 (M/s Jyoti Model Sr.Sec.School, Kotakpura Vs. State of Punjab and another) and 12891 of 2010 (Haryana School Welfare Association (Regd.), Bilaspur, District Yamunanagar Vs. State of Haryana and another).
A hotly debated issue raised in these ten writ petitions is "whether Employees' State Insurance Act can be made applicable to Un-aided Education Institutions". The lead petition is filed by Association of Private Schools, namely, Ideal Private School Education (Regd.), Faridabad. Other writ petition Nos.13939, 15077, 15910, 18965, 18004 of 2009 and 12891, 5302, 6135 and 8798 of 2010, containing identical challenge, have been filed by various Institutions. The facts are mainly extracted from CWP No.10743 of 2009 and all the petitions are being disposed of through this common order as common question of law arises in these petitions.
The petitioner-Association in CWP No.10743 of 2009 claims to be an Association representing about 150 recognised Unaided Private Schools, affiliated to Haryana School Education Board and are situated in various parts of District Faridabad (Haryana). All these schools are receiving no grant-in-aid nor any CIVIL WRIT PETITION NO.10743 OF 2009 :{ 3 }:
other assistance of facility from the Government of Haryana. The petitioners are aggrieved against the action of the State Government in issuing notification under Section 1(5) of Employees' State Insurance Act, 1948 (hereinafter called as "ESI Act"). The proposal to extend the provisions of the Act to the educational Institutions upon its due approval by the Central Government was published on 11.4.2008. Accordingly, a notice was given for taking up the proposal into consideration after expiry of period of six months from the date of publication of the notification in the official gazette. Objections or suggestions, if any, received from any person, likely to be affected were also to be considered along with the proposal to extend the provisions of the ESI Act to unaided educational institutions. The description of the establishment to which the provisions of the ESI Act were sought to be extended, as given in the Schedule, was as under:-
"Educational institutions (including public, private aided or partially aided) run by individual's trustees, societies and other organizations, wherein 20 or more persons are employed on any day of the preceding twelve months."
This was followed by another notification extending the provisions of the Act to educational institutions, including public, private aided or partially aided institution on 30.1.2009 (Annexure P2). Employees' State Insurance Corporation (ESI-respondent No.2) then started approaching the petitioner-Association of Schools to get themselves registered under the ESI Act. In turn, the petitioners approached Joint Director of the respondent-Corporation with a plea that the member schools are unaided, recognised schools and are CIVIL WRIT PETITION NO.10743 OF 2009 :{ 4 }:
running in the slum areas. It was claimed that the schools are neither commercial institution, nor the teachers working therein were labourers. It was, therefore, pleaded that the ESI Scheme should not be implemented on the member schools. Prayer was also made for seeking clarification from the State Government in this regard. This representation dated 23.3.2009 is annexed with the petition as Annexure P-3. The respondent-Corporation, however, continued to persist with issuing notices to the petitioners between a period from March to May, 2009. Even a threat of prosecution was advanced if the schools did not comply with the directions. The petitioners on their part again submitted yet another representation and when the notices were not withdrawn, the petitioners have approached this court through the present writ petitions.
Replies have been filed on behalf of both the States as well as the respondent-Corporation. The respondent-States would challenge the maintainability of the writ petitions on the ground that no constitutional right of the petitioners was infringed and, thus, they have no right to invoke the extra-ordinary jurisdiction of this court. Otherwise, it is pleaded that the notification issued under Section 1 (5) of the ESI Act is legally valid and sustainable in the eyes of law and was aimed at making comprehensive provisions for medical care of the Employees covered under the ESI Scheme. It is pointed out that educational Institutions, irrespective of their character of being aided or un-aided, are meant to provide education to the society and low paid employees of such educational institutions are required to be provided social security benefits and, thus, the application of the ESI Act to such Institutions. The grounds raised on merits to CIVIL WRIT PETITION NO.10743 OF 2009 :{ 5 }:
challenge the notification are also controverted.
Respondent-ESI would also justify the applicability of the Act to education institutions as the aim of this Act is to provide certain benefits to the employees in case of sickness, maternity and employment injury. Reference is made to the fact that provisions of this Act had been extended to certain other establishments, like hotels, restaurants and shops. Some more establishments, like road motor transport establishments, newspaper establishments, Cinemas including preview theaters were also brought within the preview of the Act. It is accordingly stated that the contention that the Act was intending to cover only factories or industrial workers was wrong and misconceived. Other grounds are also advanced to substantiate the plea that the provisions of this Act have rightly been extended to the educational institutions.
The primary submission made by Mr.S.P.Jain, Learned Senior counsel, is that the Act was legislated to apply to factories etc. and could be extended to industrial, commercial or agricultural institutions and these cannot be equated with educational institutions. To further support his submission, the counsel would urge that teacher cannot be termed as workman or a labourer, who is employed in such like institutions, where ESI Act was meant to apply. The counsel would, thus, contend that the provisions of the ESI Act cannot be made/extended/implemented for the educational institutions.
The counsel would also contend that the notification was not meant to apply to the unaided schools as they would not fall within the category of educational institutions covered under the CIVIL WRIT PETITION NO.10743 OF 2009 :{ 6 }:
notification. In this regard, counsel appears to be referring to the description of the establishments given in the notification, whereby the educational institutions mentioned are public, private aided or partially aided. The counsel seems to contend that unaided schools, thus, are not covered within purview of this notification.
The counsel would emphasis that much more and better benefits are already provided to the employees and teachers working in the schools and as such there would not be any need or purpose to apply the provisions of this Act to the petitioner-Institution. As per the counsel, educational institutions can neither be taken or equated with industrial, commercial or agricultural establishment, which are the ones to which the provisions of this Act can be extended under Section 1(5) of the ESI Act. Therefore, the counsel submits that the provisions of this Act could not be extended to the educational institutions and accordingly would term the notification to be bad on this count.
Continuing with his attack to the notification, the counsel would refer to the definition of an employee as given in Section 2 (9) of the ESI Act. The word "employee" is defined to mean any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies. As per the counsel, the education being imparted by the teachers to the children studying in these institutions has no parallel/similarity with the work carried on in the factory or establishment and, hence, teachers would not be covered under the definition of an employee in the ESI Act and, thus, would be another indication that this Act was not meant to apply to the educational institutions and so cannot be extended to the petitioner-Institutions. In CIVIL WRIT PETITION NO.10743 OF 2009 :{ 7 }:
support, the counsel has made reference to an earlier attempt on the part of the State Government to declare the educational institutions as commercial establishments under the provisions of Punjab Shops and Commercial Establishment Act, 1958. This action was challenged by the petitioner-Association through CWP No.16770 of 2001 and ultimately the State Government had decided to withdraw the said notification. Similarly, the action of the Government to impose the provisions of Minimum Wages Act on the educational institutions was also successfully challenged, when the Hon'ble Supreme Court had quashed the same. It is, thus, pleaded that ESI Act also can not be applied to the educational institutions.
In contrast, the counsel appearing for the States of Punjab and Haryana and for respondent-ESI, would join serious issues with the counsel representing the petitioners. They would not only contest the views canvassed by the counsel for the petitioners that this Act could not be extended to the educational institutions, it being not akin to the industrial, commercial or agricultural establishments, but would emphasis on the word "otherwise" used in Section 1(5) to contend that it is wide enough to empower the Government to extend the provisions of this Act to institutions, like educational institutions. Common submission as canvassed by the counsel for the respondents is that word "otherwise" cannot be given a restricted meaning to confine it to those establishments or class of establishments, which are akin to industrial, commercial or agricultural, but the word has to be given a wide meaning and scope so as to enable the Government to extend the provisions of this beneficial legislation to institutions, like educational institutions also.
CIVIL WRIT PETITION NO.10743 OF 2009 :{ 8 }:
The counsel would unanimously submit that the importance of word "or" used in Section between the words "other establishments" and "class of establishments" and also between the last words of sub- section where word "or" is used in between the words `agricultural' and `other' cannot be lost. Submission is that the word "otherwise" has nothing common with the other words used in the sub-section and is to be liberally construed, more so when the educational institutions have been held to be industrial establishments under the provisions of the Industrial Disputes Act as was held in the famous case of Bangalore Water Supply and Sewerage Board Vs. A. Rajappa, (1978) 2 SCC 213.
In fact, both the sides have referred to large number of precedents to substantiate their respective pleas and these would also need to be considered while appreciating their respective submissions.
At the outset, it may need a notice that the identical issue arose for consideration before a Kerala High Court, where applicability of such notification issued under Section 1(5) of the ESI Act was under challenge. The said challenge to the notification was on identical ground as is raised in the present petitions and the same was negated by the Division Bench of the Kerala High Court. This recent decision is reported as CBSE School Management's Association Vs. State of Kerala, 2010-II-LLJ 240. Similar is the view taken by Allahabad High Court in case reported as Maharishi Shiksha Sansthan and another Vs. State of U.P. And another, 2008 (119) FLR 935. The word "otherwise" used in Section 1(5) of the ESI Act has been held to be of wide amplitude covering all other CIVIL WRIT PETITION NO.10743 OF 2009 :{ 9 }:
establishments, including educational institutions. The court has accordingly held that educational institution including minority educational institutions could be brought under the ESI Act. Division Bench of Kerala High Court in CBSE School's case (supra) has accepted with approval the law laid down by Allahabad High Court in the case of Maharishi Shiksha Sansthan (supra). In fact, the challenge before the Division Bench of the Kerala High Court was by un-aided but recognised and self-financing colleges. The submission that words "or otherwise" must be understood by following ejusdem generis and, thus, to exclude educational institution being not similar to industrial, commercial or agricultural establishment is rejected in these cases. It is observed that educational institutions like schools were industrial establishments and word "or otherwise" in Section 1 (5) of ESI Act is to be given widest possible meaning and not restrictive meaning by applying principle of ejusdem generis.
The first question that would cross ones mind, thus, would be to consider if there is any need or reason for reconsidering the issue or if there is any need to take a different view. There is virtually no reason, cause or purpose either pressed or highlighted before me, which can prompt this court to take any different view than the one expressed by two different High Courts after making reference to large number of precedents. The issue has been well debated and considered by the Division Bench of the Kerala High Court in the case of CBSE School (supra). To be fair, none of the counsel for the petitioners made an attempt to distinguish the view expressed by Kerala High Court as well as by the Allahabad High Court and rather fairly conceded that the judgments would directly CIVIL WRIT PETITION NO.10743 OF 2009 :{ 10 }:
stare at them. Still, the counsel plead for considering the issue afresh on the basis of submissions made by them on the support of various precedents. Though I have not felt inclined to take any different view on merits to the one taken in the cases of CBSE School and Maharishi Shiksha Sansthan (supra), yet to be fair to the counsel, I will undertake the exercise of considering the line of submissions made on the support of precedents cited before me.
The counsel has first referred to the case of Haryana Unrecognised Schools' Association Vs. State of Haryana, (1996) 4 Supreme Court Cases 225, where the court has held that the teachers are not employees under Section 2(i) of the Minimum Wages Act, 1948 and hence cannot be brought within the purview of the said Act by issuing notification under Section 27 for fixing minimum wages for them. The observations in this case were made in the light of the definition of the expression "employee" given in Section 2 (i) of the Minimum Wages Act. The employee in the said section was defined to mean any person who is employed for hire or reward to do any work, skilled or unskilled, manual or clerical etc. That is not the definition of the word "employee" as given in Section 2 (9) of the ESI Act, where it is defined as an employee working in a factory or establishment to which this Act applies. In other words, if the provisions of this Act can be applied to educational institutions, then the definition of the word "employee" would accordingly apply to the employees working therein and nature of their work is immaterial, which is not the case as per the definition contained in Section 2(i) of Minimum Wages Act.
CIVIL WRIT PETITION NO.10743 OF 2009 :{ 11 }:
The counsel then refers to Miss A. Sundarambal Vs. Government of Goa, Daman &Diu and others, AIR 1988 Supreme Court 1700, where it is observed that though school is industry but teachers employed in the school are not workmen. This is again in the context of the definition of the term "workman" given in Sections 2
(j) and 2 (s) of the Industrial Disputes Act. Reference is made to Ruth Soren Vs. Managing Committee, East I.S.S.D.A. And others, 2001 LAB I.C. 101, wherein word "establishment" as defined in the Bihar Shops and Establishment Act has been assigned a meaning "any establishment which carries on any a business, trade or profession or any work in connection with, or incidental or ancillary thereto". It is held that the Educational Institutions imparting education though may be an industry but are held not falling within the scope of establishment as it does not carrying business, trade or profession. This apparently has been held in the light of the meaning given to establishment under the Act, which is defined as one which carries on any business, trade or profession or any work in connection with, or incidental or ancillary thereto. Obviously, the word "establishment" as used in this Act would have to be given meaning akin to business, trade or profession as other establishments could be only those who are doing any work in connection with or incidental or ancillary thereto. The ratio of law in this case also may not strictly apply to the facts in the present case.
To meet the argument advanced by the respondents that the schools have been held to be an industry as per the ratio of law laid down in Bangalore Water Supply and Sewerage Board's case (supra), a reference is made to a case of State of U.P. Vs. Jai Bir CIVIL WRIT PETITION NO.10743 OF 2009 :{ 12 }:
Singh, (2005) 5 SCC 1, where five Judges Bench has now referred the case for constituting a larger bench to re-consider the judgment in the case of Bangalore Water Supply and Sewerage Board (supra). The counsel for the petitioners, thus, would contend that the submission made on the line that the school could be taken as an industry which has weighed with the Division Bench of Kerala High Court would need a fresh consideration in the light of doubt expressed by five Judges Bench of the Supreme Court in Jai Bir Singh's case (supra).
The counsel for the respondents, on the other hand, would rely upon the ratio of law laid down in Bangalore Water Supply and Sewerage Board's case (supra) and would submit that mere doubting the view and making reference for constituting an appropriate bench can not mean that the judgment is overruled and this has to be taken as a law till it is actually overruled. That would be, in my view, a correct approach and till the time the Bangalore Water Supply and Sewerage Board's case (supra) holds the field, it is required to be followed irrespective of the fact that the same may have been doubted and reference made for re- considering the same by constituting an appropriate bench. For this view, a reference can be made to the case of Official Liquidator Vs. Dayanand and others, (2008) 10 Supreme Court Cases 1.
The counsel for the respondents has mainly sought support from the observations made in the case of CBSE School (supra). To recapitulate, the Division Bench in this case has held that the word "or otherwise" should be given a widest possible meaning and these will cover the educational institutions also. The court had also opined that the view expressed by the Allahabad High Court regarding extension of the provisions of the ESI Act to the CIVIL WRIT PETITION NO.10743 OF 2009 :{ 13 }:
educational institutions has laid down a correct legal position.
The word "otherwise" as appearing in Section 1(5) of the ESI Act also came up for consideration before the Bombay High Court in Mumbai Kamgar Sabha Vs. State of Maharashtra, 1991 LAB. I.C. 1206, where it was held as under:-
"....The government can extend the Act or any portion thereof. It can do so vide any other establishment (in contra distinction to factories other than seasonal factories) or class of establishments. The class contemplated may be industrial, commercial, agricultural or otherwise. That there can be establishments of a character other than industrial, commercial or agricultural cannot be disputed. An example of this a travel agency. That being the position, it will be erroneous to hold that the words "or otherwise" are to be read in a restricted sense and take their colour from the three words preceding them. These preceding words cannot supply the idea of a genus. Indeed the genus lies in the words "any other establishment or class of establishment". The three words which follow each represent a specie. But the legislature did not want to restrict the operation of the Act to these 3 species and therefore used the catch-all words "or otherwise".
It has been rightly observed and held by the Bombay High Court that word "establishment" is not to take colour from the words industrial, commercial, agricultural used in the section, which are species, whereas the genus lies in the words "any other CIVIL WRIT PETITION NO.10743 OF 2009 :{ 14 }:
establishment or class of establishment". It may be of use to refer to Section 1(5) for assimilation and it reads:-
"1(5) The appropriate Government may, in consultation with the corporation and [where the appropriate Government is a State Government, with the approval of the Central Government], after giving six months' notice of its intention of do doing by notification in the Official Gazette, extend the provisions of this Act or any of them, to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise:
Provided that where the provisions of this Act have been brought into force in any part of a State, the said provisions shall stand extended to any such establishment or class of establishments within that part if the provisions have already been extended to similar establishment or class of establishments in another part of that State]"
The words as used in the Section are "any other establishment". The enabling provision would give power to the appropriate Government to apply the provisions of this Act to `any other establishment'. The Section then further goes on to specify some of the class of establishments by using words "industrial, commercial and agricultural". Word "any other establishment" used in the section is not co-joined with "class of establishments" and, thus, would not have anything common with the words "industrial, commercial and agricultural" which are so mentioned in the section by adding comma after the words `class of establishments'. To CIVIL WRIT PETITION NO.10743 OF 2009 :{ 15 }:
remove any doubt in this regard, word "or otherwise" is then added at the end of the sub-section and it would clearly mean that these words are not restricted to the establishment or class of establishments referred in the section.
The submission made by the counsel for the petitioners on the support of R & B Falcon (A) PTY Limited Vs. Commissioner of Income Tax, (2008) 12 Supreme Court Cases 466 to say that word "or otherwise" has to be read ejusdem generis with the words preceding the same cannot be accepted from the manner in which the words have been used in the section. No doubt, in R & B Falcon (A) PTY Limited 's case (supra), the word "otherwise" as a general rule when it follows an enumeration was held to receive an ejusdem generis interpretation and that it is commonly interpreted in a restricted sense, as are kindred to the classes before mentioned, but it is not the word "otherwise" alone used in the section and it is "or otherwise" and is used after making reference to three different class of establishments, which are industrial, commercial and agricultural having no common link with each other to call for this interpretation by giving restrictive meaning to word "otherwise".
Advanced Law Lexicon defines "otherwise" as "By other like means; contrarily; different from that to which it relates; in a different manner; in another way; in any other way; differently in other respects in different aspects; in some other like capacity". The word is defined in the standard dictionary as meaning "in a different manner; in another way; differently in other respects". As per Webster, the word is defined to mean "in a different way or manner;
CIVIL WRIT PETITION NO.10743 OF 2009 :{ 16 }:
in other respects". The counsel appearing for the respondents, thus, are justified in submitting that word "otherwise" as appearing in this section cannot be read ejusdem generis. In Smt.Lila Vati Bai Vs. State of Bombay, AIR 1957 SC 521 again word "or otherwise" was under consideration in the light of the Explanation (a) to Section 6 of the Bombay Land Requisition Act in the context of provision reading "ceasing to be in occupation upon termination of his tenancy, eviction, or assignment or transfer in any other manner of his interest in the premises or otherwise". It is observed that "the argument proceeds further to the effect that in the instant case admittedly there was no termination, eviction, assignment or transfer and that the words "or otherwise" must be construed as ejusdem generis with the words immediately preceding them: and that therefore on the facts as admitted even in the affidavit filed on behalf of the Government there was in law no vacancy. In the first place, as already indicated, we cannot go behind the declaration made by the Government that there was a vacancy. In the second place, the rule of ejusdem generis sought to be pressed in aid of the petitioner can possibly have no application. The legislature has been cautious and thorough-going enough to bar all avenues of escape by using the words "or otherwise". Those words are not words of limitation but of extension so as to cover all possible ways in which a vacancy may occur. Generally speaking, a tenant's occupation of his premises ceases when his tenancy is terminated by acts of parties or by operation of law or by eviction by the landlord or by assignment or transfer of the tenant's interest. But the legislature, when it used the words "or otherwise", apparently intended to cover other cases which may not CIVIL WRIT PETITION NO.10743 OF 2009 :{ 17 }:
come within the meaning of the preceding clauses, for example, a case where the tenant's occupation has ceased as a result of trespass by a third party. The legislature, in our opinion, intended to cover all possible cases of vacancy occurring due to any reasons whatsoever. Hence, far from using those words ejusdem generis with the preceding clauses of the explanation, the legislature used those words in an all inclusive sense. No decided case of any court, holding that the words "or otherwise" have ever been used in the sense contended for on behalf of the petitioner, has been brought to our notice."
In Skinner & Co. Vs. Shew and Co. (1893) 1 Ch 413, words of Section 32 of the Patents, Designs & Trade Marks Act, 1883 are to the following effect:-
"Where any person claiming to be the patentee of any invention, by circulars, advertisements or otherwise threatens any other person with any legal proceedings..."
Their Lordships repelled the contention that the words "or otherwise" occurring in the section had to be read ejusdem generis with words "circulars", and "advertisement". It is observed that by so doing it will be cutting down the intendment of the provisions of the statute when clearly the words "or otherwise" had been used with a contrary intention. The rule of ejusdem generis is intended to be applied where general words have been used following particular and specific words of the same nature on the established rule of construction that the legislature presumed to use the general words in a restricted sense' that is to say, as belonging to the CIVIL WRIT PETITION NO.10743 OF 2009 :{ 18 }:
same genus as the particular and specific words. Such a restricted meaning has to be given to words of general import only where the context of the whole scheme of legislation requires it. But where the context and the object and mischief of the enactment do not require such restricted meaning to be attached to words of general meaning. It is held that in the context of the object and mischief of the enactment there is no room for the application of the rule of ejusdem generis. Hence, it follows that the vacancy as declared by the order impugned in this case, even though it may not be covered by the specific words used, is certainly covered by the legal import of the words "or otherwise".
The counsel would make reference to the beneficial nature of this legislation to urge that the word should not be given any restrictive meaning and rather should be given an expanding meaning to achieve the socio economic goal, which was the aim for enacting the said legislation. This Act aims to attain the goal of socio economic justice as are enshrined in some of the directive principles of our Constitution. Article 41 requires of a State to develop and make effective provision for securing right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want. Article 42 says that the State shall make provision for securing just and humane conditions of work and for maternity relief, whereas Article 43 requires of the State to make an endeavour to secure, by suitable legislation or economic organisation or in any other way, to all CIVIL WRIT PETITION NO.10743 OF 2009 :{ 19 }:
workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities. These provisions are aimed at establishing a socialistic state as envisaged which would endeavour to secure additional standard of life and economic to the working people.
As already noticed, the provisions of this Act though originally were meant to apply to all the factories at the first instance have subsequently been extended to various other establishments. Thus, the expression "or otherwise" as used in section 1(5) of the ESI Act is to be read broadly in the manner to advance the object of the Act and any other interpretation may lead to defeat the very purpose for which this Act was enacted. The word "or otherwise", thus, is to be assigned a widest possible meaning and can not be restricted in any manner with the preceding words in the section.
One may look at this provision from another angle. Section 1(5) of the ESI Act would have been complete upto the words "any other establishment". Subsequent wording of the section reading "or class of establishments, industrial, commercial, agricultural or otherwise" are apparently only added as an elaboration. It is not the case projected before me that the industry would not be an establishment or that other establishment of commercial nature would not be covered within the definition of establishment. Accordingly, when the Act used the words "any other establishment or class of establishment", then there was no need to further elaborate the nature of the establishments, which would call for giving any restrictive meaning to the word "otherwise" used in the CIVIL WRIT PETITION NO.10743 OF 2009 :{ 20 }:
Act.
The counsel have made reference to few of the precedents to highlight the meaning of word "establishment". Reference is made to the word "establishment" as given in Webster's Encyclopedic Unabridged Dictionary, where, inter-alia, establishment is defined as "a place of business together with its employees, merchandise, equipment etc., a permanent civil, military, or other force or organization, an institution, as a school, hospital etc. The term "establishment" was also considered by the Division Bench of Kerala High Court in Thankamma Baby Vs. Employees Provident Fund Appellate Tribunal New Delhi and another, 2010-III-LLJ
439. In this case, the court observed that it is the cardinal rule of interpretation that the court should always adopt a purposive interpretation, particularly in a welfare statute. A provision in a Statute has to be understood, interpreted and applied keeping in mind the object of Statute. If two interpretations are possible, the interpretation favouring the object of the statute has to be adopted.
The Hon'ble Supreme Court in Transport Corporation of India Vs. Employees' State Insurance Corpn. and another, (2000) 1 Supreme Court Cases 332 has also referred to the meaning of term "establishment". It is observed that the word is not defined under the Act, but the term "employee" as defined under the Act has a direct connection with the term "establishment" in which he or she may be employed for wages in or in connection with the work of the establishment. There would not be a much need to make reference to the case law like in the case of M/s. Cochin Shipping Co. Vs. Employees State Insurance Corporation, 1992(3) S.C.T. 481, CIVIL WRIT PETITION NO.10743 OF 2009 :{ 21 }:
where the provisions of ESI Act were noticed to claim benefits to the employees in the case of sickness, maternity and employment injury. It was also observed that at the first instance, it was made applicable to all factories under Section 1(4) of the ESI Act. The Act had envisaged the extension of benefit to the employees of other establishments or class of establishments and such establishments may be industrial, commercial or agricultural or otherwise. It can, thus, be observed that the benefit conferred by the Act covered a large area of employees than what the Factories Act and the akin legislations intended therein. Accordingly, endeavour has to be to place a liberal construction so as to promote the object of the Act. Again in Whirlpool of India Ltd. Vs. E.S.I. Corporation, (2000) 3 SCC 185, it is held that Act is a social legislation enacted to provide benefits to employees in case of sickness, maternity and employment injury. Accordingly, it is observed that the words and expressions used but not defined are to be given a meaning which would advance the purpose of the Act. If any provision of which two interpretations may be possible, it would deserve such construction as would be beneficial to the working class and the courts would give a go-by to the plain language of the provision.
The submission made by some of the counsel that the provisions can not be applied to unaided institutions is being noticed to be rejected. The Schedule attached clearly mentions "Education Institutions" without specifying the institution but has inclusively referred to private, public, aided or partly aided in all compassing term `Educational Institution'. There is no substance in the submission made.
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In view of the detailed discussion and the law discussed above, it can be said that there is no merit in the plea raised and the respondent-State is fully justified in applying the provisions of ESI Act to the petitioner-Institutions. There is no merit in the writ petitions and the same are, therefore, dismissed.
August 17, 2010 ( RANJIT SINGH ) ramesh JUDGE