JUDGMENT A.H. Joshi, J.
1. Heard learned Advocates for the parties.
2. Petitioner herein is the proprietor running the business of manufacture and sale of Bidis, having the business location at Kamptee in Nagpur district. Petitioner claims that he employs only ten Bidi-roller home workers, and has two workmen employed to do miscellaneous jobs titled as Tendurwala-curh-Clerk and Relaiwala, who work in the business premises. The petition has been aimed to challenge application of provisions of Employees' State Insurance Act to the petitioner's factory, in particular, and generally to challenge the amended Section 2(12), i.e., definition of "Factory" and consequential notifications. The prayers read as follows:
(i) strike down the impugned Notification No. S-38012/6/89-SS-l dated 20-10-1989 issued by the Central Government vis-a-vis the bidi industry in general and the petitioner in particular as violative of Articles 14 and 19(1)(g) of the Constitution of India;
(ii) strike down the impugned Notification No. S-38013/20/82-H1, dated 28-5-1982 issued by the Central Government vis-a-vis the bidi industry in general and the petitioner in particular as violative of Articles 14 and 19(1)(g) of the Constitution of India;
(iii) strike down the amended definition of "factory" under Section 2(12) of the Insurance Act, 1948 vis-a-vis the bidi industry in general and the petitioner in particular being un-constitutional and in violation of Articles 14 and 19(1)(g) of the Constitution of India;
(iv) issue a Writ of Certiorari to quash the impugned notice dated 22-3-1991 - (Annexure "A") given by the respondent No. 4 in respect of Code No. 23/2613-10- allotted to the petitioner.
Petitioner has also incidentally challenged Notification (Annexure-B) applying various provisions of Employees' State Insurance Act, 1948, extended to Kamptee Municipal limits and Cantonment limits within which area petitioner's factory is located, and the date has been appointed for effecting the application thereof. Consequently, the petitioner is also challenging letter (Annexure-A) dated 22nd March, 1991, directing the petitioner to comply with the provision as to contribution etc., under the Employees' State Insurance Act until petitioner's application for exemption is heard and decided by Competent Authority.
3. Sequence of events shows that soon after application of Employees' State Insurance Act to Kamptee area, the petitioner has submitted an application under Section 87 of the Employees' State Insurance Act to the State Government and claimed exemption. Annexure-E to the petition is the copy of forwarding letter and accompaniment thereto is the application in the prescribed form. The substance of the foundation of prayer for exemption contained in the application reads as follows:
We seek exemption from the provisions of E.S.I. Act as we are already governed by the Beedi Workers Welfare Fund Act, 1976 in which employees are not required to make any contribution amount of cess is collected from Employers only as per Section 3. This Act has been specially enacted to cover the Beedi Workers who are living in scattered villages, where the E.S.I., cannot be implemented for administrative reasons, by appropriate Government.
You are requested to sympathetically consider our case and grant necessary exemption from provisions of E.S.I. Act from the date of applicability.
(quoted portion is extracted from page Nos. 25 and 26 of Writ Petition Paper-book).
The contents of application in the prescribed form contain certain information stated as the basis for claiming exemption, which reads as follows:
12. Nature of benefits 1. Governed by Workmen's
available to employees Compensation Act, 1923
(if necessary attach a 2. Employees' Provident
separate sheet) Fund and Misc. Provi-
sions Act, 1952.
3. Bidi Workers Welfare
Fund, Act, 1976.
13. A. Medical benefits : All employees are
available including entitled to Medical
hospitalisation to : treatment as laid down in
1. Permanent. the Beedi Workers Welfare
2. Temporary employees. Fund Rules No. 29 and 32.
3. Works charged and
casual employees.
B. Leave benefits : Employees of all
(casual leave and categories are
Medical or other permitted to enjoy
leave available the leave permissible
to as per Section 26 of
1. Permanent employees. : B and C Workers
2. Temporary employees (Conditions of Employment)
3. and casual employees Act, 1966, leave is
taken against Medical
13. C. Cash benefits leave granted by Dr. of
available during dispensaries set up
sickness. under the Beedi
Workers Welfare Fund
Rules. These are
1. Available to pt. : payable as per
Employees Section 4 of the
2. - do - temp, employees Workmen's Compensation
3. - do - work-charged Act, 1923.
and casual employees. : These are payable
13. D. Nature of benefits and as per Section 4 of
its duration; in case Workmen's Compensation
of incapacity due to Act, 1923.
employment injury to
all employees viz. : As above.
Permanent/temporary/work-
charged casual employees. : Maternity benefit available
13. E. No. of female employees as per Maternity Benefit
and details of cash and Act including payment
other benefits available of Leave. In case of
(maternity benefits). death of employees due
13. F. Nature of benefits to employment injury,
available to dependents the compensation as
of employees in case of per Section 3 of
employee's death due Workmen's Compensation
to employment injury. Act, 1923 is payable by
the Company. Rs. 1000/-
G. Details of funeral in case of death during
benefits, if any. course of employment.
H. Details of benefits The treatment provisions
cash and otherwise is already there but
available in prolonged there is no specific
illness/malignant disease provision in this regard.
14. Area the employees : Yes.
covered under Act.
15. Any other consideration 1. Presently we are
for which exemption is governed by Beedi
desired. Workers Welfare Fund
Act, 1976. It has
been specially enacted
for the benefit of
beedi workers who are
generally residing in
scattered rural areas
where present ESI
Act is generally not
applicable in Maharashtra
State. Under Beedi
Workers Welfare Fund
Act, 1976, ONLY EMPLOYER
HAS TO CONTRIBUTE AS
PER SECTION 3 AND THERE IS
NO CONTRIBUTION PAYABLE
BY THE EMPLOYEES.
2. As per Beedi Workers
Welfare Fund Act,
1976 the fund is
collected and spent
for following purposes:
(1) to defray the cost of
measures for benefit
of such persons
directed afterwards.
(i) the improvement of
public health, sanitation,
the prevention of
disease and medical
facilities.
(ii) the provisions and
improvement of water
supplies and facilities
for washing.
(iii) the provisions and
improvement of educational
facilities.
(iv) the provisions and
improvement of housing and
recreational facilities and
including standards of
living, nutrition and
amelioration of
conditions;
(v) the provision and improvement
of such other welfare
measures and facilities
as may be prescribed.
(vi) to grant loan and
subsidy to a State
Government, a local
authority or any employer
in aid of any scheme
approved by the Central
Government for the purpose
connected with the welfare
of persons engaged in beedi
establishments.
(vii) to pay annually grants-in-aid
to a State Government, or a
local authority or to an employer
who provides to the satisfaction
of the Central Government
measures and facilities of
the prescribed standards for
the benefit of persons
engaged in beedi establishment.
The Scope of above facilities
is for more wider than the
one under the E.S.I. Act.
ESI Act is mainly enacted
for covering the liability
of the employees under the
Workmen's Compensation Act,
1923 only. The statutory
liability of compensation
payment WITHOUT ANY
CONTRIBUTION BY THE
EMPLOYEES already exists
in the employers under
the Workmen's Compensation
Act, 1923.
Normally bidi workers
hail from adjoining
villages where
medical facilities
from ESIC are not at all
available and maximum
employees fall within
the category of persons
residing in non-implemented
areas. Hence they cannot
avail of the medical
facilities under the
ESIC Scheme whereas the
dispensaries set up
under Beedi Workers Welfare
Fund Act are situated in
residential areas of bidi
workers only and medical
treatment is readily
available.
(Quoted portion is extracted from page Nos. 27 to 29 of the Writ Petition Paper-book).
After the petitioner furnished the application for exemption, and received the letter at Annexure-A, the petitioner has filed present petition, challenging the constitutional validity of the Amending Act No. 29/1989 passed by Parliament and for consequential reliefs.
4. Grievance of the petitioner is that the benefit, which is available under the Employees' State Insurance Act, is limited to (i) sickness benefits, (ii) maternity benefits, and (iii) disablement and accidental death benefits arising in course of employment only, while vast range of benefits have been extended and made available to Bidi workers under various other laws. By amending the petition, the petitioner has incorporated legal challenges to application of the Employees' State Insurance Act to the petitioner, the Bidi industry.
5. According to petitioner, the legal position, which governs the field, as is averred in the petition, is as follows:
2. That, there are 3 special Acts of the Parliament applicable to the petitioner, namely (i) The Beedi and Cigar Workers (Conditions of Employment) Act, 1966, (ii) The Beedi Workers Welfare Cess Act, 1976, and (iii) The Beedi Workers Welfare Fund Act, 1976. Moreover different labour laws including the Maternity Benefits Act, 1961, and the Workmen's Compensation Act, 1923 also apply to the petitioner.
3...the cess levied on manufactured beedis under the Beedi Workers Welfare Cess Act, 1976 works out to 0.30 paise per 1000 beedis and the same is collected by the Central Government along with Excise Duty on beedis so manufactured under the provisions of Central Excises and Salt Act, 1944. The cess so collected is utilized by the Central Government for the purposes of the Welfare Scheme under the Beedi Workers Welfare Fund Act, 1976. The petitioner firm has paid the amount of cess of more than 63,425.90 in respect of bidis manufactured for the period from 1980 uptodate.
...the facilities under the Beedi Workers Welfare Funds Act are not only confined to medical facilities, but they also extend to improvement of public health and sanitation, prevention of diseases, educational facilities, housing and recreational facilities, nutrition and amelioration of social conditions etc. etc. Standard of dispensaries and hospital services and of maternity centres are also prescribed under the Rules along with other Rules for different other facilities. There is already a full-fledged hospital run under the Beedi Workers Welfare Fund Act at Kamptee itself.
Moreover, the workers in the Beedi Industry are also entitled to Maternity benefits prescribed under the Maternity Benefits Act and that in respect of disablement, injury or death during the course of employment, the workers are entitled to compensation under the Workmen's Compensation Act.
(Above-quoted portion is extracted from Page Nos. 2 to 4 of the Writ Petition Paper-Book, i.e., Memo of Writ Petition.)
6. Petitioner has placed on record a Pursis, dated 30th October, 2004, with a compilation of comparative statement of information consisting of various facilities available to Bidi workers under various other enactments and under the Employees' State Insurance Act generally. Petitioner has stated in this Pursis that it has been done under the Orders of Court. The contents of Pursis purport to place on record the details of things, namely:
(i) a comparative statement showing different facilities available to Bidi Workers under Bidi Workers' Welfare Funds Act, 1976, and Rules, 1978, read with Welfare Schemes for Bidi Workers and their dependents under Employees' State Insurance Act, Provident Fund Act and Rules, thereunder, including Schemes and Maternity Benefit Act.
(ii) a profile of benefits available to Bidi workers and their state of affairs purportedly furnished by Welfare Commissioner and a list of schemes implemented under the Welfare Fund for the Bidi workers;
(iii) copy of letter, dated 15th October, 1999, showing mandatory assistance available to the Bidi workers in case of emergency.
7. The information and documents are placed on record by the petitioner on 30th October, 2004 in order to portray before the Court the position of working conditions of Bidi workers to be far better and superior as compared to the industries to which the Bidi Workers' Welfare Funds Act and Bidi and Cigar Workers (Regulation of Conditions of Service) Act do not apply, and in order to show that the application of Employees' State Insurance Act to the Bidi workers as well as to the employers in the Bidi industry is unjust, improper, arbitrary and unfair.
8. The Writ Petition has been opposed by filing a Return by the respondent Nos. 3 and 4, namely Employees' State Insurance Corporation. The tenor of objection is that:
(a) The legislative enactment extending certain provisions of law by amendment cannot be challenged except on the ground of want of legislative competence or violation of fundamental rights.
(b) Challenge to violation of fundamental rights of the employers upon implementation of the Employees' State Insurance Act is absolutely without any foundation.
(c) The benefits extended under the Employees' State Insurance Act are not available under any other law.
(d) Comparison of facilities and concessions availed by the Bidi workers, excluding the provisions of the Employees' State Insurance Act, does not, in any manner, reveal that the benefits available to the Bidi workers after implementation of the Employees' State Insurance Act, do not, in any manner, become derogative to their conditions of service.
9. Respondent Nos. 1 and 2 opposed the petition by orally advancing submissions and relying on certain judgments. Their contention is that it is well within legislative competence to expand the scope and extent of applicability of the provisions of any enactment. It is upon the satisfaction of the State, the application the Act has been extended, and this does not, in any manner, violate the fundamental rights of the petitioner.
10. Heard learned Advocate Mr. M.D. Quazi for the petitioner, Mr. Anup Parihar, learned Asstt. Govt. Pleader for respondent No. 2, and learned Advocate Mr. M.P.M. Pillai for respondent Nos. 3 and 4, at length.
Submissions of the Petitioner:
11. According to the learned Advocate Mr. Quazi, the application of the Employees' State Insurance Act to Bidi workers is, arbitrary on its face, and is in violation of fundamental rights. This violation of fundamental right, according to the petitioner, has been worded by learned Advocate as follows:
(a) By enlarging the scope of the definition of the term "factory", as defined in the Employees' State Insurance Act and making it applicable to the factories who employ more than ten workers when no power is used, the Employees' State Insurance Act carves out a class amongst the exempted employers from application of the Employees' State Insurance Act and brings them within the class of factories which were 'not exempted', i.e., to whom the Employees' State Insurance Act applies.
(b) This carving out one class of factories from existing class of 'exempted employers' amounts to class discrimination.
12. In order to elucidate this discrimination, learned Advocate Mr. Qazi tried to read out to the Court the exemption clause in the applicability of the Employees' State Insurance Act showing that the factories, which are run by or under the authority of Government, are enjoying exemption since beginning. Factories, which were run without power within which class the Beedi employers fell, were also forming part of the exemption. Thus, all these employers enjoying exemption, taken together, constitute the class of 'exempted employers'. Learned Advocate Mr. Qazi has formulated his submissions based on the applicability clause of the Employees' State Insurance Act, and the definition of term 'factory' as it existed prior to impugned amendment which reads as follows:
1. Short title, extent, commencement and application (4) It shall apply, in the first instance, to all factories (including factories belonging to the government) other than season factories.
PROVIDED that nothing contained in this sub-section shall apply to a factory or establishment belonging to or under the control of the government whose employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act.
Quoted below is relevant part of unamended definition of term 'factory':
2(12) 'factory' means any premises including the precincts thereof whereon twenty or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on with the aid of power or is ordinarily so carried on but does not include a mine subject to the operation of the Mines Act, 1952 or a railway running shed;
seasonal factory" means a factory which is exclusively engaged in one or more of the following manufacturing processes, namely, cotton ginning, cotton or jute pressing, decortification of groundnuts, the manufacture of coffee, indigo, lac, rubber, sugar (including gur) or tea or any manufacturing process which is incidental to or connected with any of the aforesaid processes and includes a factory which is engaged for a period not exceeding seven months in a year.
(a) in any process of blending, packing or re-packing of tea or coffee; or
(b) in such other manufacturing process as the Central Government may, by notification in the Official Gazette, specify, The expressions "manufacturing process" and "power" shall have the meanings respectively assigned to them in the Factories Act, 1948;
13. According to learned Advocate Mr. Quazi, "now by enlarging the definition of term "Factory" and by including by implication, the Bidi factories as well where more than 10 workers are employed and even if power is not used, the petitioner's status as an exempted employer has been taken away.
14. According to learned Advocate for the petitioner, cess is levied on the Bidi manufacturers, which is at the rate of Re. 1/- per one thousand Bidis rolled, and the said amount is transferred to Beedi Workers' Welfare Funds under the Beedi Workers' Welfare Funds Act, 1976. This fund is to be applied to various purposes, which include Maternity Centres, their buildings, staff, medical equipments and ancillary needs.
Learned Advocate also urged that since the provisions of Workmen's Compensation Act also apply to the Bidi workers, it is not necessary to apply the provisions of the Employees' State Insurance Act.
15. Learned Advocate, Mr. Qazi advanced one more submission in the written submissions and additional synopsis which reads as follows:
II Special Act vis-a-vis General ESI Act, 1948 Special Acts prevail over general Acts. The ESI Act, 1948 is a general Act applicable to factories and establishments of different industries, while Bidi and Cigar Workers (Conditions of Employment) Act, 1966 and Bidi Workers Welfare Cess Act, 1976 and Bidi Workers Welfare Fund Act, 1976 are special Acts and as such the benefits under these Acts will prevail over the benefits under the ESI Act, 1948. Moreover by virtue of Section 37(3) of the BCW Act, 1966, the Maternity Benefits Act, 1961 is made applicable to bidi establishments including home workers and as such the Maternity Benefit Act, 1961 has to be treated as special Act vis-a-vis the Bidi industry.
Section 28 of the BCW Act, 1966 provides for application of PW Act, 1936 to the bidi industry.
Similarly Section 39 of the B.C.W. Act applies Industrial Disputes Act, 1947 to bidi industry. All these special Acts including Bidi Welfare Fund Act are complete code in themselves. As such the Special Act will prevail upon the ESI Act, 1948.
16. In support of the submissions, learned Advocate placed reliance on following judgments:
(i) State of Punjab v. Labour Court, Jullunder and Anr. (1980) SCC 4, (ii) St. Stephen's College v. University of Delhi , (iii) Prithvichand Ramchand Sablok v. S.Y. Shinde , and (iv) Chairman, Thiruvalluvar Transport Corporation v. Consumer Protection Council .
17. According to learned Advocate, Mr. M.D. Quazi, (1991) II LLN 170, Gaffar and Jahangirs' case upholding the application of the Employees' State Insurance Act to Bidi workers does not stop the petitioner from pursuing present petitioner, as the issues were not properly pursued and challenged in said case, while present petition comprehensively incorporates the challenges.
Reply by Respondents:
18. The petition is defended by the respondents by submissions which are noted in Para 8 above and relying upon various judgments, namely:
(i)W.H. Deeth Ballabhgarh and Co. v. Employees State Insurance Corporation, Chandigarh 1984 LAB.I.C. 1658, (ii)P.M. Patel and Sons and Ors. v. Union of India and Ors. , (iii) Hindu Jea Band, Jaipur v. The Regional Director, E.S.I.C, Jaipur 1987 (I) CLR 228.
19. The thrust of submissions is that the provisions of enactment are for labour welfare, within the legislative competence, and are not liable to be struck down. According to learned Advocate Mr. Pillai and Mr. Purohit, reasonableness of provisions is so apparent that on that ground also, the petition cannot succeed. So far as the ground of discrimination urged by the petitioner is concerned, the same is most superfluous. Moreover, the exemption of the factories run under the authority of appropriate Government is only when 'the provisions thereunder are more beneficial'. Thus, effort of the petitioner to classify itself to put into the class of the factories to which the Act does not apply is most artificial attempt made without any similli or similarity, much less equivalence, due to which the petitioner-factory would be entitled to be classified and retained in the class of employers whose conditions of service are more beneficial than those would be, when the Employees' State Insurance Act is applied.
20. The last submission of both the learned Advocates for the respondents is that the fact that the petitioner has applied for exemption before the appropriate Government soon after Notification amending the Employees' State Insurance Act applying to the factories which, in turn, applies to the Bidi Industries, operates as estoppel, and now it is not open to the petitioner to challenge validity of said enactment.
Insofar as this submission is concerned, the petitioner's challenge is based on violation of constitutional guarantees. It would be gravely unsafe to rule out and disregard any challenge to constitutional validity or ultra vires any enactment on the ground of estoppel on the ground that by praying for exemption, petitioner is precluded from right to challenge the vires. If this submission is accepted, it would result in forfeiture of right to challenge constitutional validity of any enactment, and constitutional rights and remedies are not to be construed to be so easily perishable or being so fragile to be so easily broken or eroded. This Court, therefore, would be competent to examine the legality of submissions not being impressed by the ground of estoppel on account of the petitioner's having subjected to filing an application for exemption.
Analysis of Submissions of the petitioner:
Special Legislation would exclude General:
21. The proposition that special enactment will prevail upon general enactments is the rule of interpretation of law, and of precedent, and is not a matter which would call for any debate and decision. Whether former group of laws, i.e., Bidi-related laws and other laws constitute a group of 'special enactments' as against the scheme of the Employees' State Insurance Act will have to be objectively tested. It is, therefore, necessary for this Court to comparatively examine and find out whether the objects of and the provisions contained in (a) Bidi and Cigar Workers (Conditions of Employment) Act, 1976, (b) Maternity Benefits Act, 1961, (c) Maharashtra Workmen Minimum House Rent Allowance Act, 1983 and (d) Workmen's Compensation Act taken together, form a group of enactments and do constitute a scheme of "special enactment" and as to whether the Employees' State Insurance Act liable to be classified as 'general enactment'.
For this analysis, this Court will have to compare, analyze and find out the effect of this comparison and examine if the rule of exclusion of general enactment by special enactment applies and if the Employees' State Insurance Act cannot be said to apply to Bidi Industry, by necessary implication.
Examination of provisions:
22. After considering the accompaniments to the Pursis and submissions, it reveals that the points on which the provisions of the Employees' State Insurance Act extend the benefits, as are admitted in the comparative statement given by the petitioner, are as follows:
1. (a) Section 46 - Periodical payment for sickness to the insured person.
(b) Periodical payment to an insured woman in case of confinement or miscarriage or sickness of pregnancy.
(c) Periodical payment to an insured person suffering from disablement, as a result of an employment injury.
(d) Periodical payment to dependents of an insured person who dies as a result of employment injury.
(e) Medical treatment for an attendance on insured person.
(f) Payment to the eldest surviving member of the family of an insured person who has died towards the funeral expenses (not exceeding Rs. 100/-).
2. Section 49 : Sickness benefit (read along with Regulation 45(a).
3. Section 50 - Maternity benefits (read along with Regulation 45(b).
4. Section 51 - Disablement benefits (read along with Regulation 45(c)
5. Section 52(A) - Occupational disease.
6. Section 56 - Medical benefits to the insured person and his family.
7. Section 58 - Provision of medical treatment by State Government (State Government to provide reasonable medical treatment, surgical and obstetric).
8. Section 59 - Establishment and maintenance of hospitals.
Regulation No. 9(E) of the E.S.I., Regulations, 1950, provides for referring any proposal to set up Hospital under Section 59 of the Act to the E.S.I. Corporation.
THE BOMBAY EMPLOYEES' STATE INSURANCE (MEDICAL BENEFITS) RULES, 1954.
Rules 3, 3A, 3B, 12, 14 and 15 are germane.
Section 61 provides for bar of benefits under other enactments. N.B.(I).The bar created under Section 61 of E.S.I. Act, 1941 cannot apply to the new piece of Legislation enacted by the Parliament in 1976 called "Bidi Workers Welfare Fund Act, 1976, and the Rules, 1978, framed thereunder.
(II)(i) Similarly Section 61 of E.S.I. Act, 1948 cannot override the benefits to Bidi workers made available by the Parliament in 1966 by enacting the Bidi and Cigar Workers Conditions of Employment Act, 1965, which is a subsequent piece of Legislation of the Parliament. This Act No. 32 of 1966 received the assent of the President of India on 30-11-1966. This is special Act for Bidi workers.
Section 28 of the Bidi Workers Act (Act No. 32 of 1966) provides for application of the Payment of Wages Act, 1936 to industrial premises.
Section 37(3) of the Act No. 32 of 1966 provides for the application of the Maternity Benefits Act to every establishment, including home workers.
Section 38(2) rather puts a bar on the application of E.S.I. Act, 1948, to the Bidi industry. Sub-section (2) of Section 38 reads as under:
Nothing contained in any law relating to the regulation of the conditions of work of workers in shops of commercial establishment shall apply to any establishment to which this Act applies.
Section 39 applies to the Industrial Disputes Act, 1947, to Industrial Premises under the B.C.W. Act (Act No. 32 of 1966).
Section 39 applies for Industrial Premises under B.C.W. Act "Act No. 32 of 1966.
(This information is extracted from the comparative statement furnished by the petitioner which is at pages 6 to 9 of the Pursis, dated 30-10-2004, filed by the petitioner.) In comparison, this Court finds that no other benefit comparable to those given under the Employees' State Insurance Act is admittedly available under the provisions of the Bidi Workers' Laws.
23. Going by the theory of deduction as quoted in foregoing para, the benefits, which emerge from, and pass on to the workers to which the Employees' State Insurance Act applies, are not seen included in any other enactment, excepting one, namely the Maternity Benefits Act. Moreover, all the benefits relating to the maternity as available under the Employees' State Insurance Act are not in pari materia available to the workmen to whom the Maternity Benefits Act applies and these are not more beneficial than those available under the Employees' State Insurance Act.
24. Learned Advocate has tried to bring on record the details as to the benefits available under Bidi-related laws and the Employees' State Insurance Act with an objective of bringing the case out of the handicaps suffered by the petitioner while arguing in view of the reported judgment of Division Bench of Karnataka High Court reported in (1991) II UN 170 between Gaffar and Jahangir Beedi Works, Mysore and Union of India and Ors.. Their Lordships of Karnataka High Court had examined the comparative provisions contained in the Employees' State Insurance Act and Bidi and Cigar Workers (Conditions of Employment) Act, 1966, and recorded a conclusion that found in paragraph 7 as follows:
7. If all the benefits which were required to be extended under the Employees' State Act are extended under the enactments applicable for the beedi workers, there would have been justification to invoke the principle of "special excludes the general" and hold that by necessary implication the application of the Employees' State Insurance Act to beedi and cigar workers stands excluded. But, as pointed out above, in respect of a large number of benefits required to be provided under the Employees' State Insurance Act, no corresponding benefits are provided for under the enactments applicable to the beedi workers. Therefore, we are unable to agree with the contention of the petitioner that the provisions of the Employees' State Insurance Act are inapplicable to the beedi workers.
Learned Advocate for the petitioner, however, was not able to demonstrate as to how it would be possible for him to persuade this Court that the conclusions drawn by Division Bench of Karnataka High Court be ignored, since those suffer from lack of advertance to some of the provisions either due to failure of said Court or failure on the part of petitioner before said Court in showing comparability to said Court.
Learned Advocate tried to urge and distinguish and contend that while reading these findings, the Karnataka High Court was not provided with entire details of comparison which was provided after Court called it. In this case as well, petition was amplified only after Court expected more information, further details are given with Pursis.
25. In present case, this Court has found from the details given by the petitioner as per finding recorded in Paras 23 and 24 that the benefits comparable to those which are flowing from the Employees' State Insurance Act are not available under existing set of welfare legislations specially legislated for application to Bidi industry.
26. This Court is, therefore, convinced against the submissions of learned Advocate for the petitioner that the former group of enactments constitutes the enactments liable to be described as special enactments who 'occupy the field', and it, therefore, cannot be said that the Employees' State Insurance Act attempts to enter upon or intrude in a field which is pre-occupied by law legislated by competent Legislature.
27. Conclusion and findings on submission of the learned Advocate as to ultra vires are as follows:
(A) This challenge on the point as to vires pertains to arbitrariness and giving unequal treatment and creating classes or excluding the petitioner from the existing class of exempted employers. Petitioner's submission that exempted employers or factories constituted a class in view of proviso to Sub-section (4) of Section 1 is a submission which is decorative, but is non-palatable equally.
Applicability of the Act is provided by Sub-section (4) which says that "it shall apply, in the first instance, to all factories (including factories belonging to the government) other than seasonal factories." The exception is carved out by the proviso "to such government factories whose employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act."
(Emphasis supplied, and relevant portion of proviso to Sub-section (4) 1 of the Employees' State Insurance Act is extracted).
Thus, it would be extremely courageous, and even may reach absurdity to say that there is a 'class of factories' liable to be denoted as 'exempted factories.' It is very difficult to read and hence cannot be accepted that statute recognises a class of factories which are per se exempted. Therefore, the submission that there is a class of factories which is exempted or excluded does not stand to any reason, even subjectively, much less to any objective test.
Petitioner's claim and contention that the petitioner's class of Bidi industry constituted an industry of exempted class is, thus, a far stretched submission, and does not find any factual foundation and nexus with the similis sought to be presented.
Comparison and Pre-occupied field:
(B) (i) It is shown from the comparative statement which the Court has stated, and has extracted relevant portion that the provisions of the Employees' State Insurance Act which are peculiar in nature are not shown to be overlapping on any field preoccupied by laws relevant to Bidi workers and other general laws. There is some overlapping as to the maternity benefits. However, the benefits under the Employees' State Insurance Act are better in nature and, therefore, it cannot be said that those purport to act on a preoccupied field. Barring that the employer has hesitation for being governed by this Act, this Court does not see any ground as to object to the application of the Employees' State Insurance Act.
(ii) Comparison by the petitioner to demonstrate that the benefits available to the workers of the petitioner are equal or superior than those available under the Employees' State Insurance Act is not supported by facts. This Court has already recorded that the benefits which are flowing from the Employees' State Insurance Act are not emerging from any of the provisions of Bidi and Cigar Workers (Conditions of Employment) Act, 1966. Barring establishments of hospitai does not, in any manner, have a comparability with the benefits available under the Employees' State Insurance Act. Moreover, the workmen will be getting superior benefits from which they may be parting with small amounts by way of contribution. Even by paying contribution, similar benefits are not available to them under the existing laws. The petitioner's claim and contention on this ground is, thus, not supported by facts of the case as brought on record.
(C) The application of enactment is automatic and upon completion of procedure of Sub-section (5) of Section 1. However, once Sub-section (5) is resorted to, i.e., the stage where the State Government may act upon the proviso, or a party to whom the Act has been applied, may apply for exemption and on facts demonstrate that the "employees are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act" which renders such claimant eligible for applying for being excluded.
(D) (i) The argument that fundamental rights, and in particular Article 14, are violated due to wrongful classification is found based on hypothesis than on a sound factual foundation, thereby failing to bring on record a case of class discrimination. Both the grounds on which the petitioner claims that the Employees' State Insurance Act is ultra vires are, thus, untenable.
(ii) Reliance placed by learned Advocate for the respondents in support of the proposition on various judgments, namely (i) W.H. Deeth Ballabhgarh and Co. v. Employees State Insurance Corporation, Chandigarh 1984 LAB.I.C. 1658, (ii) M/s P.M. Patel and Sons and Ors. v. Union of India and Ors. , and (iii) M/s Hindu Tea Band, Jaipur v. The Regional Director, E.S.I.C., Jaipur 1987 (I) CLR 228 is found to be rightful. The amending Act by which definition of factory has been amended and consequently Bidi industry was covered under the Employees' State Insurance Act which is a labour welfare legislation is not shown to violate fundamental rights of the petitioner. The challenge to vires, thus, miserably fails.
This Court finds support to uphold the respondents' plea that a statute should be presumed to be intra vires unless the claimant, who urges that the statute is ultra vires, proves it to be an enactment beyond legislative competence or any patent violation of fundamental rights, or so worded that it would admit an interpretation which is contrary to the very scheme of legislation.
28. In the result, petition does not call for any interference, and the same is liable to be dismissed.
29. This Court, however, considers that if the petitioner is keen on pursuing its application for exemption, nothing precludes it. It is true that the Government has declined to go into the application in view of pendency of petition. Instead of unilaterally declining to consider application of petitioner, Government could have placed on record before the Court that in spite of pendency of petition, if the employer feels that the application for exemption be considered, Government could have considered it. However, such prudent action has not come forward from the Government, as well the petitioner preferred to acquiesce to the stand taken by the Government. This Court, however, finds that it is open for the petitioner to approach the Government to pursue its application for exemption, if petitioner wants to oppose the application of the Employees' State Insurance Act.
30. It is seen that petition was admitted. No interim relief was granted. Petitioner also did not pursue the application for exemption. On the other hand, Government declined to consider the application in view of pendency of this petition. It is not clear as to whether the employee and employer's contribution was deposited with Employees' State Insurance Corporation. If it is deposited, it is well and good, however, if it has not been so done, it creates a situation of interest of the Corporation being jeopardized, which will ultimately affect the large number of beneficiaries of the Corporation, naturally including those who are governed by the Bidi industry. This Court is, therefore, of the view that the Government will consider the application for exemption, the same shall be decided, as far as possible, within three months from the date of receipt of Writ. If Government finds that the Writ Petitioner, who is applicant before the Government, is not pursuing the application, it is needless to state that the State would be free to decide the application in absence of the applicant, on its own merits, or dispose it of in default.
31. In view of above findings and observations, petition fails, and Rule is discharged. Costs of respondent No. 2 and the Employees' State Insurance Corporation are quantified at a sum of Rs. 10,000-00 (rupees ten thousand only) each. Employees' State Insurance Corporation shall recover total cost of Rs. 10,000-00 as its dues, and shall make over a sum of Rs. 10,000-00 to the State upon such recovery.