R.K. Patel And Co. And Anr. vs State Of Maharashtra And Ors.
2007 Latest Caselaw 798 Bom

JUDGMENT

R.M. Borde, J.

1. Petitioner No. 1 is a partnership firm registered in the name and style as 'M/s R. K. Tobacco Processors, Amalner', whereas petitioner No. 2 is partner of petitioner No. 1-firm. The partnership firm deals in the business of manufacturing 'jarda', having its industry situate in Section No. 583 at Amalner. Petitioner-firm employes about 175 employees. There are two other firms run by the same group namely 'R.K. Patel Manufacturers' and 'R.K. Patel Tobacco Trading Company'. Both the above firms deal in the business of manufacturing 'jarda' having their units situate in Section No. 759/3 at Amalner.

2. Petitioners herein challenge the notification issued by the State Government dated 21-1-1987 and letter issued in pursuant to the said notification on 20-3-1989 by the Assistant Regional Director, E.S.I. Corporation. It is contended by petitioners that respondent No. 1 applied provisions of Employees' State Insurance Act, 1948 (for short, 'the Act') to the establishment of petitioners by notification dated 3-10-1981. In view of the said notification, coverage in respect of provisions of the Act was extended to the municipal limits of Amalner and revenue area of Section No. 583 of 'kasba' Amalner in district Jalgaon. Petitioners contend that the act of issuing notification covering industry/establishment of the petitioners in exclusion of other establishments is violative of principle of equality. It is contended by petitioners that there are other four units situate in adjoining Section No. 759/3 dealing in similar business. However, those units are not covered by the notification issued on 3-10-1981. It also appears that other two units run by the same group dealing in manufacturing of 'jarda' situate in Section No. 759/3 are also not brought within the ambit of provisions of E.S.I. Act.

It is further contended by petitioners that by virtue of notification issued on 15-1-1982, in exercise of powers conferred under Section 87 read with Section 91A of the E.S.I. Act, the Government of Maharashtra was pleased to exempt the establishments which are undertaking manufacturing process in respect of "redrying manufactured leaf tobacco", for a period of one year with effect from 1-1-1981 up to and inclusive of 31-12-1981 from the operation of the provisions except Chapter VA of the E.S.I. Act. In view of the exemption granted by the State Government in respect of applicability of provisions of the Act, the unit/industry run by the petitioner-firm was not required to pay contribution as contemplated by E.S.I. Act. The coverage, it appears, was extended for further period until July, 1985. It appears that by virtue of notification issued on 21-1-1987, exemption, as contemplated in exercise of powers conferred under Section 87 read with Section 91A of the E.S.I. Act, was extended to the units undertaking manufacturing process in respect of "redrying unmanufactured leaf tobacco". The exemption was extended for a period effective from 1st July, 1985 up to and inclusive of 30th June, 1987. It appears that by virtue of Government Notifications dated 20-6-1988 and 10-10-1988, exemption in respect of operation of provisions of E.S.I. Act, was extended to the units undertaking process of "redrying unmanufactured leaf tobacco". Earlier notifications granting exemptions were in respect of manufacturing process of "redrying manufactured leaf tobacco". Admittedly, petitioner-firm is undertaking manufacturing process of "redrying manufactured leaf tobacco". Obviously, notifications issued on and after 21-1-1987 do not cover the process of manufacturing undertaken by petitioner factory/unit.

After the respondent authorities became aware of the correct position on receiving complaints, a communication was issued on 20-3-1989 wherein it was intimated to the petitioner-firm that exemption notification dated 20-1-1987 and subsequent notifications covering further period were obviously not applicable to the petitioner-unit. Petitioner-unit is undertaking the process of manufacturing of "redrying manufactured leaf tobacco" and as such the establishment does not qualify for the exemptions granted under the said notifications. The petitioner was, therefore, advised to start compliance of the provisions of E.S.I. Act immediately and also to make compliance for the past period from 1-7-1985 till date. The notifications issued on 21-1-1987 and the communication issued by ESI Corporation directing the petitioner to make compliance in respect of provisions of ESI Act for the past period is subject-matter of challenge in this petition.

3. Petitioner contends that the notification dated 3-10-1981 is bad in law as the said notification is violative of principle of equality. According to the petitioner, petitioner-establishment is singled out for extending applicability of the provisions of Act, whereas other units similarly situate have not been covered. It is also the contention of petitioners that during the process of manufacturing undertaken by petitioner-unit, such distinction cannot be made in respect of "redrying of un-manufactured leaf tobacco" and "redrying of manufactured leaf tobacco". It is further contended that by virtue of notification dated 21-1-1987, change has been brought out with retrospective effect from 1-7-1985, which, according to the petitioners, is impermissible.

4. Respondents have controverted contentions raised by petitioners by filing a return. It is contended by respondents that Employees' State Insurance Act, 1948 is a Central Enactment and the Central Government has issued a notification under Section 1(3) of the Act in respect of implementation and applicability of provisions of the Act in respect of different centres on different dates. The provisions of the Act are extended by the State Government only to those areas covered by the notification issued by Central Government in exercise of powers under Section 1(3) of the Act. It is contended that the said provisions of the Act are implemented in respect of areas comprising of Amalner Municipality and Revenue Section No. 583 of taluka Amalner, by virtue of Central Government notification issued under Section 1(3) of the Act and as such, the Government of Maharashtra could not have extended provisions of the Act in exercise of powers under Section 1(5) of the Act to any other survey numbers except those mentioned in the notification issued by the Central Government. It is further contended that applicability of provisions of the Act cannot be decided solely on the basis of location of a particular factory. It is also contended that provisions of the Act have been directed to be extended to other areas also by subsequent notifications. The challenge raised by the petitioner, based on principle of equality, therefore, holds no ground. It is further contended by the respondents that the decision in respect of enforcement of the Act is taken on consideration of many feasibility aspects, such as total insurable population, availability of infrastructure for providing medical benefits, etc. The criteria of location of a particular factory alone is not relevant for taking decision in respect of applicability of provisions of the Act. The challenge raised by petitioners on the ground of principle of equality has, therefore, no substance.

It is further contention of respondents that extending medical benefits is not the only object of extending applicability of provisions of the Act, but there are other benefits which stand covered in respect employees i.e. apart from securing medical benefits, the benefits in respect of maternity and employment injury are also covered under the enactment. The argument advanced by petitioners, therefore, that the Corporation has not extended medical benefits for the past period, cannot be held to be a convincing reason for refusal by the petitioners to pay contribution.

Respondents have also contended that the writ petition ought not to be entertained in view of availability of an alternate remedy of challenging notifications/decisions by filing proceedings under Section 75 of the Act. It is also contended that prior to institution of this petition, the petitioners had in fact approached the E.S.I. Court at Jalgaon by instituting E.S.I. Case bearing No. 2/89 challenging the impugned decisions. The proceedings filed by petitioners were dismissed in default on 21-10-1991. Instant petition is filed by the petitioners on 27-7-1990 and although petitioners have availed of two different remedies simultaneously, have suppressed this fact of availment of an alternate remedy in the memo of the petition presented to this Court. It is contended that the petitioners, by suppressing the fact in respect of approaching alternate forum before instituting present petition, have secured interim orders. It is contended that the petition is liable to be dismissed only on the count of availment of alternate remedy provided under the Act so also suppression of material fact of having approached alternate forum.

5. We have heard arguments advanced by Shri C.G. Solshe, Learned Counsel for petitioners as well as Shri V.D. Sonawane, Learned Counsel appearing for E.S.I. Corporation and Shri K.B. Choudhary, learned A.G.P. appearing for the State.

6. It would be appropriate to consider certain provisions of E.S.I. Act. Section 1(3) reads as under:

(1) It shall come into force on such date or dates as the Central Government may, by notification in the Official Gazette, appoint, and different dates may be appointed for different provisions of this Act and for different States for different parts thereof.

Sub-section (4) provides:

1(4) It shall apply, in the first instance, to all factories (including factories belonging to the Government) other than seasonal 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.

Sub-section (5) reads as below:

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 so 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.

Section 2(1) provides that:

2(1) "appropriate Government" means, in respect of establishment under he control of the Central Government or (a railway administration) or a major port or a mine or oil field, the Central Government, and in all other cases, the State Government.

Sub-section (12) reads as under:

2(12) "factory" means any premises including the precincts thereof-

(a) whereon ten 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, or

(b) 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 without 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 (35 of 1952) or a railway running shed.

Sub-section (14AA) provides that:

2(14AA) "manufacturing process" shall have the meaning assigned to it in the Factories Act, 1948 (63 of 1948).

Sub-section (38) reads as under:

Section 38 contemplates that:

38. All employees to be insured.--Subject to the provisions of this Act, all the employees in factories, or establishments to which this Act applies shall be insured in the manner provided by this Act.

Section 40 reads as under:

40. Principal employer to pay contributions in the first instance.--(1) The principal employer shall pay in respect of every employee, whether directly employed by him or by or through an immediate employer, both the employer's contribution and the employee's contribution.

(2) Notwithstanding anything contained in any other enactment but subject to the provisions of this Act and the regulations, if any, made thereunder, the principal employer shall, in the case of any employee directly employed by him (not being an exempted employee), be entitled to recover from the employee the employee's contribution by deduction from his wages and not otherwise:

Provided that no such deduction shall be made from any wages other than such as relate to the period or part of the period in respect of which the contribution is payable, or in excess of the sum representing the employee's contribution for the period.

(3) Notwithstanding any contract to the contrary, neither the principal employer nor the immediate employer shall be entitled to deduct the employer's contribution from any wages payable to an employee or otherwise to recover it from him.

(4) Any sum deducted by the principal employer from wages under this Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted.

(5) The principal employer shall bear the expenses of remitting the contributions to the Corporation.

Section 87 contemplates that:

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.

7. That so far as the challenge raised by petitioners in respect of applicability of provisions of the Act to the petitioner-establishment on the ground of discriminatory treatment being meted out, is concerned, it is to be taken note of that the provisions were made applicable by the Central Government in exercise of powers conferred under Section 1(3) of the Act, to Amalner town as well as the area comprising of Section No. 583. The State Government, therefore, could not have issued a notification in exercise of powers conferred under Section 1(5) of the Act in respect of an area not covered by the notification issued by the Central Government. Apart from this, it is to be taken note of that provisions of enactment shall apply in the first instance to all the factories (including factories belonging to the Government) other than seasonal factories, in view of the provisions of Section 1(4) of the Act. In view of the fact that the provisions of the Act are made applicable to other factories in adjoining survey numbers, the challenge based on the principle of equality does not hold good. It is to be taken note of that there are two other establishments run by the same group in adjoining survey number, which are also covered by subsequent notifications and the provisions of the Act are made applicable to those establishments as well. The argument based on the principle of equality does not hold good more specifically in view of provisions of Section 1(4) of the Act. The petitioner-establishment is a 'factory' as contemplated by provisions of Section 2(12) of the Act.

8. The challenge raised by petitioners to notification issued on 3-10-1981 in exercise of powers under Sub-section (5) of Section 1 of the Act is unsustainable for more than one reason. Although the Government thought it fit to extend coverage under the ESI Act in respect of establishments situate within the municipal limits of Amalner town as well as in Revenue Survey No. 583 of 'kasbe' Amalner in district Jalgaon, petitioner-establishment, being a factory within the meaning of Sub-section (12)(b) of Section 2 of the Act, the provisions of E.S.I. Act are bound to be made applicable even irrespective of any notification in that regard.

The Learned Counsel appearing for respondent-Corporation has invited our attention to Sub-section (4) of Section 1 of the Act, which provides that provisions of the Act shall apply, in the first instance, to all the factories (including factories belonging to the Government) other than seasonal factories. There can be no dual opinion that petitioner-establishment is a factory within the meaning of provisions of Section 2(12)(b) of the Act. In this context, reliance can be conveniently placed on a reported judgment of Division Bench of this Court in the case of Poona Industrial Hotel Ltd. v. I.C. Sarin and Anr. 1980 Lab. I.C. 100. In paragraph 4 of the judgment, Division Bench has observed that:

The Employees' State Insurance Act, 1948, has admittedly come into force in the area in which the Hotel Blue Diamond is situated. Sub-section (4) of Section 1 of the said Act provides that it shall apply, in the first instance, to all factories other than seasonal factories. Appropriate Government, which means State Government in all cases where the establishments are not run by the Central Government or where the establishment is not a major port or a mine or an oil field, has been invested with the power to extend the provisions of the E.S.I. Act or any of them to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise. This extension of the provisions of the Act has got to be done with the approval of the Central Government and after giving 6 months' notice of the intention of applying the provisions by a notification issued in the official gazette. The use of the phraseology in Sub-section (5) of Section 1 viz. of extending the provisions of the E.S.I. Act to any other establishment or class of establishments suggests, in our view, that the factories which are covered by the provisions of Sub-section (4) are also establishments. Sub-section (4) applies without anything more to be done by the Government to all the factories as defined in the Act, the applicability of notification of the Government under Sub-section (5) refers to any other establishment or class of establishments. The establishment must, therefore, be taken to be generic which includes factory and other establishments. If the establishment is a factory as defined under the Act, it applies to the said establishment and it does not require any action on the part of the Corporation or of the Government to apply the provisions of the Act to the factory. In the present case the Corporation has moved to apply the provisions of the Act on the basis that the petitioner's establishment viz. Hotel Blue Diamond is a factory as defined under the Act itself. It is not the contention of the Corporation that they are applying the provisions of the E.S.I. Act to the petitioner's establishment in accordance with the provisions contained in Section 1(5) of the E.S.I. Act. The contention which has been taken in the petition to which we will make a reference again that there is a denial of natural justice because the Corporation has not informed the petitioner before applying the provisions of the E.S.I. Act is therefore wholly misconceived. If the establishment of the Hotel Blue Diamond is a factory as defined in the Act, then the provisions of the Act automatically come into operation.

It would thus be clear that so far as factories are concerned, the provisions of E.S.I. Act would be made applicable by virtue of Sub-section (4) of Section 1 of the Act. Although the factories, which are covered by the provisions of Sub-section (4) of Section 1 are also establishments, the provisions are applicable without anything more to be done by the Government to all the factories as defined in the Act and the notification issued by the Government under Sub-section (5) will have a reference to other establishments or class of establishments. In this view of the matter, the provisions of the Act shall have to be made applicable by virtue of Sub-section (4) of Section 1 of the Act in respect of factories.

9. The Apex Court, in the matter of Cochin Shipping Corporation Co. v. E.S.I. Corporation , has considered the extent of applicability of provisions of Sub-sections (4) and (5) of Section 1 of the Act. The Apex Court has observed that:

Under Section 1(4), in the first instance, the Act is made applicable to all factories. The Act envisages the extension of benefit to the employees in other establishments or class of establishments, industrial, commercial, agricultural or otherwise. The extension of benefit is to be done by means of a notification by the appropriate Government. Thus the benefits conferred by the Act cover a large area of employees than what the Factories Act and the akin legislations intended.

In view of the above observations of the Division Bench of this Court as well as the interpretation put to the relevant provisions by the Apex Court, the challenge raised by the petitioners to the notification issued by the State Government on 3-10-1981 is not sustainable.

10. That after the petitioner-establishment was extended coverage under the provisions of the Act by virtue of notification dated 3-10-1981, the establishment was granted exemption in respect of payment of contribution for a period between 1-1-1981 to 31-12-1981 by virtue of notification dated 15-1- 1982. It appears that the exemption was extended until July, 1985. As such, petitioner-establishment was not required to pay contribution for the period covered by the exemption up to 30-6-1985. The State Government had issued a notification in exercise of powers under Section 87 read with Section 91A of the Act granting exemption in respect of establishments indulging in manufacturing process of "redrying unmanufactured leaf tobacco". There was no notification granting exemption in favour of such of those units undertaking manufacturing process of "redrying manufactured leaf tobacco", after July, 1985. However, petitioner-unit was extended benefits wrongly for subsequent period and when this fact was brought to the notice by filing complaint lodged by Employees' Union, the respondent-authorities have taken corrective action and issued communication on 20-3-1989 directing the petitioner-establishment to make compliance for the past period from 1-7-1985 onwards.

The perusal of the notifications itself, issued from time to time, make it very clear that the exemption is granted in respect of manufacturing process of redrying manufactured leaf tobacco for the period up to July, 1985 and thereafter there are no exemptions in respect of the said manufacturing process. The contention of the petitioner that the notification dated 21-1-1987, being retrospective in application, is bad in law, cannot be accepted for the reason that the said notification does not cover the manufacturing process undertaken by the petitioner-unit. The exemption under the said notification is extended to the manufacturing process of "redrying unmanufactured leaf tobacco". The petitioner is entitled to seek exemption for the period covered under the notification. Therefore, we do not find any error or illegality in the action taken by respondent-authorities in directing the petitioner-establishment to make compliance of the provisions of the Act for past period from 1-7-1985 and pay the contribution in accordance with law.

11. The contention of the petitioners that there is in fact no distinction in respect of manufacturing process, namely "redrying unmanufactured leaf tobacco" and "redrying manufactured leaf tobacco" cannot be gone into by this Court in exercise of writ jurisdiction conferred under Article 226 of the Constitution of India. It is for the authorities, who are entrusted with the task of implementation of provisions of the Act and who are well versed and equipped with the technical knowledge, to take an appropriate decision. This Court would be very slow in considering the challenges raised in respect of notifications issued by the State Government regarding grant of exemptions covering different manufacturing processes. The field in respect of decision making involves some special skill and specialised knowledge and the decisions rendered by the appropriate authorities, after taking into consideration the relevant aspects, cannot be a subject-matter of challenge and this Court would not entertain such challenge in exercise of writ jurisdiction.

12. Petitioners have contended that after filing of the petition, this Court has granted stay to the impugned notification and as such the petitioner-establishment was not required to pay contribution. Petition is presented in 1990 and the interim order is in operation till today. Petitioners contend that by virtue of communication dated 25-10-1999, petitioner-unit is surveyed/inspected and the authorities had directed to start compliance in accordance with various provisions of E.S.I. Act. It is the contention of petitioners that as such the petitioner-establishment is covered under E.S.I. Act with effect from 1-5-1998 provisionally and Code number being "33-30967" has been allotted to the petitioner-establishment and petitioner has started depositing contribution since 1998. It is the further contention of the petitioners that the E.S.I. Corporation has not extended coverage to the employees of petitioner-establishment for the past period covered under the impugned order. Many of the employees stood retired on attaining age of superannuation. In this view of the matter, petitioners contend that at this stage, petitioner-establishment shall not be directed to comply with the directives issued by the E.S.I, authorities. It is the contention of the petitioner that by virtue of communication dated 25-10-1999, there is a fresh coverage in respect of petitioner-establishment and as such the directives issued by the ESI authorities regarding past coverage stands automatically modified and petitioner-establishment cannot be compelled to pay contribution for the period in respect of past coverage.

13. The respondents have controverted these contentions contending that the Code number which is said to have been allotted in 1999 does not imply a fresh coverage under the provisions of the Act. It is contended that petitioner-establishment is covered under E.S.I. Act in 1981 itself and the said Code number was allotted at the relevant time. Other two units run by the same group are also extended coverage in 1998. Petitioners are seeking to take advantage of this situation. It is contended that object of enactment is not only to extend medical benefits but certain other benefits are also extended to the employees and as such the argument advanced by the petitioner that employees were not extended medical benefits is not acceptable. It is contended that by virtue of operation of the interim order, passed by this Court, the contribution could not be recovered. The employer cannot escape from his liability of making contribution.

14. It is also the argument advanced by Learned Counsel for petitioners that in view of the settlement arrived at with the Employees' Union on 2-4-2000, the establishment has paid monetary benefits in the form of medical allowance at the rate of Rs. 100/- per month to all the employees and as such the establishment should not be compelled to pay contribution.

15. It is to be noted that extension of medical benefits in view of settlement between Employees' Union and petitioner-establishment is by virtue of settlement reached in the month of April, 2000 and extending medical allowance for a period covering after April, 2000, cannot be a reason for exempting the petitioner-unit from making payment of past contribution covering the period between 1985 to 1998, the year 1998 being the year when petitioner-establishment resumed paying contribution under the Act.

16. Learned Counsel for petitioners has placed reliance on the judgment of the Apex Court in the case of Employees' State Insurance Corporation v. Distilleries and Chemical Mazdoor Union and Ors. reported in AIR 2006 SC 271, wherein it is held that:

In our opinion, the High Court was fully justified in passing the judicious order after considering the equities by directing the employer and the employees to make ESIC contribution for the future i.e. from the date of disposal of the writ petition and should not bear with the liability for the past inasmuch as the employees of the respondent No. 2 has not availed any medical facilities due to interim order of the High Court. In these circumstances, the order passed by the High Court, in our considered opinion, meets the ends of justice and does not require interference by this Court under Article 136 of the Constitution of India.

17. In the instant case, by virtue of interim order, petitioners were not directed to bear the liability of extending medical facilities nor there is any material placed on record to indicate that for the period between 1985 to 1998, the employer has contributed for medical benefits of the employees. Admittedly, petitioner-establishment, by virtue of settlement reached in April, 2000, has started paying medical allowance at the rate of Rs. 100/- per month to its employees. However, for the past period under the coverage, there is no record to indicate that the employees received any benefits from the petitioner-establishment. The reliance, placed by the petitioner on the reported judgment is, therefore, misplaced.

18. Our intention is invited to the provisions of Section 75 of the E.S.I. Act, which provides for a remedy of filing proceedings before the Employees' Insurance Court for determination of disputes in relation to the questions or disputes arising under the Act. The question - whether the coverage under the Act extended to the petitioner-establishment or the liability of the petitioner-establishment to pay employees' contribution, are the questions which can be determined by the Employees' Insurance Court. In view of availability of efficacious alternate remedy of raising challenge before a forum established under the Act, it is contended that the extraordinary jurisdiction, conferred on this Court under Articles 226 and 227 of the Constitution of India, need not be invoked.

19. It is also brought to our notice that the petitioners had already approached the E.S.I. Court by instituting E.S.I. Case No. 2/89 raising a similar dispute as has been raised in the instant petition. It is evident that the proceedings were initiated before the E.S.I. Court in the year 1989 before filing the instant petition, which came to be submitted to the Registry of this Court on 27-7-1990. It is also brought to our notice that the proceedings before the E.S.I. Court came to be dismissed in default on 21-10-1991. The petitioner has, at the same time, availed two different remedies - one before a forum provided under the Act and another by way of filing instant petition. It is impermissible for the petitioners to raise the challenge before two different forums. Moreover, though the petition was presented after filing of E.S.I. Case No. 2/89, the petitioners have conveniently suppressed the fact of instituting proceedings before the E.S.I./Labour Court at Jalgaon. It is strenuously urged by the Learned Counsel for respondent-Corporation that the petition filed by the petitioners is liable to be dismissed on account of petitioners' availing alternate remedy by way of instituting a case before the forum provided under the statute and also on account of withholding material facts from this Court.

20. It is true that petitioners have not made any reference as regards institution of proceedings before E.S.I. Court in the instant petition. It is also equally true that had the fact of institution of proceedings before the alternate forum been disclosed, this Court would not have interfered and passed interim orders at the stage of admission.

21. Learned Counsel for the petitioners has contended that the petitioners have not prosecuted the remedy before the E.S.I. Court and after institution of the instant petition and after securing interim orders, the proceedings before the E.S.I. Court were allowed to terminate for want of prosecution. Learned Counsel for petitioners has placed reliance on the judgment of the Apex Court in the case of S.J.S. Business Enterprises (P) Ltd. v. State of Bihar and Ors. and has contended that only when the suppression of fact is material one, that is, one which would have had an effect on the merits of the case and where the writ petition was otherwise maintainable, the same could not be rejected on the ground of suppression of fact of filing of proceedings before an alternate forum. Learned Counsel for the petitioners has further contended that in the circumstances, filing of an appeal/application and suppression of the said information cannot be considered as "withholding material fact". Learned Counsel placed reliance on the observations of the Apex Court in paragraphs No. 14, 15 and 16, which read as under:

14. Assuming that the explanation given by the appellant that the suit had been filed by one of the Directors of the Company without the knowledge of the Director who almost simultaneously approached the High Court under Article 226 is unbelievable (sic), the question still remains whether the filing of the suit can be said to be a fact material to the disposal of the writ petition on merits. We think not. The existence of an adequate or suitable alternative remedy available to a litigant is merely a factor which a Court entertaining an application under Article 226 will consider for exercising the discretion to issue a writ under Article 226. But the existence of such remedy does not impinge upon the jurisdiction of the High Court to deal with the matter itself if it is in a position to do so on the basis of the affidavits filed. If, however, a party has already availed of the alternate remedy while invoking the jurisdiction under Article 226, it would not be appropriate for the Court to entertain the writ petition. The rule is based on public policy but the motivating factor is the existence of a parallel jurisdiction in another Court. But this Court has also held in State of Orissa that even when an alternative remedy has been availed of by a party but not pursued that the party could prosecute proceedings under Article 226 for the same relief. This Court has also held that when a party has already moved the High Court under Article 226 and failed to obtain relief and then moved an application under Article 32 before this Court for the same relief, normally the Court will not entertain the application under Article 32. But where in the parallel jurisdiction, the order is not a speaking one or the matter has been disposed of on some other ground, this Court has, in a suitable case, entertained the application under Article 32. Instead of dismissing the writ petition on the ground that the alternative remedy had been availed of, the Court may call upon the party to elect whether it will proceed with the alternative remedy or with the application under Article 226. Therefore, the fact that a suit had already been filed the appellant was not such a fact the suppression of which could have affected the final disposal of the writ petition on merits.

15. In this case, admittedly, the appellant has withdrawn the suit two weeks after the suit had been filed. In other words, the appellant elected to pursue its remedies only under Article 226. The pleadings were also complete before the High Court. No doubt, the interim order which was passed by the High Court was obtained when the suit was pending. But by the time the writ petition was heard the suit had already been withdrawn a year earlier. Although the appellant could not, on the High Court's reasoning, take advantage of the interim order, it was not correct in rejecting the writ petition itself when the suit had admittedly been withdrawn, especially when the matter was ripe for hearing and all the facts necessary for determining the writ petition on merits were before the Court, and when the Court was not of the view that the writ petition was otherwise not maintainable.

16. As the issue of suppression was the only ground on which the High Court has rejected the appellant's plea for relief, we would ordinarily have set aside the order of the High Court in view of our finding and remanded back to the High Court for decision of the matter on merits. But the matter has been argued on merits before us and we are in a position to dispose of the matter which we accordingly proceed to do.

22. The reliance placed by the petitioner on the reported judgment is misplaced for the reason that in para 14 of the judgment, the Apex Court has cautioned against entertaining a petition when parallel proceedings are initiated and pending. The Apex Court has observed:

If, however, a party has already availed of the alternative remedy while invoking the jurisdiction under Article 226, it would not be appropriate for the Court to entertain the writ petition.

In the instant case, petitioners had already filed proceedings before the E.S.I./Labour Court in the year 1989 and having failed to obtain interim orders from the E.S.I. Court, petitioners had approached this Court without disclosing the fact of pendency of proceedings before the E.S.I. Court. Another distinguishing feature is that the fact, which has been withheld, should not be considered as "material fact". The Apex Court, in the reported judgment, found that withholding of fact of institution of a suit could not have any bearing on the consideration of issue on the merits of the matter. However, in the instant case, had the petitioners disclosed the fact regarding availment of alternate remedy provided under the statute, this Court would not have entertained the petition. The fact, which has been withheld, is a material fact. The third distinguishing feature is that the High Court, in the reported judgment, has rejected appellant's plea in that matter only on the ground of suppression of material fact and had not considered the matter on merits. However, in the instant matter, apart from the material defect as regards withholding of vital facts from the Court, the petitioner has failed to demonstrate his entitlement to seek a relief on consideration of other aspects, which have already been dealt with in foregoing paragraphs of this judgment.

23. In this view of the matter, we do not find any merit in the contentions raised by the petitioners in the petition. Writ Petition fails and is accordingly dismissed. Rule discharged. Interim relief stands vacated. However, in the circumstances of the case, there would be no order as to costs.