Maharashtra State Seeds ... vs The Employees State Insurance ...
2017 Latest Caselaw 4197 Bom

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                IN THE HIGH COURT OF JUDICATURE AT BOMBAY,

                                   NAGPUR BENCH : NAGPUR



First Appeal No.  371 of 2005



Appellant               :          Maharashtra State Seeds Corporation

                                   Limited, through its Managing Director, 

                                   Shastri Nagar, Akola

                                   versus

Respondents             :          1)  The Employees State Insurance 

Corporation, through its Deputy Regional

Director, Sub-Regional Office, ESIC

Bhavan, Ganeshpeth, Nagpur

2) The Employees State Insurance

Corporation, through its Recovery Officer,

Sub-Regional Office, ESIC Bhavan,

Ganeshpeth, Nagpur

Shri S. G. Loney, Advocate for appellant

None appears for respondents

Coram : S. B. Shukre, J

Dated : 7th July 2017

Oral Judgment

1. This appeal questions the legality and correctness of the

judgment and order dated 9.1.2004 rendered in ESI Application No. 1 of

2002 by the Member, Industrial Court/ESIC Court, Amravati.

2. I have heard Shri S. G. Loney, learned counsel for the

appellant Corporation. None appears for the respondents though duly

served. I have gone through the record of the case. The only point

which raises substantial question of law, is :-

Whether the impugned judgment and order are

perverse ?

3. This appeal involves a short controversy and, therefore, only

relevant facts would be stated herein.

There was a Government factory at Tapowan, Amravati

which was transferred in January 1982 to the appellant corporation. A

Government Resolution was issued on 9.5.1985 granting exemption to all

the Government Factories from payment of contribution under the

provisions of the Employees State Insurance Act, 1948 (For short, the "ESI

Act") retrospectively i.e. from 17.7.1967. But the respondents refused to

give any effect to the Government Resolution and claimed payment of

contribution from the appellant. An application under Section 74 of the

ESI Act was, therefore, filed before the ESI Court, Amravati for

adjudication of the issue. The issue was partly answered in favour of the

appellant and partly against it, holding that the respondents have no right

to recover contribution from the appellant in relation to Tapowan

processing plant for a period which was before its transfer to the

appellant. Thus, after transfer, the ESI contribution is held to be payable

by the appellant.

4. Shri Loney, learned counsel for the appellant submits that if

the share capital of Agriculture University is considered, which is of

2.86% in the appellant Company, it would together come to 49% share

capital held by the Government of Maharashtra and would thereby make

the appellant Company as the "Government Company" within the

meaning of Section 617 of the Companies Act, 1956. He submits that

there is a ruling of the Division Bench of the Madhya Pradesh High Court

taking a view that when an Agriculture University is maintained from and

out of the State funds, it would be a "State" within the meaning Article 12

of the Constitution of India and, therefore, an Agriculture University

should also be considered as a Government entity. He submits that this

ruling has not been considered by the Industrial Court although reference

to this ruling has been made in the impugned judgment and order.

5. On perusal of the impugned judgment and order, the

submission so made by learned counsel for the appellant is found to be

correct. The learned Member of the ESI Court has referred to the case of

Ashalata d/o Baboolal v. M.B. Vikram University, Ujjain & ors reported

in AIR 1961 MP 299 (referred to above) decided by the Madhya Pradesh

High Court. But, it has not considered the ratio of the case and no finding

whatsoever in that behalf has been recorded by the ESI Court. This issue

is fundamental for just and proper adjudication of the dispute between

the appellant and the respondents and, therefore, judgment of the

Division Bench of the MP High Court had significant bearing on the issue

involved in this case. But, this judgment having not been considered, I

am of the view that the impugned judgment and order are perverse. Even

otherwise, the impugned judgment and order do not give any reason as to

why an Agriculture University could not be considered to be a State entity

and, therefore, the share capital held by the Agriculture University is not

the share capital owned by the State Government. On this count also, I

find that the impugned judgment and order to be perverse. The point is

answered accordingly.

6. In the circumstances, appeal is allowed with costs. Impugned

judgment and order are quashed and set aside. In view of what is

observed in paragraphs 4 and 5 above, the matter is remitted back to the

ESI Court/Industrial Court, Amravati for decision afresh after hearing

both the sides. Since the matter is quite old, the ESI Court shall try to

decide the same as expeditiously as possible.

S. B. SHUKRE, J

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