Gujarat High Court

E.S.I.C vs Somabhai Ishwardas Patel on 27 June, 2024

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               IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                          R/FIRST APPEAL NO. 1101 of 2007


FOR APPROVAL AND SIGNATURE:

HONOURABLE MR. JUSTICE SANDEEP N. BHATT

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1      Whether Reporters of Local Papers may be allowed                          Yes
       to see the judgment ?

2      To be referred to the Reporter or not ?                                   Yes

3      Whether their Lordships wish to see the fair copy                          No
       of the judgment ?

4      Whether this case involves a substantial question                          No
       of law as to the interpretation of the Constitution
       of India or any order made thereunder ?

==========================================================
                                     E.S.I.C.
                                     Versus
                           SOMABHAI ISHWARDAS PATEL
==========================================================
Appearance:
MR SACHIN D VASAVADA(3342) for the Appellant(s) No. 1
MR PRAVIN P PANCHAL(2059) for the Defendant(s) No. 1
MR. PRAKASH JANI WITH MR SHIVANG P JANI(8285)
for the Defendant(s) No. 1
==========================================================

    CORAM:HONOURABLE MR. JUSTICE SANDEEP N. BHATT

                                     Date : 27/06/2024
                                     CAV JUDGMENT

1. The present First Appeal, under Section 82 of the

Employees' State Insurance Act, 1948, is preferred by the

appellant - original opponent, being aggrieved and

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dissatisfied with the impugned judgment and order dated

12.12.2006 passed by the Employees' State Insurance

Court, Ahmedabad, in E.S.I. Application No.5 of 1998, by

which the order/communication dated 28.08.1997 and

24.10.1997 received from the corporation by the applicant

- society together with the order of the corporation dated

09.09.2002 (C-18) and resultant order dated 30.10.2002

under Section 25A of the ESI Act quantifying the

amount of contribution, etc. are hereby set aside, by

allowing the application filed by the applicant - society.

2. Brief facts of the case are as under:

2.1. The aforesaid respondent, hereinafter referred as the Society", is registered under the to provisions of the Co-

Operative Societies Act and the appellant hereinafter

referred to as "the corporation".

2.2. It is the case of the society that the permanent

employees of the Mehsana District Co-Operative Milk

Producers Union Limited, are the member of the

applicant society. It is also stated by the society that

about 150 persons of the society are getting the benefit

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of a settlement (under Section 2 (p) of the ID Act, 1947)

under which medical allowance is given to the employees.

The period of operation of the said settlement is stated

to be from 01.04.97 to 31.02.2000. It is also the case of

the society that the benefit of Group Insurance is also

extended to the employees under the said settlement

through United India Insurance Company that in

addition to that the medical facility is made available to

the employees in the dispensary situated in the premises

of the Dudh Sagar Dairy; that the medical facility

includes all the expenses incurred by the employees and

the employees are fully satisfied with these facilities and

therefore, the present system and scheme is not required

to be disturbed. It is also the case of the society that the society received intimation from the corporation to

the effect that the ESI Act is applicable to the society

with retrospective effect from 1988 which is illegal unjust

and improper, that the persons enjoying the said

facilities would be put to hardships and that in fact, the

application of the ESI Act would not confer any

additional benefits and on the contrary it would damage

the interest of the persons concerned, that the intimation

is issued without application of mind by the corporation;

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that the Central Government has exercised its powers

without following any guidelines; that the exercises of

unbridled discretion without material on record is illegal,

improper and unjust; that the impugned communication/

notification show that they are ultravires because the

procedural safeguards are violated; that even the

impugned notification was not published in the local

language; that they are based upon mis-construction, mis-

interpretation, mis-conception of law and facts and

therefore, they are illegal and ultravires the constitution;

that the society has no knowledge of the notification nor

it had the opportunity to deal with the legality and

propriety of the impugned intimation/communication and

the so called notification and hence, it is non-existent in eye of law; that the publication of the SO called

notification is mandatory; that the impugned notification

does not cover the applicant society and hence, the

provisions of the ESI Act are not applicable to it; that if

the notification is presumed to exist, it is irrational,

illegal and unjustified; that there is no nexus between

the notification and the object and purpose sought to be

achieved by the Act, that after about 14 years, the

corporation wants to recover the contribution

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retrospectively, which is illegal and unjustified. After

several repetition, the society requested to set aside the

order/communication dated 28.8.1997 and 24.10.1997 and

to hold that the provisions of the ESI Act are not

applicable to it. A stay application was also moved by

the society upon, which a show cause notice was ordered

to be issued.

3. Heard learned advocates appearing for the respective

parties.

4.1. Mr. Sachin D. Vasavada, the learned advocate for

the appellant - corporation has relied upon the judgment

of the Hon'ble Supreme Court in case of ESIC Vs.

Kakinada Municipality, reported in 2021 (0) AIJEL-SC

67934, more particularly, paragraph Nos.1(2), 8, 13, 16

and 17 are relevant, and has submitted that after

considering the earlier judgment of Municipal Committee,

Abohar (which is relied by El Court and Respondent),

the Hon'ble Apex Court has held that only Appropriate

Government, under Section 87 of 1990 of the Act has

power to compare the benefits given by employer and

ESIC, and not by the ESI Court as it cannot be said as

dispute. In present case also, applicability of law is not

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in dispute as per respondent (Pg.8/Para 8 of El Court

judgment). It is contended before El Court that

respondent employer is giving superior benefits to

employees than that of appellant corporation. That issue

can only be decided by appropriate Government u/s. 87

of ESI Act and not by El Court u/s. 75(1)(g) as El Court

has no jurisdiction. Furthermore, he has submitted that

the appellant - ESI Corporation is established under

Section 3 of the ESI Act and is independent autonomous

body. ESI Act being benevolent legislation has been

enacted by Parliament under Entry 23, 24 of List III of

the 7th Schedule of the Constitution of India, which

provides that Parliament has the power to make law for

the purposes of social security, social insurance and numerous medical benefits to workers / employees. It is

submitted that the main object of ESIC enshrined under

Article 39(c)(d), Articles 41 and 43 of Constitution of

India and as per the social state directive policy and

social welfare measure rendering socio economic justice to

those who in hey-day of their life ceaselessly toiled for

the employers on an assurance that after their

retirement / retrenchment they would not be left in

lurch. The ESI Act is made with a social welfare

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objective in mind and to protect the interest of workers /

employees by offering the accident benefits/disablement

benefits, unemployment benefits, sickness benefits etc. to

the workers and their dependents. Under ESIC 2.0

Reforms and Vision ESI Scheme is being extended

massively throughout the country. The ESI Scheme has

been implemented in 442 districts and partially

implemented in 153 districts of our country. There are

more than 3.10 Crore insured persons with more than

12.3 beneficiaries are covered under ESI Scheme. Medical

/ Para Medical care to the beneficiaries is provided

through a large infrastructure by setting up various

hospitals and dispensaries besides tie-up arrangement

with various other institutions, ESIC also conducting Annual Preventive Health Check-up Programme and also

implementing Atal Bimit Vyakti Kalyan Yojana (ABVKY)

and Rajiv Gandhi Shramik Kalyan Yojana for providing

relief in case of the insured persons facing

unemployment. From the above, it could be observed that

ESIC is providing comprehensive social security benefits

more than any other employer to its insured persons and

beneficiaries.

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4.2. Furthermore, he has submitted that ESI Act is

applicable to entire India so if Any Employee left the

respondent's job and joins another organization in

anywhere in India, said employee and his/her family

members would continue to get same and all benefits

from appellant corporation without any hurdle as he/she

is already registered with ESI Corporation which is a

statutory Organization and working under Ministry of

Labour, Employment and Welfare Department.

Furthermore, he has submitted that respondent employer

is neither statutory body nor their employees / workers,

who are protected under any statutory rules. Respondent

employer is relying upon the judgments wherein the

employer/s were either statutory corporation or statutory organization or statutory rules, which gives guarantee to

workers. Facts are totally different from the judgment on

which El Court as well as Employer has relied upon.

4.3. Furthermore, he has submitted that Settlement

under Industrial Disputes Act cannot override statutory

provisions of ESI Act: settlement is private arrangement

between group of workers and employer. It cannot bypass

or override any other benevolent statutory provisions.

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Workman cannot say not to apply any provisions of law

as ESI Act is benevolent and to protect the interest of

workers only. In view of the above, he has prayed to

allow the present appeal.

5.1. Per contra, Mr. Prakash Jani, learned senior

advocate with Mr. Shivang P. Jani, learned advocate for

the respondent has submitted that present First Appeal

is filed under Section-82 of the Employees State

Insurance Act, 1948. It is submitted that under Section-

82(1)(2) of the E.S.1. Act, 1948, appeal should lie to the

High Court from an order of Employees State Insurance

Court, if it involves a substantial question of law. It is

also stated that present First Appeal doesn't raise any substantial question of law and, therefore, present First

Appeal is liable to be dismissed. It is further submitted

that in the case of Regional Director, E.S.I.C Vs.

Bhavnaben D. Joshi Wd/o Dahyabhai S. Joshi reported in

2021 (1) G.L.R. 149, it has been held by this Hon'ble

Court that "The scope and examination of judgment and

order passed by the Employees' Insurance Court is

limited. As per Section-82 of the E.S.I. Act, the grounds

of appeal are also restricted. All the provisions of appeal

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under Code of Civil Procedure are not applicable to the

appeal filed under section 82 of the E.S.I. Act. Power of

Appellate Court is subject to Sub-Section 2 of Section-82

of the E.S.I. Act. An appeal to the High Court from an

order of an Employees' Insurance Court is permitted only

if a substantial question of law is involved". It is

submitted that in the present case, there is no

substantial question of law which arises.

5.2. Furthermore, he has contended that application

under E.S.I. Application No.5 of 1998 was filed by

respondent being aggrieved by communications dated

28.08.1997 and 24.10.1997 together with order of

corporation dated 09.09.2002 and resultant order dated 30.10.2002 under Section 45(a) of E.S.I. Act, 1948 by

which E.S.I. Corporation had quantified the amount.

That, it is not correct on part of the appellant to

contend that application was filed only to declare that

provisions of E.S.I. Act, 1948 are not applicable. It is

submitted that E.S.I. Authority has quantified amount

against respondent after period of 14 years and had

passed further order to deposit the amount with E.S.I.

Corporation. That, it is stated that against this order,

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application under Sections-75, 76 and 77 of E.S.I. Act,

1948 was filed before E.S.I. Court, which is maintainable

and E.S.I. Court has rightly exercised its jurisdiction by

granting application and setting aside order of the

authorities under E.S.I. Act, 1948 by holding that it is

in view of better provisions for employees. It is

submitted that there is no jurisdictional error in passing

impugned judgment wherein E.S.I. Court has held that

when Co-operative Society is giving more benefits to its

employees, coverage under the E.S.I. Act, 1948 is not

necessary.

5.3. Furthermore, he has contended that in view of

judgment of Hon'ble Supreme Court of India reported in 1996 (7) S.C.C. 488 rendered in case of Municipal

Committee, Abohar Vs. Regional Commissioner, E.S.I.

Corporation and Another, if the employer has provided

better and more beneficial benefits to its employees, such

employees need not be covered under E.S.I. Scheme. If

the employees of respondent - Co-operative Society are

covered under E.S.I. Scheme, they will lose more

beneficial scheme of the employer which is settled and

agreed under the agreement arrived with employees of

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respondent Co-operative Society before the statutory

authority under the Industrial Disputes Act, 1947 by way

of settlement under section-2(p) of the Industrial Disputes

Act, 1947. Furthermore, he has contended that the

respondent is Dudhsagar Dairy Employees Credit and

Supply Co-operative Society Ltd. (herein after referred to

as Co-operative Society). That, there is a settlement

between the respondent - Co-operative Society and its

employees under Section- 2(p) of the Industrial Disputes

Act, 1947. By virtue of the said settlement, large number

of benefits are agreed to be given by respondent Co-

operative Society to its employees. These employees are

getting more benefits compared to the benefits which are

made available to the employees if they are covered under the Employees' State Insurance Act, 1948. It is

submitted that the employees working in respondent Co-

operative Society are getting benefits under various heads

undisputedly as medical reimbursement allowance, all

expenses of medical treatment in any hospital, benefits

in case employees suffer temporary or permanent injury,

sick leave benefits, maternity benefits and benefits to

dependants and legal heirs and benefits in event of

death. He has also submitted that that all these benefits

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are far more beneficial to employees compared to benefits

which employees may get from E.S.I. Scheme as per

E.S.I. Act, 1948. The respondent has produced statement

with aforesaid details before the court below in

Application No. 5 of 1998 at Exh. 51. The correctness

and factual details of said statement is not disputed by

appellant before E.S.I. Court or before this Hon'ble High

Court in present First Appeal. It is stated that all

employees working in respondent Co-operative Society

have given in writing before the E.S.I. Court that they

are getting more benefit under settlement with

Respondent Co-operative Society and therefore, they

should not be covered under E.S.L. Scheme. A document

with this regard dated 01.07.1997, signed by all employees is on record at Exh. 81. The correctness of

this document is also not disputed by the appellant at

any stage. In view of the above, he has prayed to

dismiss the present appeal.

6.1. I have considered the rival submissions made at the

bar. I have gone through the material available on the

record. It transpires that the moot question, arisen for

consideration of the present appeal by this Court by way

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of framing the substantial question of law as required

under the statute, more particularly, the appeal filed

under the statutory provision under the E.S.I. Act, is

that in light of the facts of the present case and in view

of the provisions of law as well as catena of decisions,

whether settlement under Section 2-P of the Industrial

Disputes Act, 1947 entered between the employees and

the management of the opponent society, would override

the provisions of E.S.I. Act, 1948, being a special Act? In

the facts of the present case, and in view of the

definition under Section 1(5), whether the provisions of

E.S.I. Act be made applicable to the present opponent?

These are the basis questions, which have been pleaded.

6.2. Learned advocate for the appellant has actually

harped upon the provisions of E.S.I. Act, more

particularly, Sections 87/90 read with Section 75(1)(g) and

3. It is necessary to refer the relevant provisions, which

are required to be considered for the facts of the present

case, more particularly, Sections 3, 45A, 75(1)(g), 76, 77,

82, 87, 90, as under:

"3. Establishment of Employees State Insurance Corporation.

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(1) With effect from such date as the Central Government may, by notification in the Official Gazette, appoint in this behalf, there shall be established for the administration of the scheme of Employees State Insurance in accordance with the provisions of this Act a Corporation to be known as the Employees State Insurance Corporation.

(2) The Corporation shall be a body corporate by the name of Employees State Insurance Corporation having perpetual succession and a common seal and shall by the said name sue and be sued.

45A. Determination of contributions in certain cases.

(1) Where in respect of a factory or establishment no returns, particulars, registers or records are submitted, furnished or maintained in accordance with the provisions of section 44 or any Social Security Officer or other official of the Corporation referred to in sub-section (2) of section 45 is prevented in any manner by the principal or immediate employer or any other person, in exercising his functions or discharging his duties under section 45, the Corporation may, on the basis of information available to it, by order, determine the amount of contributions payable in respect of the employees of that factory or establishment:

Provided that no such order shall be passed by the Corporation unless the principal or immediate employer or the person in charge of the factory or establishment has been given a reasonable opportunity of being heard:

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Provided further that no such order shall be passed by the Corporation in respect of the period beyond five years from the date on which the contribution shall become payable.

(2) An order made by the Corporation under sub-section (1) shall be sufficient proof of the claim of the Corporation under section 75 or for recovery of the amount determined by such order as an arrear of land revenue under section 45B or the recovery under sections 45C to 45-I.

75(1)(g) Any other matter which is in dispute between a principal employer and the Corporation, or between a principal employer and an immediate employer or between a person and the Corporation or between an employee and a principal or immediate employer, in respect of any contribution or benefit or other dues payable or recoverable under this Act, or any other matter required to be or which may be decided by the Employees' Insurance Court under this Act.

76. Institution of proceedings, etc.

(1) Subject to the provisions of this Act and any rules made by the State Government, all proceedings before the Employees' Insurance Court shall be instituted in the Court appointed for the local area in which the insured person was working at the time the question or dispute arose.

(2) If the Court is satisfied that any matter arising out of any proceeding pending before it can be more conveniently

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dealt with by any other Employees' Insurance Court in the same State, it may, subject to any rules made by the State Government in this behalf, order such matter to be transferred to such other Court for disposal and shall forthwith transmit to such other court the records connected with that matter.

(3) The State Government may transfer any matter pending before any Employees' Insurance Court in the State to any such Court in another State with the consent of the State Government of that State. (4) The court to which any matter is transferred under sub-section (2) or sub-section (3) shall continue the proceedings as if they had been originally instituted in it.]

77. Commencement of proceedings.

(1) The proceedings before an Employees Insurance Court shall be commenced by application.

(1A) Every such application shall be made within a period of three years from the date on which the cause of action arose.

Explanation.-- For the purpose of this sub-section,

(a) the cause of action in respect of a claim for benefit shall not be deemed to arise unless the insured person or in the case of dependants benefit, the dependants of the insured person claims or claim that benefit in accordance with the regulations made in that behalf within a period twelve months after the claim became due or within such further period as the Employees Insurance Court may allow on grounds which appear to it to be reasonable;

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(b) the cause of action in respect of a claim by the Corporation for recovering contributions (including interest and damages) from the principal employer shall be deemed to have arisen on the date on which such claim is made by the Corporation for the first time:

Provided that no claim shall be made by the Corporation after five years of the period to which the claim relates;

(c) the cause of action in respect of a claim by the principal employer for recovering contributions from an immediate employer shall not be deemed to arise till the date by which the evidence of contributions having been paid is due to be received by the Corporation under the regulations.

(2) Every such application shall be in such form and shall contain such particulars and shall be accompanied by such fee, if any, as may be prescribed by rules made by the State Government in consultation with the Corporation.

82. Appeal.

(1) Save as expressly provided in this section, no appeal shall lie from an order of an Employees' Insurance Court. (2) An appeal shall lie to the High Court from an order of an Employees' Insurance Court if it involves a substantial question of law.

(3) The period of limitation for an appeal under this section shall be sixty days.

(4) The provisions of sections 5 and 12 of the Limitation Act, 1963 (36 of 1963) shall apply to appeals under this section.

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87. Exemption of a factory or establishment or class of factories or establishments.

The appropriate Government may, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt any factory or establishment or class of factories or establishments in any specified area from the operation of this Act for a period not exceeding one year and may from time to time by like notification renew any such exemption for periods not exceeding one year at a time:

Provided that such exemptions may be granted only if the employees in such factories or establishments are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act:

Provided further that an application for renewal shall be made three months before the date of expiry of the exemption period and a decision on the same shall be taken by the appropriate Government within two months of receipt of such application.

90. Exemption of factories or establishments belonging to Government or any local authority.

The appropriate Government may, after consultation with the Corporation, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt any factory or establishment belonging to any local authority from the operation of this Act, if the employees in any such factory or establishment are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act."

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6.3. It is also relevant to refer the provisions of Section

2(P) of the Industrial Disputes Act, 1947, as under:

""settlement" means a settlement arrived at in the course of conciliation proceeding and includes a written agreement between the employer and workmen arrived at otherwise than in the course of conciliation proceeding where such agreement has been signed by the parties thereto in such manner as may be prescribed and a copy thereof has been sent to an officer authorised in this behalf by the appropriate Government and the conciliation officer;"

6.4. Now, considering the submissions of the rival

parties, I found that in the present case, settlement is

arrived at between Dudhsagar Dairy Employees Credit and Supply Co-operative Society Ltd. and its employee

under Section 2(P) of the Industrial Disputes Act. By

virtue of the said settlement, large number of benefits

are agreed to be given by respondent Co-operative

Society to its employees. These employees are getting

more benefits compared to the benefits which are made

available to the employees if they are covered under the

Employees' State Insurance Act, 1948. It also transpires

that that the employees working in respondent Co-

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operative Society are getting benefits under various heads

undisputedly. Some of the benefits are as under:

 Sr.No.                                      Particulars
1.
               Medical reimbursement allowance
2.

All expenses of medical treatment in any hospital

3. Benefits in case employees suffer temporary or permanent injury

4. Sick Leave Benefits

5. Maternity benefits

6. Benefits to dependants and legal heirs and benefits in event of death

6.5. It also transpires from the record that the

respondent has produced statement with aforesaid details

before the court below in Application No.5 of 1998 at

Exh.51. The correctness and factual details of said

statement is not controverted and not disputed by

appellant before E.S.I. Court or before this Hon'ble High

Court in present First Appeal and, therefore, such details

have been considered as correct details. Considering this

aspect as well as considering the fact that all employees,

working in respondent - Co-operative Society have given

in writing before the E.S.I. Court that they are getting

more benefit under settlement with respondent - Co-

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operative Society and, therefore, they should not be

covered under E.S.L. Scheme. A document dated

01.07.1997 signed by all employees is produced on record

at Exh. 81 before the court below. Considering this

aspect in background, now, it is required to be

considered that the First Appeal is filed under Section

82 of the Employees' State Insurance Act, 1948, and as

per the provisions of Section 82(1)(2) of the E.S.I. Act,

appeal should lie to the High Court from an order of

Employees State Insurance Court, if it involves a

substantial question of law. In this reference, it is

relevant to note that the judgment relied by learned

advocate for the appellant of the Hon'ble Supreme Court

in case of ESIC Vs. Kakinada Municipality (supra), more particularly, the relevant observations are as under:

".... 1(2). To declare that the provisions of ESI Act are not applicable to the employees working in Water Works Department of the Petitoiner Municipality as the Petitioner Municipality is providing better and superior benefits and facilities than by the 1st Respondent Corporation....

(8) We may notice further, apart from Section 1(4) and Section 90 which we have already noticed, Sections 87, 88 and 89.

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"87. Exemption of a factory or establishment or class of factories or establishments. -- The appropriate Government may by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt any factory or establishment or class of factories or establishments in any specified area from the operation of this Act for a period not exceeding one year and may from time to time by like notification renew any such exemption for periods not exceeding one year at a time:

Provided that such exemptions may be granted only if the employees' in such factories or establishments are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act:

Provided further that an application for renewal shall be made three months before the date of expiry of the exemption period and a decision on the same shall be taken by the appropriate Government within two months of receipt of such application.

(13) Having reached the said conclusions, the time is ripe for us to notice the law as laid down by this Court in Zuari Cement Limited (supra). In the said case also, which emanated from the same High Court, the appellant therein sought an exemption from the Act but by approaching the Court under Section 75. The argument ran that the Court had jurisdiction by virtue of Section 75(1)(g). The discussion is to be found in paragraphs 12, 13 and 14:

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12. As discussed earlier, in terms of Section 87 of the Act, only the appropriate government has the power to grant exemption to a factory or establishment or class of factories or establishments from the operation of the Act. In fact, the appellant-factory itself has obtained exemption from the appropriate Government-State Government under Section 87 of the Act for the period from 1986 to 1993. Likewise, the rejection of exemption was also under Section 87 of the Act.

While so seeking the relief of declaration from the ESI Court that the appellant is entitled to exemption from the operation of the Act is misconceived. Contrary to the scheme of the statute, the High Court, in our view, cannot confer jurisdiction upon the ESI Court to determine the issue of exemption. The ESI Corporation, of course, did not raise any objection and subjected itself to the jurisdiction of the ESI Court. The objection as to want of jurisdiction can be raised at any stage when the Court lacks jurisdiction, the fact that the parties earlier acquiesced in the proceedings is of no consequence.

13. The Employees' Insurance Court is a tribunal specially constituted for the purpose of deciding any controversy that may arise on the matters enumerated in Section 75 of the Act. A reading of Section 75 of the Act would show that the ESI Court has full jurisdiction to decide all the matters arising between the employer and the Corporation under the Act. Section 75 of the Act sets out the matters to be decided by the ESI Court. As per Section 75(1)(g) of the Act, the ESI Court is empowered to decide any matter which is in dispute between the employer and the

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Corporation in respect of any contribution or benefit or other dues payable or recoverable under the Act or any other matter required to be or which may be decided by the ESI Court under the Act and such question or dispute subject to the provisions of sub-section (2-A) shall be decided by the ESI Court in accordance with the provisions of the Act. When considered in the light of clauses (a) to

(d) in Section 75 (1) of the Act, the expression "any other matter" occurring in Section 75(1) (g) only means any other dispute between an employer and corporation or a person and Corporation pertaining to the contribution or benefit or other dues payable under the Act or any other matter required to be decided by the ESI Court under the provisions of the Act. Grant or refusal of exemption by the appropriate government cannot be said to be a dispute between the employer and the Corporation. For grant or refusal of exemption, a specific provision is prescribed under the Act, it cannot be brought within the ambit of "any other matter" required to be decided by the Employees' Insurance Court under this Act.

14. As per the scheme of the Act, the appropriate government alone could grant or refuse exemption. When the statute prescribed the procedure for grant or refusal of exemption from the operation of the Act, it is to be done in that manner and not in any other manner. In State of Jharkhand v. Ambay Cements, it was held that

"26.............It is the cardinal rule of interpretation that where a statute provides that a particular thing should be

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done, it should be done in the manner prescribed and not in any other way."

(16) However, the High Court has proceeded to rely upon judgment of this Court in Municipal Commitee, Abohar v. Regional Commissioner, E.S.I. Corpn. and Another (1996) 7 SCC 488. The High Court has premised its stand partly on the judgment of this Court in Municipal Commitee, Abohar (supra).

(17) It is rightly pointed out by Shri Santosh Krishnan, learned counsel for the appellant, that it is an order. In the said case, no doubt, the appellant was a municipality running Waterworks; the employees were sought to be covered under the Act and after notice was issued, an order under section 45-A of the Act was passed against which an appeal was carried to the Insurance Court which confirmed that the employees were covered under the Act. Thereafter, we notice the following:

"3. The question is whether the employees of the Municipal Corporation are also covered under the Act? The employees of the Corporation are governed by the statutory rules made under the Act and in some cases in other States the benefits of the Government scales of pay etc. have been extended. However, the fact remains that they are provided with the health scheme and are also eligible to medical facilities and reimbursement of the amounts spent by the employees concerned. Under these circumstances, the coverage of employees under the Act is per se illegal." We

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may notice that the said order does not reveal any discussion of the legal issues. There is no consideration of the statutory provisions in question.

We see merit in the argument of the learned counsel for the appellant that the High Court should not have treated this as a precedent which it should follow, particularly, having regard to the factual matrix in this case and the statutory provisions in place.

(18) The upshot of the above discussion is that the impugned judgment of the High Court is unsustainable and is liable to be set aside."

In view of the above judgment, it is canvassed by

learned advocate for the appellant that only Appropriate

Government, under Section 87 of 1990 of the Act has power to compare the benefits given by employer and

ESIC, and not by the ESI Court as it cannot be said as

dispute. It is also canvassed by learned advocate for the

appellant that in present case also, applicability of law is

not in dispute as per respondent. By relying on the

relevant paragraph, it is canvassed that only appropriate

Government under Section 87 of the E.S.I. Act can

consider the superior benefits to employee and not E.I.

Court under Section 75(1)(g) of the E.S.I. Act. Hence, it

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is tried to contend that the E.I. Court has no

jurisdiction regarding this. It is also canvassed by

learned advocate for the appellant that E.S.I.C. is

providing comprehensive social security benefits more

than any other employer to its insured persons and

beneficiaries such as Atal Bimit Vyakti Kalyan Yojana

(ABVKY) and Rajiv Gandhi Shramik Kalyan Yojana. It is

also canvassed by learned advocate for the appellant that

E.S.I. Act is applicable to entire India. It is also

canvassed by learned advocate for the appellant that

respondent employer in the present case is neither

statutory body nor their employees / workers, who are

protected under any statutory rules. It is also canvassed

by learned advocate for the appellant that Settlement under Industrial Disputes Act cannot override statutory

provisions of ESI Act.

6.6. Considering these submissions, prima facie, the

submissions are found very attractive, but considering the

facts of the present case, I am of the opinion that such

contentions are not required to be accepted though there

is no dispute about the settled legal propositions, more

particularly, the decisions of the Hon'ble Apex Court,

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which is otherwise binding to this Court. But considering

the submissions of the respondent, in response to the

submissions of learned advocate for the appellant, learned

advocate for the appellant has relied upon the judgment

in the case of Bhavnaben D. Joshi Wd/o Dahyabhai S.

Joshi (supra), wherein it has been observed that The

scope and examination of judgment and order passed by

the Employees' Insurance Court is limited. As per

Section-82 of the E.S.I. Act, the grounds of appeal are

also restricted. All the provisions of appeal under Code

of Civil Procedure are not applicable to the appeal filed

under section 82 of the E.S.I. Act. Power of Appellate

Court is subject to Sub-Section 2 of Section-82 of the

E.S.I. Act. An appeal to the High Court from an order of an Employees' Insurance Court is permitted only if a

substantial question of law is involved"

It is canvassed by learned advocate for the

respondent that application under E.S.I. Application No.5

of 1998 was filed by respondent being aggrieved by

communications dated 28.08.1997 and 24.10.1997 together

with order of corporation dated 09.09.2002 and resultant

order dated 30.10.2002 under Section 45(a) of E.S.I. Act,

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1948 by which E.S.I. Corporation had quantified the

amount. Hence, it is canvassed by learned advocate for

the respondent that it is not correct on part of the

appellant to contend that application was filed only to

declare that provisions of E.S.I. Act, 1948 are not

applicable. It is also canvassed by learned advocate for

the respondent that E.S.I. Authority has quantified

amount against respondent after period of 14 years and

had passed further order to deposit the amount with

E.S.I. Corporation, and against this order, application

under Sections-75, 76 and 77 of E.S.I. Act, 1948 was

filed before E.S.I. Court, which is maintainable and

E.S.I. Court has rightly exercised its jurisdiction by

granting application and setting aside order of the authorities under E.S.I. Act, 1948 by holding that it is

in view of better provisions for employees. It is also

canvassed by learned advocate for the respondent that

there is no jurisdictional error in passing impugned

judgment wherein E.S.I. Court has held that when Co-

operative Society is giving more benefits to its employees,

coverage under the E.S.I. Act, 1948 is not necessary. It

is also tried to be contend by relying on the judgment of

Hon'ble Supreme Court of India reported in 1996 (7)

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S.C.C. 488 rendered in case of Municipal Committee,

Abohar Vs. Regional Commissioner, E.S.I. Corporation

and Another, if the employer has provided better and

more beneficial benefits to its employees, such employees

need not be covered under E.S.I. Scheme. If the

employees of respondent - Co-operative Society are

covered under E.S.I. Scheme, they will lose more

beneficial scheme of the employer, which is settled and

agreed under the agreement arrived with employees of

respondent Co-operative Society before the statutory

authority under the Industrial Disputes Act, 1947 by way

of settlement under Section-2(P) of the Industrial

Disputes Act, 1947.

6.7. These contentions are required to be considered by

perusing various documents produced along with the

written submissions by the respondent, whereby the

terms of settlement, which is signed by all the employee,

as per submissions made by respondent - corporation are

also indicating the better benefits given by the

respondent - Society. There is no doubt that that the

ratio of judgment of the Hon'ble Apex Court in the case

of Municipal Committee, Abohar Vs. Regional

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Commissioner, E.S.I. Corporation and Another (supra), as

well as the judgment of this Court in the case of

Bhavnaben D. Joshi Wd/o Dahyabhai S. Joshi (supra).

Considering the findings of the E.S.I.C., prima facie, it

transpires that there is no error committed by the E.I.

Court, while considering the settlement arrived at

between the parties, more particularly, when there is

serious dispute raised by the society about the orders

and communication by the E.S.I.C., which are under

challenge before the E.I. Court.

6.8. In light of the judgment of the Hon'ble Supreme

Court in case of ESIC Vs. Kakinada Municipality (supra),

it transpires that it has clearly dealt with the contentions raised by the respondent.

6.9. In view of the above judgment, it transpires that

the view taken by the learned E.I. Court is not in

consonance with the aforesaid judgment of the Hon'ble

Apex Court in case of ESIC Vs. Kakinada Municipality

(supra). Hence, while going through the judgment,

considering the fact that thought the contention raised

by the respondent from the documentary evidence, more

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particularly, in this factual scenario, it am of the opinion

that the benefits given by the respondent - society is

more attractive, than the benefits given by the E.S.I.C.,

but considering the legal position that such settlement is

required to be approved or sanctioned by the State

Government as required under Section 87 of the E.S.I.

Act, and such issue can only be decided by appropriate

government and, therefore, the impugned judgment is

erroneous and also against the settled position of law.