Kerala High Court
Sincere Public School vs The Employees State Insurance ... on 3 March, 2021
Ins.APP.No.2 OF 2020
1
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE C.S.DIAS
WEDNESDAY, THE 03RD DAY OF MARCH 2021 / 12TH PHALGUNA,
1942
Ins.APP.No.2 OF 2020
AGAINST THE ORDER IN EIC 15/2018 OF EMPLOYEES INSURANCE
COURT, KOZHIKODE DATED 7.12.2018
APPELLANT/PETITIONER:
SINCERE PUBLIC SCHOOL,
CHIRAMANGALAM, POST NADUVA, PARAPPANANGADI,
MALAPPURAM DISTRICT, REPRESENTED BY ITS
MANAGER MUSHRIFF, S/O. HASSAN, AGED 29 YEARS.
BY ADVS.
SRI.C.M.MOHAMMED IQUABAL
SMT.ANJALI G.KRISHNAN
SMT.N.S.SOUMYA MOL
SRI.P.ABDUL NISHAD
RESPONDENTS/RESPONDENTS:
1 THE EMPLOYEES STATE INSURANCE CORPORATION,
SUB REGIONAL OFFICE, KOZHIKODE HOUSEFED
COMPLEX, 3RD FLOOR, SASTHRI NAGAR ROAD,
ERANHIPALAM, KOZHIKODE-673006, REPRESENTED BY
ITS DIRECTOR.
2 THE DEPUTY DIRECTOR,
THE EMPLOYEES STATE INSURANCE CORPORATION, SUB
REGIONAL OFFICE, KOZHIKODE HOUSEFED COMPLEX,
3RD FLOOR, SASTHRI NAGAR ROAD, ERANHIPALAM,
KOZHIKODE-673006.
3 THE RECOVERY OFFICER,
THE EMPLOYEES STATE INSURANCE CORPORATION, SUB
REGIONAL OFFICE, KOZHIKODE HOUSEFED COMPLEX,
3RD FLOOR, SASTHRI NAGAR ROAD, ERANHIPALAM,
KOZHIKODE-673006.
R1-3 BY ADV. SMT.A.K.PREETHA
THIS INSURANCE APPEAL HAVING COME UP FOR ADMISSION
ON 03.03.2021, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
Ins.APP.No.2 OF 2020
2
JUDGMENT
The appeal is preferred challenging the order
dated 7.12.2018 in E.I.C No.15/2018 of the Employees
Insurance Court (in short 'Court'), Kozhikode.
2. The facts in a nutshell, for the
determination of the appeal, are: the appellant is
the applicant in E.I.C No.15/2018 of the above Court,
in an application filed under Section 75 of the
Employees State Insurance Act, 1948 ( for brevity
referred to as 'Act') to declare that it does not fall
within the purview of the Act, and, therefore, is not
liable to pay any contribution to the 1 st respondent -
Corporation. The number of employees engaged by
the appellant is less than the statutory minimum
number to fall within the ambit of the Act.
Nevertheless, on a misplaced misconception, the 2nd
respondent after conducting an inspection at the
appellant's school, has found that the appellant falls
Ins.APP.No.2 OF 2020
within the purview of the Act. Accordingly, the
respondents have directed the appellant to pay
contribution in accordance with Section 40 of the Act.
The appellant was not served with any notice or
afforded an opportunity of being heard. The 2 nd
respondent has unilaterally determined the
contribution and issued recovery notices to recover an
amount of Rs.5,54,577/- and Rs.1,35,135/-.
3. Aggrieved by the assessments made by the
respondents, the appellant preferred an application
before the 1st respondent. Along with the application,
the appellant preferred M.P. No.46/2018 under
Section (2-B) of Section 75 of the Act and M.P.
No.47/2018 under Section 83 of the Act, to waive the
payment of statutory deposit and to stay all further
proceedings pursuant to the recovery notice,
respectively.
4. The Court by its order dated 3.10.2018
directed the appellant to deposit an amount of
Ins.APP.No.2 OF 2020
Rs.75,000/- on or before 14.11.2018 and in default, the
application would stand dismissed. As the appellant
was unable to deposit the amount within the stipulated
time period, the Court dismissed the application.
5. Challenging the dismissal of the application,
the appellant is before this Court.
6. Heard the learned counsel appearing for the
appellant and the learned counsel appearing for the
respondents.
7. The learned counsel appearing for the
appellant argued that the impugned order passed by
the Court is patently erroneous and unsustainable in
law. The Court failed to appreciate the fact that the
appellant does not fall within the realm of the Act.
Notwithstanding the said legal contention, the Court
directed the appellant to deposit an amount of
Rs.75,000/- which is ex facie wrong. Therefore, the
appeal be allowed and the impugned order be set
aside and the appellant be exonerated from any
Ins.APP.No.2 OF 2020
liability.
8. Per contra, the learned counsel appearing for
the respondents contended that the appeal itself is not
maintainable because there is no substantial question
of law involved, as per the mandate under Section
82(2) of the Act. The learned counsel submitted that
by virtue of Section 75 (2-B) of the Act, it is mandatory
for the principal employer to deposit 50% of the
assessed amount before the Corporation unless the
Court waives or reduces the amount to be deposited
under the above sub-section. The Court after
appreciating the pleadings and materials on record, in
exercise of its powers under the Proviso to Section 75
(2-B) of the Act, had directed the appellant to deposit
Rs.75,000/- as a pre-condition to consider the
application, which was not complied with by the
appellant. The non-compliance of a statutory pre-
condition cannot be treated as substantial question of
law, warranting interference by this Court. Hence,
Ins.APP.No.2 OF 2020
the appeal may be dismissed.
9. The questions that emerges for consideration
in this appeal are whether (i) the order directing the
appellant to deposit an amount of Rs.75,000/- as a pre-
condition to consider the application is justifiable or
not, and (ii) the dismissal of the application for the
failure to deposit the amount is correct or not?
10. Section 75(2-B) of the Employees State
Insurance Act, 1948 reads as follows:
"75. Matters to be decided by Employees' Insurance Court
- (1) If any question or dispute arises as to-
(a) whether any person is an employee within the
meaning of this Act or whether he is liable to pay the
employee's contribution, or
(b) the rate of wages or average daily wages of an
employee for the purposes of this Act, or
(c) the rate of contribution payable by a principal
employer in respect of any employee, or
(d) the person who is or was the principal
employer in respect of any employee, or
(e) the right of any person to any benefit and as to
the amount and duration thereof, or
[(ee) any direction issued by the Corporation under
Section 55-A on a review of any payment of dependants'
benefits, or ]
xxxxx
(g) any other matter which is in dispute between a
Ins.APP.No.2 OF 2020
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],
such question or dispute [subject to the provisions of sub-
section (2-A) ] shall be decided by the Employees' Insurance
Court in accordance with the provisions of this Act.
xxxxxx xxxxxxx xxxxxxx
xxxxxx xxxxxxx xxxxxxx
(2-B) No matter which is in dispute between a
principal employer and the Corporation in respect of
any contribution or any other dues shall be raised by
the principal employer in the Employees' Insurance
Court unless he has deposited with the Court fifty
per cent of the amount due from him as claimed by
the Corporation.
Provided that the Court may, for reasons to be
recorded in writing, waive or reduce the amount to be
deposited under this sub-section."
11. The language used by the legislature in sub-
section (2-B) of Section 75 of the Act (supra)
statutorily obliges the principal employer to deposit
50% of the amount due from him, as claimed by the
Corporation, irrespective of the dispute of the
contribution or any other dues. The proviso, confers a
leeway on the Court, in exercise of its discretion, to
Ins.APP.No.2 OF 2020
waive or reduce the amount to be deposited as
prescribed under Section 75(2-B) of the Act.
12. The petitioner had filed M.P.Nos.46 and 47 of
2018 seeking to waive the amount to be deposited
under sub-section (2-B) of Section 75 of the Act and to
stay all further proceedings. The Court by its separate
orders in the said applications directed the
appellant to deposit Rs.75,000/-, as a pre-condition to
entertain the application, on or before 14.11.2018.
13. Admittedly, the appellant failed to comply
with the pre-condition to sustain the application filed
under Section 75 of the Act. The Tribunal, on the
request made by the appellant, extended the time
from 14.11.2018 to 5.12.2018, to enable the appellant
to deposit the ordered amount. Again the appellant
failed to deposit the ordered amount. Accordingly, the
Tribunal by the impugned order dismissed the
application for non-compliance of the direction.
14. In light of the unambiguous language in
Ins.APP.No.2 OF 2020
which sub-section (2-B) of Section 75 of the Act stands
couched, it is mandatory for the principal employer to
deposit the amount as ordered by the court, in order
to entertain an application filed under Section 75 of
the Act. I do not find any irregularity or illegality in
the impugned order passed by the Court warranting
interference by this Court in exercise of its appellate
jurisdiction that too de hors any question of law,
leave alone a substantial question of law.
Nevertheless, taking a lenient view in the matter and
considering the fact that the appellant's legal
contentions were not adjudicated by the Court , on its
merits, due to non-compliance of the pre-condition, I
am of the considered opinion that the appellant can be
granted one more opportunity to deposit the directed
amount of Rs.75,000/-.
In the result, the appeal is allowed in part, by
enlarging the time period to deposit the amount of
Rs.75,000/- as ordered by the Court, by a further
Ins.APP.No.2 OF 2020
period of 60 days from today. If such deposit is made,
the Court shall consider E.I.C 15/2018 on its merits
and in accordance with law. Needless to mention
that, if the above amount is not deposited within the
stipulated time period, the impugned order would
stand confirmed.
Sd/-
ma/3.3.2021 C.S.DIAS, JUDGE
/True copy/
