Madras High Court
Paramasivam Palanisamy vs The Employees State Insurance ... on 24 November, 2023
Author: N.Seshasayee
Bench: N.Seshasayee
CMA.Nos.1875, 1948, 1951/2022 & 2550 of 2023
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 24.11.2023
CORAM: JUSTICE N.SESHASAYEE
CMA.Nos.1875, 1948, 1951/2022 & 2550 of 2023
& CMP.Nos.13685, 14543, 14576/2022 & 23587/2023
Paramasivam Palanisamy
Charitable Trust,
M/s.Maharaja Arts and Science College,
Coimbatore – 641 407,
Rep. by its Managing Trustee,
Mr.K.Paramasivam. ... Appellant in CMA/1875/2022
Paramasivam Palanisamy
Charitable Trust, Owning
Maharaja Engineering College
Coimbatore – 641 407,
Rep. by its Managing Trustee/
Chairman Mr.K.Paramasivam. ... Appellant in CMA/1948/2022
Paramasivam Palanisamy
Charitable Trust,
Owning Maharaja Prithvi Engineering College,
Avinashi,
Tirupur – 641 654,
Rep. by its Managing Trustee/Chairman.
Mr.K.Paramasivam ... Appellant in CMA/1951/2022
Paramasivam Palanisamy
Charitable Trust,
M/s. Maharaja Institute of Technology,
Coimbatore – 641 407,
Rep. by its Managing Trustee/
Chairman Mr.K.Paramasivam ... Appellant in CMA/2550/2023
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CMA.Nos.1875, 1948, 1951/2022 & 2550 of 2023
-Vs-
The Employees State Insurance Corporation,
Rep. by its Deputy Director,
Coimbatore. ...Respondent in all CMAs
Prayer in CMA/1875/2022: Civil Miscellaneous Appeal filed under
Section 82 of the Employees State Insurance Act 1948, against the order
and decree of Employees State Insurance Court, Coimbatore in I.A.No.1
of 2022 in ESICFR.No.49 of 2022 dated 06.07.2022.
Prayer in CMA/1948/2022: Civil Miscellaneous Appeal filed under
Section 82 of the Employees State Insurance Act 1948, against the order
and decree of Employees State Insurance Court, Coimbatore in I.A.No.1
of 2022 in ESICFR.No.1310 of 2022 dated 01.08.2022.
Prayer in CMA/1951/2022: Civil Miscellaneous Appeal filed under
Section 82 of the Employees State Insurance Act 1948, against the order
and decree of Employees State Insurance Court, Coimbatore in I.A.No.1
of 2022 in ESICFR.No.197 of 2022 dated 28.07.2022.
Prayer in CMA/2550/2023: Civil Miscellaneous Appeal filed under
Section 82 of the Employees State Insurance Act 1948, against the order
and decree of Employees State Insurance Court, Coimbatore in I.A.No.1
of 2022 in ESIOP.CFR.No.2283 of 2022 dated 31.08.2023.
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CMA.Nos.1875, 1948, 1951/2022 & 2550 of 2023
For Appellant : Mr.S.Haroon AL Rasheed
for M/s.T.S.Gopalan and Co.
in all CMAs
For Respondent : Mr.M.Rohit
for Mr.TNC.Kaushik
in CMA/1875, 1948 & 1951/2022
Mr.S.P.Srinivasan
in CMA/2550/2023
COMMON JUDGMENT
These batch of appeals has a common feature and it is explained as
below;
a) Certain Paramasivam Palanisamy Charitable Trust was running
four Educational Institutions – Maharaja Arts and Science College,
Maharaja Engineering College, Maharaja Prithvi Engineering
College and Maharaja Institute of Technology.
b) Originally, Educational Institutions were kept outside the purview
of the ESI Act, 1948. However, Vide Government Order dated
29.12.2010, Educational Institutions were brought under the net of
ESI Act. This came to be challenged Vide a batch of writ petitions
by many Educational Institutions and also by the association of
these Educational Institutions. So far as the four colleges now
before the Court are concerned, they were represented by their
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CMA.Nos.1875, 1948, 1951/2022 & 2550 of 2023
association.
c) These Writ Petitions as was originally filed came to be dismissed
by a learned single Judge of this Court. These orders however,
became subject matter of appeal subsequently. So far as the
appellant institutions are concerned, as earlier stated they were
represented by their association and the appeal preferred by the
association are W.A.Nos.1233 and 1234 of 2011. These two
appeals came to be dismissed and these orders of dismissal were
unsuccessfully challenged before the Hon'ble Supreme Court Vide
order dated 09.02.2018.
d) For completion of facts, it may be stated that since another Division
Bench intended to take a different view, the entire matter landed
before the full Bench. On 27.07.2020, the full Bench upheld the
validity of the Government Order dated 29.12.2010. The Full
Bench also directed the ESI Corporation to consider the waiver of
past contribution.
e) Be that as it may, the ESI Corporation came out with two separate
orders, one dated 14.05.2019 and another dated 05.03.2020, both
of which are proceedings under Section 45A of the ESI Act. The
proceedings dated 14.05.2019 relate to a period from 01.04.2011 to
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CMA.Nos.1875, 1948, 1951/2022 & 2550 of 2023
30.03.2012 and the second proceedings dated 05.03.2020 relates to
another period from 01.12.2011 to 30.12.2019. These contributions
appear to have been made based on certain ad hoc or provisional
assessment and not on actuals.
f) It may be stated that as on the date of these proceedings, the four
colleges herein above have already been closed. The appellant
challenged the proceedings of the ESI Corporation before the
Labour Court. The next aspect that was under challenge was in
terms of proviso of Section 45A.
2.The learned counsel for the appellant made two pointed submissions;
a) on the date when the Corporation passed the impugned order, it can
relate back only to five years next before the date of the order. In
others words, while the award is anywhere between 2011 and
2014, it can inter alia, if at all it can commence, it can commence
only from 2014-2015. In all these cases, since the notification
bringing the educational institutions within the net of ESI regime
itself was stayed, there was no occasion for the employer to make
the contribution, for there is no statutory obligation as long as the
stay of operation of the notification continues;
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CMA.Nos.1875, 1948, 1951/2022 & 2550 of 2023
b) All the four educational institutions now has been closed, three
were closed in 2019 and another was closed in 2020. Today, there
is no employee from who the employer can levy contribution nor it
is going to benefit anyone. The alleged failure to contribute has
occurred during the period when there was a stay, as a result, it was
not even a situation where a certain statutory benefit which ought to
be extended to the employees was deliberately denied by the
employer.
3.The learned counsel for the appellant further submitted that for whose
benefit now these proceedings are initiated by the ESI Corporation cannot
still be justified. It is in this backdrop, the appellants sought for full
waiver from payment of the 50% amount as was required to be deposited
under Section 75(2)B of the ESI Act.
4.Heard, the learned counsel for the respondent.
5.As required by this Court, the learned counsel for the appellant
circulated a calculation memo which also included a column indicating
the approximate amount which the appellant might have to pay in the
eventuality of the Court upholding the order of the Corporation passed
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CMA.Nos.1875, 1948, 1951/2022 & 2550 of 2023
under Section 45A of the ESI Act. The learned counsel underscored that
this column is only for the benefit of the Court and that the appellant does
not admit the same. This Court therefore chose to extract the following
details from the statement provided by the learned counsel for the
appellant;
S.N Name of CMA Period Date of Amount Amount
o. Institution No of Involved Section Claimed in directed to
2022 45 A Section 45 A be
Order Order deposited
by the ESI
Court
1 Maharaja 1948 01.05.2013 to 29.09.2020 38,47,784/- 9,61,946/-
Engineering 30.09.2019 (25%)
College
2 Maharaja 1)04/2011 to 1)14.05.2019 1)7,72,200/- 1)1,93,050/-
Arts and 11/2012 (25%)
Science
2)12/2012 to 2)05.03.2020 2)36,46,566/- 2)9,11,641/-
College 31.10.2019 (25%)
3 Maharaja 1)01.04.2011 to 1)14.05.2019 1)12,87,000/-
Institute of 30.11.2012
18,41,153
Technology 2)01.12.2012 to 2)05.03.2020 2)60,77,610/-
2550 (25%)
31.10.2019
Prohibitory 3)01.07.2021 3)1,23,26,058/- 30,81,515/-
order with (25%)
interest
4 Maharaja 1951 1) 01.05.2013 26.12.2019 13,97,385/- 3,49,346/-
Prithvi to 31.07.2019 (25%)
Engineering
College
Total Rs.2,93,54,603 Rs.54,97,498/-
/-
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CMA.Nos.1875, 1948, 1951/2022 & 2550 of 2023
6.Both the learned counsel who appeared for the Corporation in this batch
of cases submitted in unison that ultimately the order of stay was vacated
when the Educational Institutions lost their contention before the Court.
This cannot be taken advantage of by the appellants.
7.There is more law to this case, than facts. a) one pertains to limitation
and the other is b)when the act actually had come into force. In other
words, when the notification was upheld, according to the appellant, it
takes effect from the date on which the notification became operational or
functional. The educational institutions of the appellant had ran barely for
an year or two at the time. The most pertinent question was when the
notification bringing the educational institutions in question under the net
of ESI Act, whose benefit the Act is intended to serve. In other words,
where are those employees who the ESI Act now requires the appellant to
care.
8.Given the fascinating circumstance involved in this case, this Court
considers it appropriate to reduce the amount which the appellant are
required to deposit under Sectinon75(2)B of the ESI act to 10%. The
appellant is now required to deposit the said sum within a period of one
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CMA.Nos.1875, 1948, 1951/2022 & 2550 of 2023
month from the date of receipt of a copy of this order before the Tribunal.
This Court directs the trial Court to act on the web-copy of this order for
the said purpose. Since the essential questions of law as indicated above
appear to be involved in this case, the Court merely requires the labour
Court concerned to dispose of this case within a period of six (6) months
from the date of receipt of a copy of this order.
9.The Civil Miscellaneous Appeals are partly allowed on the above terms.
No costs. Consequently, the connected miscellaneous petitions are closed.
24.11.2023
Tsg
N.SESHASAYEE, J.,
Tsg
To
1.The Employees State Insurance Court,
Coimbatore.
2.The Section Officer,
V.R.Section, High Court, Madras.
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CMA.Nos.1875, 1948, 1951/2022 & 2550 of 2023
CMA.Nos.1875, 1948, 1951/2022
& 2550 of 2023
24.11.2023
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