Madras High Court
M/S.Noor Sait Beedi Company vs The State Of Tamil Nadu on 26 June, 2025
Author: R.Vijayakumar
Bench: R.Vijayakumar
W.P.(MD).No.18779 of 2018
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 26.06.2025
CORAM:
THE HONOURABLE MR.JUSTICE R.VIJAYAKUMAR
W.P(MD)No.18779 of 2018
and
W.M.P(MD) Nos.16636 and 16637 of 2018
M/s.Noor Sait Beedi Company,
No.28, Kutty Moopan Street,
Melapalayam,
Tirunelveli – 627 005,
Represented by its Proprietor. ... Petitioner
Vs.
1. The State of Tamil Nadu,
Represented by its
Secretary to Government,
Labour and Employment Department,
Secretariat, Chennai.
2. The Regional Director,
Employees' State Insurance Corporation,
147, Sterling Road,
Nungambakkam,
Chennai – 600 034.
3. A.Mohammed Ismail
4. S.A.Abdul Rahman
1/9
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W.P.(MD).No.18779 of 2018
5. T.Esakkiappan ... Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of India,
praying this Court to issue a Writ of Certiorarified Mandamus, calling for the
records relating to the impugned Letter No.11792/L1/2016-5, dated
11.07.2017 issued by the first respondent and quash the same as illegal and
consequently direct the first respondent to grant exemption to the petitioner
from the provisions of the Employees' State Insurance Act, 1948 for the
period from 22.10.16 to 21.10.2017.
For Petitioner : Mr.M.Jerin Mathew
For R1 : Mrs.D.Farjana Ghoushia
Special Government Pleader
For R2 : Mr.R.Ravindran
For R3 to R5 : No appearance
ORDER
The present Writ Petition has been filed by the Beedi Company
challenging the order passed by the first respondent herein on 11.07.2017
rejecting the request of the petitioner/Company to grant exemption from the
provisions of the Employees' State Insurance Act, 1948 for the period
between 22.10.16 and 21.10.2017.
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2. Section 87 of the Employees' State Insurance Act, 1948 provides for
granting exemption to factories or establishment from the purview of the ESI
Act, subject to certain conditions as may be specified in the notification. As
per the first proviso 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. The
exemption application for renewal has to 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.
3. It is not in dispute that the petitioner/ Management was enjoying
exemption benefits from the year 2007 onwards, on year to year basis based
upon the order passed by the authority under the Act. The petitioner
Management has made an application on 15.06.2016 seeking exemption for
the period between 22.10.2016 and 21.10.2017. This application came to be
rejected under the impugned order dated 11.07.2017. This order is put to
challenge in the present Writ Petition.
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4. According to the learned counsel appearing for the writ petitioner,
the petitioner/Management provides similar as well as the better benefits to
the employees of the Beedi Company. Therefore, they were granted
exemption from the purview of the Act for various years. In fact, the
exemption was granted in the next year, covering the period between
22.10.2017 and 21.10.2018. In such circumstances, the authorities should not
have rejected the request for exemption for the period between 22.10.2016
and 21.10.2017.
5. The learned counsel appearing for the petitioner had relied upon the
decision of a learned Single Judge of the this Court in W.P.Nos.17572 of
2010, 5186, 5187 and 10143 of 2011, dated 21.06.2011 wherein, the learned
Single Judge has held that if the exemption is granted for a particular year, the
same cannot be rejected for a different year without assigning any specific
reasons and there cannot be any discrimination between the employees.
6. The learned counsel appearing for the petitioner has also relied upon
the judgment of the Hon'ble Supreme Court reported in (2006) 3LW 771
(Employees State Insurance Corporation and others Vs.Jardine Henderson
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Staff Association and others), wherein in paragraph Nos.34 and 35 of the
Judgment, the Hon'ble Supreme Court has held that tremendous hardship will
be caused if arrears are sought to be paid and nobody stands to gain, neither
the employer nor the employee. Therefore, directing the Management to pay
E.S.I contribution at a belated point of time would cause prejudice. The
learned counsel appearing for the petitioner has also relied upon the judgment
of Jharkhand High Court reported in (2008) 117 FLR 781 (Tata-Yodogawa
Limited and Tayo Workers union and another Vs.State of Bihar and others)
in support of the contentions.
7. Per contra, the learned counsel appearing for the second respondent/
ESI Corporation relied upon the judgment of Hon'ble Division Bench of this
Court in W.A.(MD) No.204 of 2019, dated 29.09.2023, wherein the Hon'ble
Division Bench was pleased to hold that the exemption can be claimed based
upon the records submitted by the Management from year to year basis and
they cannot seek exemption as a matter of right, unless, the Management has
pointed out that they were providing similar or better benefits to the
employees, the right of exemption cannot be granted automatically.
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8. Heard the learned counsel appearing on either side and perused the
materials available on record.
9. A perusal of the application filed on the side of the petitioner/
Management reveals that they have enclosed the Application Form, Proforma,
No Objection letter from the employees and Comparative statement to show
that similar or better benefits are conferred to their employees. Paragraph No.
2 (f) of the order impugned in the writ petition is extracted as follows:
“(f) The Beedi workers' Welfare Act is
applicable only to the ... Beedi workers
operating from Home (also known as Home
workers). It is pertinent to note that the office
employees and the Godown employees and other
auxiliary workers the Beedi Companies are
denied benefits under the Beedi Workers Welfare
Act. If Exemption is granted, this category of
workers will be denied benefits under both the
Beedi Workers Welfare Act as well as Employees
State Insurance Act. Hence, Government may
consider this aspect while processing this case.”
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10. The above said recommendation made and the remarks offered by
the Deputy Director (Inspn), ESI Corporation reveal that the Beedi workers
from the office and Godown are not covered under the Beedi Workers Welfare
Act. In case, if the exemption is granted, they would be denied benefits. A
perusal of Section 87 of the E.S.I Act, further reveals that the Management
has to establish that they are providing similar or better benefits to the
employees. It differs from year to year. Therefore, every year they have to
establish that they are providing similar or better benefits to the employees. In
such circumstances, relying upon the benefits granted in a particular previous
year, exemption cannot be automatically sought for in the next year.
11. In such circumstances, this Court is of the considered opinion that
the judgments relied upon by the learned counsel for the petitioner are not
applicable to the facts of the present case. On the other hand, the Hon'ble
Division Bench of this Court in W.A(MD) No.204 of 2019, dated 29.09.2023,
after having considered the similar submissions raised by the learned counsel
appearing for the petitioner therein, has arrived at a finding that the rejection
of application for exemption of particular year is valid in the eye of law.
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12. In view of the above said deliberations, there are no merits in the
Writ Petition. Accordingly, this Writ Petition stands dismissed. There shall be
no order as to costs. Consequently connected Miscellaneous Petitions stand
closed.
26.06.2025
Index : Yes / No
Internet : Yes / No
ebsi
To
1. The Secretary,
Labour and Employment Department,
Secretariat,
Chennai.
2. The Regional Director,
Employees' State Insurance Corporation,
147, Sterling Road,
Nungambakkam,
Chennai – 600 034.
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R.VIJAYAKUMAR,J.
ebsi
26.06.2025
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