Employees State Insurance Corporation Bhopal
Vs. Central Press & ANR  INSC 63 (21 February 1977)
BEG, M. HAMEEDULLAH (CJ) BEG, M. HAMEEDULLAH
(CJ) GUPTA, A.C.
CITATION: 1977 AIR 1351 1977 SCR (3) 35 1977
SCC (2) 581
CITATOR INFO :
R 1978 SC1478 (22)
Employees State Insurance Act (Act 34 of
1948), 1948--Sections 45A, 75(1)(c), and 75(2) and 99A--Scope of
Section 75(1)(c) of the Employees State Insurance
Act 1948 makes it obligatory on the Insurance Court to decide "the rate of
contribution payable by a principal employer in respect of any employees"
if such question or dispute arises. Section 75(2) also provides that "the
claim for the recovery of contributions from the principal employer" shall
be decided by it.
The appellant-Corporation filed five
applications under s.
75 of the Employees State Insurance Act
before the Insurance Court, Bhopal (Civil Judge First Class) for recovery from
the respondent of employees' contributions payable under s. 39 of the Act for
different periods from 27-9-1959 onwards, working out the contribution payable
on an "ad hoc basis" by taking the wages at Rs. 100/per employee per
month as indicated by the Central Government by their notification SRO 224
dated 25-1-1957 issued in exercise of their powers under s. 99A of the Act.The
Insurance Court disallowed the claims on the ground that the claims have been
made on an "ad hoc basis". The first appeals against that order were
allowed by a single Judge of the Madhya Pradesh High Court (Jabalpur Bench)
relying on s. 99A of the Act and on a further notification dated 16-1-1968
issued by the Central Government under s.
99A. The Letters Patent Appeals filed by the
respondent were allowed by the Division Bench which held: (1) The power of the
Central Government of issuing directions is not absolute and The directions
cannot be inconsistent with the Act (22). When under section 45A of the Act a
special procedure is prescribed regarding the method of calculation of the
employees' contribution, no notification or order can be issued by the Central
Government prescribing any other method on ad hoc basis which obviously becomes
inconsistent with the other provisions of the Act, namely, section 45A.
Remanding the matter to the Insurance Court,
the Court, HELD:
(1) The nature of the proceedings under the Employees
State, Insurance Act 1948 was not properly understood either by the Employees
Insurance Court or by the High Court when the matter was taken before these
authorities. [37D] (2) The scheme of the Act is that the. Corporation itself
should, in a case where there is omission on the part of the employer to
maintain records in accordance with s. 44 of the Act, determine the amount of
contribution on the strength of such information as it may collect, make a
demand and upon refusal come up before the Insurance Court under s. 75 of the
Act. The Court should give the Corporation a direction to perform its duty
where it considers that this should be performed by the Corporation. It cannot
decline to perform its ,own duty because the Corporation has failed to discharge
its function The Insurance Court is under a duty to determine the basis of
calculation itself.[36F-H] (3) The notification of the Central Government under
s. 99A of the Act was intended to overcome difficulties in determining the
wages of the employees. This provision cannot be availed of for the purpose of
supplying a defect or overcoming a difficulty in adjudication of a dispute for
which the Employees Insurance Court is given ample powers under s. 75(1)(c) and
75(2). [37A-B] 36
CIVIL APPELLATE JURISDICTION Civil Appeals
Nos. 325-329 1977.
(Appeals by special leave from the Judgment
and Order dated 1.12.1971 cf-the Madhya Pradesh High Court in L.P.ANos. 13--17
L.N. Sinha, Sol. Genl. and Girish Chandra for
J. P. Gopal and Shreepal Singh, for the
The Judgment of the Court was delivered by
BEG, C.J.--This appeal by special leave arises out of the proceedings initiated
on 12.7.1961 by the appellant Corporation, under section 75 of the Employees'
State Insurance Act 1948 (hereinafter referred to as the Act),claiming
contribution from the respondents for various periods between. 27.9.1959 and
31.3.1965, which they are liable to pay under section 40 of the Act.
It appears that the respondents-employers
maintain the registers or records and to
submit returns of wages paid as required under section 44 of the Act.
Hence, the Insurance Court, which was called
upon to adjudicate under Section 75(1)(c) of the Act, on the matter in dispute,
found itself under to decide, the question in issue. It dismissed the
application on the "round that there was no provision for deciding such a
dispute on an "ad hoc basis." We fail to understand what is precisely
meant by "ad hoc basis" Section 75(2) of the Act provides inter alia,
that a claim for the respondent We find that recovery of contributions shall be
decided by the Employees' Insurance Court. Not only as the mandatory duty cast
upon it to decide such disputes, but it is armed with the powers of a Civil
Court, including summoning and enforcing the attendance of witnesses,
compelling the discovery and production of documents and material objects,
under section 78 of the Act.
The powers of the Corporation are given in
Section 45A of the Act, introduced by Act 44-of 1966, whereby the Corporation
may, on the basis of the information available to.
it, determine the amount of contributions
payable and make necessary demands. Apparently, the scheme of the Act, after
the amendment, is that the Corporation itself should, in a case where there is
omission on the part of the employer to maintain records in accordance with
Section 44 of the Act, determine the amount of contributions on the strength of
such information as it may collect. It can then make, the demand. If the
employer refuses to comply with the demand so made, the matter can come up
before the Employees' Insurance Court under Section 75 of the Act. The Court
should give the Corporation a direction to perform its duty where it considers
that this should be performed by the Corporation. It cannot decline to perform
its own duty because the Corporation has failed to discharge its functions.
The matter having Come up before that Court,
the claim by the Corporation was rejected erroneously merely on the ground that
there 37 was difficulty in determining the basis of wages in a particular
factory so as to enable a calculation of the amount of contributions to be made
by the employer. It seems that the notification of the Central Government under
section 99A of the Act, also, introduced by Act 44 of 1966, was intended to
overcome such a difficulty in determining the wages of the employees. After
having considered the provisions of section 99A of the Act, we doubt whether
this provision can be availed of for the purpose of supplying a defect or
overcoming a difficulty in adjudication of a dispute. for which the Employees'
Insurance Court is given ample powers.
Moreover, the Corporation has itself to
collect the information initially and make a provisional demand on the basis of
that information under section 45A in such a case.
The learned single Judge, before whom the
matter went up in appeal, thought that the notification of the Central
Government fixing wages, presumably on the strength of some notion as to what
prevailing wages in such cases are, could be. used for this purpose. The
Corporation itself should have gathered information under section 45A. The
Employees' Insurance Court should be apprised of this information.
and is under a duty to determine the basis of
calculation itself. It cannot expect the Central Government to overcome such a
difficulty by an order or direction under section 99A of the Act. We think that
the nature of the proceedings was not properly understood either by the Employees'
Insurance Court or by the High Court when the matter was taken before these
authorities. Hence, the Division Bench, which accepted the appeal from the
decision of the single judge had, while invalidating the notification under
section 99A of the Act, failed to give a direction that the Employees'
Insurance Court should itself perform its duties.
In the light of the foregoing statement of
the legal position, we allow this appeal, set aside the. judgments of the
Division Bench as well as of the learned single Judge and orders of the
Employees Insurance Court. We remand the matter to the Employees' Insurance
Court for determination in accordance with law as explained by us above.
Parties will bear their own costs.
S.R. Appeal allowed and case remanded.