IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 13.07.2010 CORAM THE HONOURABLE MR. JUSTICE S.NAGAMUTHU W.P.No.5007 of 2002 and W.P.M.P.No.7058 of 2002 Tamil Nadu Asbestos (Pipes) (A Unit of Tamil Nadu Cement Corporation Ltd.,) Mayanur 639 108, Kulithalai Taluk, Karur District. Rep. by its Manager (Tech.,) .... Petitioner -Versus- 1]The Regional Director (Tamil Nadu), Employees' State Insurance Corporation, No.143, Sterling Road, Chennai 600 034. 2]The Deputy Regional Director, Employees' State Insurance Corporation, No.143, Sterling Road, Chennai 600 034. ... Respondent Petition filed under Article 226 of the Constitution of India, for issuance of a Writ of Certiorari calling for the records of the 2nd respondent in respect of Notification in Ref.No.51/N/15/13/6/6/91-BF-II, dated 21.12.1995 and quash the same. For petitioner : Mr.Ravindran for M/s.T.S.Gopalan For respondent (s): Mrs.S.Jayakumari ORDER
The petitioner is a factory as defined in the Employees’ State Insurance Act, 1948 [hereinafter referred to as “the Act”] and the same is situated at Mayanur Village in Kulithalai Taluk, Karur District. The Village viz., Mayanur was not originally brought within the purview of the said Act by the Central Government by issuing any notification in the official gazette. With effect from 01.01.1996, Mayanur Village was also brought within the purview of the Act as per the notification issued by the Central Government under Sections 1(3) & 1(5) of the Act. Based on the same, the 1st respondent by his proceedings in Ref.No.51/N/15/13/6/6/91-BF II , dated 21.12.1995 directed the petitioner to take necessary steps for completion of all initial registration work so that the employees of the petitioner and their family members can avail of the benefits without any difficulty. In the said letter, it was also informed that the families of the insured persons will be entitled to the medical benefits and for the said purpose the employees and their families can approach ESI Dispensary (Puliyur) at Puliyur Cement Factory, Post Office, Puliyur, Karur Taluk. It was also informed that besides the above dispensary, it is open to the employees to opt any one of the ESI Dispensaries situated in Karur, Trichy areas if their residence is in proximity with those dispensaries. Challenging the said letter of the 1st respondent, the petitioner is before this Court with this writ petition.
2. The said challenge is mainly on two grounds viz., (1) As per the guidelines issued by the ESI Corporation dated 04.05.2001 in No.N-15/15/9/98-P&D, dated 04.05.2001, the minimum insurable population should be not less than 1000 workers in that area and that there should be an ESI dispensary within a radius of 8 Kms from the said area. In this case, according to the petitioner, there was no survey taken to show that the insurable population in Mayanur Village was 1000 and above during the relevant period; and (2) The distance between the ESI dispensary at Puliyur Cement Factory and Mayanur Village is more than 8 kms. Thus, the guideline issued by the ESI Corporation has not been followed while bringing the Mayanur Village within the purview of the Act.
3. In the counter affidavit filed by the respondent, it is contended that the Scheme can be extended to an area adjacent to an already implemented area and situated within 8 – 10 kms radius of an existing dispensary even if the insurable population is less than 1000 for which no additional infrastructure is needed. These are only broad guidelines. It is further contended that what the Act says is that as per Section 1(3) of the Act, the same shall come into force on such date or dates as the Central Government may by Notification in the official gazette, appoint and different dates may be appointed for different provisions of this Act. Here in this case, the Central Government as per the recommendations of the Government of Tamil and the ESI Corporation has notified the areas in which the petitioner’s factory is situated for implementing the scheme. The notification of Central Government under Section 1(3) of the Act is valid and enforceable. The revenue villages viz, Mayanoor, Manavasi and Balarajapuram are situated within 9 kms of the existing ESI dispensary at Puliyur and frequent bus services are also available and there are 890 workers in 7 factories situated in these areas. There is no additional infrastructure required to implement the ESI scheme to these areas. It is based on the above, the scheme was extended to these three villages w.e.f. 01.01.1996 and the same is sustainable under law.
4. The learned counsel appearing for the petitioner would submit that the petitioner is contributing 4.75% of amount calculated on the wage of the wages of each worker towards ESI contribution and each worker is paying 1.75% of amount from out of his wages. Thus, totally 6.50% of amount calculated on the basis of the wages of each worker is paid to the ESI contribution for the purpose of providing adequate medical facilities to the workers. He would further submit that the payment of contribution both by the employer and the employees cannot be equated either to revenue or to a tax. But, it should be treated as a consideration for the services to be rendered by the ESI Corporation. He would further submit that since the ESI dispensary at Puliyur is at far of place viz., beyond 8 kms from Mayanur Village, it would not cater the needs of the workers of the petitioner factory. He would also add that the guideline issued by the ESI Corporation itself stipulate that there shall be a dispensary within a radius of 8 kms. When there is no such dispensary within a radius of 8 kms from Mayanur village, bringing the same within the purview of the Act is not only contrary to the guidelines of the corporation but also contrary to the very spirit and object of the Act.
5. The learned counsel for the petitioner would further submit that before bringing any area within the purview of the Act, a survey should be taken to know the insurable population. Here in this case, even without knowing the quantum of insurable population in Mayanur village , the said village has been brought within the purview of the Act. Thus, according to him, it is again contrary to the provisions of the Act. The learned counsel for the petitioner would conclude his argument to say that the impugned notice is unreasonable as the same would not serve the purposes of the Act and, therefore, the same is liable to be quashed.
6. The learned counsel appearing for the respondent would stoutly oppose this writ petition. She would point out that the notification issued by the Central Government under Section 1(3) of the Act has not been challenged in this writ petition. In the absence of any such challenge, the challenge only to the consequential letter of the ESI Corporation, calling upon the petitioner to register the factory and to start paying the contribution, cannot be sustained. The learned counsel for the respondent would further submit that the guidelines referred to in the counter are very broad and general in nature and the same shall not bind the Central Government. She would further submit that it is not always necessary that the insurable population should be more than 1000 and, therefore, there is no need for taking survey of the insurable population in a particular area. For all these reasons, the learned counsel would pray for dismissal of the writ petition.
7. I have considered the rival submissions carefully and also perused the records.
8. At the outset , I have to state that the petitioner has not challenged the notification issued by the Central Government under Section 1(3) of the Act whereunder the Central Government has brought Mayanur Village within the purview of the Act. What is under challenge is only a consequential notice issued by the respondent corporation requesting the petitioner to register its name and to start paying ESI contribution as required under the Act. Similarly, the State Government has issued a notification under Section 1(5) of the Act bring these clauses of establishments within the purview of the Act. When there are such notifications under Sections 1(3) and 1(5) of the Act, it goes without saying that the petitioner factory is liable to pay the ESI contribution as required under the Act. To put it otherwise, in the absence of any challenge to the notification issued by the Central Government under Sections 1(3) of the Act and the notification issued by the State Government under Section 1(5) of the Act, challenge to the consequential demand notice issued by the Corporation is not at all sustainable.
9. Now coming to the distance rule which the learned counsel for the petitioner mainly relies on, it is only a guideline issued by the ESI Corporation. [vide page 20 of the typed set of papers] This has not been issued by the Central Government. Section 1(3) of the Act does not prescribe any such distance rule for the implementation of the Act. There is also no statutory rule issued in this regard. Similarly, to extend the provisions of the Act to any establishment or clauses of establishments, industrial, commercial, agricultural or otherwise, the appropriate Government viz., the Central Government or State Government shall issue a Notification. In this case, there is no controversy that the State Government has also issued such a notification under Section 1(5) of the Act bringing these types of establishments within the purview of the Act. The guideline which is sought to be pressed into service by the petitioner was not issued by the Central Government. A perusal of Section 1(3) of the Act would go to show that it does not even require any consultation either with the State Government or with the ESI Corporation for the Central Government to issue such notification. Had it been true that the guideline has been issued by the Central Government in respect of the implementation of the provisions of the Act to a particular area, then the petitioner may have a point to argue before this court. But,unfortunately, the said guideline has been issued only by the ESI Corporation and, therefore, the Central Government cannot be expected to bind itself by the said guideline. Similarly, in respect of insurable population also, such clause is found only in the guideline issued by the ESI Corporation. As I have already stated, neither Section 1(3) of the Act nor Section 1(5) of the Act prescribes any such insurable population for implementing the Act. Therefore, the second ground raised by the learned counsel for the petitioner also has to fail.
10. Now coming to the last limb of the argument advanced by the learned counsel for the petitioner, there can be no doubt at all that contribution paid by the employer as well as the workers to the ESI Corporation can never be equated either to a tax or a revenue. It is collected only with the avowed object of providing medical facilities to the workers in the factories or establishments and their family members. The money so collected is meant to spent only for these purposes. In the case on hand, the learned counsel for the petitioner would submit that since there is no dispensary within a radius of 8 kms, the workers in the petitioner factory are not benefited by the dispensary situated at Puliyur and , therefore, the object of the Act is defeated. In my considered opinion, I find no substance in it for the following reasons. There is no dispute in this case that the distance between Mayanur and ESI Dispensary which is situated at Puliyur is hardly 9 kms. It is also not in dispute that there are frequent bus facilities between these two villages. In these days, travelling a distance of 10 kms for medical treatment may not be a difficult job for the workers. Apart from that, no employee has come to this Court or approached the appropriate Government with any grievance that it would cause hardship for him to travel such a long distance to go to the ESI dispensary at Puliyur. Even in this writ petition, it is not the case of the petitioner that its employees have made complaints to the management that it would be difficult for them to go to Puliyur for availing medical facility in the ESI dispensary. Therefore, the difficulties which are sought to be expressed before this Court on behalf of the workers by the petitioner factory are only imaginary. But, the learned counsel for the petitioner would submit that since the petitioner factory is contributing 4.75% of amount calculated on wages of each employee , it has got locus standi to question the authority of the ESI Corporation in this regard. For a moment, I would like to clarify that it is not the conclusion of this Court that the petitioner has got no locus standi to question. The petitioner factory has got every interest to protect the interest of its employees. Therefore, to air the grievances of its employees and to protect their interest, the petitioner factory can very well approach this Court by filing writ petition. Therefore, it is not on the ground of want of locus standi, I am inclined to dismiss this writ petition,but on the ground that the Central Government has already notified Mayanur Village and the same has not been challenged by anybody and that there is no legal infirmity in the notification pointed out by the petitioner before this court.
11. Lastly, the learned counsel for the petitioner would submit that in the counter affidavit, the respondents have stated that there has to be a dispensary within 8 kms and, therefore, it may at least be ensured that there is such dispensary within the radius of 8 kms. In this regard, I have to clarify that if required medical facilities are not extended by the ESI Corporation after having collected contribution from the employers and workers, surely the aggrieved can workout his remedy in the manner known to law.
12. In view of all the above, I do not find any merit in the writ petition. The writ petition fails and the same is accordingly dismissed. No cost. Consequently connected MP is closed.
14. At this juncture, it is submitted by the learned counsel for the petitioner that from the year 2002 there has been an order of stay granted by this Court and, therefore, the workers as well as the petitioner have not paid their ESI contributions and apart from that the workers have not availed of any medical facility in any of the dispensaries run by the ESI Corporation. Therefore, it is directed that neither the petitioner nor the workers shall be required to pay contribution for the period commencing from the month of February 2002 till July 2010 and it shall be sufficient if the petitioner as well as its workers start paying ESI contribution from the month of August 2010 onwards.
Index : yes / no 13.07.2010 Internet : yes / no kmk To 1.The Manager (Tech.,), Tamil Nadu Asbestos (Pipes) (A Unit of Tamil Nadu Cement Corporation Ltd.,),Mayanur 639 108, Kulithalai Taluk, Karur District. 2.The Regional Director (Tamil Nadu), Employees' State Insurance Corporation, No.143, Sterling Road, Chennai 600 034. 3.The Deputy Regional Director, Employees' State Insurance Corporation, No.143, Sterling Road, Chennai 600 034. S.NAGAMUTHU. J., kmk W.P.No.5007 of 2002 13.07.2010