JUDGMENT
Anoop V. Mohta, J.
1. This appeal has been preferred by the original on-applicant, appellant herein, Deputy Regional Director, Employees’ State Insurance Corporation, Nagpur (for short “Corporation”), against the judgment/Order dated October 10, 1997, passed by the Judge, Labour Court, Chandrapur in E.S.I.C. Case No. 1/1993, thereby, it was held that the respondent/original applicant, Industry/Factory is exempted from the provisions of the Employees’ State Insurance Act, 1948 (for short ‘E.S.I. Act’), and therefore, not liable to pay contribution under the Act. Therefore, this appeal under Section 82(2) of the E.S.I. Act.
The learned counsel Ms. Maldhure, appearing for the appellant pointed out the question of law, which needs consideration, and the same is as under:
In view of no individual exemption granted to the factory Navyug Minerals, by the Notification issued by the Government of Maharashtra, Industries, Energy and Labour Department, Mantralaya, Bombay, SIA 7290/1624/Lab-4, dated November 29, 1990 in exercise of powers conferred by Section 87 read with Section 91A of the Act, whether the exemption granted to adjacent factory will ipso facto exempt the respondent/factory from operation or purview of the Employees’ State Insurance Act, 1948?”.
2. The respondent is an Industry situated at Indira Udyog Nagar, Padoli, Chandrapur. It is a unit located in the area between M.I.D.C. and Mahavir Potteries. The Government of Maharashtra, by its Notification dated August 9, 1990, issued under Section 1(5) of the E.S.I. Act, exempted the factories mentioned in the Schedule from operation of the Act retrospectively from the date of the factory coming under the purview of the Act, till the date of issue of the Notification and prospectively upto and inclusive of December 31, 1990. By another Notification dated November 29, 1990, in exercise of powers conferred by Section 87, Rule 91-A of the Act, exempted the factories located in the area of M.I.D.C., Chandrapur and Mahavir Potteries, Indira Udyog Nagar, Padoli, Chandrapur, retrospectively w.e.f. July 1, 1990. On February 13, 1992; the respondent applied the concerned authority to extend the said benefits to his unit also, and his unit be treated as exempted upto June 30, 1991, in view of the Notification dated November 29, 1990. The said application was resisted by the appellants in view of the Notification dated August 9, 1990. There was admittedly no exemption. Filing of the application itself provides and reflects that, it was not exempted expressly by the concerned department, therefore, a show cause notice dated June 26, 1992 was issued to the respondent demanding contribution for the period January 1, 1991 to May 30, 1991. It was resisted, however, by order dated September 9, 1992, the amount was determined with interest. The respondent therefore, filed an application under Section 75 of the Act, before the Employees Insurance Court, Chandrapur and impugned the said order in the application. The Employees Insurance Court, Chandrapur by order dated October 10, 1997, allowed the said application of the respondent, therefore, the present appeal by the appellants.
3. The scheme and purpose of the E.S.I. Act, is to provide for benefits to the employees, in case of sickness, maternity, employment injury, and to make provision for certain other matters in relation to therein. This object of the Act cannot be overlooked, while considering the submission as raised by the parties. Section 87, as relied is reproduced as under:
“87. Exemption of a factory or establishment or class of factories or establishments.- The appropriate Government may, by Notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt any factory or, establishment or class of factories or establishments in any specified area from the operation of this Act, for a period not exceeding one year and may from time to time by like Notification renew any such exemption for periods not exceeding one year at a time.”
This section and other provisions, therefore provide the power of concerned authorities, basically State of Maharashtra to exempt certain factory or establishment or class of factories or establishments from operation of this Act, for a period of not exceeding one year and may from time to time issue such Notification of renewal also. It means, positive Notification of exemption is a must. There is no automatic exemption, merely because a particular area falls within the ambit of M.I.D.C. or such other area.
4. In the present case, there is no dispute that, by the Notification dated August 9, 1990, initially, the respondent’s unit was exempted as the same was located in the area of Indira Udyog Nagar, Padoli, Chandrapur upto December 31, 1990. However, by the Notification dated January 29, 1990, only Mahavir Potteries Industries, was exempted. The learned counsel, has relied on the sentence which is reproduced as under “The Government of Maharashtra hereby exempts the factories located in the M.I.D.C. Area of Chandrapur, District-Chandrapur, and Mahavir Potteries, Indira Udyog Nagar, Padoli, Chandrapur from the operation of the said Act retrospectively”. He therefore, contended that in view of this they were also exempted by this Notification itself. The basic fact, which cannot be overlooked is their application, for exemption after this Notification. Admittedly, there was no exemption granted by the department inspite of the application filed by the respondent. In his evidence, he admitted that he had made application on February 13, 1992 for exemption as per Exhibit 39. He also deposed that, he feel that there may be general Notification to be issued by the State Government for exemption, and therefore, he had not made attempt for exemption w.e.f. December 31, 1990 . It is argued, on another aspect that, there were no medical facilities available in the area, and therefore, the applicant’s industry should have been exempted. Considering his own admission and undisputed position on the record, according to me the learned Judge ought not to have exempted the respondent from the liability of paying contribution as required under the provisions of the E.S.I. Act. According to me, if specific provision is made for issuing specific Notification under the Specific Act, there is no question of exemption by an implication, merely because earlier the said factory was exempted from the purview of E.S.I. Act. In my view, in absence of the specific Notification for the factory of the respondent, on the basis of the general statement as referred and relied, that itself cannot be the foundation for automatic exemption, in the facts and circumstances of the case, specially when the respondent had applied for exemption in respect of the said Notification and prayed for exemption. The non-availability of medical facilities, may be an irregularity, but that cannot be the reason to grant total exemption from payment of contribution under the E.S.I. Act.
5. Keeping in mind the scheme and purpose of the Act, read with the specific provisions as referred above, unless there is specific Notification for specific factories, or establishments, there is no question of exemption of such factories from the purview of this E.S.I. Act, unless established contrary on facts itself, based on the other provisions. In the present case, according to me the respondent is not entitled for exemption as prayed towards the contribution under the Act for the period from January 1, 1991 to May 30, 1991. In view of this the impugned order passed by the learned Judge, Labour Court, Chandrapur dated October 10, 1997, is quashed and set aside.
6. I am of the view that, the exemption granted to adjacent factory will not ipso facto exempt the respondent factory from operation of the E.S.I. Act. Hence the following order:
(i) The appeal is allowed, and it is declared that the original applicant/respondent herein, is not exempted from payment of contribution in question under the E.S.I. Act. Parties to take appropriate steps, according to law.
(ii) No order as to costs.