JUDGMENT
The Court
1. This appeal arises out of the decision given by the Employees’ State Insurance Court, Bangalore, in Application No. 15 of 1992. Under Section 73 of the Employees’ State Insurance Act (‘the Act’ for short) the applicant approached the E.S.I. Court seeking a direction to the 1st respondent i.e., E.S.I. Corporation to assess the degree of disability as required under the provisions of the E.S.I. Act and seeking benefits to which he was entitled to as an employee.
2. It was the case of the applicant that he met with an accident on 15-6-1987 while he was working as operator attached to the Prestige Department; thereby he sustained severe injuries to his right hand resulting in permanent disability. He was first taken to E.S.I. Hospital where he was treated as in-patient. Contending that the injury was in the course of employment and he is entitled for all the accidental benefits, he approached the concerned authorities for payment of sickness benefit and also permanent disability benefit. So far as the sickness benefit, the Corporation allowed the same and when it came to the question of permanent disablement benefit they refused to give benefit on the ground that as on the date of the accident i.e., 15-6-1987 he ceases to be an employee as defined under Section 2(9) of the Act. The E.S.I. Court after appreciating the material on record came to the conclusion that the employee sustained injury in an accident out of and during the course of employment. It also granted permanent disable-
ment benefit to the employee. Aggrieved by the said order, the Corporation has filed this appeal.
3. The learned Counsel for the appellant contends that the respondent-employee is not entitled for any benefit under the E.S.I. Act as the accident has occurred when he was not an employee as defined under the Act. He further contends that by paying contribution for the contribution period whatever benefit he is entitled to, for that period, gets postponed i.e., corresponding benefit period and therefore, the cause of action of claiming the benefit being the injury which has happened during the benefit period on 15-6-1987 and by virtue of the employee ceasing to be an employee under the Act he is not entitled for the benefit. He also took me through the Regulation 4 of the E.S.I. Act and also relies on the decision of this Court in M.F.A. Nos. 393 and 394 of 1989 which was disposed off on 10-8-1998.
4. The point that would fall for Court’s consideration is, whether the 1st respondent is entitled for the permanent disablement benefit under the Act for the injury in the benefit period during which he ceases to be an employee?
5. It is necessary to mention the relevant section and the regulation for disposal of this appeal. Section 2(9) pertains to the definition of employee which reads as under:
“2(9) ‘Employee’ means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and-
(i) who is directly employed by the principal employer on any work, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or
(ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or
(iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service.
2(9)(a) xxx xxx. (b) any person so employed whose wages (excluding remuneration for overtime work) exceed (such wages as may be prescribed by the Central Government) a month: Provided that an employee whose wages excluding remuneration for overtime work) exceed (such wages as may be prescribed by the Central Government) a month at any time after (and not before) the beginning of the contribution period shall continue to be an employee until the end of that period". Section 49 deals with 'sickness benefit' available to the employee and Section 51 deals with disablement benefit to which the employee is entitled. In particular Section 51(b) deals with 'permanent disablement benefit'. Regulation 4 provides different periods as under: "4. Contribution and benefit periods.--Contribution periods and the corresponding benefit periods shall be as under: ------------------------------------------------------------------- Contribution period Corresponding period benefit ------------------------------------------------------------------- 1st April to 30th 1st January of the year following to September 30th June 1st October to 31st March 1st July to 31st December". of the year following -------------------------------------------------------------------
6. It is not in dispute that the 1st respondent was the employee of the second respondent in the Prestige Department as an operator. It is also not in dispute that the injury occurred on 15-6-1987 out of and during the course of employment. So far as payment of sickness benefit on account of the accident in question, it is not in dispute. But according to the appellant it was only a mistaken payment. This was not the defence taken by them before the E.S.I. Court. The payment of contribution from 1-4-1986 to 30-9-1986 by the 1st respondent herein is not under challenge. The occurrence of the accident on 15-6-1987 during the corresponding benefit period i.e., 1-1-1987 to 30-6-1987 is also not in dispute. It is also not in dispute that from 1-10-1986 the 1st respondent-employee ceased to be an employee as defined under Section 2(9) of the Act on account of enhancement of his wages. Whether the employee would be barred for claiming disablement benefit as he sustained injury subsequent to 1-10-1986 on the plea that has made contribution between 1-4-1986 to 30-9-1986 on which date he was an employee under the second respondent. According to the appellant, the cause of action arises for the employee only when employment injury is caused and as on that , date he was not an employee, therefore, they are not liable to pay the benefit. According to the respondent-employee he is seeking benefit for the contribution he has already made, therefore, the appellant cannot absolve its liability as contended by them.
7. The learned Counsel for the 1st respondent relies on the decision in Tirupur Textiles (Private) Limited, Ammapalyam, Tirupur v. Employees’ State Insurance Corporation, Madras (by Regional Director) , in which para 13 reads as under:
“13. It is to be seen that the 3rd respondent who was an employee under the appellant was paying contribution and the appellant was also paying the management contribution and the 1st respondent had objected to the eligibility of the 3rd respondent for permanent disablement benefit on the ground that he was not an employee within Section 2(9) of the Act since he was drawing wages exceeding Rs. 1,000/- on the date of accident on account of the increase in the dearness allowance due to rise in the cost of
living. The Employees State Insurance Corporation, viz., the 1st respondent in the counter filed in the lower Court has stated that he was an employee drawing a salary of less than Rs. 1,000/- and was entitled to the benefits under the E.S.I. Scheme but has stated that according to the Act if the salary of the employee reaches the stage of Rs. 1,000/- and above he automatically ceased to come under this Scheme. All the same he will be entitled to medical sickness benefits and cash benefits by virtue of the contributions paid in the earlier contribution period. He ceased to be an employee under the Act with effect from 24th November, 1984, but he had to be provided with the medical benefits on the date of the accident and subsequently due to contributions paid from November 1983 to May 1984 and from 1984 to 24th November, 1984. It is also further stated in the said counter that the 3rd respondent being an insured person is entitled to enjoy the above benefits as per Section 46(1)(a) and 46(1)(e) of the Act and he need not be an employee at the time of the accident. In this connection, it is to be pointed out while stating that from 24 November, 1984, the third respondent ceased to be an employee under the Act, but he had to be provided sickness benefit and medical benefit on the date of accident and subsequently due to contributions paid in the earlier contribution periods, the proviso to Section 2(9) of the Act has not been taken into consideration. Under the proviso to Section 2(9) it is provided that an employee whose wages (excluding the remuneration of overtime work) exceeds one thousand rupees before the amendment in the year 1985 a month at any time after and not before the beginning of the contribution period shall continue to be an employee until the end of that period. The third respondent belonged to the said C Category and as per Section 4 of the Employees’ State Insurance (General) Regulations, 1950, the contribution period for the said C Category is from last Saturday of May to last Saturday in next November and the corresponding benefit period is from November to May. Even in the counter-statement filed by the first respondent it is clearly admitted that even though the third respondent ceased to be an employee under the Act with effect from 24th November, 1984, he had to be provided with sickness benefit and medical benefit on the date of accident and subsequently due to the contributions paid from November 1983 to May 1984 and from May 1984 to 24th November, 1984. It is also further stated therein that the third respondent being an insured person is entitled to enjoy the above benefits as per Section 46(1)(a) and 46(1)(e) of the Act and he need not be an employee at the time of the accident. While that is so it is not known why the Employees’ State Insurance Corporation is denying the liability to provide disablement benefit as contemplated under Section 51 of the Act. Section 51 of the Act provides for disablement benefit whether total or partial. The lower Court has failed to take the said provision into consideration providing for disablement benefit under the Act. It is also to be pointed out
that the lower Court failed to consider the corresponding benefit periods for the contribution periods of employees under set C. It appears that only in November 1984, the third respondent became entitled to wages at Rs. 1,033.02 and from 25th November, 1984, contributions had not been recovered. In such cases there could be no doubt that the proviso to Section 2(9) of the Act will come into play, even assuming that the third respondent happened to receive more than one thousand rupees much earlier having regard to the fact that during the contribution period from November 1982 to May 1983, he will be entitled to benefits during the corresponding benefit period viz., from August 1984 to February 1985. In this connection it may also be pointed out that under Act 45 of 1984, the wage limit of Rs. 1,000/- was raised to Rs. 1,600/- with effect from 27th January, 1985. But the accident in this case occurred on 7th January, 1985. But having regard to amendment it may be pointed out how Parliament was interested in protecting the welfare of the employees by raising the wages limit so as to cover the employees whose wages will be less than Rs. 1,600/-“.
8. In the above case, as on the date of the accident on account of increase in the deamess allowance due to inflation the Corporation denied to pay permanent disablement benefit. But their Lordships of Madras High Court held that for the contribution period from November 1982 to May 1983 he would be entitled to benefits during the corresponding benefit period i.e., August 1984 to February 1985. Just because the employees receive more than Rs. 1,000/- salary as on the date of the accident he cannot be barred from receiving the benefit from the Corporation.
9. The decision relied upon by the learned Counsel for the appellant Sri M.P. Papanna deals with a case where from the beginning of the contribution period the employee was drawing more than Rs. 1,000/-wages. Therefore, this Court held in that case that as the employee ceases to be an employee at the beginning of the contribution period itself and he was not entitled for any benefit which would accrue to him in the corresponding benefit period.
10. From the above two decisions, it follows that the employee must be an employee at the beginning of contribution period as defined under Section 2(9) of the Act and contribution must be made to claim the benefit in the corresponding benefit period. Merely because he ceases to be an employee during the corresponding benefit period, he is not precluded from claiming statutory benefit which accrues to him under the Act. If we look into the facts of the present case, the 1st respondent-employee has made the contribution for the corresponding benefit period during which he sustained employment injury. Therefore, he is entitled for all the benefits available under the statute. Therefore, the award of the E.S.I. Court do not call for any interference.
11. Accordingly, the appeal stands dismissed. No order as to costs.