S.Thangasamy vs The Employee’S State Insurance … on 28 February, 2011

Madras High Court
S.Thangasamy vs The Employee’S State Insurance … on 28 February, 2011




DATED:   28.02.2011



W.P.No.13249 of 2008 and
M.P.No.1 of 2008

S.Thangasamy 	...Petitioner


1.The Employee's State Insurance Corporation,
  Rep. By its Regional Director,

2.The Management of Sunderam Industries
   Rubber Factory,
  Sunderam Industries Rubber Factory,
  Rep. By its Managing Director,
  Usilampatty, Kochadai,
  Madurai -6.				...Respondents

Prayer :Petition under Article 226 of the Constitution of India praying for a Writ of Declaration, declaring the petitioner as entitled to the benefit of the E.S.I. scheme and treatment in the E.S.I. hospital on having attained the age of superannuation.

		For Petitioner  : Mr.V.Prakash,SC
					   for Mr.D.Anbarasu 

		For Respondents : Mr.A.Paramasivam
					   for R1 
					   Ms.D.Veda for R2


The petitioner in this writ petition seeks for a writ in the nature of declaration, declaring that he is entitled to have the benefit of the E.S.I. Scheme as well as the treatment in the E.S.I. hospital on having attained the age of superannuation.

2. The writ petition was admitted on 03.06.2008. Pending the writ petition, notice was taken by the respondents.

3. The facts leading to the filing of the case are as follows:-

The petitioner was employed in the second respondent Factory. He joined the Factory at Madurai on 01.10.1976 as a temporary worker. Subsequently, he got his services confirmed on 01.01.1980. It was claimed that he is covered by the provisions of the Employees’ State Insurance Act, 1948 (for short ESI Act). However, the petitioner was dismissed from service on 21.05.1999. The dismissal of the petitioner became the subject matter of challenge in I.D.No.115 of 2000, before the Industrial Tribunal. Even while the case was pending before the Tribunal, he attained the age of superannuation on 11.03.2003. He has a dependent viz., his wife T.Shagayarani as his daughter is already married. His ESI Card Number is 51-1802813. Though the petitioner was suffering due to ill-health and his wife was suffering due to diabetes and hypertension, the first respondent ESI is not extending the medial benefits.

4. The petitioner claimed that he is an insured person within the meaning of Section 2(14) of the ESI Act. Chapter V of the ESI Act provides for various benefits. The ESI (Central) Rules, 1950, more particularly, Rule 55 provides for Sickness Benefit. The Regulations framed under the ESI Act viz., ESI (General) Regulations, 1950 more particularly, 103-B provides for continuation of medical benefits even to persons who became disabled or retired.

5. It is necessary to refer to Regulation 103-B of the ESI (General) Regulations, 1950:

“103-B. Medical Benefit to insured person who ceases to be in insurable employment on account of permanent disablement.-(1) An insured person who ceases to be in insurable employment on account of permanent disablement caused due to employment injury shall continue to receive medical benefit for himself and his/her spouse till the date on which he would have vacated the employment on attaining the age of superannuation had he not sustained such permanent disablement, if he produces a certificate from the employer/a declaration in the form which may be specified by the Director-General for the purpose.

(2) Medical benefit to retired insured persons.-An insured person who has attained the age of superannuation shall be eligible to receive medical benefit for himself and his/her spouse, if he produces a certificate from the employer in the form which may be specified by the Director General for the purpose.

(3)An employer shall, on demand, issue the certificate as referred to in sub-regulations (1) and (2) to an employee who had been employed by him.”

Since the petitioner had reached the age of superannuation as on 11.03.2003, he is entitled for benefits under the ESI Act as well as the Regulations framed thereunder.

6. The respondent ESI Corporation had filed a counter affidavit dated Nil (October 2010). In paragraphs 7 and 8 of the counter affidavit, it was averred as follows:-

“7. The form prescribed by the Director General, ESI Corporation in Annexure (B) clearly states that he should have been superannuated as per factory’s order. This certificate of superannuation should be submitted by the employer along with his proof of eligibility that he was in insurable employment for minimum of 5 years preceding to the date of superannuation. The employer should submit a certificate furnishing contributory particulars for the preceding 5 years (10 half yearly contributory particulars)

8.It is submitted that the petitioner has himself admitted that he was dismissed from the service on 21.05.1999, it is very clear that he was not in the insurable employment from the date of dismissal i.e.21.05.1999 to till the date of superannuation i.e.11.03.2003. As being so the employer did not contribute and submit the Return of Contribution in respect of the petitioner to the ESI Corporation. Hence he was not eligible for Medical Benefit under Rule 61 of ESI (Central) Rules 1950.”

7. Mr.V.Prakash, learned Senior Counsel appearing for the petitioner brought to the notice of this Court that subsequent to the filing of the writ petition, the Industrial Tribunal by its Award dated 30.01.2010 found that the dismissal order given to the petitioner was disproportionate. Therefore, the Tribunal set aside the dismissal order and held that he is deemed to have been in service as on the date of dismissal till the date of superannuation. He was also entitled to 50% of the backwages for the said period. The learned Senior Counsel submits that the petitioner has been unjustly deprived of the medical benefits.

8. In view of the Award of the Industrial Tribunal which granted a declaratory relief that the petitioner had deemed to have attained superannuation, Regulation 103-B(2) comes into operation. The only qualification stated therein is that the petitioner should produce a certificate from the Employer in the form in which it may be specified by the Director-General for the purpose. The learned Senior Counsel would submit that because of the strain relationship between the petitioner and the second respondent, they are likely to furnish such a certificate. Besides that the Tribunal’s Award is also under challenge before this Court in W.P.No.8019 of 2010.

9. With reference to the pendency of the Award under challenge before this Court, it must be noted that the said writ petition (W.P.No.8019/2010) has been dismissed by this Court today. Therefore, the issue has become final. With reference to non-grant of certificate by the Employer, it is very well open to the first respondent ESI to send an appropriate notice to the second respondent Employer and ascertain the details regarding the petitioner’s employment and grant all the benefits in terms of Regulation 103-B(2).

10. Though Mr.A.Paramasivam, learned Standing Counsel for the ESI contends that during the period of petitioner’s absence, no contribution has been paid and therefore, he is not eligible to get any amount. It must be noted that the term ‘insured person’ is defined under Section 2(14) of the ESI Act, which means a person who is or was an employee in respect of whom contributions are or were payable under this Act and who is, by reason thereof, entitled to any of the benefits provided by this Act.

11. The Supreme Court had an occasion to consider the true meaning of the definition under Section 2(14) vide its judgment reported in (2003) 2 SCC 138 [Bharagath Engg. v. R.Ranganayaki]. In paragraph 8 to 10 and 12, the Supreme Court held as follows:-

“8. Section 2(14) of the Act, which is the pivotal provision, reads as follows:

Insured person means a person who is or was an employee in respect of whom contributions are or were payable under this Act and who is, by reason thereof, entitled to any of the benefits provided by this Act.

9. It is to be noted that the crucial expression in Section 2(14) of the Act is are or were payable. It is the obligation of the employer to pay the contribution from the date the Act applies to the factory or the establishment. In ESI Corpn. v. Harrison Malayalam (P) Ltd. 1 the stand of the employer that employees are not traceable or that there is dispute about their whereabouts does not do away with the employers obligation to pay the contribution. In ESI Corpn. v. Hotel Kalpaka International 2 it was held that the employer cannot be heard to contend that since he had not deducted the employees contribution on the wages of the employees or that the business had been closed, he could not be made liable. The said view was reiterated in ESI Corpn. v. Harrisons Malayalam Ltd.3 That being the position, the date of payment of contribution is really not very material. In fact, Section 38 of the Act casts a statutory obligation on the employer to insure its employees. That being a statutory obligation, the date of commencement has to be from the date of employment of the employee concerned.

10. The scheme of the Act, the Rules and the Regulations clearly spell out that the insurance covered under the Act is distinct and different from the contract of insurance in general. Under the Act, the contributions go into a fund under Section 26 for disbursal of benefits in case of accident, disablement, sickness, maternity etc. The contribution required to be made is not paid back even if an employee does not avail any benefit. It is to be noted that under Regulation 17-A, if medical care is needed before the issuance of temporary identification certificate, the employer is required to issue a certificate of employment so that the employee can avail the facilities available. Wage period, benefit period and contribution period are defined in Section 2(23) of the Act, Rule 2(1-C) and Rule 2(2-A) of the Rules. Rule 58(2)(b) is a very significant provision. For a person who becomes an employee for the first time within the meaning of the Act, the contribution period under Regulation 4 commences from the date of such employment from the contribution period current on that day and the corresponding benefit period shall commence on the expiry of the period of nine months from the date of such employment. In cases where employment injuries result in death before the commencement of the first benefit period, Rule 58(2)(b)(ii) provides the method of computation of dependants benefits. It provides for computation of dependants benefits in the case of an employee dying as a result of employment injuries sustained before the first benefit period and before the expiry of the first wage period.

12. When considered in the background of statutory provisions, noted above, the payment or non-payment of contributions and action or non-action prior to or subsequent to the date of accident is really inconsequential. The deceased employee was clearly an insured person, as defined in the Act. As the deceased employee has suffered an employment injury as defined under Section 2(8) of the Act and there is no dispute that he was in employment of the employer, by operation of Section 53 of the Act, proceedings under the Compensation Act were excluded statutorily. The High Court was not justified in holding otherwise. We find that the Corporation has filed an affidavit indicating that the benefits under the Act shall be extended to the persons entitled under the Act. The benefits shall be worked out by the Corporation and shall be extended to the eligible persons.”

12. In view of the aforesaid judgment, it is for the ESI authorities to recover the amount, if any due and continue to grant benefit to the petitioner as he is deemed to have become superannuated from the service of the second respondent factory.

13. The writ petition is disposed of accordingly. No costs. Consequently, connected miscellaneous petition is closed.


The Regional Director,
The Employee’s State Insurance Corporation,

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