{"id":64099,"date":"2010-10-07T00:00:00","date_gmt":"2010-10-06T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/e-s-i-corporation-represented-vs-panickaveettil-sir-sebastian-on-7-october-2010"},"modified":"2017-06-13T18:20:13","modified_gmt":"2017-06-13T12:50:13","slug":"e-s-i-corporation-represented-vs-panickaveettil-sir-sebastian-on-7-october-2010","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/e-s-i-corporation-represented-vs-panickaveettil-sir-sebastian-on-7-october-2010","title":{"rendered":"E.S.I.Corporation Represented … vs Panickaveettil Sir Sebastian … on 7 October, 2010"},"content":{"rendered":"
Kerala High Court<\/div>\n
E.S.I.Corporation Represented … vs Panickaveettil Sir Sebastian … on 7 October, 2010<\/div>\n
       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nIns.APP.No. 9 of 2010()\n\n\n1. E.S.I.CORPORATION REPRESENTED BY ITS\n                      ...  Petitioner\n\n                        Vs\n\n\n\n1. PANICKAVEETTIL SIR SEBASTIAN PUBLIC\n                       ...       Respondent\n\n                For Petitioner  :SMT.T.D.RAJALAKSHMI\n\n                For Respondent  :SRI.M.B.PRAJITH\n\nThe Hon'ble MR. Justice M.N.KRISHNAN\n\n Dated :07\/10\/2010\n\n O R D E R\n                     M.N.KRISHNAN, J\n                 =====================\n                INAP Nos.9, 13 & 25 OF 2010\n                 =====================\n\n           Dated this the 7th day of October 2010\n\n                        JUDGMENT\n<\/pre>\n
     INAP No.9\/2010 is filed against the preliminary order<\/p>\n
passed in I.C.No.78\/2009, INAP No.13\/2010 is filed against the<\/p>\n
preliminary order passed in I.C.No.64\/2009 and INAP<\/p>\n
No.25\/2010 is filed against the preliminary order passed in<\/p>\n
I.C.No.105\/2009 by the E.I.Court, Palakkad. All these<\/p>\n
insurance cases were filed by the employers challenging the<\/p>\n
order passed by the Employees State Insurance Corporation<\/p>\n
(for short ‘the Corporation’) under Section 75 of          the<\/p>\n
Employees State Insurance Act(for short ‘the ESI Act’).<\/p>\n
     2. When the matter came up for consideration, the<\/p>\n
Corporation raised an objection regarding the territorial<\/p>\n
jurisdiction of the court to deal with the matters. It was<\/p>\n
contended that by virtue of the provisions under Section 76(1)<\/p>\n
INAP 9\/2010 & con.cases         -:2:-<\/span><\/p>\n
of the ESI Act the proceedings can be instituted only before<\/p>\n
the court appointed for the local area in which the insured<\/p>\n
person was working at the time the question or dispute arose.<\/p>\n
That was seriously challenged by the applicants before the EI<\/p>\n
Court and after elaborate consideration of the arguments of<\/p>\n
both sides, the court held that action can be initiated for the<\/p>\n
reason     that     the Regional     Director representing    the<\/p>\n
Corporation is having his office at Thrissur which comes<\/p>\n
within the jurisdiction of the Palakkad EI        Court.    It is<\/p>\n
aggrieved by that decision, the Corporation has come up in<\/p>\n
appeal.\n<\/p>\n
     3. Heard the learned counsel on both sides.          Before<\/p>\n
analysing the matter, it is relevant to understand the provisions<\/p>\n
regarding the adjudication of disputes and claims under the<\/p>\n
ESI Act. Section 74 of the ESI Act empowers the State<\/p>\n
Government to constitute an Employees’ Insurance Court for<\/p>\n
such local area as may be specified in the notification. There<\/p>\n
INAP 9\/2010 & con.cases          -:3:-<\/span><\/p>\n
are other sub sections relating to additional courts, etc.<\/p>\n
Section 75 deals with the matters to be decided by Employees’<\/p>\n
Insurance Court. It takes in the dispute between a principal<\/p>\n
employer and the Corporation, or between a principal<\/p>\n
employer and an immediate employer, etc. A perusal of the<\/p>\n
same would reveal that some of the disputes enumerated under<\/p>\n
Section 75(2) are between the employer and immediate<\/p>\n
employer, etc. where really the junction of the worker or the<\/p>\n
insured person is not necessary. Then comes the disputed<\/p>\n
question and the provisions. Under Section 76 of the ESI Act<\/p>\n
subject to the provisions of this Act and any rules made by the<\/p>\n
State Government, all proceedings before the EI Court shall be<\/p>\n
instituted in the Court appointed for the local area in which the<\/p>\n
insured person was working at the time the question or<\/p>\n
dispute arose.        Section 76 envisages a situation where the<\/p>\n
insured     person is involved in the dispute. Then       taking<\/p>\n
recourse to Section 96 of the ESI Act and also Section 76 the<\/p>\n
INAP 9\/2010 & con.cases         -:4:-<\/span><\/p>\n
State Governments are empowered to make rules regarding<\/p>\n
proceedings to be conducted. Accordingly the Kerala<\/p>\n
Government had framed the Kerala Employees Insurance<\/p>\n
Courts Rules 1958 as per the powers conferred on it under<\/p>\n
Section 96(1) of the ESI Act, 1948(Central Act XXXIV of<\/p>\n
1948). The relevant rule which requires attention is Rule 16<\/p>\n
which is having the heading ‘place of suing’. It reads as follows:<\/p>\n
               “Place of suing-In cases not falling under
\n         sub-section (1) of section 76, a proceeding against
\n         any person shall be instituted in the Court within
\n         the local limits of whose jurisdiction.\n<\/p><\/blockquote>\n
               (a) the opposite party or each of the opposite
\n         parties where there are more than one, at the time
\n         of commencement of the proceedings, actually and
\n         voluntarily resides, or carries on business, or
\n         personally works for gain, or\n<\/p><\/blockquote>\n
               (b)any of the opposite parties, where there
\n         are more than one, at the time of the
\n         commencement of the proceedings, actually and
\n         voluntarily resides, or carries on business, or
\n         personally works for gain, provided that in such
\n         case either the leave of the court is given, or the
\n         opposite parties who do not reside, carry on
\n         business or personally work for gain, as aforesaid,
\n         acquiesce in such institution; or\n<\/p><\/blockquote>\n
        (c)the cause of action, wholly or in part arose”.<\/p><\/blockquote>\n
INAP 9\/2010 & con.cases         -:5:-<\/span><\/p>\n
      4. So a reading of Rule 16 would make it clear that it will<\/p>\n
be applicable only to cases not falling under sub section (1) of<\/p>\n
Section 76. If it does not fall within the section then necessarily<\/p>\n
the parameters of the jurisdiction are provided in the said rule.<\/p>\n
Now the argument of the learned counsel appearing for the<\/p>\n
Corporation is to the effect that the insured person is the<\/p>\n
affected person and in all cases and the Supreme Court has<\/p>\n
held that where his interest is involved, the worker or the<\/p>\n
representative of the worker is a necessary party to the<\/p>\n
proceeding. But the learned counsel for the employers would<\/p>\n
contend that the Supreme Court has classified it in a later<\/p>\n
judgment with the prefix ordinarily and therefore it is not<\/p>\n
necessary in all cases to have the insured impleaded. It is<\/p>\n
profitable to refer to the two decisions of the Supreme Court in<\/p>\n
FACT Ltd. v. ESI Corporation(2009(3) KLT 946). The<\/p>\n
Supreme Court in paragraph 10 of its judgment made it clear<\/p>\n
that “it may be seen that S.75 of the Act does not mention who<\/p>\n
INAP 9\/2010 & con.cases       -:6:-<\/span><\/p>\n
will be the parties before the Insurance Court. Since the<\/p>\n
determination by the Insurance Court is a quasi-judicial<\/p>\n
determination, natural justice requires that any party which<\/p>\n
may be adversely affected or may suffer civil consequences by<\/p>\n
such determination, must be heard before passing any order<\/p>\n
by the authority\/court”. In paragraph 12 again it is reiterated<\/p>\n
that “hence, the workmen (or at least some of them in a<\/p>\n
representative capacity, or their trade union) have to be<\/p>\n
necessarily made a party\/parties because the Act is a labour<\/p>\n
legislation made for the benefit of the workmen”. In a later<\/p>\n
decision in ESI Corporation v. Bhakra Beas Management<\/p>\n
Board and another(2009(10) SCC 671), the Supreme Court<\/p>\n
reiterated that “thus, if a determination is given by the<\/p>\n
Employees’ Insurance Court that the persons concerned are<\/p>\n
not the employees of the petitioner, and that determination is<\/p>\n
given even without hearing the persons concerned,it will be<\/p>\n
clearly against the rules of natural justice. It may be seen that<\/p>\n
INAP 9\/2010 & con.cases        -:7:-<\/span><\/p>\n
Section 75 of the Act does not mention who will be the parties<\/p>\n
before the Insurance Court. Since the determination by the<\/p>\n
Insurance Court is a quasi-judicial determination, natural<\/p>\n
justice requires that any party which may be adversely<\/p>\n
affected    or     may  suffer  civil consequences      by   such<\/p>\n
determination, must be heard before passing any order by the<\/p>\n
authority\/court”.\n<\/p>\n
      5. In all the cases before me the dispute is relating to the<\/p>\n
liability of the employer to pay contribution.          The said<\/p>\n
contribution is intended and is for the benefit of the worker<\/p>\n
who comes under the definition of ‘insured’ under the Act.<\/p>\n
     6. Now I will consider the other line of argument<\/p>\n
projected by the learned senior counsel appearing for the<\/p>\n
employers. It has been brought to my notice that a Division<\/p>\n
Bench of the Madras High Court had taken a view regarding<\/p>\n
the jurisdictional aspect after considering Section 76(1) as well<\/p>\n
as Rule 16 of the Madras Rules which are identical with the<\/p>\n
INAP 9\/2010 & con.cases        -:8:-<\/span><\/p>\n
Kerala Rules. A Division Bench of the Madras High Court in<\/p>\n
Modern Radio Service v. Regional Director, ESI Corporation<\/a><\/p>\n
(2006(1) LLJ59) has considered this point. The Employees<\/p>\n
Insurance Corporation at Madras issued a notice determining<\/p>\n
the contribution under Section 45A of the ESI Act. It was<\/p>\n
challenged before the EI Court at Madras, which had returned<\/p>\n
the petition for presentation before proper court. The<\/p>\n
appellant’s establishment was at Kumbakonam. So it was<\/p>\n
contended that the petition should be filed within the<\/p>\n
jurisdiction of the court under which Kumbakonam comes.<\/p>\n
The Division Bench held that since part of cause of action had<\/p>\n
arisen at Madras, under Rule 16 that court will have also<\/p>\n
jurisdiction. It was stated that at the time of rendering the<\/p>\n
decision in Sree Karpagambal Mills Ltd. Rule 16 was not<\/p>\n
brought to the notice of the Judge who decided that case. The<\/p>\n
Division Bench of the Madras High Court then relied on and<\/p>\n
referred to the decision of a learned single Judge of the same<\/p>\n
INAP 9\/2010 & con.cases       -:9:-<\/span><\/p>\n
Court in Sree Lakshmi Medicals, etc. v. Regional Director, ESI<\/p>\n
Corporation(1999(1) LW 204).        There the question arose<\/p>\n
whether Rule 16 can be extended in a case where demand is<\/p>\n
made. The learned Judge was of the opinion that since the<\/p>\n
insured was not directly involved in the litigation Section 76(1)<\/p>\n
will not apply and therefore the rules framed under the ESI<\/p>\n
Act will govern the field and therefore the EI Court has the<\/p>\n
power to exercise jurisdiction under Rule 16 of the Rules. The<\/p>\n
learned Judge in that case considered the question of an<\/p>\n
insured person and held that since there is no direct<\/p>\n
involvement Rule 16 can be invoked. If that is the position of<\/p>\n
law as on today also, I will also agree with the learned senior<\/p>\n
counsel for the employers that Rule 16 of the Kerala Rules<\/p>\n
also can be made applicable and if the cause of action arises in<\/p>\n
full or part within the area mentioned. But, by virtue of the<\/p>\n
latest authoritative pronouncement by the Supreme Court<\/p>\n
when the interest of the worker is involved in an employees’<\/p>\n
INAP 9\/2010 & con.cases        -:10:-<\/span><\/p>\n
State insurance case and as the worker is the beneficiary and<\/p>\n
the Corporation is only acting as an agent to implement the<\/p>\n
provisions of the welfare legislation, when an employer comes<\/p>\n
denying the right of a worker or entitlement of a worker then<\/p>\n
necessarily the worker has to be heard before pronouncing an<\/p>\n
order for or against the employer. Or, in other words, in all<\/p>\n
type of these matters where the ultimate beneficiary is the<\/p>\n
worker either the worker or the representative of the worker<\/p>\n
has to be heard by impleading them as parties. In the light of<\/p>\n
the changed circumstances and in view of the decision of the<\/p>\n
Apex court now we have to analyse the present case. Now the<\/p>\n
dispute is with respect to the coverage of establishment. If it is<\/p>\n
covered it is beneficial to the employee or the insured. If it is<\/p>\n
not covered, it is detrimental to his interest if he is not heard.<\/p>\n
Therefore in all these type of cases, since the junction of the<\/p>\n
employee is a must the court, viz., the EI Court has to give<\/p>\n
direction to the persons concerned to implead the workers or<\/p>\n
INAP 9\/2010 & con.cases       -:11:-<\/span><\/p>\n
the representative of the workers or the representative of the<\/p>\n
union to be impleaded before a final decision is taken in the<\/p>\n
matter.\n<\/p>\n
      7. How this will affect the jurisdiction of a court is the<\/p>\n
next question. Certainly it will affect the jurisdiction of the<\/p>\n
court fundamentally for the reason that if the interest of a<\/p>\n
worker or an insured is involved in a dispute, then Section 76<\/p>\n
(1) of the Act makes it very clear that it has to be filed in a<\/p>\n
court where he had worked or where he was working or the<\/p>\n
question or dispute arose. When the said principle is applied<\/p>\n
Section 76(1) comes into play. When Section 76(1) comes into<\/p>\n
play Rule 16 goes out for the reason that Rule 16 starts with<\/p>\n
the words “in cases not falling under sub-section (1) of Section<\/p>\n
76”. Therefore when rule 16 goes, the contentions raised by<\/p>\n
the learned senior counsel cannot be accepted and looked into.<\/p>\n
Therefore, I hold that in view of these developments and as<\/p>\n
Section 76(1) is directly involved, only the courts   stipulated<\/p>\n
INAP 9\/2010 & con.cases         -:12:-<\/span><\/p>\n
in that section will have jurisdiction over the matter. Learned<\/p>\n
counsel appearing for the Corporation had          produced the<\/p>\n
notification relating to all courts where they had conferred the<\/p>\n
powers exercising the functions under the ESI Act. It      is   in<\/p>\n
order. So as the interest of the insured is involved Section 76(1)<\/p>\n
will govern the field and therefore the orders passed by the<\/p>\n
learned insurance court have to be set aside and I do so.<\/p>\n
      In the result, all the appeals are allowed and orders under<\/p>\n
challenge are set aside. The applications are to be filed in the<\/p>\n
respective courts as contemplated under Section 76(1)(b) of the<\/p>\n
Act and therefore the court below is directed to send the<\/p>\n
applications to the respective courts empowered to deal with it<\/p>\n
and shall inform the applicants and the opposite party<\/p>\n
accordingly. I make it very clear that the ESI Corporation<\/p>\n
shall not proceed to recover the amount for a period of two<\/p>\n
months from today as a matter of precaution to safeguard the<\/p>\n
interest of the applicants to obtain appropriate orders from the<\/p>\n
INAP 9\/2010 & con.cases    -:13:-<\/span><\/p>\n
appropriate courts.\n<\/p>\n<\/p>\n
                             M.N.KRISHNAN, JUDGE<\/p>\n
Cdp\/-<\/p>\n","protected":false},"excerpt":{"rendered":"
Kerala High Court E.S.I.Corporation Represented … vs Panickaveettil Sir Sebastian … on 7 October, 2010 IN THE HIGH COURT OF KERALA AT ERNAKULAM Ins.APP.No. 9 of 2010() 1. E.S.I.CORPORATION REPRESENTED BY ITS … Petitioner Vs 1. PANICKAVEETTIL SIR SEBASTIAN PUBLIC … Respondent For Petitioner :SMT.T.D.RAJALAKSHMI For Respondent :SRI.M.B.PRAJITH The Hon’ble MR. Justice M.N.KRISHNAN Dated :07\/10\/2010 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,21],"tags":[],"class_list":["post-64099","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"\nE.S.I.Corporation Represented ... vs Panickaveettil Sir Sebastian ... on 7 October, 2010 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/e-s-i-corporation-represented-vs-panickaveettil-sir-sebastian-on-7-october-2010\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"E.S.I.Corporation Represented ... vs Panickaveettil Sir Sebastian ... on 7 October, 2010 - 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