Employees State Insurance Corporation vs Chinmaya Vidyalaya

B. Kemal Pasha, J.—The questions of law that come up for consideration in this appeal precisely are:

(1) Whether a Nursery School can be treated as an educational institution within the meaning of notification G.O. (P) No. 135/2007/LBR dated 08.10.2007 issued by the Government of Kerala (''the impugned notification'', for short).

(2) Whether a Nursery School can be covered under the provisions of the Employees'' State Insurance Act, 1948 (''the ESI Act'', for short).

Heard the learned Standing Counsel Sri. T.V. Ajayakumar for the ESI Corporation and the learned counsel Sri. K.K. Premlal for the respondents. The ESI Corporation has come up in appeal challenging order dated 14.05.2012 passed by the E.I. Court, Palakkad in I.C. No. 154/09 whereby the E.I. Court had declared that the Nursery School being run by the applicant is not covered under the ESI Act.

By challenging the coverage under the ESI Act, the applicant had approached the E.I. Court, Palakkad through I.C. No. 154/09. The learned Standing Counsel for the ESI Corporation has pointed out that the court below has miserably failed in entering a finding as to whether nursery school can be covered by the provisions of the ESI Act or not. It has also been pointed out that the court below has not mentioned the specific aspect as to whether Nursery School can be clubbed with any other school for the purpose of coverage. In paragraph 49 of the impugned order the court below has observed:

"In the present case, both the applicant and the Corporation have not adduced any evidence in respect of coverage of Nursery School. In the absence of evidence, it is not possible to examine the coverage aspect of Nursery School treating it as part of the High Court. Activities in Nursery School and High School are entirely different and the qualifications of the staff are also different. As per Ext. B1 survey report, the Nursery School is functioning outside the premises of High School and the employment strength is only seven. Therefore, prima facie, the Nursery School cannot be covered as part of the High School. As already observed above, as final decision is not possible on this point."

According to the learned Standing Counsel for the ESI Corporation, when the court below has entered a specific finding that both sides have not adduced any evidence in respect of the coverage of a Nursery School and that a final decision is not possible on the said point, the court below ought to have dismissed the I.C. According to this Court, a mere dismissal of the I.C. will not solve the problem. When the applicant had approached the court below for a specific finding with regard to the said aspects relating to the clubbing as well as independent coverage, the court below ought to have entered specific findings on it. If there is deliberate failure on the part of the applicant to prove that a Nursery School cannot be covered under the provisions of the ESI Act, and that a Nursery School cannot be clubbed along with any other school for the purpose of such coverage, the court below ought not have entered such specific findings on the said aspects. When the court below has clearly observed that no evidence was adduced by any of the parties in respect of the coverage of the Nursery School before the court below, and when it has been revealed through the impugned order that a final decision was not possible to be taken by the court below in the matter, the impugned order passed by the court below with a doubtful mind cannot serve any purpose. The findings entered by the court below and the conclusion arrived at by the court below in the impugned order at the last portion cannot be acted upon, in the light of the observations made by the court below in paragraph 49 of the impugned order. On a careful consideration of all the aspects, this Court is of the view that the entire matter requires reconsideration by the court below. The parties shall be given an opportunity to prove the rival claims and they shall have a right to adduce fresh evidence in the matter. On the observations made by the court below in paragraph 49 of the impugned order alone, the entire impugned order is liable to be set aside.

In the result, this appeal is allowed and the impugned order is set aside. The matter is remitted to the court below for denovo disposal in accordance with law. The court below shall extend sufficient opportunity to the parties to adduce evidence in the matter. The court below shall enter independent findings with regard to the question of clubbing for the purpose of coverage, the question of independent coverage etc., quite untrammeled by any of the observations made by the court below in the impugned order. The parties shall appear before the court below on 24.09.2014.