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Judgment
Honourable Mr. Justice K. Chandru
The petitioner is a Spinning Mill. The present Writ petition is filed to challenge an order passed by the 1st respondent dated 23.02.2007. By the impugned order, the 1st respondent / ESI Corporation holding that the petitioner / Mill denied payment of Permanent Disablement Benefit to one Thenmozhi, who was employed in the petitioner / Mill and who got injured on 14.10.2003 in an accident arising out of during the course of her employment. Therefore, the authorities held that as she was an insured person, is entitled to be paid a sum of Rs.2,39,985/-, which is a capitalised value of the Permanent Disablement Benefit and accordingly, directed the petitioner/ Mill to pay the amount to the ESI Corporation, failing which, they were threatened with coercive action.
Though the Writ petition challenging the said order and the petitioner/Mill have cited the said Thenmozhi as a third respondent, for reasons best known, they deleted the injured person being a party to the Writ petition. In view of the non implement of the concerned workman the Writ petition is liable to be dismissed. In this context, it is necessary to refer to a decision of the Supreme Court which arose under the ESI Act. The Supreme Court in Fertilizers and Chemicals Travancore Ltd. Vs. Regional Director, ESIC and Others, in paragraphs 7 to 10 has held as follows:
The rules of natural justice require that if any adverse order is made against any party, he/she must be heard. Thus if a determination is given by the Employees'' Insurance Court that the persons concerned are not the employees of the petitioner, and that determination is given even without hearing the persons concerned, it will be clearly against the rules of natural justice. It may be seen that Section 75 of the Act does not mention who will be the parties before the Insurance Court. Since the determination by the Insurance Court is a quasijudicial determination, natural justice requires that any party which may be adversely affected or may suffer civil consequences by such determination, must be heard before passing any order by the authority/Court.
In our opinion, wherever any petition is filed by an employer u/s 75 of the Act, the employer has not only to implead ESIC but has also to implead at least some of the workers concerned (in a representative capacity if there are a larger number of workers) or the trade union representing the said workers. If that is not done, and a decision is given in favour of the employer, the same will be in violation of the rules of natural justice. After all, the real parties concerned in labour matters are the employer and the workers. ESI Corporation will not be in any way affected if the demand notice sent by it under Sections 45-A/45-B is quashed.
It must be remembered that the Act has been enacted for the benefit of the workers to give them medical benefits, which have been mentioned in Section 46 of the Act. Hence, the principal beneficiary of the Act is the workmen and not ESI Corporation. ESI Corporation is only the agency to implement and carry out the object of the Act and it has nothing to lose if the decision of the Employees'' Insurance Court is given in favour of the employer. It is only the workmen who have to lose if a decision is given in favour of the employer. Hence, the workmen (or at least some of them in a representative capacity, or their trade union) have to be necessarily made a party/parties because the Act is a labour legislation made for the benefit of the workmen.
In the present case the workmen concerned were not made parties before the Employees'' Insurance court, nor was notice issued to them by the said court. Also, the order of the Employees'' Insurance Court dated 04.02.1993, relevant portion of which we have quoted, is not a very happy one as no proper determination has been made therein as to whether the workmen concerned are the employees of the appellant and whether they are entitled to the benefit of the Act.
Therefore, in the absence of the workmen being made as a party the Writ petition filed by the petitioner is liable to be rejected on this ground also.
In the Writ petition notice of motion was ordered on 27.04.2007 and interim stay was granted till 07.06.2007. Thereafter, there is no further extension of the said interim order.
On notice from this Court, the 1st respondent / Corporation has filed a counter affidavit dated 12.09.2007. In the counter affidavit it is stated that the petitioner / Mill did not register all the names of the employees for coverage and with ulterior motive to escape from the contribution, they have kept them away from registering their name. The said Thenmozhi, who was employed by them around middle of September 2003 suffered an employment injury on 14.10.2003 and she lost her right hand upto the wrist portion. It was thereafter, the petitioner attempted to comply with the Regulations 11 and 12 in an irregular and improper manner. The matter was enquired into by the Vigilance Department of ESI and it was found that in spite of the said employee being the roll of the employer, no attempt was made to include her name as a subscriber to the ESI fund. After issuing a show cause notice, the final order came to be passed, fixing the liability and the petitioner / Mill, which is a capitalised value of the permanent disablement, did not challenge the said liability in the manner known to law.
u/s 75 of the E.S.I. Act, any employer, who disputes the liability, can file appropriate dispute before the ESI Court and the said Court can go into all the issues arising out of the same. Even assuming the ESI Court had denied any relief to the employer erroneously, a further appeal lies to this Court u/s 82 as against the order passed by the ESI Court. When there is a two tier remedy is available under a special law, it is not open to the petitioner to come to this Court and contend that there are no other remedy except to approach this Court under Article 226 of the Constitution of India.
The Supreme Court in identical circumstances in E.S.I.C. Vs. C.C. Santhakumar, has held that if a liability fixed u/s 45(A) is not challenged before ESI Court u/s 75, the authorities are entitled to proceed to enforce the order passed by them, it has been observed as follows:
Prior to the incorporation of Section 45-A under Act 44 of 1966, the only resort available to the Corporation was Section 75, for recovery of contribution through the court. Since this procedure was found to be impracticable and delayed process involved, a special provision was contemplated where under adjudication is to be made by the Corporation itself. By reason of incorporation of Section 45-A with effect from 17-6-1967, it became possible for the Corporation to have determination of the question, binding on the principal employer, without resorting to the ESI Court. In regard to the order u/s 45-A, the same is enforced, as envisaged u/s 45-B, which was similarly brought into the Act, by which the contribution may be recovered as arrears of land revenue. With regard to the decision reached by the ESI Court in the application u/s 75, the said decision is enforced, as envisaged in sub-section (4) of Section 75 as if it is a civil court. The mode of recovery u/s 45-B of the Corporation and the mode of recovery as per Section 75(4) by the ESI Court as the civil court are entirely different as both Sections 45 and 75 operate in different spheres.
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Section 45-A of the Act contemplates a summary method to determine contribution in case of deliberate default on the part of the employer. By Amendment Act 29 of 1989, Sections 45-C to 45-I were inserted in the Principal Act, for the purpose of effecting recovery of arrears by attachment and sale of movable and immovable properties or establishment of the principal or immediate employer, without having recourse to law or the ESI Court. Therefore, it cannot be said that a proceeding for recovery as arrears of land revenue by issuing a certificate could be equated to either a suit, appeal or application in the court. u/s 68(2) and Sections 45-C to 45-I, after determination of contribution, recovery can be made straightaway. If the employer disputes the correctness of the order u/s 45-A, he could challenge the same u/s 75 of the Act before the ESI Court.
What Section 75(2) empowers is not only the recovery of the amounts due to the Corporation from the employer by recourse to the ESI Court, but also the settlement of the dispute of a claim by the corporation against the employer. While this is so, there is no impediment for the Corporation also to apply to the ESI Court to determine a dispute against an employer where it is satisfied that such a dispute exists. If there is no dispute in the determination either u/s 45-A(1) or u/s 68, the Corporation can straightaway go for recovery of the arrears.
The legislature has provided for a special remedy to deal with special cases. The determination of the claim is left to the Corporation, which is based on the information available to it. It shows whether information is sufficient or not or the Corporation is able to get information from the employer or not, on the available records, the Corporation could determine the arrears. So, the non-availability of the records after five years, as per the Regulations, would not debar the Corporation to determine the amount of arrears. Therefore, if the provisions of Section 45-A are read with Section 45-B of the Act, then, the determination made by the Corporation is concerned. It may not be final so far as the employer is concerned, if he chooses to challenge it by filing an application u/s 75 of the Act. If the employer fails to challenge the said determination u/s 75 of the Act before the Court, then the determination u/s 45-A becomes final against the employer as well. As such, there is no hurdle for recovery of the amount determined u/s 45-B of the Act, by invoking the mode of recovery, as contemplated in Sections 45-C to 45-I.
In ESI Corpn. v. F. Fibre Bangalore (P) Ltd. 2 it was observed that it is not necessary for the Corporation to seek a resolution of the dispute before the ESI Court, while the order was passed u/s 45-A. Such a claim is recoverable as arrears of land revenue. If the employer disputes the claim, it is for him to move the ESI Court for relief. In other cases, other than cases where determination of the amount of contributions u/s 45-A is made by the Corporation, if the claim is disputed by the employer, then, it may seek an adjudication of the dispute before the ESI Court, before enforcing recovery.
Even otherwise in a special law where there is a remedy by way of an appeal, the parties must necessarily avail the remedy provided under law and cannot come to this Court under Article 226.
In this contest it is necessary to refer to the judgment of the Supreme Court in Raj Kumar Shivhare Vs. Assistant Director, Directorate of Enforcement and another reported in 2010 (4) LW 1, wherein it has been held as follows:
Therefore, principle laid down in the Ratan''s case (supra) applies in the facts and circumstances of this case. If the appellant in this case is allowed to file a writ petition despite the existence of an efficacious remedy by way of appeal u/s 35 of FEMA this will enable him to defeat the provisions of the Statute which may provide for certain conditions for filing the appeal, like limitation, payment of court fees or deposit of some amount of penalty or fulfillment of some other conditions for entertaining the appeal. (See para 13 at page 408 of the report). It is obvious that a writ court should not encourage the aforesaid trend of by-passing a statutory provision.
Learned counsel for the appellant relied on a decision of this Court in Monotosh Saha Vs. Special Director, Enforcement Directorate and Another, . That was a decision entirely on different facts. In that decision Saha preferred an appeal before the appellate tribunal with a request for dispensing with requirement of pre-deposit, but the tribunal directed the deposit of 60% of the penalty amount before entertaining the appeal. When an appeal was preferred before the High Court u/s 35 of 11 the FEMA, the same was dismissed by the High Court holding that no case for hardship was made out either before the tribunal or before it. In the background of those facts, this Court observed that since pursuant to this Court''s interim order Rs.10 lacs have been deposited with the Directorate, the appellant was directed to furnish further such security as may be stipulated by the tribunal and directed that on such deposit tribunal is to hear the appeal without requiring further deposit.
In the affidavit filed in support of the Writ petition, there is no dispute regarding the accident and the loss of earning capacity by the employee. The only ground raised was that no opportunity has been given to the petitioner. Even such issues could have been raised before the regular petition in the ESI Court and for that reason this Court is not inclined to entertain the Writ petition. Hence, the Writ petition stands dismissed. Consequently, connected M.P. is closed. No costs.