Pyare Lal, President, Wings Wear Lal Jhanda Union vs Wings Wear (P.) Ltd.

Sudershan Kumar Misra, J.—This application has been moved by the applicant in his capacity as the President of M/s. Wings Wear Lal Jhanda Union on his own behalf as well as on behalf of some unspecified workers of the said Union. Counsel for the applicant limits the relief to Shri Pyare Lal, the applicant himself. The essence of the case of the applicant is that whilst the company-in-liquidation was functioning, he was entitled to coverage and the benefit of the ESI scheme in terms of the Employees State Insurance Act and Rules. It is, therefore, prayed that medical benefit should be granted by the ESIC to the applicant in terms of Rule 61 of the ESI (Central) Rules, 1950.

Rule 61 states as follows:

Medical benefits to retired insured persons, - An insured person who leaves the insurable employment on attaining the age of superannuation after being insured for not less than five years, shall be eligible to receive medical benefits for himself and his spouse at the scale prescribed under the Act and the regulations made there under, subject to--

(i) the production of proof of his superannuation and having been in the insurable employment for a minimum of five years to the satisfaction of such officer as may be authorized by the Corporation; and

(ii) the payment of contribution at the rate of ten rupees per month in lump sum for one year at a time in advance to the concerned office of the Corporation in the manner prescribed by it.

Admittedly, the applicant reached the age of superannuation on 6-6-2004. However, the company was directed to be wound up earlier on 7-11-2002. The key to relief under this clause is that there must be (a) an insured person; (b) an insurable employment; (c) that such insured person should have left the insurable employment on the occurrence of two eventualities: (i) on attaining the age of superannuation, and (ii) that the age of superannuation should have been attained by the insured person after he has been insured for not less than five years.

It is the applicant''s case that he has been insured vide insurance No. 11-236551 since the year 1964, and therefore, he satisfies the requirement of being insured for not less than five years. As regards the issue of leaving the insurable employment is concerned, admittedly, the age of superannuation, on which he would have left the company, would have come about only on 6-6-2004, i.e., after the date of winding up order.

Section 445 of the Companies Act, 1956 deals with procedural requirement regarding the filing of a certified copy of the winding up order with the Registrar of Companies. Sub-clause (3) of that section provides as follows:

(3) Such order shall be deemed to be notice of discharge to the officers and employees of the company, except when the business of the company is continued.

The only aspect that needs to be examined is whether the applicant falls within the scope of the expression ''employees'' mentioned in Section 445(3) of the Companies Act extracted above. The expression ''employee'' has not been defined under the Companies Act. At the same time, there is no reference to workers as a separate class or category anywhere in the Companies Act, 1956, and, therefore, there is nothing to presume that the expression "employees" used in Section 445(3) does not include workmen. Not only that, the expression "employees", as normally understood in the absence of any further qualification, would, to my mind, include workers also. A workman is a special class of employee, so designated under the Industrial Disputes Act, 1947, who meets the requirements as laid down by the Industrial Disputes Act, but he remains an employee nonetheless. In this context, it can be said that the expression "employee" forms a larger group, of which a workman is a part.

It is unfortunate that after remaining in continuous employment for as many as 38 years, the applicant''s employment has come to an end by the order of winding up, which has resulted in non-fulfillment of the requirement under Rule 61 of the ESI Central Rules, 1950, thereby depriving him of the benefits of practically a lifetime of employment. Had the order come about after another two years, the applicant would have attained superannuation and thereafter would have been entitled to the benefits of the ESI Scheme by paying a small contribution of Rs. 10 per month.

The ground on which this application is predicated is that cessation of employment due to the order directing the winding up of the company amounts to a deemed superannuation of the applicant. I can see no basis in law for this conclusion. It may be that in this case, the applicant had put in a substantial number of years and his superannuation would have occurred in the normal course within a year or two, but for the intervention of the order of winding up; however, the fact remains that his employment came to an end on the date of winding up order. To hold otherwise, as contended by counsel for the applicant, would mean that any employee, who fulfils the condition of having been insured for not less than 5 years, would have to be deemed to be superannuated on the date of the order of winding up even if he had joined the employment at the age of 18 years and had continued in that employment till the age of 23 or 24 years only.

A reading of Section 445(3) of the Act makes it clear that the order of winding up also amounts an order of discharge to the applicant in view of the fact that on that date, the business of the company was at an end and was not continued. Sadly, in this case, the applicant himself had brought the petition for winding up of the Respondent Company on his own behalf and on behalf of unpaid workers of the company and it was on his petition that this order came to be passed. To my mind, the scope of the expression "discharge" used in Section 445(3) of the Companies Act, 1956 cannot be taken to mean that all employees, thus, discharged are deemed to have left the insurable employment on attaining the age of superannuation, as required under Rule 61 of the ESI (Central) Rules, 1950.

The application is dismissed.