THE HON’BLE SRI JUSTICE B.PRAKASH RAO AND THE HON’BLE SRI JUSTICE R.KANTHA RAO C.M.A.No.2036 of 2002 and C.M.A.No.4474 of 2003 COMMON JUDGMENT: (Per BPR,J) Since common question arises in these two appeals, they are being taken up together for disposal. The appellants are the APHMBL Staff and Workers Union and A.P. Heavy Machinery and Engineering Limited, who filed these appeals under Section 82 of E.S.I Act, inter alia, seeking to assail the correctness of the orders dismissing their applications purportedly filed under Section 75 (1) (g) of the Employees State Insurance Act, 1948, as per orders in E.I.Case No.113 of 2000, dated 19-1-2001, on the file of the Employees Insurance Court and Chairman, Industrial Tribunal – I, Hyderabad. Heard the learned counsel on both sides. Conspectus of the issue which was raised and the issue which got decided and correction of such a course is the scope raised in these appeals. The complaint at the first blush by the appellant is that the Court below did not considered nor paid any attention to the issue which was raised, but went astray going beyond the scope. Briefly, the facts giving rise to these proceedings are that, in the said application filed before the Employees Insurance Court, the relief sought for is for a declaration that the action of the first respondent i.e., Union of India in issuing Circular bearing No.52/12/15/96-PICI dated 1-1-1997 and the notification bearing No.GSR 528 (F) dated 23-12-1996 as null and void and set aside the same and to declare that the benefits provided by the 3rd respondent- Management are favourable to the petitioner union members and to allow the petition. In short, the case of the petitioner Union was that, having regard to the benefits which are already in vogue and in existence and which are being enjoyed by the employees of the 3rd respondent herein, the impugned action on the part of the Union of India in trying to put a limit of Rs.6,500/- for the applicability of the Act is totally odious, unnecessary, misconceived and cannot be applied. The prime contention was that having regard to the far beneficial benefits, which the members are already enjoying, there is no need for extending the benefit or putting any rider adding a paying limit. It is this question, which according to the appellant, which should have been addressed rather than other questions as framed and gone into by the Court below, and therefore, there is a total miscarriage of justice. After filing of the petition in the Court below, though it was couched in a very broader way, but it only rested on the plea that the existing benefits are far better than one which are sought to be extended, and therefore, there is no need to apply or otherwise. The said application was contested by the respondents herein denying about the correctness of the claim and the power of the authorities including the Union of India in issuing such Circular and fixing the limit. Further, that the Court has no jurisdiction to go into the validity of the rule or any provision. In fact, the 3rd respondent, which is the Management of the employees filed a separate written statement and reiterated that the scheme as in existence is more beneficial to the employees. Further it referred to the writ proceedings in W.P.No.5237 of 1997, which was subsequently disposed of along with a batch and for approaching the Court below and in pursuance of which only the present application has been filed. Further, it is pointed out that even as per Section 1 (4) of the ESI Act, it will not apply to the said 3rd respondent company and that apart it has already become sick in the year 1992 and referred to BIFR and where scheme was formulated for revival of the company. Having regard to such situation and financial hardship being faced there is difficulty in making the payment and that some of the employees have opted for VRS already. With these and other written statement filed by the respondents, the Court below framed the following issues: 1. Whether the notification issued by the Central Government dated 23-12-1996 which come into force from 1-1-1997 enhancing the wage ceiling for coverage from Rs.3,000/- to Rs.6,500/- is not valid. 2. Whether the members of the petitioner union drawing more then Rs.3,000/- are not coverable under the ESI Act? 3. To what relief? During the course of enquiry, on behalf of the petitioner PW.1 was examined and Ex.P.1 to P.4 were marked, whereas on behalf of respondents RWs.1 and 2 were examined and Exs.R.1 to R.14 were marked. After considering the material on record, and by taking into the checkered events including the filing of a writ in W.P.No.5273 of 1997 questioning the very same notification by the appellants-petitioners, which was disposed by the orders of the Division Bench on 31-1-2000 as withdrawn with a direction to approach the E.S.I Court. Accordingly, after obtaining certain extension orders the present application is filed on 20-10-2000 and parties appeared. The Court below while dismissing curiously proceeded in the following manner. For convenient sake, the same is extracted below: “The main question which calls for determination in this dispute is whether the facts as stated the impugned notification Ex.R.1 enhancing the ceiling limit of E.S.I Coverage from Rs.3,000/- to Rs.5,6000/- binds the employees and employees by means of statutory obligation and liability to contribute to the E.S.I funds as contemplated under Section 39 and 40 of the E.S.I Act and to enforce the benefits.” Later, the Court tried to proceed as if the mute question is in regard to the implication of the Act, its objects, purposes etc. The Court sought to deal the entire scheme of the Act under various provisions from beginning to end and giving introduction of prelude on the statutory provisions, it proceeded as if the benefits under the Act which are extended and of which sought to be reviewed. Again falling back on the competency in issuance of the circular by the government and the delegated authority and the principles contained therein by referring to the provisions under Section 94 (a) and 95, it held that in the light of the said legal provisions and the competency which exists with the respondent No.4, the impugned circular cannot be questioned as unconstitutional nor can it be called as ultravires of the statutes. Further in the last but one para taking into consideration that the Management has not moved the government for the exemption and therefore a liberty was given to the management to raise the dispute before the authority for exemption and relaxation. In the result, the petition was dismissed as not maintainable. As already stated above, neither the Court below is a constitutional court where it can be said that constitutional validity or ultravires of a provision or circular could have been gone into. Nor is it a case of the appellants that they are seeking any such relief in the manner by way of Writ under Article 226 of the Constitution of India before this Court. On a reading of the entire orders, and especially the issues, the questions as framed, which has been extracted above, it really does not reflect nor would take in the grievance of the parties. The main question is as to whether having regard to the existing far beneficial benefits, could there be any applicability of the said Act and prescribing any limitation thereunder. In this regard, the reliance is placed on by the appellants on the proviso to Section 1 (4) of the Act. These aspects or the question as to the effect of existing far beneficial benefits on any move or a policy which sought to be introduced has not come up for consideration nor any attention is paid thereto. There is no issue framed in this regard nor the same was addressed to from a proper perspective. The entire grounds raised in these two Memorandum of Appeals is only on the said approach made by the Court below going quite outside real grievance as they sought to make out. On a perusal of the orders under Appeal, it is seen that none of real aspects are in any way addressed to nor any attempt has been made to go into the same, which is very fatal. It cannot be said that by merely raising a question of constitutionality or ultravires, the petitioner could in any way stand to gain. Therefore, it is a fit case where the matter has to be re-enquired into by properly framing the issues as they arise and by directing both the parties to file the draft thereof and then to draw the ultimate lis to reflect on the issues. In view of the aforesaid reasons, we are of the view that the matters require to be remitted back for disposal afresh. The appeals are accordingly allowed. The impugned orders are set aside and the matter is remitted back to the Employees Insurance Court and Chairman, Industrial Tribunal – I, Hyderabad for fresh disposal on merits, and in accordance with law, after giving notice and opportunity to both sides. It is also made clear that we are conscious of the long lapse of duration, however, having regard to the aspects involved effecting the substantive rights of the employees on one side and the Management on the other side, it is desirable that a proper opportunity to be given to both sides to lead any evidence or material in support of their respective submissions, from all angles and the same should be considered. No costs. During the course of the arguments, a reference is made to the Judgment of a Division Bench of which one of us BPR,J is a party in CMA.Nos.266 of 2005 and batch dated 21-9-2007 wherein almost under similar circumstances where the relief under Section 75 (1) (g) was likely in a different context was allowed at the instance of the Corporation by giving certain directions. However, having regard to the reasons mentioned above and different set of circumstances involved, the Court below would certainly take into consideration the principles laid down therein as well. ________________ (B PRAKASH RAO,J) _______________ (R.KANTHA RAO,J) DATE: 14-03-2011 GRK THE HON’BLE SRI JUSTICE B.PRAKASH RAO AND THE HON’BLE SRI JUSTICE R.KANTHA RAO (Judgment of the Bench Pronounced by Hon’ble Sri Justice B.Prakash Rao) C.M.A.No.2036 of 2002 and C.M.A.No.4474 of 2003 Dated: -03-2011 THE HON’BLE SRI JUSTICE B.PRAKASH RAO AND THE HON’BLE SRI JUSTICE R.KANTHA RAO (P.D.Judgment prepared by Hon’ble Sri Justice B.Prakash Rao) C.M.A.No.2036 of 2002 and C.M.A.No.4474 of 2003 Cirlculated to His Lordship Hon’ble Sri Justice R.Kantha Rao for perusal.