IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN WEDNESDAY, THE 30TH JULY 2008 / 8TH SRAVANA 1930 Ins.APP.No. 71 of 2005() ------------------------ JUDGMENT IN I.C.NO.40/2000 DATED 1/11/2004 OF THE EMPLOYEES' INSURANCE COURT, ALAPPUZHA .................... APPELLANT/OPP. PARTY: ---------------------- THE REGIONAL DIRECTOR, E S I CORPORATION, PANCHADEEP BHAVAN, SWARAJ ROUND NORTH, THRISSUR. BY ADV. SMT.T.D.RAJALAKSHMY, SC, ESI CORPN. RESPONDENT/APPLICANT: ---------------------- H.BASHEER, KOROTHU, VAYALAR POST, CHERTHALA. BY ADV. SRI.M.V.MATHEW - R1 SRI.AZAD BABU THIS INSURANCE APPEALS HAVING BEEN FINALLY HEARD ON 30/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: scm M.N.KRISHNAN, J. -------------------------- Ins. Appeal No. 71 OF 2005 --------------------- Dated this the 30th day of July, 2008 JUDGMENT Aggrieved by the decision of the Employees' Insurance Court, Alappuzha, in I.C. 40/00, the Employees State Insurance Corporation has come up with this appeal. 2. The applicant before the court below is the owner of a peeling shed at Vayalar. The Employees State Insurance Corporation issued notice to him and wanted to fix the liability on him under the statute and rules. The relevant provision applicable is Rule 38 of the Employees' State Insurance (General) Regulations, 1950. The said Rule reads as follows: 38. Scheme by joint employers.- Where an employee is ordinarily employed by two or more employers in a [wage period] the employers of such an employee may, if they think fit, submit to the Corporation a scheme for the payment of the contributions in respect of such employee and the corporation may, if it is satisfied that the scheme is such as will secure the due payment of the contributions, approve such a scheme subject to such terms and conditions as it may think necessary: Provided that if on such scheme is submitted to or approved by the Corporation, the Corporation may specify that any one of such employers shall be treated as the employer for the purposes of the provisions of the Act and the regulation relating to contributions, and in such a case the contribution for any [wage period] shall fall due on the last day of the [wage period] on which an employee was employed by the employer so specified.” Ins. Appeal No.71/05 2 3. A reading of this rule makes it clear that when an employee is employed by two or more employers, it is the duty of the employers to submit a scheme to the corporation for payment of the contributions in respect of such employee. The proviso states that when no such scheme is submitted or approved by the corporation, the corporation may specify that any one of such employers shall be treated as the employee for the purpose of provisions of this Act. The practical difficulty envisaged by the corporation and some of the employers are also to be borne in mind while giving effect to Regulation 38 mentioned above. A plain reading of Regulation 38 would make it clear that it is only the duty of the employer to file a scheme before the corporation and in default of filing a scheme, the corporation is empowered to consider one of the employers liable under the Act. 4. Being a social welfare legislature, the intention of the legislature to confer benefit on such employees have to be implemented by resorting to a practical approach at this place. Even if two employers are willing, there may be cases where other employers may not co-operate at all. So in order to get a scheme for the purpose, it is necessary to find out regarding a particular Ins. Appeal No.71/05 3 employee under whom he or she works and thereafter issue notice to such employers intimating about their legal responsibility to frame a scheme and give some time for the purpose of producing a draft of the scheme. Even if only some of the employers turn round, the picture will be clear as to who all are the employers and who all have not responded. Still, it may be possible for the Employees State Insurance Corporation to find out under whom all, a particular individual is working. Therefore, on the basis of the scheme proposed by atleast some of the employer, the ESI Corporation can take further action and apportion the responsibility contemplated under the Rule. Suppose nobody turns round and submits a scheme, necessarily under law, the corporation has to resort to the proviso of Regulation 38. Even in such cases there can be a practical method of fixing the liability taking into consideration the maximum number of days an employee works under a particular employer so that only a person who employs him for a large number of days is affixed with the responsibility of paying the contribution. Needless to say that when materials are available to fix the liability irrespective of the question of submission of a scheme, the corporation may be in a position to fix the liability and pass Ins. Appeal No.71/05 4 appropriate orders. But, at the same time, since nobody has submitted a scheme and the action is initiated under the proviso by the corporation before finalising, it is necessary that those employers who are contemplated to be roped in for the liability are given notices and they are heard and the matter is decided. This is the only practical way in which a solution can be arrived. Let that be adopted in one or two cases and if it is also not practicable, it is for the Employees State Insurance Corporation to process through its head for appropriate amendment of the regulation for implementation of the intention of the legislature in such cases. In the present case also let this mechanism be adopted and a decision be arrived at. In the meanwhile no steps shall be taken for realisation of the amount. This appeal is disposed of accordingly. M.N.KRISHNAN, JUDGE vps Ins. Appeal No.71/05 5