IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.N.RAVINDRAN THURSDAY, THE 1ST SEPTEMBER 2011 / 10TH BHADRA 1933 WP(C).No. 18748 of 2011(P) --------------------------------------- PETITIONER(S): ------------------------- KERALA EDUCATIONAL SOCIETY, (REG.NO.ER 71/75), KOOTHATTUKULAM-686 662, ERNAKULAM DISTRICT, REPRESENTED BY GENERAL MANAGER K.M.MATHAI. BY ADV. SRI.MOHAN PULIKKAL SMT.MANJU RAJAN SRI.K.JAYASANKAR (KAPRASSERY) SRI.K.S.ARUN BABU RESPONDENT(S): -------------------------- 1. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY, LABOUR & REHABILITATION (B) DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695 001. 2. THE EMPLOYEES' STATE INSURANCE CORPORATION, REGIONAL OFFICE (KERALA), PANCHADEEP BHAVAN, NORTH SWARAJ ROUND, THRISSUR-680 020, REPRESENTED BY ITS REGIONAL DIRECTOR. 3. UNION OF INDIA, REPRESENTED BY THE SECRETARY, MINISTRY OF LABOUR, NEW DELHI-110 001. R1 BY GOVERNMENT PLEADER SRI.HANIL KUMAR R2 BY ADV. SRI.P.SANKARANKUTTY NAIR, SC, ESI CORPN R3 BY ADV. SRI.P.PARAMESWARAN NAIR,ASG OF INDIA THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01/09/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: sts WP(C)NO.18748/2011 APPENDIX PETITIONER'S EXHIBITS: P1 COPY OF THE REPRESENTATION DATED 11/01/2010 SUBMITTED BY THE PETITIONER TO THE MINISTER FOR LABOUR, GOVERNMENT OF KERALA. P2 COPY OF THE LETTER DATED 20/05/2010 ISSUEDBY THE 2ND RESPONDENT. P3 COPY OF THE APPLICATION IN PROFORMA A SUBMITTED BY THE PETITIONER BEFORE THE 2ND RESPONDENT. P4 COPY OF THE RESOLUTION DATED 14/08/2010 PASSED AT THE AGM OF THE PETITIONER SOCIETY. P5 COPY OF THE BYE LAWS OF THE PETITIONER SOCIETY P6 COPY OF THE MEMBER'S INSURANCE SCHEME FORMULATED BY THE PETITIONER SOCIETY. P7 COPY OF THE STATEMENT SHOWING THE BENEFITS UNDER THE MEMBER'S INSURANCE SCHEME OF THE PETITIONER SOCIETY. P8 COPY OF THE CERTIFICATE DATED 29/12/2010 ISSUED BY THE NATIONAL INSURANCE CO.LTD TO THE PETITIONER. P9 COPY OF THE LETTER DATED 21/10/2010 FROM THE PETITIONERT TO THE FIRST RESPONDENT. P10 COPY OF THE LETTER DATED 03/12/2010 FROM THE PETITIONER TO THE 1ST RESPONDENT. P11 COPY OF THE LETTER DATED 28/06/2007 FROM THE 2ND RESPONDENT TO THE PETITIONER. P12 COPY OF THE LETTER DATED 13/06/2007 FROM THE SECOND RESPONDENT TO THE CPE COMMISSIONER, NEW DELHI P13 COPY OF THE JUDGMENT DATED 13/01/2011 IN WPC.NO.1164/2011 P14 COPY OF THE ORDER DATED 10/06/2011 PASSED BY THE FIRST RESPONDENT. RESPONDENT'S EXHIBITS: NIL /TRUE COPY/ P.S.TO.JUDGE sts P.N.RAVINDRAN, J. ----------------------------------------- W.P(C).No.18748 of 2011 ----------------------------------------- Dated this the 1st day of September, 2011 JUDGMENT The petitioner is a society registered under the Travancore- Cochin Literary, Scientific and Charitable Societies Act, 1955. It is running schools and creches in different parts of the State of Kerala. When the Employees State Insurance Corporation (hereinafter referred to as the Corporation for short) initiated proceedings against the petitioner society under the provisions of the Employees' State Insurance Act, 1948 (hereinafter referred to as the Act for short), the petitioner filed Ext.P3 application before the State Government, the appropriate authority under the Act seeking exemption from the provisions of the Act. Earlier, the petitioner had filed a representation before the Hon'ble Minister for Labour seeking the same relief, but, pursuant to Ext.P2 letter dated 20.5.2010 received from the Government an application in the prescribed form, evidenced by Ext.P3, was submitted. When that representation was kept pending, the petitioner filed W.P.(C) No.1164 of 2011 in this Court. By Ext.P13 judgment delivered on W.P(C).No.18748 of 2011 -:2:- 13.1.2011 this Court disposed of the said writ petition with a direction to the State Government, joined as the second respondent in the writ petition, to pass appropriate orders on Ext.P3 application after ascertaining the views of the Corporation and after affording the petitioner and a representative of the Corporation an opportunity of being heard. The Government thereafter passed Ext.P14 order dated 10.6.2011 rejecting the application. Hence this writ petition challenging Ext.P14 and seeking the following reliefs:- i) issue a writ of certiorari or any other appropriate writ, order or direction quashing Extg.P14. ii) a writ of mandamus or any other appropriate writ, order or direction commanding the first respondent to consider the petitioner's request in Ext.P3 application afresh and pass orders thereon, after affording an opportunity of being heard. iii) a writ of mandamus or any other appropriate writ, order or direction commanding the second respondent to desist from proceeding against the petitioner under the provisions of the Act until a decision is taken by the appropriate government, the first respondent, on Ext.P3 application of the petitioner Society under Sections 87 and 88 of W.P(C).No.18748 of 2011 -:3:- the Act. The main contention raised by the petitioner is that the Government, instead of rejecting the application on a technical ground, namely an incomplete entry in column 9 of the application, ought to have considered the petitioner's application for exemption on the merits and taken a decision as to whether the order of exemption sought for should be granted. Various other contentions are also raised in the writ petition. 2. I heard Sri. Mohan Pulickkal, learned counsel appearing for the petitioner, Sri.Hanil Kumar, learned Government Pleader appearing for the State of Kerala, Sri.P.Sankarankutty Nair, learned standing counsel appearing for the Corporation and Sri.P.Parameswaran Nair, learned Assistant Solicitor General of India appearing for the third respondent. 3. The operative portion of the impugned order reads as follows:- “4. In the Ext.P3 application submitted by the petitioner for exemption from the purview of ESI Act under section 87 & 88, the period for which exemption is required, has not been specifically indicated. The petitioner has sought exemption “with retrospective effect” without specifying the W.P(C).No.18748 of 2011 -:4:- period of exemption. 5. As per section 91A of the ESI Act, 1948, as amended by the Act 18 of 2010, which came into force w.e.f. 1.6.2010, exemption can be granted only with prospective effect. Since there is no provision in this Act to exempt with retrospective effect the request of the petitioner cannot be considered and the Ext.P3 application for exemption is therefore rejected. The directions of the Hon'ble High Court in the judgment read above is thus complied with.” From a reading of the impugned order it is evident that the Government was mainly influenced by the entry made against column No.9 of the application which reads as follows:- “9.(a) Section of the ESI Act under which exemption : Section 87 & 88 of is sought the ESI Act, 1948. (b) The period for which the : With retrospective exemption is required effect.” Against column 9(b) the petitioner had stated that the period for which exemption was required is “with retrospective effect”. The impugned order also proceeds to state that in view of section 91A of the Act as amended by Act 18 of 2010 with effect from 1.6.2010, exemption can be granted only prospectively. The application submitted by the petitioner for exemption has been W.P(C).No.18748 of 2011 -:5:- rejected on two grounds, namely, the period for which exemption was sought has not been specified and retrospective exemption cannot be granted. 3. Section 91A of the Act as it stood prior to 1.6.2010 reads as follows:- “91A. Exemptions to be either prospective or retrospective.-- Any notification granting exemption under section 87, section 88, section 90 or section 91 may be issued so as to take effect either prospectively or retrospectively on such date as may be specified therein.” Section 91A of the Act as amended with effect from 1.6.2010 reads as follows:- “91A. Exemption to be prospectively. Any notification granting exemption u/s.87, Section 88, Section 90 or Section 91 may be issued so as to take effect prospectively on such date as may be specified therein.” As per the provisions in force prior to 1.6.2010 the State Government could have granted exemption either prospectively or retrospectively with effect from such date as may be specified in the order of exemption. On and with effect from 1.6.2010 the exemption granted can only have prospective effect from such W.P(C).No.18748 of 2011 -:6:- date as may be specified therein. In my opinion the word 'prospectively' occurring in section 91A of the Act as amended with effect from 1.6.2010 cannot be interpreted to mean that an order of exemption can take effect only from the date on which it is granted. In a given case, the Government may have to spend some time on the application before granting an exemption. In another case, the Government may be in a position to pass expeditious orders. In other words, if the Government were to grant exemption with effect from the date of the application it cannot be said that such an order of exemption is illegal. The words “may be issued so as to take effect prospectively on such date as may be specified therein” cannot be interpreted to mean that that date can only be a future date. If that were the intention the Parliament would have stated that the notification granting exemption will take effect only from the date of the order. All that section 91A as amended prohibits is the grant of retrospective exemption from an earlier date, anterior in point of time, to the application for exemption itself. In other words in view of the stipulations in section 91A as amended, an order of exemption cannot take effect from a date earlier than the date of W.P(C).No.18748 of 2011 -:7:- the application. In the instant case the Government appears to have taken the stand that exemption can be granted only from the date of the order. That apart, the Government have also declined to grant exemption on the ground that the date with effect from which the petitioner seeks exemption has not been specified. In my opinion, if the Government were of the opinion that the application was defective for want of details, it should have returned the application to the petitioner and directed the petitioner to rectify the defect and to resubmit the application. It is evident from a reading of the impugned order that it was because of the omission in the application that the Government rejected the application. Such being the situation, I am of the opinion that the Government should reconsider Ext.P3 application after giving the petitioner an opportunity to rectify the defect in it, namely the entry in column 9(b). I accordingly allow the writ petition, quash Ext.P14 and direct the Government to reconsider Ext.P3 application after giving the petitioner an opportunity to correct the entry against column 9(b) of the application. The petitioner shall move the Government for such correction within two weeks from the date W.P(C).No.18748 of 2011 -:8:- of receipt of a certified copy of this judgment. On the petitioner moving an application for correction, the Government shall consider Ext.P3 application afresh and pass appropriate orders thereon after notice to and affording the petitioner an opportunity of being heard. Needless to say the Government shall ascertain the views of the Corporation and shall, if necessary, afford an opportunity of being heard to the Corporation also. The Government shall pass revised orders on Ext.P3 application within three months from the date of receipt of the application for correction and shall after orders are passed communicate copies thereof to all the parties simultaneously. Until such time, the status quo as on today shall be maintained as regards the proceedings, if any, initiated by the Corporation against the petitioner/petitioner's establishment. P.N.RAVINDRAN, Judge. ahg. P.N.RAVINDRAN, J. --------------------------- W.P(C).No.18748 of 2011 ---------------------------- JUDGMENT 1st September, 2011