IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 07.01.2011 CORAM: THE HON’BLE MR. JUSTICE K.CHANDRU W.P.Nos.4424 and 4525 of 2008 1 M/S.PAVIS TEXTILES NO 13-B, SALEM MAIN ROAD T.KAILASAMPALAYAM TIRUCHENGODE TK NAMAKKAL DT. REP BY ITS PROPRIETOR M.Mohanambal [ PETITIONER IN W.P.4424/2008 ] 1 M/S ARUN TEXTILES NO. 12-B/1 T. KAILASAMPALAYAM TIRUCHENGODE (TK) NAMAKKAL(DT) REP. BY ITS PROPRIETOR VELUSAMY [ PETITIONER IN W.P.4525/2008 ] Vs 1 THE DIRECTOR GENERAL EMPLOYEES' STATE INSURANCE CORPORATION PANCHDEEP BHAVAN, C.I.G ROAD NEW DELHI 2 THE SECRETARY TO GOVERNMENT HEALTH DEPARTMENT GOVERNMENT OF TAMIL NADU SECRETARIAT CHENNAI 3 THE SECRETARY TO GOVERNMENT LABOUR AND EMPLOYMENT DEPARTMENT GOVERNMENT OF TAMIL NADU SECRETARIAT CHENNAI https://hcservices.ecourts.gov.in/hcservices/ 4 REGIONAL DIRECTOR EMPLOYEES' STATE INSURANCE CORPORATION 143 STERLING ROAD NUNGAMBAKKAM CHENNAI 5 THE JOINT DIRECTOR EMPLOYEES' STATE INSURANCE CORPORATION SUB-REGIONAL OFFICE 39/57 THEERTHAMALAI VANIGA VALAGHAM 2 AND 3 FLOOR THREE ROADS SALEM 6 THE BRANCH MANAGER BRANCH OFFICE ESIC SANKARI SALEM 7 THE UNION OF INDIA REP. BY SECRETARY TO GOVERNMENT MINISTRY OF LABOUR AND EMPLOYMENT NEW DELHI [ RESPONDENTS IN BOTH W.Ps ] Prayer in both W.Ps.: Petitions under Article 226 of the Constitution of India praying for a Writ of Declaration to declare the regulation 10B of the ESI (General) regulation 1950 as illegal, ultravires and unconstitutional and violative of Article 14 and 16 of Constitution of India. For Petitioner :: Mr.N.Umapathi For Respondents :: Mrs.S.Jayakumari for R1, 4, 5 &6 Mr.R.Murali, G.A for R2,R3 COMMON ORDER There are two writ petitioners. They are having factories and manufacturing the textile. Their factories are situated at No.12-B/1, Salem Road, T.Kailasampalayam, Tiruchengode Taluk, Namakkal District. When the respondent ESI Corporation issued notices to the petitioners to comply with the provisions of the ESI ACT by making contribution, the petitioners have approached this Court. 2. The prayer in both the Writ Petitions were for a Writ of https://hcservices.ecourts.gov.in/hcservices/ Declaration declaring Regulation 10-B of the ESI (General) Regulation 1950 as illegal, ultravires, unconstitutional and violative of Articles 14 and 16 of the Constitution of India. The W.P.No.4428 of 2008 was admitted on 2.9.2008 and W.P.No.4525 of 2008 was admitted on 22.2.2008. 3. It is seen from the averments made in the affidavit that the grievance projected by the petitioners was that only after providing of all medical facilities, the question of coverage under the Act or in the alternative seeking for payment of subscription will not arise. It is also stated that the respondents have not formed an appropriate committee. In cases where committees were formed also, they are not in terms of the Act. They have also not appointed Inspectors under the Act in accordance with law. 4. On notice, the respondents have filed a reply affidavit dated 14.11.2008 in justification of the coverage in paragraph Nos.20 and 21, which are as follows: ".. It is evident from the above that it is incumbent on the petitioner to furnish the details of the factory, otherwise, the respondent corporation may gather the information and allot code number and will brought the unit under the purview of the Act. However, in the instant case, as the petitioner has not come forward to register its unit under the purview of the Act, though it is very well coverable under the Act as per the Notification No.S-38013/15/85 dated 25.6.85. That is, in the instant case, the petitioner has not at all furnished its details in Form -01 as stated in the above said provisions of Registration 10-B though received a copy of Form-01 form the team of the respondent Corporation during their survey on 13.7.06 for this purpose. Hence a team of Inspectors conducted the survey on 13.7.2006 and found that 13 coverable employees were working and issued a visit note to the petitioner. Moreover, the petitioner itself signed the list of employees who were working in the unit on that day. It is evident from the above that the petitioner was very well aware of its statutory liability. Only to evade the applicability of the Act and deprive the employees to avail the benefits available under the ESI Act the petitioner had not come formed to comply with the provisions of the ESI Act. 21. However, the petitioner had filed this petition to declare the Regulation 10-B of the ESI (General) Regulation 1950 as illegal, ultravires and unconstitutional and https://hcservices.ecourts.gov.in/hcservices/ violative of Article 14 to 16 of Constitution of India. The Regulation 10-B of the ESI (General) Regulations 1950 is in conformity with the provisions for which it is made in the Act for registration of factories and establishments so that effective implementation of the welfare scheme as provided for in the Act is carried out. It enjoins upon the employers to give correct information with regard to its employees, its unit, etc. and fixes responsibility upon the employees for giving incorrect information, if any. There is nothing obvious in registration 10-B which may be termed as being opposed to the principles of natural justice. Hence, registration 10-B is not ultravires, unconstitutional and violative of Article 14 and 16 of Constitution of India. The same had been upheld by the Hon'ble Divisional Bench of High Court of Jammu and Kashmir in the case of Jay Kay Marbles – vs- Union of India as reported in 1997 iii LLJ 368." 5. Though affidavit of the petitioners sets out the various provisions of the Act, it is unnecessary to travel into those provisions. It is suffice that Regulation 10-B of the ESI (General) Regulation 1950 came to be made pursuant to the exercise of power by the ESI Corporation in terms of Section 97 of the ESI Act. Insofar as Regulation 10-B is concerned, it requires all the factories or establishments to register themselves under the ESI Act, since the Act is made applicable in respect of those factories or establishments. Even in cases where no employer code is allotted or in respect of any factory or establishment, to which the Act is earlier applicable but ceased to apply for the time being, they must furnish proper registration form to the ESI Corporation. It is not clear as to how the petitioners can challenge the Regulation without challenging the substantive provision under the Act. Regulation 10-B is resemblance to Section 2-A of the ESI Act. Section 2-A of the ESI Act was inserted by central Act 44 of 1966 with effect from 28.1.1968. 6. Section 2-A of the ESI Act reads as follows: "2-A Registration of factories and establishments: Every factory or establishment to which this Act applies shall be registered within such time and in such manner as may be specified in the regulations made in this behalf." 7. Therefore, when there is substantial provision obliging employer to register the establishment in the manner prescribed and also the Regulations have been made in terms of Regulation 97 to carry out the purpose of Section 2-A, there cannot be any challenge to the https://hcservices.ecourts.gov.in/hcservices/ Regulation independent of the main provisions of the Act. Assuming that certain Committees were not formed or committees were defective as contemplated under the Act, the said challenge is taken note of by Section 24 of the Act, which reads as follows: "24. Acts of Corporation, etc., not invalid by reason of defect in constitution etc. No act of the Corporation, the Standing Committee or the Medical Benefit Council hall be deemed to be invalid by reason of any defect in the constitution of the Corporation, the Standing Committee or the Medical Benefit Council, or on the ground that any member thereof was not entitled to hold or continue in office by reason of any disqualification or of any irregularity in his appointment or election, or by reason of such act having been done during the period of any vacancy in the office of any member of the Corporation, the Standing Committee or the Medical Benefit Council." 8. It is not known as to how the writ petitioners are invoking Articles 14 and 16 of the Constitution of India for impugning the Regulation 10-B, when it has got no relevance of this nature. 9. In the light of the clear legal provisions, the challenge made to Regulation 10-B is misconceived. Accordingly, both the Writ Petitions are dismissed. No costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar ajr To 1 THE DIRECTOR GENERAL EMPLOYEES' STATE INSURANCE CORPORATION PANCHDEEP BHAVAN, C.I.G ROAD NEW DELHI https://hcservices.ecourts.gov.in/hcservices/ 2 THE SECRETARY TO GOVERNMENT HEALTH DEPARTMENT GOVERNMENT OF TAMIL NADU SECRETARIAT CHENNAI 3 THE SECRETARY TO GOVERNMENT LABOUR AND EMPLOYMENT DEPARTMENT GOVERNMENT OF TAMIL NADU SECRETARIAT CHENNAI 4 THE REGIONAL DIRECTOR EMPLOYEES' STATE INSURANCE CORPORATION 143 STERLING ROAD NUNGAMBAKKAM CHENNAI 5 THE JOINT DIRECTOR EMPLOYEES' STATE INSURANCE CORPORATION SUB-REGIONAL OFFICE 39/57 THEERTHAMALAI VANIGA VALAGHAM 2 AND 3 FLOOR THREE ROADS SALEM 6 THE BRANCH MANAGER BRANCH OFFICE ESIC SANKARI SALEM 7 THE SECRETARY TO GOVERNMENT OF INDIA MINISTRY OF LABOUR AND EMPLOYMENT NEW DELHI +2CC TO Mr.S.Jayakumari Sr 1744 & 1745 KM(CO) km/31.1. W.P.Nos.4424 and 4525 of 2008 https://hcservices.ecourts.gov.in/hcservices/