Case: M/S. Sahni Silk Mills(P) Ltd.  Vs. Employees State Insurance Corpn

Regional Directors, Assistant Regional Directors and other officers mentioned in the resolution by designations. Neither any grievance has been made nor can it be made so far as this resolution is concerned because the Corporation has directly delegated its power under Section 85-B to different officers with reference to their designations, throughout the country, and no power is given in this resolution to the Director General to authorise any other officer to levy and recover damages from the employers 12. It has to be borne in mind that the exercise of the power under Section 85-B(1) is quasi-judicial in nature, because there is always a scope for controversy and dispute and that is why the section itself requires that before recovering any such damages, a reasonable opportunity of being heard shall be given to the employer. The employer is entitled to raise any objection consistent with the provisions of the Act. Those objections have to be considered. After consideration of objections, if any, an order for recovery of damages has to be passed. The maxim delegatus non-potest delegare was originally invoked in the context of delegation of judicial powers saying that in the entire process of adjudication a judge must act personally except insofar as he is expressly absolved from his duty by a statute. The basic principle behind the aforesaid maxim is that "a discretion conferred by statute is prima facie intended to be exercised by the authority on which the statute has conferred it and by no other authority, but this intention may be negatived by any contrary indications found in the language, scope or object of the statute". (Vide John Willis, "Delegatus non-potest delegare, (1943) 21 Can. Bar Rev. 257, 259) "13. It cannot be disputed that by the impugned resolution dated 28-2-1976 the Corporation not only delegated its power under Section 85-B(1) of the Act to the Director General, but also left it to the Director General to authorise any other officer to exercise the power under Section 85-B(1). From Section 94-A it does not appear that Parliament vested power in the Corporation to delegate its power on any officer or authority subordinate to the Corporation, and also vested power in the Corporation to empower such officer or authority, to authorise any other officer to exercise the said power under Section 85-B(1). If Section 94-A had a provision enabling the Corporation not only to delegate its power to any other officer or authority subordinate to the Corporation, but also to empower such officer or authority in its own turn to authorise any other officer to exercise that power, the resolution could have been sustained on the principle indicated in the cases Harishankar Bagla v. State of M. P. and Barium Chemicals Ltd. v. Company Law Board. As such it has to be held that the part of the resolution dated 28-2-1976, which authorises the Director General to permit any other officer to exercise the power under Section 85-B(1) of the Act is ultra vires Section 94-A14. It is an admitted position that the Regional Directors have exercised the power under Section 85-B(1) of the Act while passing the impugned orders for recovery of the damages from the appellants. The Regional Directors had been authorised to do so by the Director General of the Corporation by an office order dated 3-5-1976 made on the basis of the aforesaid resolution of the Corporation dated 28-2-1976. Once that part of the earlier resolution is held as invalid, the office order dated 3-5-1976 issued by the Director General also becomes invalid. The Regional Directors therefore could not have passed the impugned orders on the basis of the invalid office order dated 3-5-197615. Hence the view taken in the case of Rameshwar Jute Mills Ltd. v. Union of India by the Full Bench of the Patna High Court as well as in the case of Employees State Insurance Corpn. v. Dhanda Engineers Pvt. Ltd., by a Division Bench of the Punjab and Haryana High Court upholding the resolution dated 28-2-1976 and office order dated 3-5-1976 cannot be sustained and the opinion expressed in the case of Employees State Insurance Corpn., Bangalore v. Shoba Engineers, by a Division Bench of the Karnataka High Court, that the aforesaid resolution dated 28-2-1976 and office order dated 3-5-1976 was invalid has to be upheld16. Unfortunately, these appeals have remained pending in this Court for the last many years and in the meantime, on the basis of the resolution dated 28-2-1976 and office order dated 3-5-1976 the different Regional Directors of the Corporation in different parts of the country have exercised power under Section 85-B(1) of the Act for recovery of the damages from different employers. That exercise of power had been upheld by a Full Bench of Patna High Court and a Division Bench of the Punjab and Haryana High Court referred to above. In this background, it be improper to declare all such actions taken by the different Regional Directors as invalid. The Corporation has itself, later by its resolution dated 19-2-1983 superseded and recalled the aforesaid resolution dated 28-2-1976. As such, any exercise of power by the Regional Directors on and from 19-2-1983 cannot be questioned. The disputed period is only between 28-2-1976 and 19-2-1983. According to us, it will not be proper for this Court to upset and unsettle position at this late stage. Nor is it in public interest to do so. The orders passed are in no way erroneous on merits. Taking all facts and circumstances into consideration, we direct that no actions or proceedings shall be entertained for refund of amounts which have already been realised as damages from the employers concerned. However, if from some employers, the damages under Section 85-B(1), on the basis of orders passed by the Regional Directors between 3-5-1976 and 19-2-1983 have not yet been realised, they shall not be realised. In such cases, it will be open for the Regional Directors to issue fresh notices and assess and recover the damages, if any

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]10. So far as the present Section 94-A is concerned, it says that the Corporation subject to any regulation made by the Corporation in that behalf, may direct that particular or any of the powers and functions which may be exercised or performed by the Corporation, may, in relation to such matters and subject to such conditions, if any, as may be specified "be also exercisable by any officer or authority subordinate to the Corporation". Section 94-A does not specifically provide that any officer or authority subordinate to the Corporation to whom the power has been delegated by the Corporation, may in his turn authorise any other officer to exercise or perform that power or function. But by the resolution dated 28-2-1976 the Corporation has not only delegated its power under Section 85-B(1) of the Act to the Director General, but has also empowered the Director General to authorise any other officer to exercise the said power. Unless it is held that Section 94-A of the Act, enables the Corporation to delegate any of its powers and functions to any officer or authority subordinate to the Corporation, and he in his turn can sub-delegate the exercise of the said power to any other officer, the last part of the resolution dated 28-2-1976 cannot be held to be within the framework of Section 94-A. According to us, parliament while introducing Section 94-A in the Act, only conceived direct delegation by the Corporation to different officers or authorities, subordinate to the Corporation, and there is no scope for such delegate to sub-delegate that power, by authorising any other officer to exercise or perform the power soIt has to be borne in mind that the exercise of the power under Section 85-B(1) is quasi-judicial in nature, because there is always a scope for controversy and dispute and that is why the section itself requires that before recovering any such damages, a reasonable opportunity of being heard shall be given to the employer. The employer is entitled to raise any objection consistent with the provisions of the Act. Those objections have to be considered. After consideration of objections, if any, an order for recovery of damages has to be passed. The maxim delegatus non-potest delegare was originally invoked in the context of delegation of judicial powers saying that in the entire process of adjudication a judge must act personally except insofar as he is expressly absolved from his duty by a statute. The basic principle behind the aforesaid maxim is that "a discretion conferred by statute is prima facie intended to be exercised by the authority on which the statute has conferred it and by no other authority, but this intention may be negatived by any contrary indications found in the language, scope or object of the statute". (Vide John Willis, "Delegatus non-potest delegare, (1943) 21 Can. Bar Rev. 257, 259) "13. It cannot be disputed that by the impugned resolution dated 28-2-1976 the Corporation not only delegated its power under Section 85-B(1) of the Act to the Director General, but also left it to the Director General to authorise any other officer to exercise the power under Section 85-B(1). From Section 94-A it does not appear that Parliament vested power in the Corporation to delegate its power on any officer or authority subordinate to the Corporation, and also vested power in the Corporation to empower such officer or authority, to authorise any other officer to exercise the said power under Section 85-B(1). If Section 94-A had a provision enabling the Corporation not only to delegate its power to any other officer or authority subordinate to the Corporation, but also to empower such officer or authority in its own turn to authorise any other officer to exercise that power, the resolution could have been sustained on the principle indicated in the cases Harishankar Bagla v. State of M. P. and Barium Chemicals Ltd. v. Company Law Board. As such it has to be held that the part of the resolution dated 28-2-1976, which authorises the Director General to permit any other officer to exercise the power under Section 85-B(1) of the Act is ultra vires Section 94-A14. It is an admitted position that the Regional Directors have exercised the power under Section 85-B(1) of the Act while passing the impugned orders for recovery of the damages from the appellants. The Regional Directors had been authorised to do so by the Director General of the Corporation by an office order dated 3-5-1976 made on the basis of the aforesaid resolution of the Corporation dated 28-2-1976. Once that part of the earlier resolution is held as invalid, the office order dated 3-5-1976 issued by the Director General also becomes invalid. The Regional Directors therefore could not have passed the impugned orders on the basis of the invalid office order dated 3-5-197615. Hence the view taken in the case of Rameshwar Jute Mills Ltd. v. Union of India by the Full Bench of the Patna High Court as well as in the case of Employees State Insurance Corpn. v. Dhanda Engineers Pvt. Ltd., by a Division Bench of the Punjab and Haryana High Court upholding the resolution dated 28-2-1976 and office order dated 3-5-1976 cannot be sustained and the opinion expressed in the case of Employees State Insurance Corpn., Bangalore v. Shoba Engineers, by a Division Bench of the Karnataka High Court, that the aforesaid resolution dated 28-2-1976 and office order dated 3-5-1976 was invalid has to be upheld16. Unfortunately, these appeals have remained pending in this Court for the last many years and in the meantime, on the basis of the resolution dated 28-2-1976 and office order dated 3-5-1976 the different Regional Directors of the Corporation in different parts of the country have exercised power under Section 85-B(1) of the Act for recovery of the damages from different employers. That exercise of power had been upheld by a Full Bench of Patna High Court and a Division Bench of the Punjab and Haryana High Court referred to above. In this background, it be improper to declare all such actions taken by the different Regional Directors as invalid. The Corporation has itself, later by its resolution dated 19-2-1983 superseded and recalled the aforesaid resolution dated 28-2-1976. As such, any exercise of power by the Regional Directors on and from 19-2-1983 cannot be questioned. The disputed period is only between 28-2-1976 and 19-2-1983. According to us, it will not be proper for this Court to upset and unsettle position at this late stage. Nor is it in public interest to do so. The orders passed are in no way erroneous on merits. Taking all facts and circumstances into consideration, we direct that no actions or proceedings shall be entertained for refund of amounts which have already been realised as damages from the employers concerned. However, if from some employers, the damages under Section 85-B(1), on the basis of orders passed by the Regional Directors between 3-5-1976 and 19-2-1983 have not yet been realised, they shall not be realised. In such cases, it will be open for the Regional Directors to issue fresh notices and assess and recover the damages, if any