Case: Employees State Insurance Corporation and Ors Vs. Jardine Henderson Staff Association and Ors.

A learned Single Judge of the High Court disposed off all the writ petitions by a common judgment and order, by quashing the amendment of the Rules of 1950 with the result that there was no enhancement of wage ceiling. About 63 appeals were filed by the Corporation as well as by the Union of India against that part of the order by which the amendment was quashed. No appeals and/or cross appeals were filed by any of the writ petitioners. Therefore, the Division Bench of the High Court, by the impugned common judgment, allowed the appeals and set aside the judgment of the learned Single Judge of the High Court. The High Court held that the enhancement could not be termed as ultra vires for the purpose of the Act or being inconsistent therewith as held by the learned Single Judge. The High Court further held that all interim orders passed in this connection, inter alia, staying the operation of the said enhancement are vacated. However, the High Court did not stop at that, but, proceeded to direct that the employers who had stay order in their favour, will implement the amendment only from the date of the impugned judgment of the High Court dated 16.03.2004 though the amendment came into operation w.e.f. 01.01.1997.The Corporation, being aggrieved of this direction of the High Court giving liberty to the employers to comply with the Notification on and from 16.03.2004, preferred the above civil appeals. The High Court also gave liberty to the employers to apply for exemption and directed the State Government to dispose off the same within two months.

Court's reasoning:
34. We have already noticed that the respondent-Companies have spent large amount of money on the employees and provided medical facilities in view of the order of the High Court granting stay/injunction etc. If the High Court had not passed the order of injunction, the respondent-companies would have contributed the ESI contribution instead of spending monies on the medical facilities and allowances. In these circumstances, the submissions made by learned senior counsel appearing for the respondents that it would be unfair and unjust to make the employer to pay contribution towards ESIC since in lieu of the contribution to ESIC, the employer provided better medical facilities, in our view holds water and it would cause extreme and grave hardship to the employer if they are required to pay contribution for the past several years for no fault of their own. In our view, no party much less the respondents should suffer because of the orders of the Court if duly complied with.We see much force, substance and merit in the submissions made by the learned senior counsel appearing for the respective respondents and as duly adopted by the other learned Counsel appearing for other civil appeals.35. In our opinion, the High Court was fully justified in passing the judicious order after considering the equities by directing the employer and the employees to make ESIC contribution for the future and should not bear with the liability for the past inasmuch as the employees of the respondents have not availed any medical facilities from ESIC and at the same time the employer was providing the medical facilities due to interim orders of the High Court. The order passed by the High Court, in our considered opinion, meets the ends of justice and does not require interference by this Court under Article 136 of the Constitution of India.36. In our view, passing of the final order by the High Court directing the payment of the ESI contribution from the date of the said judgment does not amount to postponing the enforcement of notification and the same is also not in violation of the principles laid down by this Court in various judgments referred to above. There has been no postponing of the enforcement of the Notification in view of the peculiar circumstances of the case, namely, the non-availability of the facilities, non-deduction of contribution from the members of the union for several years and provision of medical relief by the Management. The High Courts direction for deduction of contribution w.e.f. the date of the judgment in our view, is perfectly justified. This apart, the members of the union included casual, temporary contractual and it will be practically impossible to find each and every member of the union to recover their contribution for the past several years and in fact some of the workmen who would have been the employees during all these years would have left, expired etc. and on account thereof also their contribution cannot be recovered. The order passed by the High Court, in our opinion, is perfectly justified in view of the peculiar facts and circumstances of the case.37. The High Court, in our opinion, while disposing of the matter has taken a just, pragmatic, fair and judicious view after considering all the equities and facts and circumstances of the case. Extreme hardship might have been caused to both the employer as well as the employee since no medical facilities admittedly have been availed by the workmen from ESIC and the employer had provided medical facilities to the workmen as per the Court orders and in view of the interim order also had paid medical allowances.38. A similar view was taken by us in the case of Employees State Insurance Corporation v. DistilleriesChemical Mazdoor Union and Ors. in Civil Appeal Nos. 1727 of 2005, 3002 and 3003 of 2006 by the very same Bench comprising of Dr. AR. Lakshmanan and Lokeshwar Singh Panta, JJ. We have also considered the submissions both factual and legal made by Mr. C.S.Rajan, learned senior counsel appearing on behalf of the ESI Corporation. In our opinion, his argument has no merits in the facts and circumstances of this case and the interim orders passed by the High Court which prevented employer and employee from making any contribution towards ESI.. In the present case, the law as well as the facts are in favour of the respondents. The High Court has correctly appreciated the tremendous hardship that will be caused if arrears are sought to be paid and nobody stands to gain, neither the employer nor the employee under the circumstances. Even assuming that the law is in favour of the ESI, keeping in view the special facts and circumstances of the present case, relief can be denied under Article 136 of the Constitution of India.40. This Court under Article 142 of the Constitution of India is empowered to pass such orders as would do complete justice between the parties. This Court is also empowered to mould the relief in such a manner so that it is not only just but also equitable even while declaring the law as observed in para 25 of ONGC Ltd. v. Sendhabhai Vastram Patel and Ors. JT2005(7)SC465 and Raj Kumar and Ors. v. Union of India and Anr. IR2006SC938 . It is also permissible in law to prospectively overrule the judgment as has been done recently in the case of SBP Co. v. Patel Engineering Ltd. AIR2006SC450 . If the respondent is now allowed to recover from the erstwhile covered employees, it would severely affect industrial relations. Reversal of the impugned order would lead to prosecution, penalty and also interest against the respondent without any fault of the respondent. The decision of this Court in ITDC Employees Union (supra) is clearly distinguishable as unlike in the present case. In that case, the High Court did not give any positive direction. The decision of the High Court was not reversed by this Court.41. The High Court under Article 226 and this Court under Article 136 read with Article 142 of the Constitution of India have the power to mould the relief in the facts of the case. Likewise, the judgment cited by learned Counsel for the appellant-Corporation are in a different context altogether and the ratio of the said cases are not applicable to the present case. This apart the maxim of equity which is founded upon justice and good sense was applied as well as other maxim: lex non cogit ad impossibilia (i.e. the law does not compel a man to do what he cannot possibly perform) The applicability of the aforesaid maxim has been approved by this Court in Raj Kumar Dey and Ors. v. Tarapada Dey and Ors. [1988]1SCR118 and Gursharan Singh and Ors. v. New Delhi Municipal Committee and Ors. [1996]1SCR115442. The ESI Act has enacted to provide for certain benefits to employees in case of sickness, maternity and employment injury. Under the scheme of the Act, function of the ESI Corporation is to derive insurance fund from the contribution from employees and workmen. The employer is entitled to recover workmens share from the wages of the workmen concerned. It was argued by the respondent that the employer is providing better medical facilities to the workmen and, therefore, the object and purpose of the Act has been fully satisfied. It is pertinent to notice that none of the employees of the Union have complained about medical services provided by the employer since the object is otherwise fulfilled. No further direction, in our opinion, is required to be passed.43. The act of Court can prejudice no party either the ESI or the respondent-companies. We, therefore, relieve the respondents from making any contributions for the period in question and direct them to make the contribution as directed by the Division Bench of the High Court. It is stated that some of the respondents have already filed exemption applications and that the appellant-Corporation has also granted them necessary relief. We also permit the other respondents who have not filed any exemption application may now file the same and if such application for exemption is filed, it is for the authorities to consider the same on merits and in accordance with law.