Case: Zuari Cement Ltd Vs. Regional Director E.S.I.C. Hyderabad &amp; Others

2. Brief facts which led to the filing of these appeals are as under:- The appellant is engaged in the business of manufacture and sale of cement situated at Yerraguntla in Cuddapah District. The said area was brought under the purview of ESI Scheme with effect from 1.03.1986. The Government of Andhra Pradesh granted exemption to the appellant-cement factory from the operation of the Act by various orders for the period from 1.03.1986 to 31.03.1993. The State Government rejected appellants application for exemption for the period from 1.04.1993 to 31.03.2001. Following rejection of claim for exemption, the Regional Director, ESI Corporation, issued various demand notices cumulatively demanding a sum of Rs. 65,38,537/- towards contributions for the period from 1.04.1993 to 31.03.1999. Challenging the order of appropriate government rejecting its claim for exemption and also challenging the demand notices, the appellant filed number of writ petitions before the High Court. The High Court disposed of those writ petitions with direction to the appellant to approach the ESI Court constituted under Section 74 of the Act. The appellant filed the review petition before the High Court, interalia, praying to remit the matter back to the government to rehear the representation of the appellant-company pertaining to its exemption of ESI Scheme under Section 87 of the Act for the period from 01.04.1993 to 31.03.1999 by affording personal hearing to the appellant. The review petition was dismissed observing that the appellant has an alternative remedy before the ESI Court constituted under Section 74 of the Act and therefore the question of remanding the matter back to the State Government does not arise3. The appellant again filed number of writ petitions before the High Court expressing apprehension that ESI Court may not have the power to grant the relief of exemption from the scheme of the Act and therefore prayed that the appropriate government be directed to consider the issue of exemption by personal hearing to the appellant and by conducting an inquiry. However, vide order dated 11.10.2001 those writ petitions were disposed of holding that ESI Court has jurisdiction to decide the issue and all questions including the applicability of the Act can be raised before the ESI Court. The appellant then approached the ESI Court, Hyderabad under Section 75(1)(g) of the Act challenging the demand notice. The ESI Court appointed an Advocate Commissioner to submit a report as to the medical benefits made available to the workmen in the industry. An affirmative report was filed by the Court Commissioner stating that appellant is providing all the due benefits. On the basis of the report, vide Order dated 18.10.2004, the petitions filed by the appellant as well as by the workmen union were allowed and the ESI Court granted future exemption to the appellant from the coverage of the ESI Scheme and the ESI Court also set aside the impugned demand notices for the period between 1993 to 2001 and the interest thereon. Assailing the said order, the ESI Corporation filed appeal before the High Court contending that ESI Court does not have power under Section 75 of the Act and it is only the appropriate government which has got the power under Section 87 of the Act to exempt anyone from the application of the Act. By the impugned judgment dated 21.09.2007, the High Court allowed the appeals of the Corporation holding that ESI Court does not have the power to grant exemption under Section 75(1)(g) of the Act. In these appeals, the appellant assails the correctness of the above judgment

Court's reasoning:
9. As per the scheme of the Act, the power to grant exemption is a plenary power given to an appropriate government. It follows that the ESI Court constituted under Section 74 of the Act has no jurisdiction to take up the question of grant of exemption. The Court constituted under Section 74 of the Act cannot decide such matters including the validity of an exemption notification. The order granting or denying exemption is certainly open to judicial review under Article 226 of the Constitution of India. But the question of exemption under Section 87 cannot be raised under Section 75 of the Act and the ESI Court constituted under Section 74 of the Act, cannot decide the legality or otherwise of an order relating to exemption passed by the appropriate government11. While disposing the writ petitions, of course, the High Court directed the appellant to approach the ESI Court constituted under Section 74 of the Act for the relief which the appellant had claimed in the writ petitions. Notably, both the appellant as well as the ESI Corporation did not challenge the order of the High Court but subjected themselves to the jurisdiction of the ESI Court. In our view, neither the order of the High Court nor the act of Corporation subjecting itself to the jurisdiction of ESI Court would confer jurisdiction upon ESI Court to determine the question of exemption from the operation of the Act. By consent, parties cannot agree to vest jurisdiction in the Court to try the dispute when the Court does not have the jurisdictionWhile so, seeking the relief of declaration from the ESI Court that the appellant is entitled to exemption from the operation of the Act is misconceived. Contrary to the scheme of the statute, the High Court, in our view, cannot confer jurisdiction upon the ESI Court to determine the issue of exemption. ESI Corporation, of course, did not raise any objection and subjected itself to the jurisdiction of the ESI Court. The objection as to want of jurisdiction can be raised at any stage when the Court lacks jurisdiction, the fact that the parties earlier acquiesced in the proceedings is of no consequence15. Where there is want of jurisdiction, the order passed by the court/tribunal is a nullity or. What is relevant is whether the Court had the power to grant the relief asked for. ESI Court did not have the jurisdiction to consider the question of grant of exemption, order passed by the ESI Court granting exemption and consequently setting aside the demand notices is. The High Court, in our view, rightly set aside the order of ESI Court and the impugned judgment does not suffer from any infirmity warranting interference16. Since the order passed by the ESI Court is a, which was rightly set aside by the High Court, we are not inclined to go into the merits of the appellants contention that they have ad hospital and are providing various medical facilities and better health schemes to its employees and their family members.