Appeal No 125/2011, by which, the High Court has allowed the said appeal and has set aside the order dated 13.12.2010 passed by the Employees Insurance Court (hereinafter referred to as the EI Court) dismissing EIC No. 14/2003 in which the respondent herein challenged the demand notice dated 31.08.1994 issued by the ESI Corporation, the ESI Corporation has preferred the present appeal. Before the High Court, it was the case on behalf of the respondent – original appellant that Sub-section (6) of Section 1 of the ESI Act which came to be inserted on 20.10.1989 shall not be made applicable retrospectively and the same would be effective only on or after 20.10.1989 and not prior to that date.
Shri Mahesh Srivastava, learned counsel appearing on behalf of the appellant – ESI Corporation has vehemently submitted that the High Court has materially erred in allowing the appeal and setting aside the demand notices even for the period post 20.10.1989 by holding that amendment to Section 1 by inserting Sub-section (6) shall not be applicable retrospectively.
It is submitted that at the most, the demand notices for the period prior to 20.10.1989 can be said to be bad in law as in that case Sub-section (6) of Section 1 of the ESI Act can be said to have applied retrospectively. Having heard learned counsel appearing on behalf of the appellant – corporation and having gone through the impugned judgment and order passed by the High Court, the short question which is posed for consideration of this Court is whether with respect to the demand notices post 20.10.1989 a factory or an establishment, established prior to 20.10.1989 shall be governed by the ESI Act notwithstanding that the number of persons employed therein at any time falls below the limit specified by or under the ESI Act?
The object and purpose of the ESI Act has been elaborately considered by this Court in the case of Bangalore Turf Club Limited (supra).
The primary rule of interpretation of statutes may be the literal rule, however, in the case of beneficial legislations and legislations enacted for the welfare of employees, workmen, this Court has on numerous occasions adopted the liberal rule of interpretation to ensure that the benefits extend to those workers who need to be covered based on the intention of the legislature.
Also Read: https://newslaw.in/case-type/civil/acquisition-of-land-and-deemed-lapse-under-the-act-2013/
The court must seek light from loadstar Articles 38 and 39 and the economic and social justice envisaged in the Preamble of the Constitution which would enliven meaningful right to life of the worker under Article 21.
The fusion between the law and social change would be effected only when law is introspected in the context of ordinary social life. The Act fastens in an insured employment, statutory obligation on the employer and the employee to contribute in the prescribed proportion and manner towards the welfare fund constituted under the Act (Sections 38 to 51 of the Act) to provide sustenance to the workmen in their hours of need, particularly when they become economically inactive because of a cause attributable to their employment or disability or death occurred while in employment.
Before parting with the discussion on this point, it is necessary to keep in view the salient fact that the Act is a beneficial piece of legislation intended to provide benefits to employees in case of sickness, maternity, employment injury and for certain other matters in relation thereto. But in dealing with the plea raised by Mr Dolia that the section should be liberally construed, we cannot overlook the fact that the liberal construction must ultimately flow from the words used in the section.
The Employees’ State Insurance Act is a beneficial legislation.
Also Read: https://newslaw.in/case-type/civil/taxation-of-engineering-design-drawings-goods-or-services/
The provisions of the ESI Act provide that all employees in factories or establishments to which the ESI Act applies shall be insured in the manner provided under the ESI Act.
Case Title: THE ESI CORPORATION Vs. M/S RADHIKA THEATRE (2023 INSC 60)
Case Number: C.A. No.-000312-000312 / 2023
