BAREILLY HOLDINGS LTD. versus THEIR WORKMEN

Citation: [1979] 3 S.C.R. 236 · Decided: 16-02-1979 · Supreme Court of India · Bench: Y.V. CHANDRACHUD · Disposal: Dismissed

Judgment (excerpt)

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D 
236 
BAREILLY HOLDINGS LTD. 
v. 
THEIR WORKMEN 
February 16, 1979 
[Y. V. CHANDRACllUD, C.J., R. S. SARK.ARIA, N. L. UNTWALIA, 
0. CHINNAPPA REDDY AND A. P. SEN, JJ.J 
E111ployees State Insurance Act, 1948, Section 72 and Regulation 97 
framed under Section 97(1) of the E.S.l., Act, .1948, purpose and effect oj-
Whether 1he deduction of half day's wages corresponding to the sickness bene-
fit to which the lvorkmen were entitled under the E.S.l. Act, in the event of 
their not availing themselves of the benefits under the E.S.l. scheme in order. 
By virtue of the award in Adjudication case No. 33 of 1952 given by the 
State Tribunal Allahabad, respondents were entitled to fifteen days' sick leave 
on full wages as a condition of their service. The appellant adopted the Em-
ployees State Insurance Act in 1957. 
The appellant, therefore, paid to the 
workmen full wages for two day's sick leave out of 1.5 days' sick leave for 
the reason that the workmen did not get cash benefit for the first two days 
of the waiting period of sickness on account of the provisions of section 49 
of the E.S.I. Act. For the balance of the thirteen days only half the wages' 
were paid. In the industrial dispute referred for adjudication to the Indtll!trial 
Tribunal under section 4(k) of the U.P. Industrial Disputes Act, the award 
went in favour of the workmen. 
Dismissing the appeal by special leave, the Court, 
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HELD : !. The general purpose and effect of section 72 is to deny to 
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the employers the right or power to reduce or discontinue the benefit payable 
to the workmen under their conditions of service on the ground 
that the 
benefits available under the conditions of service and under the E.S.I. 
Act 
being similar the workmen would not be entitled to a double 
benefit. [240 
A-Bl 
Section 72 provides in terms that the mere circumstance th.et an employer 
is liable to make a contribution under the E.S.I. Act will not entitle him, 
directly or indirectly, to reduce the wages of an employee or, in so far as the 
Regulation permits, discontinue or reduce the benefits payable to him under 
the conditions of his service even if those benefits are similar to tho benefits 
conferred by the E.S.I. Act. The purpos.e of Section 72 is evidently to 
dis~ 
courage employers from using the benefits provided under the E.S.I. Act as 
an excuse or justification for reducing or dis-continuing the benefits avDilable 
to the workmen under their conditions of service on the ground of similarity 
between the two types of benefits. 
The case of the appellant before the 
lndutrsial Tribunal was that it was making a contribution to the E.S.I. Cor-
poration for the benefit of its employees and if any 
individual 
employee 
chose not to avail of the benefits due to him from the Corporation on account 
of the sickness benefit; it is he who ought to suffer and there would be no 
justification for obliging the employer to spend for his sickness benefit twice 
over. It is precisely this type of argument and attitude that the legislature 
anticipated and guarded against by incorporating the particular provision in 
section 72. (240 B-E] 
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MREILLY HOLDINGS LTD. v. WORKMEN (Chandrachud, C.J.) 237 
2. The contention that it is enough for justifying the deduction from wages 
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<lue to the workmen for sick leave that the employee is 
covered 
by 
the 
E.S.I. Act is not correct. In the first place, section 46 of the 
E.S.I. 
Act 
would show that employees who are covered by the E.S.I. Act are 
entitled 
to certain benefit subject to the provisions of the E.S.I. Act. It is, therefore, 
not as if the workmen are entitled to the benefits absolutely and without 
compliance with the conditions laid do~·n by the Act or 
the 
Regulation. 
Secondly, the proviso to Regulation 97 says that the employer shall be en-
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titled to deduct from the leave salary of the employee, "the amount of benefit" 
to which he may be entitled under the E.S.I. Act for the corresponding period 
of his sickness. A \vorkman does not become entitled to the "amount" paya· 
ble to him by way of sickness benefit unless, in the first instance, he chooses 
to avail himself of the sickness benefit. That benefit cannot be forced on 
him. This would show that the employer's right to make a deduction from 
the employee's sick leave WQ,ges can only be exercised. in respect of those days 
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of sickness leave for which the workman has actually availed of the sickness 

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