EMPLOYEES STATE INSURANCE CORPORATION AND ORS. versus JARDINE HENDERSON STAFF ASSOCIATION AND ORS.

Citation: [2006] SUPP. 4 S.C.R. 27 · Decided: 25-07-2006 · Supreme Court of India · Bench: AR. LAKSHMANAN · Disposal: Dismissed

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Judgment (excerpt)

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EMPLOYEES STATE INSURANCE CORPORATION AND ORS. 
A 
v. 
JARDINE HENDERSON STAFF ASSOCIATION AND ORS. 
JULY 25, 2006 
[DR. AR. LAKSHMANAN AND LOKESHWAR SINGH PANTA, JJ.] 
B 
Employees State Insurance Act, 1948: 
Section 2(9)(b); Employees State Insurance (Central) Rules, 1950, Rules 
50, 51 and 54-Writ petition challenging Notification amending Rules 50, 51 C 
and 54 by which the wage limit for coverage of an employee under the Act 
enhanced from Rs.3000 to Rs.6500-By interim order, High Court restrained 
employers from deducting ES/ contribution, however, directed them to provide 
medical facilities-High Court upheld the validity of Notification-Further 
directed employers to enforce Not!ficationfiwn date of judgment-Justification D 
of challenged on the ground that enforcement of Notification ought to be from 
date of Notification-Held: High Court's direction for enforcement of 
Notification w. e.f the date of judgment is pe1fectly justified, fair and judicious 
considering the facts and equity and hence calls for no interference under 
Article 136-Employers-Companies have spent large amount of money on 
employees in providing medical facilities, it would cause extreme and grave E 
hardship to them if they are required to pay contribution for the past several 
years for no fault of their own-This apart, employee-union included workmen 
who have left or expired and hence deduction of their contribution from 
salary is not workable-Constitution of India, 1950, Articles 226, 136, 142. 
Employees State Insurance (Central) Rules, 1950 : 
Rules 50, 51 and 54-Amendment of Rules 50, 51 and 54 enhancing 
wage limit-For coverage of employees under the Act-From Rs.3000 to 
Rs.6500 -Held: Is not ultravires-Employees State Insurance Act, 1948-
Section 2(9)(b). 
Equity : 
Act of court should not prejudice any party-No party to suffer because 
27 
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G 
H 
28 
SUPREME COURT REPORTS [2006] SUPP. 4 S.C.R. 
A of 1he orders of the Court if duly complied with. 
Maxim: 
lex non cogit ad impossibilia--App/icabi/ity of 
B 
Pursuant to the issuance of Notification dated 23.12.1996, Rules 50, 
51 and 54 of the Employees State Insurance (Central) Rules, 1950, were 
amended by virtue of which the wage limit for coverage of an employee 
u/s. 2(9)(b) of the Employees State Insurance Act, 1948 was enhanced from 
Rs.3000/- to Rs.6500/-. Various Employees Unions challenged the vires of 
the Notification by filing Writ Petitions before High Court. By an interim 
C order, High Court restrained employers from deducting the ESI 
contributions required to be deposited with the Corporation but continue 
to provide existing medical facilities to the employees till the disposal of 
Writ petitions. 
The Single Judge of High Court disposed of all the Writ Petitions 
D by quashing the amendment of the Rules of 1950. Corporation and Union 
of India filed appeals against that part of Order by which amendment was 
quashed. On t 6.3.2004, Division Bench allowed the appeals holding that 
the enhancement could not be termed as u/1ra vires for the purpose of the 
Act and that all interim orders passed in this connection staying the 
E operation of the said enhancement are vacated. The High Court further 
directed 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 said interim order was n_ot appealed or 
challenged by the Corporation nor was it stayed during the pendency of 
F the appeal before the Division Bench. Hence these appeals by Corporation. 
G 
Appellant-Corporation contended that once the Notification is 
enforced, the applicability of the same will be from the date of Notification 
and not from any future date. 
Dismissing the appeals, the Court 
HELD: I. 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 
H had not passed the order of injunction, the respondent-companies would 
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EMPLOYEES STATE INSURANCE CORPN. '"JARDINE HENDERSON STAFF ASSON 
29 
have contributed the ESI contribution instead of spending monies on the A 
medical facilities and allowances. In these circumstances, it will cause 
extreme and grave hardship to the employer if they are required to pay 
contribution for the past several years for no fault o

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