EMPLOYEES STATE INSURANCE CORPORATION, BHOPAL versus CENTRAL PRESS & ANR.

Citation: [1977] 3 S.C.R. 35 · Decided: 21-02-1977 · Supreme Court of India · Bench: M. HAMEEDULLAH BEG · Disposal: Appeal(s) allowed

Judgment (excerpt)

' • 
\. 
EMPLOYEES STATE INSURANCE CORPORATION, 
BHOPAL 
I'. 
CENTRAL PRESS & ANR. 
Febrnary 21, 1977 
[M. H. BEG, C. J., A. C. GUPTA AND P. S. KAILASAM, JJ.] 
35 
E1nployees State Insurance Act (Act 34 of 1948), 1948-Sections 45A, 
75(I)(c), and 75(2) mid 99A.,-Scope of. 
A 
B 
Section 75(1)(c) of the Employees State Insurance Act 1948 makes it obli-
gatory on the Insurance Court to decide "the rate of contribution payable by 
a principal employer in respect of any employees'', if such question or dispute 
C 
arises. 
Section 75(2) also provides that "the claim for the recovery of contri-
butions from the principal employer'" shall be deckh:d by it. 
1'he appellant .Corporation filed five applicatLJns under s. 7 5 of the En1p-
loyces State Insurance Ac( before the Insurance Court, Bhopal 
(Civil 
Judge 
First Class) for recovery from the respondent of employees' contributions pay· 
able 
under 
s. 39 
of the Act for different periods from 27·9·1959 on· 
wards, 
¥.'orking 
out the 
contribution payable 
on 
an "ad 
hoc 
basis" 
by 
taking 
the 
wages 
at 
Rs. 
100/· per 
erpployce 
per 
month 
as 
D 
indicated by 
the Central 
Government 
by 
their 
notification 
SRO 
224 
dated 1'5·1·1957 issued in exercise of their po·n>ers under s. 99A of the Act. 
The Insurance Court disallowed the claims on the ground that the claims have 
been made on an "ad hoc basis". The first appeals against that order V.'ere 
allowed by a single Judge of the Madhya Pradesh High Court (Jabalpur Bench) 
relying on s. 99A of the Act an<l on a further notification dated 16·1·1968 
issued by the Central Government under s. 99A. 
The Letters Patent Appeals 
filed by the respondent were allo, .. ved by the Division Bench which held : ( 1) 
'fhe power of the Central Government of issuing directions is not absolute and 
E 
the directions cannot be inconsistent with the Act (22). When under section 
45A of the Act a special procedure is prescribed regarding the method of cal· 
culation of the employees' contribution, no notification or order can be issued 
by the Central Government prescribing any other method on ad hoc basis which 
obviously becomes inconsistent ·with the other provisions of the Act, namely, 
section 45A. 
Remanding the matter to the Insurance Court, the Court, 
HELD: 
( 1) The nature of the proceedings under the Employees State Insurance Act 
1948 was not properly understood either by the Employees Insura·nce Court or 
·by the H'igh Court when the matter was taken before these authorities. [37D] 
(2) The scheme of the Act is that the Corporation itself should, in a case 
where there is omission on the part of the employer to maintain records 
in 
accordance with s. 44 of the Act, ·determine the amount of contribution 
on 
the strength of such information as it may collect, make a demand and upon 
refusal come up before ·the Insurance Court under s. 75 of the Act. The Court 
should give the Corporation a direction to perform its duty where it considers 
that this should be performed by the Corporation. It cannot decline to per· 
form its own duty because the Corporation has failed to discharge its function. 
The Insurance _Court is under a duty to determine the basis of calculation itself. 
[36F-H] 
F 
G 
(3) The notification of the Central Govern1nent under s. 99A of the Act 
ff 
was intended to overcome difficulties in determining the wages of the employees. 
This provision cannot be· availed of for the purpose of supplying a defect or over· 
coming a difficulty in adjudication of a dispute for which the Emplovees Insu· 
ranee Court is given ample powers under s. 75(1)(c) and 75(2). [37A-B] 
36 
SUPREME COURT REPORTS 
[1977] 3 S·C.R. 
A 
CIVIL APPELLATE JURISDICTION 
Civil Appeals Nos. 325-329 
B 
c 
D 
E 
F 
G 
H 
of 1977. 
(Appeals by special leave from the Judgment and Order dated 
l.12.1971 of the Madhya Pradesh High Court in LP.A. Nos. 13-17 
of 1969). 
L. N. Sinha, Sol. Genl. and Girish Chandra for the appellant. 
J. P. Go}al and Shreepal Singh, for the respondent. 
The Juugment of the Court was delivered by 
BEG, C.J.-This appeal by special leave arises out of the proceed-
ings initiated on 12.7.1961 by the appellant Corporation, under sec-
tion 75 of the Employees' State Insurance Act, 1948 (hereinafter 
referred to as the Act), claiming contributions from the respondents 
for various periods between, 27.9.1959 and 31.3.1965, which they are 
liable to pay under section 40 of the Act. 
It appears that the respondents-emplo

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