EMPLOYEES STATE INSURANCE CORPORATION versus ALL INDIA I.T.D.C. EMPLOYEES UNION AND ORS.

Citation: [2006] 3 S.C.R. 361 · Decided: 24-03-2006 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Disposed off

Judgment (excerpt)

-
--
EMPLOYEES STATE INSURANCE CORPORATION 
A 
v. 
ALL INDIA I.T.D.C. EMPLOYEES UNION AND ORS. 
MARCH 24, 2006 
[ARIJIT PASA Y AT AND TAR UN CHA lTERJEE, JJ.] 
B 
Judicial Review-Powers of High Court-Court's Direction to an 
Authority to 'Consider-Constitution of India-Article 226-Notification 
enhancing employees contribution to ES/. challenged by the respondents- C 
High Court while dismissing the petition directing ES! corporation to consider 
the case of respondents-Direction challenged by the ESJC-Held, Power to 
direct that statute shall operate prospectively is no longer res integra-On 
facts, Held, the High Court only directed for consideration by the corporation 
and did not give a positive direction. 
Judicial review of Administrative Actions-Scope of-General practice 
of High Courts to dispose of writ petition with a direction to authority to 
'consider '-Import of such direction-Held, the High Court should make 
D 
clear and specific direction-Further, the order should clearly indicate 
whether the Court is recording any finding about the entitlement of the 
petitioner to the relief or the petition is disposed of without examining the E ' 
claim on merits. 
Government issued a notification enhancing employees contribution to 
ESI. Employees' Union filed a writ petition challenging the employer's notice 
on the ground that notification has no application to them as their employer 
was a Government of India undertaking. Single judge issued an interim order F 
staying operation of notification to petitioners. Finally court dismissed the 
petition as not maintainable in view of the alternative remedy available. 
However, the court made a direction to ESIC to consider that since the 
petitioners have not availed the facility of ESI from them they should waive 
the realization of contribution for this period from the petitioner. Corporation G 
appealed to this court challenging the said direction. 
Disposing of the appeals, the Court 
HELD: I. The question relating to the jurisdiction of the High Court to 
direct that statute shall operate prospectively is no longer res integra. When 
361 
H 
362 
SUPREME COURT REPORTS 
[2006] 3 S.C.R. 
A a court directs an authority to 'consider', it requires the authority to apply 
its mind to the facts and circumstances of the case and then take a decision 
thereon in accordance with law. [366-D; 369-G-H] 
2. Where an order or action of the State or an authority is found to be 
illegal, or in contravention of prescribed procedure, or in breach of the rules 
B of natural justice, or arbitrary/unreasonable/irrational, or promoted by ma/a 
}ides or extraneous consideration, or the result of abuse of power, such action 
is open to judicial review. When the High Court finds that the order or action 
requires interference and exercises the power of judicial review, thereby 
resulting in the actio11/order of the state or authority being quashed, the High 
C Court will not proceed to substitute its own decision in the matter, as that 
will amount to exercising appellate power, but require the authority to 
'consider' and decide the matter again. The power of judicial review under 
Article 226 concentrates and lays emphasis on the decision making process, 
rather than the decision itself. [370-B-q 
D 
3. The High Courts also direct authority to 'consider', in a different 
E 
category of cases. Where an authority vested with the power to decide a 
matter, fails to do so in spite of a request, the person aggrieved approaches 
the High Court, which in exercise of power of judicial review, directs the 
authority to 'consider' and decide the matter. The High Court may also 
direct the authority to 'consider' afresh, where the authority had decided 
a matter without consideFing the relevant facts and circumstances, or by 
taking extraneous or irrelevant matters into consideration. In such cases 
also, High Court may not examine the validity or tenability of the claim 
on merits, but require the authority to do so. [3'10-D-F] 
F 
4. Where the High Court finds the decision-making process erroneous 
and records its findings as to the manner in which the decision should be 
made, and then directs the authority to 'consider' the matter, the authority 
will have to consider and decide the matter in the light of findings or 
observations of the Court. But where the High Court without recording any 
findings, or without expressing any view, merely directs the authority to 
G 'consider' the matter,

Excerpt shown. Read the full judgment & AI analysis in Lexace.