SAHNI SILK MILLS (P) LTD. AND ANR. ETC. ETC. versus EMPLOYEES STATE INSURANCE CORPORATION

Citation: [1994] SUPP. 1 S.C.R. 626 · Decided: 14-07-1994 · Supreme Court of India · Bench: KULDIP SINGH, P.B. SAWANT, N.P. SINGH

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Judgment (excerpt)

A 
SAHNI SILK MILLS (P) LTD. AND ANR. ETC. ETC. 
B 
v. 
EMPLOYEES STATE INSURANCE CORPORATION 
JULY 14, 1994 
[KULDIP SINGH, P.B. SAWANT AND N.P. SINGH, JJ.J 
Employees State Insurance Act, 1948 : Sections 85-B and 94-A-
Enzployees State Insurance Corporation-Power to levy and recover 
damages-Delegation of-Resolution delegating power to Director General 
C and authorising him to sub-delegate the said powei-Order by Director 
General sub delegating power to Regional Directors-Permissibility of-Held 
that part of resolution which authorises the Director General to authorise any 
other officer to exercise the power and the consequential order by Director 
General is invali<f-Section 94-A envisages only direct delegation by Corpora-
D tion and delegatee cannot further sub-delegate his power. 
E 
Administrative Law : Delegation of power-In the absence of a 
statutory provision a delegatee cannot sub-delegate his power. 
Maxim-'delegatus non potest de/egare'-Applicability of 
In exercise of its power under section 94·A the Employees State 
Insurance Corporation passed a resolution dated 28.2.76 delegating its 
powe1, under Section 85(8) (i) to impose and recover damages, to the Direc· 
tor General and also empowered him to authorise any other officer to 
exercise the said power. Accordingly, the director General passed an order 
F 
dated 3.5.76 authorising the Regional Directors to exercise the aforesaid 
power and they passed orders against the appellants for recovery of 
damages for the years 1979 to 1981. The appellants unsuccessfully chal· 
lenged the orders before the Employees State Insurance Corporation and 
the High Court. 
G 
In appeal to this Court it was contended on behalf of the appellants 
that (i) in exercise of its power under section 94-A, the Corporation could 
not have delegated its power under section 85-B(i) of the Act, to be exercised 
by any other officer authorised by the Director General inasmuch as in this 
process there has been sub-delegation; (ii) when Parliament has specifically 
H appointed authority to discharge a function, it cannot be readily presumed 
626 
SAHNI SILK MILLS v. INSURANCE CORPN. 
627 
that it has intended that its delegate should be free empower another A 
person or body to act in its place. 
The connected appeals have been filled by the Respondent- Corpora-
tion against judgmenw1Jassed by different High Courts holding that in 
exercise of the power under section 94-A, the Corporation could not have 
delegated its powers under Section 85- 8(i) to the Director General of the 
Corporation empowering him to authorsie any other officer to exercise the 
aforesaid power. 
Allowing the appellants' appeals and dismissing the appeals of 
Respondent Corporation, this Court 
HELD : 1. Section 94-A does not specifically provide that any officer 
or authority subordinate to the Corporation to whom the power has been 
delegated by the Corporation, may in his turn authorise any other officer 
B 
c 
to exercise or perform that power or function. From the section it does not 
appear that Parliament vested power in Corporation to delegate its powers D 
on any of officer or authority subordinate to the Corporation, and also 
vested power in the Corporation to empower such officer or authority, to 
authorise any other officer to exercise the said power under Section 8508(1). 
Thus the Parliament while introducing section 94-A only conceived direct 
delegation by the Corporation to different officers or authorities , subor-
dinate to the Corporation, and there Is no scope for such delegate to 
sub-delegate that power, by authorising any other officer to exercise or 
perform the power so delegated. Therefore, that part or the resolution 
which authorises the Director General to permit any other officer to exer· 
E 
cise the power under Section 85-8(i) of the Act Is ultra vires Section 94-A. It 
is not within the framework of section 94-A. [634·E·G] 
Barium Chemicals Ltd. v. Company Law Board, (1966] Supp. S.C.R. 
311; Mangula/ Chunnilal v. Manila/ Magan/al, (1968] 2 S.C.R. 401 and 
Harishankar Bag/a &Anr. v. State of Madhya Pradesh, A.I.R. (1954) S.C. 465, 
referred to. 
Rameshwar Jute Mills Ltd. v. Union of India, A.I.R. (1986) Patna 288; 
Employees' State Insurance Corporation v. Mis Dhanda Engineers Pvt. Ltd. 
Faridabad, (1981) Labour and Industrial Cases 658, disapproved. 
F 
G 
Employees' State Insurance Corporation, Bangalore v. Shoba En-
lf,neers, Bangalore, (1981) 59 Indian Factoris Joum

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