1. In this batch of petitions referred to the Division Bench by the learned Single Benches from time to time, the following questions are required to be decided by us:-

1) Whether Chapter IV of the Employees' State Insurance Act, 1948 (Central Act No. 34 of 1948) (hereinafter to be referred as Act) is ultra vires the Constitution of India or not?

2) Whether Regulation 10 B of the Employees' State Insurance (General) Regulations, 1950 (hereinafter to be referred as Regulations) is ultra vires the 1948 Act or the Constitution of India or not?

3) Whether the respondents can insist on contributions being made by the employees or the employers, as required under Section 39 of the Act, without correspondingly providing benefits to the employees?

4) Whether the employees or the employers or both have any option to pay or not to pay the contributions as envisaged under Section 39 of Act?

5) Whether the notices of demand issued from time to time by the respondents calling upon the petitioners to pay certain sums of money as contributions were issued without observing principles of natural justice, the provisions of 1948 act or the Regulations and whether, in law or on facts, such notices of demand are sustainable or not?

6) Whether the petitioners in fact are, or not liable to pay the amounts demanded from them by the respondents as contributions or, arrears of contributions allegedly payable by them under the Act?

7) Whether the factories/establishments of the petitioners- employers do or do not come within the scope and purview of 1948 Act and thus whether these are, or not amenable to the applicability of the 1948 Act itself and its various provisions?

8) Whether in respect of such factories/establishments where number of employees is such that such factories/ establishments are not covered by the 1948 Act, respondents can insist on payment of contributions?

9) Whether all types of employees working in the factories/establishments of the petitioners, whether on casual or contract basis or otherwise come within the scope and purview of the expression "employee" as used in Section 2(9) of the 1948 Act and if so, whether the petitioners are liable to pay contributions in respect of such employees also, both as the employees contributions and the employers contributions?

10) Whether a factory/establishment would continue to be governed by the 1948 Act, notwithstanding the fact that the number of persons employed therein at any point of time falls below the limit specified by or under this Act or the manufacturing process therein ceases to be carried on?

2. During the course of arguments, learned counsel appearing for the respondents stated that during the intervening period, the State of J & K has issued a notification SRO 157 dated August 10, 1994 whereby in exercise of the powers conferred under Section 74 of 1948 Act, the Govt. of Jammu and Kashmir has constituted the Employees Insurance Courts for the local areas of Revenue districts of Srinagar, Jammu and Kathua for the purpose of Section 75 of the Act. For ready reference text of this notification is reproduced as under:-

"SRO-157. In exercise of the powers conferred by Section 74 of the Employees' State Insurance Act, 1948, the Govt. of Jammu and Kashmir hereby constitute Employees' Insurance Courts for the local areas of Revenue districts of Srinagar, Jammu and Kathua for the purpose of Section 75 of the said Act.

The Govt. further in consultation with High Court directs that the said Court shall consist of the following Judges for the Revenue districts shown against each:-

3. section 74 of the 1948 act enjoins upon a State Government to constitute an Employees' Insurance Court of such local area as may be specified in notification to be issued for this purpose by the State Govt. Section 75 of the Act prescribes and deals with the matters which are required to be decided by a Court constituted under Section 74 of the Act. For ready reference, it shall be advantageous to reproduce Sub-section (1) of Section 75 of the Act which thus reads as under:-

"75. Matters to be decided by Employees' Insurance Court.- (1) If any question or dispute arises as to-

(a) Whether any person is an employee within the meaning of this Act or whether he is liable to pay the employee's contribution or

(b) The rate of wages or average daily wages of an employee for the purpose of this Act or,

(c) The rate of contribution payable by the principal employer in respect of any employer or

(d) The person who is or was the principal employer in respect of any employee, or

(e) The right of any person to any benefit and as to the amount and duration thereof, or (ee) Any direction issued by the Corporation under Section 55A on a review of any payment of dependent's benefits or,

(f) (Omitted), or

(g) Any other matter which is in dispute between a principal employer and the Corporation, or between a principal employer and an immediate employer, or between a person and the Corporation or between an employee and a principal or immediate employer, in respect of any contribution or benefit or other dues payable or recoverable under this Act, (or any other matter required to be or which may be decided by the Employees' Insurance Court under this Act), such question or dispute (subject to the provisions of Sub-section (2A) shall be decided by the Employees' Insurance Court in accordance with the provisions of this Act."

Regulation 10 B of the Regulations read as under:-

10 B. Registration of factories or Establishments: -

(a) The employer in respect of a factory or an establishment to which the Act applies for the first time and to which an Employer's Code Number is not yet allotted and the employer in respect of a factory or an establishment to which the Act previously applied but has ceased to apply for the time being, shall furnish to the appropriate Regional Office not later than 15 days after the Act becomes applicable, as the case may be, to the factory in writing in Form 01 (thereinafter referred to as Employer's Registration Form).

(b) The employer shall be responsible for the correctness of all the particulars and information required for and furnished on the Employer's Registration Form.

(c) The appropriate Regional Office may direct the employer who fails to comply with the requirements of paragraph (a) of this regulation within the time stated therein, to furnish to that office Employer Registration Form duly completed within such further time as may be specified and such employer shall, thereupon, comply with the instructions, issued by that office in this behalf.

(d) Upon receipt of the completed Employers' Registration Form, the appropriate Regional Office shall, if satisfied that the factory of the establishment is one to which the Act applies, allot to it an Employer's Code Number (unless the factory or the establishment has already been allotted an Employer's Code Number) and shall inform the employer of that number.

(e) The employer shall enter the Employer's Code Number on all documents prepared or completed by him in connection with the Act, the rules and these regulations and in all correspondence with the appropriate office".

4. Learned counsel for the petitioners argued that provisions of Chapter IV of the Act and some other related provisions were unconstitutional, because these left no option for the petitioners, employees as to whether to pay or not to pay contributions and that in any event, the provisions were not enforceable because corresponding obligations and the duties of the State to grant benefits to the employees were neither forthcoming nor available. They wanted, therefore, these provisions to be struck down as unconstitutional. They also argued that Regulation 10 B of Regulations was opposed to the Principles of natural justice because it did not afford any opportunity to the employer before the respondents would take action in terms of Regulations 10 B including one regarding allotment of Code number.

5. In so far as most of the questions enumerated in the very opening part of the judgment are concerned, we are fully convinced and wholly satisfied that the Employee's Insurance Court constituted under Section 74 of the Act by the State Govt. vide its Notification SRO 157 is the most appropriate forum to handle, adjudicate upon and decide them, in the light of the provisions of the Act, rules and the regulations and after affording opportunity to all concerned in accordance with the principles of natural justice. Barring the questions relating to the constitutionality of the provisions of the Act and the Regulation 10 B, we have no doubt in our minds that approaching the Employees' Insurance Court with regard to all other questions is an effective and efficacious remedy and that the parties shall be better placed, if all such questions are decided by the said Court, more particularly since the decision with regard to most of such questions would revolve around disputed questions of fact. This Court is wholly ill-equipped to enter into such disputed questions of fact which are best left to be decided by the Court specifically constituted and meant for this purpose. That Court undoubtedly is better equipped to decide all such disputed questions with regard to the applicable provisions of law. Not only that, orders/judgments that may ultimately be passed by that Court as subject to appeal before the High Court, in terms of Section 82 of the Act, which in effect and substance means that the petitioners are not left wholly on the mercy of that Court and that if they, or any one of them should feel aggrieved by any order/judgment by that Court, it should be open to him to avail of right of appeal under Section 82 of the Act. 6. Coming to the argument about the constitutional validity of Chapter IV of the Act and other related provisions as well as Regulation 10 B of Regulations the first and foremost thing which has to be borne in mind is that the Act is a piece of welfare legislation, enacted solely with the intention of providing relief as a welfare measure to the employees working in the factories and establishents covered by the Act. The intention of the Legislature in enacting a law like the Act was to ensure that in some adverse situations and circumstances whenever the employees need some relief either by way of cash assistance and medical treatment or both, they do not suffer for want of such relief and that State creates a machinery, provides a mechanism whereby such a relief to them is ensured. If for creation of such a machinery and for providing such a mechanism as also for building such an infrastructure, the State insists upon the employees to pay some meagre contributions, a token payment, perhaps no one can find fault with this noble objective of such a welfare legislation. After all in a welfare society where the State takes upon itself the noble task of providing relief to deserving oppressed and poor employees working in the private sector, who otherwise do not have enough means to look after their needs and to redress their grievances, one surely cannot find fault with this approach of the State. Provision of relief is wholly dependent upon the financial resources of the State and if with such intention in mind, the State finds that its financial resources are not wholly adequate, and if with that in view, it creates a mechanism to provide for some contributions by the employees, the mechanism has to be approved, perhaps there being no other alternative to it. Similarly, by way of welfare intendment, if the State thinks that, apart from its own contribution to such a huge infrastructure and the contributions of the employees themselves, some contributions should be made by the employers also for the welfare of their employees, nobody can find fault with such an approach as well. If the joint efforts of the State, the employers and the employees themselves led to creation of a mechanism, a system and infrastructure whereby relief is ensured to the deserving weaker, poor and oppressed employees, the objective indeed is laudable.

7. In the case of Basant Kumor v. Eagle Rotting Mills reported in (1964-II-LLJ-105) (SC) their Lordships while dealing with the Constitutional validity of the Act clearly held that by enacting this legislation, the legislature evolved a scheme of socio-economic welfare, made elaborate provisions in respect of the benefits to be granted to the employees and left it to the Government concerned to decide when, how and in what manner these benefits be given.

8. In the case of MA. Cochin Shipping Co. v. E.S.I. Corporation reported in (1993-II-LLJ-795) the Supreme Court held as under at pages 797-798:

"The Employees' State Insurance Act is an Act to provide certain benefits to employees in case of sickness, maternity and employment injury and make provision for certain other matters in relation thereto. The Act is an outcome of a policy to provide remedy for the widespread evils arising from the consequences of national poverty. Indeed, it is a piece of social security"

9. In the case of Employees' Employees' State Insurance Corpn. v. Harrison Malayalam Pvt. Ltd.. reported in (1994-II-LLJ-12) the Supreme Court held as under at P 14:

....... The scheme under the Act for insuring the workmen for conferring on them benefits in case of accident, disablement, sickness, maternity etc.,; is distinct from the contract of insurance in general. Under the Act, the scheme is more akin to group insurance. However, he does not get any part of the contribution back if during the benefit period, he does not qualify for any of the benefits. The contribution made by him and by his employer is credited to the insurance fund created under the Act and it becomes available for others or for himself, during other benefit period, if he continues in employment. What is more there is no relation between contribution made and the benefit availed of. The contribution is uniform for all workmen and is a percentage of the wages earned by them. It has no relation to the risks against which the workman stands statutorily insured. It is for this reason that the Act envisages automatic obligation to pay the contribution once the factory or the establishment is covered by the Act, and the obligation to pay the contribution commences from the date of the application of the Act to such factory or establishment. The obligation ceases only when the Act ceases to apply to the factory/establishment. The obligation to make contribution does not depend upon whether the particular employee or employees cease to be employee/employees after the contribution period and the benefit period expired.

10. Once therefore, the State decided to create a mechanism in the form of this welfare legislation and called upon the employees and the employers together to make contributions for a Fund so that some benefit can be given to the employees in their hour of need, it clearly comes out that once the employees stand insured in terms of Section 38 of the Act, in terms of Section 46 of the Act they shall be automatically entitled as a matter of right to the grant of benefits contained in and prescribed in Chapter V of the Act. Section 38 of the Act clearly lays down that all employees working in the factories or establishments to which the Act applies shall be insured in the manner provided by the Act. One of the conditions precedent of course for enforcing this doctrine and concept of insurance under Section 38 to pay contributions as prescribed under Section 39 of the Act. All things having been done, all requirements having been completed, the insurance having thus come into effect, the right of the employees to get the benefits under Chapter V of the Act becomes absolute and unquestioned. It therefore, clearly follows that the employees are entitled, as and when they so need and as and when the situation so warrants, having regard to the provisions of the Act, for the grant of benefits.

11. If therefore, at any point of time, the employees ever feel either neglected by the authorities under the Act in the matter of grant of any benefit to them or, if ever such benefits as is legitimately due to them is denied to them, the employees have a remedy of approaching the Court constituted under Section 74 of the Act because under Clause (e) of Sub-section (1) of Section 75 of the Act, question or dispute relating to the right of the employees to get benefit under the Act and as to the amount of benefit and the duration thereof, shall be determined and decided by the Court constituted under Section 74 of the Act. To that extent also, therefore, the issues raised in this petition involving the alleged denial of benefit to the employees, like the lack of facilities etc. are such which can be raised by the employees in the Employees' Insurance Court and if that Court ever finds the grievances of the employees are genuine and that the rights guaranteed to them that under Chapter V of the Act are either being denied, or are not being effectively granted to them that Court has absolute powers under Section 75 of the Act to pass all appropriate orders and issue necessary directions so as to ensure that the grant of benefits under Chapter V of the Act is not a mere ritualistic exercise and empty formality, but a realistic requirement, a practical realisation and an effective answer to the need based requirement, the spirit behind the enactment, the policy of the Legislature and the need of the employees.

12. In the totality of circumstances, therefore, based upon our appreciation of various provisions of the Act, particularly those contained in Chapter IV and V and having regard to the pronouncements of the Apex Court quoted above we are convinced that no part of the Act, neither Chapter IV nor Chapter V thereof suffers from any unconstitutionality or legal vice or mischief. We are of the view that no provision of the Act is ultra-vires the Constitution of India and that the Act being a piece of welfare legislation is based upon noble and laudable objectives. We therefore, hold that the Act is intra vires the Constitution of India. Accordingly therefore, the pleas of the petitioners with regard to the unconstitutionality and the vires of the Act are rejected.

13. Coming to the plea regarding the constitutionality of Regulation 10 B of the Regulations, we find that this Regulation is in conformity with the purpose for which provision is made in the Act for registration of factories and establishments so that effective implementation of the welfare scheme, as provided for in the act is carried out. Regulation 10B merely provides for a mechanism for registration of the factories, furnishing of requisite information and allotment of employers Code Number etc. It enjoins upon the employers to give correct information with regard to the employees etc. and fixes responsibility upon the employers for giving incorrect information. There is nothing obnoxious in Regulation 10B which may attract any legal vice or mischief or which may be termed as being opposed to the principles of natural justice. We hold that Regulation 10B is therefore also not ultra vires either the Constitution of India, the Act or any other law.

14. We are therefore, of the considered view that the petitioners have failed to make out any case for the grant of any relief to them in these petitions. The grievances of the petitioners, if any, can be effectively redressed if they approach Employees' Insurance Court. We have no doubt in our mind that the Employees Insurance Court shall exercise jurisdiction vested in it under the Act, if and when called upon to do so by any party and pass applicable law on the subject and the merits of the case.

15. The petitions are dismissed. Interim directions shall be vacated in all cases. Since however, Employees' Insurance Court came to be constituted by the State Govt. during the pendency of most of the petitions in this Court, we give absolute liberty to the petitioners herein to approach that Court or otherwise. If they approach the Employees' Insurance Court within 30 days, and if along with the petitions that they may choose to file in that Court, they also deposed the amounts demanded from them by the respondents which had been impugned by them in these petitions before this Court, the Employees' Insurance Court on receipt of such petitions and the deposit of the amounts so made shall keep the amounts in a fixed deposit and not disburse the same to any party.

Depending upon the result of the petitions to be filed before that Court, consequential orders disposing of the petitions as also those with regard to the payment or otherwise of the amounts deposited/demanded by the respondents shall be passed by that Court. To achieve this result, therefore, we direct that for a period of 30 days from today, no recovery shall be effected from any of the petitioners in any petition of the amounts which were demanded from them in the cases before us. If however, the petitioners, or any one of them do not file any such petitions before the Employees' Insurance Court within the period of 30 days permitted by us, the respondents, at the expiry of 30 days period shall be at absolute liberty to recover the disputed amounts from the petitioners and take all such steps for effecting such recovery under law applicable in Jammu and Kashmir State, as are available and permissible to them.

16. The directions contained in this judgment regarding the liberty to the petitioners to approach the Employees' Insurance Court, the deposit of the amount in that Court and its non- disbursal to the respondents during the pendency of the petitions to be filed in that Court, are all peculiar to these cases, and have been issued because of the pendency of these petitions in this Court, the constitution of the Employees' Insurance Court during such pendency have and the reference of disputes to that Court by the petitioners, based upon the disposal of these petitions by this judgment and the observations contained herein. These directions, therefore, shall not operate as any precedent for any other case, either in the past or in time to come, nor shall have binding effect upon any other situation, directly or indirectly akin or similar to the case being disposed of vide this judgment. Each case shall be dealt with on its own merits.

17. The petitions disposed of. No order as to costs.