Translate
Text Highlighter

Bookmark

PDF

Share

Report a problem
AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • provision of S. 75(2B) of the Employees' State Insurance Act
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Attorney(S)
Judges
Acts
  • provision of S. 75(2B) of the Employees' State Insurance Act
Smart Summary

Factual and Procedural Background

The Employees' State Insurance Corporation (the Corporation) filed an application under Article 227 of the Constitution of India challenging an order dated 19 July 2002 passed by the Judge presiding over the Employees' Insurance Court, West Bengal, in case No. 58 of 2002. The Corporation alleged that the opposite party challenged a notice of claim issued by the Corporation and also sought a temporary injunction to restrain the Corporation from claiming or taking steps for realization of the amount. The Corporation contended that the learned Judge granted the temporary injunction without considering the mandatory provision of Section 75(2B) of the Employees' State Insurance Act, which requires the opposite party to deposit 50% of the claim amount unless the Judge records proper reasons to waive or reduce this deposit.

Legal Issues Presented

  1. Whether the learned Judge erred in granting a temporary injunction without ensuring compliance with the mandatory requirement under Section 75(2B) of the Employees' State Insurance Act to deposit 50% of the claim amount or record reasons for waiver or reduction.
  2. Whether the application under Article 227 of the Constitution of India is maintainable despite the existence of an alternative remedy under Section 82(2) of the Act.
  3. Whether the High Court can exercise its power under Article 227 to correct the alleged jurisdictional or legal error committed by the subordinate court or tribunal in granting the injunction.

Arguments of the Parties

Corporation's Arguments

  • Section 75(2B) of the Employees' State Insurance Act mandates the deposit of 50% of the claim amount before entertaining a claim; this provision is mandatory and not merely directory.
  • The learned Judge failed to ensure this deposit or record any reasons for waiver or reduction, rendering the injunction order liable to be set aside.

Opposite Party's Arguments

  • The application under Article 227 is not maintainable as there is an alternative remedy available under Section 82(2) of the Act.
  • The High Court should not interfere under Article 227 for errors made by the subordinate judiciary as it would amount to re-examining jurisdiction, which is impermissible.
  • Earlier Division Bench decisions held that mandating a 50% deposit in all cases without discretion would be oppressive and should be discouraged.
  • There was a bona fide dispute over the claim amount, and the learned Judge rightly exercised discretion to waive the deposit when granting the injunction.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court noted that the existence of an alternative remedy does not bar the exercise of power under Article 227. Upon examining the record, the Court found that the subordinate Tribunal either exceeded or failed to exercise its jurisdiction properly. The Court emphasized the clear statutory mandate under Section 75(2B) requiring a 50% deposit of the claim amount before proceeding, highlighting that this provision applies equally to private employers and government undertakings as part of social security legislation.

The Court distinguished the current case from earlier Division Bench decisions, noting that the situation here was different. It acknowledged the statutory discretion granted to the learned Judge to waive or reduce the deposit but stressed that such discretion must be exercised by recording cogent and convincing reasons.

In the impugned order, the learned Judge failed to consider or record any reasons for waiving the deposit, thereby disregarding the mandatory statutory provision. This amounted to a failure to exercise jurisdiction, justifying the High Court's intervention under Article 227 to correct the legal error.

The Court directed that the matter be remitted back to the learned Judge to record reasons after hearing both parties, either to direct the 50% deposit or to waive/reduce it based on the recorded reasons. The Court also ordered that the learned Judge decide the issue within three months and that the temporary injunction remain in force until then, subject to conditions regarding participation by the opposite party.

Holding and Implications

The application filed by the Employees' State Insurance Corporation under Article 227 was allowed and the impugned order granting temporary injunction was set aside.

The case was remitted to the learned Judge for fresh consideration with a mandatory direction to record cogent reasons either for directing a 50% deposit of the claim amount or for waiving/reducing it. The temporary injunction granted earlier was to continue until the fresh decision, but would be vacated if the opposite party failed to participate within the specified time. No costs were ordered. This decision directly affects the parties by ensuring strict compliance with the statutory mandate under the Employees' State Insurance Act and clarifies the proper exercise of judicial discretion in such matters. No new precedent was established beyond the application of existing statutory requirements and the scope of Article 227 jurisdiction.

    Employees' State Insurance Corporation, Calcutta v. Steel Authority Of India, Ltd. (Durgapur Steel Plant), Durgapur

    1. Both sides are present. The opposite parts' has filed its opposition. Let it be kept with the record. Heard both sides over this application filed by Employees' State Insurance Corporation (herein to be referred as the Corporation), under Art. 227 of the Constitution of India challenging the order, dated 19 July 2002, passed by the Judge, presiding over by Employees' Insurance Court, west Bengal in connection with case No. 58 of 2002. The allegation of the Corporation as it appears from the instant application is that the opposite party challenged the notice of claim issued by the Corporation and in connection with that challenge the opposite party also preferred another application for temporary injunction to restrain the Corporation from claiming the amount or taking any step in the matter of realisation of the amount. The Corporation contends that the learned Judge by his order granted the prayer of tamporary injunction without taking into account the mandatory provision of S. 75(2B) of the Employees' State Insurance Act was under the opposite party was under obligation to deposit 50 per cent of the claim amount or the learned Judge on recording proper reason may either waive the deposit or reduce the same.

    2. Appearing for the Corporation, the learned advocate contends that language of S. 752(B) is very much clear and the Intention made for the provision was not mere directory but it was mandatory, of course, there was a rider for waiving or reducing the amount cut there must be proper reason behind exercising that discretion. The learned advocate, therefore, contends that as the order was not preceded by the deposit as required under this Act, the order itself is liable to be set aside.

    3. Appearing for the opposite party, the learned advocate first of all, has raised a preliminary question regarding maintainability of this application under Art. 227 of the Constitution of India, contening inter alia that there is provision for appeal under S. 82 (2) of the Act and when there is an alternative remedy, the petitioner cannot avail of the extraordinary provision of Art. 227 of the Constitution of India.

    4. The learned advocate, next, contends that even if there is any mistake by the subordinate judiciary including that of Tribunal, this Court exercising its power under Art. 227 of the Constitution of India cannot venture to correct the mistake, because that will be exam of jurisdiction and that will not be permissible in law as it has been held time and again by the Apex Court of the land. The learned advocate, next, contends that it has been held earlier by a Division Bench of this Court that asking the employer to deposit 50 per cent claim amount in all case without making any discretion would amount to utilise the provision of the Act as a tool of oppression and that should be discouraged.

    5. The learned advocate finally submits that in the given facts and circumstances, there was a bona fide dispute over the claim amount and hence the learned Judge rightly issued the injunction order and from the order itself it may be presumed that the learned Judge exercised his discretion in waiving the amount. For all the reasons stated above, there is no merit in the present application and the same is liable to be rejected.

    6. I have given my anxious consideration to all the points canvassed by both the sides. It may be recorded at the out set that alternative remedy is never a bar in entertaining an application under Art. 227 of the Constitution of India. On the examination of the record it appears that the subordinate Tribunal exceeded its jurisdiction or failed to exercise jurisdiction under the law.

    7. There is clear statutory mandate for making 50 per cent deposit of the claim amount before raising and entertaining a claim by the employer and it is to be borne in mind that the statutory provision relates to a social security legislation and there is no scope for making any difference between a private employer and a Government undertaking and this has been a constant observation of the Apex Court delivering its different judgments in the field of labour laws.

    8. The earlier decision of the Division Bench of this Court and its observation was in connection with an order directing deposit of money by the Employees' Insurance Court but regarding the case in our hand the situation is completely different.

    9. Admittedly, the learned Judge has been given statutory discretion in waiving or reducing the amount, but, that discretion is to be exercised by recording cogent and convincing reason.

    10. From the impugned order, it is very much clear that the learned Judge even did not consider this aspect not to speak of recording any reason and thereby the learned Judge totally disregarded the mandatory statutory provision which at once takes me to the point that there was total failure on the part of the learned Judge to exercise his jurisdiction and this will certainly attract the extraordinary power of the High Court to correct the legal mistake.

    11. When there was a statutory mandate to record a reasoned order and when the learned Judge has failed to do it, the order in question cannot sustain and the same shall be remitted back to the learned Judge to record a reason after hearing both the sides either to direct 50 per cent deposit or even to waive or reduce the amount, but, only after recording reasons behind such finding.

    12. With the above observation, I am inclined to allow this application and to set aside the impugned order with a direction indicated above and the learned Judge is to decide this issue within three months from the date of communication of this order and till that period the temporary injunction shall be in force. If the opposite party does not participate in the proceeding within the time indicated in this order, the temporary injunction shall stand vacated without further reference. There will be no order as to costs.

    13. Let urgent xerox certified copy of this order be made available to the learned advocates appearing for the parties.

    Use AI to get other relevant cases.

    Comments

    Employees' State Ins... v. Steel Authority Of I...
    (Apr 1, 2004)