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Employees' State Insurance Corporation, Indore v. Shantilal Nemichand Jain
Concise Analytical Summary of the Opinion
Factual and Procedural Background
These consolidated miscellaneous appeals arise under section 82(2) of the Employees' State Insurance Act, 1948. The respondents in the appeals are employees of the Vinod or the Vimal Mills, Ujjain. The Insurance Court awarded benefits to the respondent-claimant (an amount of Rs. 1,665 in the reported instance). The appellant (the Employees' State Insurance Corporation) filed written statements before the Insurance Court which, according to the opinion, denied substantially the claimant's averments (including the factum of injury and resultant sickness) and raised a plea of limitation. The appellant later filed appeals to the High Court under section 82(2), challenging the Insurance Court's award principally on the ground that the Insurance Court did not apply a Table described by Rule 3 of Schedule I (Schedule I having been substituted by Act No. 38 of 1975, effective 30th November 1975), and by seeking to add a ground relating to non-compliance with Regulation No. 51 of the Employees' State Insurance (General) Regulations, 1950.
The opinion states that an application (I.A. No. 3216 of 1984) to incorporate an additional ground relating to Regulation No. 51 was moved. The evidence before the Insurance Court, as described in the opinion, was limited: the Corporation's proof relied largely on an Insurance Inspector's report (referred to as Ex. D/2), and the Inspector only proved his signature on that report without deposing to the facts contained therein.
This order also governs the disposal of several connected miscellaneous appeals involving similar questions and identical facts: Misc. Appeal No. 188 of 1984 (E.S.I. Corpn. v. Niranjanlal Purohit), Misc. Appeal No. 201 of 1984 (E.S.I. Corpn. v. Chhotelal), Misc. Appeal No. 205 of 1984 (E.S.I. Corpn. v. Balwantsingh), Misc. Appeal No. 206 of 1984 (E.S.I. Corpn. v. Jairam) and Misc. Appeal No. 211 of 1984 (E.S.I. Corpn. v. Mahendrakumar).
Legal Issues Presented
- Whether the appeal to the High Court under section 82(2) of the Employees' State Insurance Act involves a "substantial question of law" so as to make the appeal maintainable.
- Whether the Insurance Court, in awarding benefits, applied the Table described by Rule 3 of Schedule I to the Act correctly, and if not, whether such an error constitutes a substantial question of law.
- Whether non-compliance with Regulation No. 51 of the Employees' State Insurance (General) Regulations, 1950 deprives the Insurance Court of jurisdiction to hold a person eligible for benefits (the additional ground sought to be incorporated in the memo of appeal).
- Whether the Insurance Inspector's report (Ex. D/2), as proved by proving the inspector's signature alone, constitutes substantive evidence sufficient to defeat the claimant's claim.
Arguments of the Parties
Appellant's Arguments (as advanced by Shri N. C. Behal, learned counsel)
- Initially relied on section 2(8) (definition of 'employment injury'), sections 49 and 51 of the Act, and Regulations Nos. 51, 53, 61 and 64 of the Employees' State Insurance (General) Regulations, 1950.
- When informed that appeal lies essentially on substantial questions of law, counsel abandoned other points and confined the challenge to whether the Insurance Court followed the Table described by Rule 3 of Schedule I in awarding benefits.
- Relied on precedent authorities (Alkali Metals (P) Ltd. v. E.S.I. Corpn. and P. D. Vidwadka v. Regional Director, E.S.I. Corpn.) to contend that the failure to apply the Table raised an arguable point warranting admission of the appeal.
- Moved to incorporate an additional ground relating to non-compliance with Regulation No. 51, arguing that such non-compliance affected the jurisdiction of the Insurance Court.
- Contended that application of the Table might curtail the amount awarded and thus that the correctness of calculation under the Table was a matter to be considered.
Respondents' Arguments
The opinion does not contain a detailed account of the respondents' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Alkali Metals (P) Ltd. v. E. S. I. Corpn., 1976 Lab IC 186 | Authority relied upon by appellant to support admission of an appeal where the Table was not followed (i.e., to show an arguable point on law). | The Court acknowledged the citation but held that notwithstanding the authority, the present appeal lacked the necessary factual material to attract the Table or to raise a substantial question of law under section 82(2). |
| P. D. Vidwadka & another v. Regional Director, E. S. I. Corpn., 1977 Lab IC (NOC) 115 | Authority relied upon by appellant for the proposition that an arguable point on the Table could justify admission. | The Court accepted that the citation was not disputable as a legal proposition but found the present record deficient in facts; hence it held the appeal did not raise a substantial question of law under section 82(2). |
| Dilbagh Rai Jarry v. Union of India, 1974 (3) SCC 554 | Quoted for observations criticising governmental disposition to litigation and stressing that the State should not pursue mere technical pleas to defeat claims of its own employees. | The Court invoked these observations to condemn the litigative attitude of the Corporation in denying the claimant's case and raising technical pleas such as limitation; used as a warning against public authorities adopting hyper-technical litigation stances. |
| The Madras Port Trust v. Hymanshu International, AIR 1979 SC 1144 | Principle that pleas of limitation based on technical grounds are viewed with disfavour when invoked by public authorities to defeat just claims of citizens. | The Court relied on this authority to state that it is improper for a public body like the Corporation to take a plea of limitation in order to defeat an employee's just claim and observed that such a plea should be treated with disfavour. |
Court's Reasoning and Analysis
The Court began with the statutory framework: section 82 of the Act bars appeals from an Employees' Insurance Court except where a substantial question of law is involved (section 82(2)). The Court emphasized that the provision for appeals is narrow and analogous in part to section 100 of the Code of Civil Procedure; findings of fact based upon appreciation of evidence ordinarily do not qualify as substantial questions of law.
On the specific contentions:
- The Court observed that the appellant-corporation's written statement before the Insurance Court had denied almost every averment of the claimant (including injury and sickness) and yet the Corporation admitted partial payment of benefits, a contradiction the Court found notable and undermining of the Corporation's present stance on appeal.
- Regarding the application to add Regulation No. 51 as an additional ground, the Court noted that this plea had apparently not been raised before the Insurance Court and that the evidentiary material on record was inadequate to support it. The only documentary evidence relied upon by the Corporation was the Insurance Inspector's report (Ex. D/2), and the Inspector merely proved his signature without deposing to the facts contained in the report. The Court held that such a report, when proved only by signature, cannot be regarded as substantive evidence sufficient to displace the Insurance Court's factual findings.
- Even if the Table (Rule 3 of Schedule I) were said to have been misapplied, the Court held that a mere inaccuracy in calculation or an error in applying the Table does not, by itself, constitute a "substantial question of law" within the meaning of section 82(2). The Court stressed that to attract appellate jurisdiction under section 82(2) there must be some factual material on record that would bring the case within the specific legal provision relied upon; such factual material was lacking.
- The Court reiterated the social-welfare character of the Act and the need to interpret it liberally for the benefit of employees (referencing Articles 41 and 42 of the Constitution as indicative of the legislative intent). The Court warned against entertaining trivial or hyper-technical appeals that would defeat the Act's object of securing benefits to employees for sickness, maternity and employment injury.
- The Court also criticized the Corporation's litigative approach—denying facts and even raising limitation to defeat a small employee claim—and invoked Supreme Court authority condemning public authorities' reliance on technical pleas to defeat just claims.
On these bases the Court concluded that the Insurance Court's award was a finding of fact based on appreciation of evidence; it did not raise any substantial question of law proper for consideration under section 82(2). The evidentiary shortcomings (particularly reliance on an Inspector's report proved only by signature) further weakened the appellant's position. Accordingly, the appeals were not maintainable and were dismissed summarily.
Holding and Implications
APPEALS DISMISSED.
Implications and direct effects as stated in the opinion:
- The appeals (including the connected appeals listed at the outset) fail and are dismissed summarily; the order was made without notice to the opposite parties in these matters.
- The Court certified that a copy of the order be supplied to counsel on payment of necessary charges.
- The Court held that where an Insurance Court's decision is founded on appreciation of evidence and results in a factual finding (such as entitlement to a quantified benefit), such a finding does not normally present a substantial question of law under section 82(2) and is therefore not amenable to interference by the High Court on appeal under that provision.
- The opinion emphasises that purely technical or mathematical errors in calculation under the Table, or reliance on insufficient evidentiary material (for example, an Inspector's report proved only by signature), do not convert the matter into a substantial question of law warranting appellate jurisdiction under section 82(2).
- The Court also formally expressed disapproval of the Corporation's litigative approach, invoking higher authority to discourage public bodies from pursuing technical pleas (such as limitation) to defeat honest claims of employees.
No novel precedent was announced by this order; the Court applied existing principles about the limited scope of appeals under section 82(2), evidentiary sufficiency, and the liberal, welfare-oriented interpretation of the Employees' State Insurance Act.
Disposition: Appeals dismissed. Certified copy to counsel on payment of necessary charges.
Heard Shri N. C. Behal, learned counsel for the appellant on the question of admission. Also considered the grounds in I. A. No. 3216 of 1984. This order shall also govern the disposal of Misc. Appeal No. 188 of 1984 (E. S. 1. Corporation v. Niranjanlal Purohit), Misc. Appeal No. 201 of 1984 (E. S. I. Corpn. v. Chhotelal), Misc. Appeal No. 205 of 1984 (E. S. I. Corpn. v. Balwantsingh),- Misc. Appeal No. 206 of 1984 (E.S.I. Corpn. v. Jairam) and Misc. Appeal No. 211 of 1984 (E. S. I. Corpn. v. Mahendrakumar), as all these appeals involve similar questions on identical facts.
2. This appeal and the other connected appeals referred to above, preferred under section 82 (2) of the Employees' State Insurance Act, 1948 (hereinafter referred to as the Act) have a common feature that the respondents in all these appeals are employees of the Vinod or the Vimal Mills, Ujjain.
3. The learned counsel for the appellants started with section 2 (8) of the Act, defining the 'employment injury' and thereafter referred to this Court section 49 and section 51 of the Act. He also referred to Regulations Nos. 51, 53, 61 and 64 of the Employees' State Insurance (General) Regulations, 1950 (hereinafter referred to as the Regulations), framed under section 97 of the Act. During the course of his arguments when it was brought to the notice of the learned counsel that an appeal lies essentially on substantial questions of law and no finding of fact is arrived at by the Insurance Court, the learned counsel stated at the Bar that he abandons
all the points raised by him and emphasised only on the question whether the Insurance Court while awarding the benefits has followed the Table, described by Rule 3 of Schedule I. In order to appreciate Shri Behal's contention it is necessary to refer to the pleadings raised by the Corporation before the Insurance Court. Except the Insurance number, every averment made by the claimant employee before the Insurance Court has not only been denied in substance by the Corporation but even a plea of limitation has also been raised. It looks strange to find the Corporation coming with such a litigative attitude. The blatant and brazen denial on the part of the Corporation does not behove of a statutory body like the present appellant. It is really painful to note that the factum of injury or resultant sickness, even the first aid, all these facts have been denied, but this denial itself stands belied by the contradictory pleadings raised by the Corporation. Even while denying the factum of injury, the Corporation admits having made the partial payment of the benefits. It does not stand to reason that sustaining of injury itself is denied, then how can there be even partial payment made by the Corporation. Perusal of the written statement submitted by the Corporation does not even remotely suggest or indicate any such plea, as is now being sought to be raised before this Court in appeal under section 82 of the Act.
4. The learned counsel moved an application, seeking to incorporate an additional ground in the memo of appeal, which relates to Regulation No. 51. By this additional ground it is claimed that Regulation No. 51 has not been complied with and it is contended that the Insurance Court had no jurisdiction to hold any person eligible for such benefit in view of the non-compliance of Regulation No. 51. This plea was apparently not raised before the Insurance Court. The set of evidence adduced on behalf of the Corporation is also equally lacking so as to reach any conclusion, supporting the contention now sought to be advanced by the learned counsel. All that has been placed by way of evidence is a report submitted by the Insurance Inspector. This report by itself can hardly be said to be substantial evidence, even if it is marked as an exhibit. Such a report not being a substantive piece of evidence, it was incumbent upon the prosecution to prove all those facts contained in the Inspector's report, being Ex. D/2. All that the witness says that it bears his signatures at place A to A, without deposing the facts stated therein. In this background of pleadings and facts it is now to be seen whether the present appeal is maintainable under section 82 (2) of the Act.
5. Section 82 of the Act, reads as under :
"S. 82. Appeal.-(1) Save as expressly provided in this section, no appeal shall lie from an order of an Employees' Insurance Court.
(2) An appeal shall lie to the High Court from an order of an Employees' Insurance Court if it involves a substantial question of law.
(3) The period of limitation for an appeal under this section shall be sixty days.
(4) The provisions of sections 5 and 12 of the Indian Limitation Act, 1908 (9 of 1908) shall apply to appeals under this section."
6. Placing reliance on Alkali Metals (P) Ltd. v. E. S. I. Corpn. 1976 Lab 1C 186. and P. D. Vidwadka and another v. Regional Director, E. S. I. Corpn. 1977 Lab IC(NOC) 115. the learned counsel contends that in view of the fact that the Table referred to above has not been followed by the Insurance Court and this appeal raised an arguable point and, therefore, deserves to be admitted. There can be no quarrel with the citations submitted by the learned counsel. Construction of a statutory provision of law is no doubt a question of law, but in order to attract a particular provision it is necessary that there should be some factual material on record and on this aspect of the matter the present appeal is miserably lacking in some such facts which would attract either the Table, which the learned counsel has very emphatically placed reliance on or Regulation No. 51 of the Regulations. Section 82 of the Act is in part materia with section 100 of the Code of Civil Procedure and even if the finding of the Insurance Court be an erroneous finding arrived at on facts based on misappreciation of evidence, it could not be said that any substantial question of law is involved in this appeal. The actual position in this case is not of any erroneous finding or erroneous appreciation or mis-appreciation of evidence The Insurance Court on a consideration of the evidence on record arrived at a finding that the respondent-claimant is entitled to an amount of Rs. 1,665 as benefit from the Corporation. This finding itself being based on appreciation of evidence, cannot be legally challenged under section 82 (2) of the Act. The finding of fact and the order of the Court does not involve any question of law, not to speak of a substantial question of law, as required under section 82(2) of the Act, in order to make an appeal competent. As such, an appeal against such order of the Insurance Court is not maintainable.
7. The matter does not rest here. The Act is a social security legislation and is required to be interpreted liberally for the benefit of the employees. It is a welfare legislation and should receive liberal construction to promote its objects, keeping in view the directive principles of Articles 41 and 42 of the Constitution of India. The object of the Act is to secure certain benefits to employees in case of sickness, maternity and employment injury. If appeals were to be entertained on such trivial grounds, as urged by the learned counsel, it would defeat the very object of the Act. A paltry sum of a few hundred rupees, which may ultimately be liable to be altered, modified or curtailed on some meticulous mathematical precision or on hyper-technical view of the matter is neither intended by the Legislature nor desirable for this Court to entertain such appeals The very fact that section 82 of the Act begins with a non-obstante clause "no appeal shall lie" is indicative of the fact that the Legislature did not intend appeals on grounds other than substantial questions of law.
8. On going through the written-statement, blatant and brazen denials on the part of the Corporation, even raising the plea of limitation to defeat the just and honest claim of an employee and the litigative attitude and approach shown by the Corporation in coming against a small benefit awarded to an employee, this Court cannot help observing that the litigative attitude on the part of the Corporation deserves to be condemned. In Dilbagh Rai Jarry v. Union of India 1974 (3) S C C 554, Krishna lyer, J. made the following observations in this context:
"I feel impelled to make a few observations not on the merits but on governmental disposition to litigation, the present case being symptomatic of a serious deficiency. In this country the State is the largest litigant today and the huge expenditure involved makes a big draft on the public exchequer. In the context of expanding dimensions of State activity and responsibility, is it unfair to expect finer sense and sensibility in its litigation policy, the absence of which, in the present case, has led the Railway callously and cantankerously to resist an action by its own employee, a small man, by urging a mere technical plea which has been pursued right up to the summit Court here and has been negatived in the judgment just pronounced. Instances of this type are legion.
It must be remembered that the State is no ordinary party trying to win a case against one of its own citizens by hook or by crook; for the State's interest is to meet honest claims, vindicate a substantial defence and never to score a technical point or overreach a weaker party to avoid a just liability or secure an unfair advantage, simply because legal devices provide such an opportunity.
The State is a virtuous litigant and looks with unconcern on immoral forensic successes so that if on the merits the case is weak, government shows a willingness to settle the dispute regardless of prestige and other lesser motivations which move private parties to fight in Court."
It is really painful to note that the Corporation should have taken the plea of limitation to defeat the just claim of an employee, quite unmindful of the pronouncement of the Supreme Court in The Madras Port Trust v. Hymanshu International A I R 1979 S C 1144., to the following effect :
"The plea of limitation based on this section is one which the Court always looks upon with disfavour and it is unfortunate that a public authority like the Port Trust should, in all morality and justice, take up such a plea to defeat a just claim of the citizen. It is high time that governments and public authorities adopt the practice of not relying upon technical pleas for the purpose of defeating legitimate claims of citizens and do what is fair and just to the citizens."
The pleas taken by the Corporation before the Insurance Court and the points urged before this Court, run counter of the spirit of section 82 of the Act, which enjoins upon the Corporation a duty to pay the benefits (compensation), if in its opinion the contributor has paid less and the difference between the amount of the benefit payable by the Corporation to an employee can be recovered from the principal contributor and even with penalty, as arrears of land revenue.
9. What applies to the State, as observed by the Supreme Court, applies with equal force to the statutory bodies constituted under any statute. The Corporation, whose prime object is to see that benefits are conferred on the employees is itself a party in seeking to defeat the just claim of an employee on some meticulous, mathematical or hyper-technical view of the Table, which according to the learned counsel is a part of the Schedule I. This Table even if applied may ultimately lead to some curtailment of the amount, yet it would not amount to a substantial question of law, so as to call for an interference by this Court. In this case (M. A. 187 of 1984) even the question of limitation was also raised. Suffice it to say that it is too late in the day for the Corporation to raise such a plea to defeat the just claim of any employee. (The Madras Port Trust v. Hymanshu International). The written-statements, which have been filed by the appellant Corporation before the insurance Court stinks of utter disregard for truth and even a fair approach, which is expected of such a Corporation and its authorities in such matters. Every averment, which could ultimately entitle the claimant to any benefit is denied with callous disregard even to its own pleadings, wherein it is not surprising to find admitting a part of the claim, yet denying even that step to obtain the first aid taken by the claimant-employee from his being treated by any doctor. This sort of approach is not only to be regretted, but deserves to be condemned.
10. The sorry state of affairs which is common feature to all these appeals is a laconic way of adducing evidence, the Inspector simply proving his own signatures on a piece of paper, said to be his report, and on that report which is to be acted upon for defeating the honest claim of any employee. Needless to say that at best it may be a basis of proving the signatures of the person who had submitted the report, but it can hardly be taken to be a substantive piece of evidence to defeat the just claim of any employee.
11. Shri Behal, learned counsel for the appellant has repeatedly emphasised that whether the claim falls within the purview of the Table, which is a part of Schedule I to the Act. This Schedule I was substituted by Act No. 38 of 1975 and brought into effect with effect from 30th November, 1975. Thus, it is apparent that either it was not there or was altered or modified. It is subject to change and even if it is assumed that the Insurance Court has erred in calculating the amount to be awarded in accordance with this Table, the basic question which remains to be answered is whether such an error or infraction of the Table can be brought within the purview of that substantial "question of law" on which alone an appeal lies.
12. Shri Behal contends that if this table is applied, the amount awarded may be curtailed to a considerable extent. But in all such cases the other question that arises is, was it not incumbent on the Corporation to adduce such convincing evidence before the Insurance Court and to assist thereby the Court in arriving at a just decision. Mere inaccuracy in calculation or error creeping in applying the particular Table by itself, in view of this Court, does not constitute a "substantial question of law", as contemplated by section 82 of the Act.
12A. These appeals fail and are dismissed summarily, without notice to the opposite party. Certified copy of this order be supplied to the counsel on payment of necessary charges.
Appeals dismissed.
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