M/S.BHAGHEERATHA ENGINEERING LTD. v. STATE OF KERALA

3

2016 and filed three writ petitions being W.P(C) Nos.6066/2015, 28813/2016 and 38469/2015. The aforesaid writ petitions were disposed of by separate orders in Exts.P15 to P17, directing the Government to consider the applications of the petitioner for exemption from the provision of the ESI Act and passing order after providing an opportunity of hearing.

5. In compliance of the judgments passed by this Court in the aforesaid writ petitions, the impugned order came to be passed, whereby the petitioner's applications for seeking exemption from the applicability of the provisions of ESI Act, 1948 had been rejected.

6. Learned counsel for the petitioner submits that the applications for exemptions were filed by the employer and employees together. In the year 2004, the Government after considering the Scheme offered by the petitioner to its employees granted exemption. However, now stand has been taken that the scheme offered by the petitioner is not similar or in better

4

terms than the scheme under the ESI Act. Therefore, he submitted that the impugned order is unsustainable and liable to be set aside. The second contention raised by the learned counsel for the petitioner is that, even if the petitioner has approached this Court in 2015-16 for exemption from the provision of ESI Act, from 2005 onwards, this Court has issued direction, the Government ought to have considered earlier exemption and should have granted to the petitioner from the applicability of ESI Act. On the other hand, learned counsel for the Employees State Insurance Corporation submits that, under Section 87, of the ESI Act,1948, the exemption is granted for a period of one year which may be renewed for another year and thereafter year to year basis on an application of the employer. The exemption is not right but an exception from the applicability of the Act. The Government is not bound to grant exemption even if the employer offers similar and better terms. It is for the Government to consider the facts and circumstances of each case,

5

documentary proof in support of the claim of the employer that the employer is offering better terms and they may or may not grant exemption. He therefore submits that, when the petitioner's application was not considered in the year 2005, he kept quiet 11 long years and approached this Court only in the year 2015 and thereafter in 2016. Such a belated claim for exemption would not have been entertained by the Government and the Government had rejected the claim.

7. Sri.Dheeraj A.S, learned Government Pleader has supported the submissions taken by the learned counsel for the ESIC and had submitted that even on merit , it has been found on facts that the petitioner's Scheme offered to its employees is neither similar nor better than it provided under the ESI Act. It is further submitted that the petitioner did not produce any documentary proof in support of his claim that the petitioner was offering better terms than provided in the ESI Act.

6

8. I have considered the submissions.

9. Section 87 of the ESI Act, 1948 on reproduction reads as under:

"87. Exemption of a factory or establishment or class of factories or establishments The appropriate government may, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt any factory or establishment or class of factories or establishments in any specified area from the operation of this Act for a period not exceeding one year and may from time to time by like notification renew any such exemption for periods not exceeding one year at a time."

10. From the perusal of Section 87, it is evident that initially exemption is granted for a period of one year, if the employer satisfied the Government that it is offering similar or better terms to its employees than provided in the Scheme of the ESI Act. The exemption can be renewed year to year basis on fresh application. It is not in dispute that after 2004 there was no exemption granted to the petitioner and petitioner's

7

application was not considered. The fresh order has been passed only after this Court had directed in the three writ petitions filed by the petitioner to consider his applications.

Para 6 of the impugned order reads as under:

"(6) On a comparative analysis of the facts it is found that the medical scheme of the employer is confined to permanent employees, only that too with the limit of Rupees two Lakh, super specialty treatment is not extended to family and no benefit to retired employee. The benefits extended by the employer such as sickness benefits, disablement benefits for temporarily disability, disablement benefits in cash for permanent disablement benefits, maternity benefit, funeral expenses, unemployment benefits etc. are very poor when compared with the benefits under the ESI Scheme. The benefits claimed as extended to the employees by the applicant are without documentary evidence substantiating the veracity of facts. The ESI Act is applicable to the casual, temporary and contract employees including their family without any discrimination. They have no such scheme of benefits to employees other than permanent employees."

8

11. Thus, from the perusal of the impugned order, it is evident that in the Government's estimation, the petitioner is not offering similar or better terms to its employees, than provided under the ESI Act,1948. Even for the claim, the petitioner has not provided any documentary proof. Further, the petitioner cannot claim exemption effectively from 2005 onwards, in the light of Section 91A of the ESI Act.

Considering the aforesaid statutory prescription and the facts of the case, I do not find the impugned order suffers from any jurisdictional error or is not in accordance with the provisions of the ESI Act and therefore, I find no substance in the writ petition. Therefore, the present writ petition is hereby dismissed.

Sd/-

DINESH KUMAR SINGH

JUDGE

AP