ESI Act covers T.R. Pattinam Commune: Madras HC

| | Updated on: Jan 28, 2011

All revenue villages in Karaikkal taluk in the Union Territory of Puducherry were covered by the provisions of Employees State Insurance Act, 1948. Thus, the T.R. Pattinam Commune also was included in coverage of the Act, the Madras High Court has held.

M/s Kannappan Iron and Steel Co Pvt Ltd, who are running a factory at TR Patinam in Karaikkal region, had challenged notices dated April 2, 2004 from the ESI Corporation directing them to recover dues from the Company from September 2000 to March 2003 and for subsequent period from April 2003 to September 2003. They contended that the Govt of India had not issued any notification in consultation with the local Government subsequent to the notification dated May 14, 1976 in respect of implementation of the ESI scheme as required. In the absence of any follow up GO, the demand claimed was illegal, the Company submitted.

Counter argument

In answer to the defence taken, in the counter affidavit, it was stated by the Regional Director, Regional Office (ESIC), Puducherry, that according to notification the scheme had been implemented in the entire Karaikkal taluk with effect from May 30, 1976. This included T.R. Pattaname.

The Company filed a writ petition challenging the demand notices issued by ESIC. Mr Justice K. Chandru, hearing the petition, said that under Section 2-A of ESI Act, every factory or establishment to which this Act applied shall be registered within the time and manner specified in the regulation. In terms of Section 1(3), the Act came into force from May 30, 1976 with Govt of India issuing notification on May 14, 1976. Thus, it was clear that entire area comprising all revenue villages in Karaikkal taluk was covered by the provisions of Act.

The Judge ruled that the scheme of the Act did not contemplate the requirement of notifying each revenue village, and after the notification in consolidation with the said village commune, further orders were not required. The attempt by petitioner to seek something which was not bound in terms of provisions of Act was intended to delay implementation of scheme, with such unfounded reasons, which were not available under the Act.

The writ petitions were clear abuse of process of this Court, the Judge held. Hence both petitions were dismissed with cost of Rs 5,000.

Published on February 16, 2011

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