Summary
A notification of 21.07.1999 under Section 1(3) of the Employees' State Insurance Act, 1948 extended the Act to 'areas under Silchar Municipal Corporation falling within Silchar Revenue Circles including' a list of named revenue villages, including Tarapur (named twice). A cold storage company whose factory lay in a part of village Tarapur outside the municipal limits resisted coverage; the Employees' Insurance Court upheld the ESIC's demand, but the Gauhati High Court held the notification covered only areas within the Silchar Municipal Board. The Supreme Court allowed the appeal: a statutory notification is construed like the statute, giving effect to every word; 'including' is a word of enlargement and the named villages extend coverage beyond municipal limits; beneficial legislation is not read restrictively; and the employer's failure to implead its workmen defeated its petition.
Issues
- Whether the notification dated 21.07.1999 under Section 1(3) of the Employees' State Insurance Act, 1948 covers only areas within the Silchar Municipal Board or extends to the other villages named in it, including the whole of village Tarapur where the respondent's factory is situated.
- Whether a petition by an employer under Section 75 of the ESI Act challenging coverage is maintainable without impleading the workmen concerned (or their union) and the Union of India which issued the notification.
Provisions considered
- Section 1(3) (notification extending the Act to areas); Sections 75 and 82, Employees' State Insurance Act, 1948A notification under Section 1(3) is a statutory notification to be construed as part of the Act; its unambiguous words naming areas beyond the municipal limits, with 'including' used as a word of enlargement and Tarapur mentioned twice, cover the entire village and thus the respondent's factory. The employer's Section 75 petition without impleading its workmen or the Union of India was not legally maintainable (ESIC v. Bhakra Beas Management Board; Fertilizers and Chemicals Travancore). (¶¶ 15, 16, 17, 18, 19, 24, 25, 26, 27, 30, 31)
Held
- A notification under Section 1(3) of the ESI Act is a statutory notification to be treated as part of the statute for construction and for the obligations arising from it; the principles of interpreting subordinate legislation apply, and where the words are unambiguous effect must be given to every word (South Central Railway Employees Cooperative Credit Society; NHAI v. Pandarinathan Govindarajulu). Confining the notification to the Silchar Municipal Board would render the other named areas surplusage, contrary to the rule that the legislature is deemed not to waste words (Union of India v. Hansoli Devi). (¶¶ 16, 17, 21, 22)
- The notification names areas beyond the municipal limits — Tarapur twice (once with the Municipal Corporation and once under Mouza-Barakpur), the Udharbond Revenue Circle and Rajnagar — and uses the word 'including', a word of enlargement (Ramanlal Bhailal Patel); the commas indicate that the areas listed are to be read disjunctively and not as qualified by the first-mentioned municipal area (M.K. Salpekar). The whole of village Tarapur, including Part III at Ramnagar in Mouza-Barakpur where the factory stands, is therefore covered, and the High Court's constrictive interpretation cannot be countenanced. (¶¶ 15, 18, 19, 20, 30, 31)
- The ESI Act is beneficial social-welfare legislation aimed at the well-being of employees, and a restrictive interpretation defeating its object must be eschewed (Delhi Gymkhana Club); the penal consequences under the Act do not justify a strained reading in the employer's favour when the village is named twice. (¶¶ 23, 29)
- In a petition under Section 75 by an employer, at least some of the workmen concerned (in a representative capacity) or their union must be impleaded, failing which a decision in the employer's favour violates natural justice; non-joinder of a necessary party goes to the root and renders the order a nullity (Khetrabasi Biswal). The respondent impleaded neither its employees nor the Union of India, and the High Court wrongly rejected the plea as belated when the governing decisions post-dated the EI Court's order. (¶¶ 24, 25, 26, 27, 28)
Result
Appeal allowed; the Gauhati High Court's judgment of 01.12.2016 in RFA No. 82 of 2006 set aside; the respondent's cold storage factory at Ramnagar, Tarapur held covered by the notification of 21.07.1999 under Section 1(3) of the ESI Act. No order on costs.