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Tuesday, January 6, 2015

CIVIL APPEAL NO. 9931 OF 2014 (Arising out of SLP (Civil) No.11990/2008) NEW MANGALORE PORT LISTED WORKERS ..Appellant MANAGING COMMITTEE NOW REPRESENTED BY NEW MANGALORE PORT TRUST Versus THE REGIONAL DIRECTOR, ..Respondent ESI CORPORATION, BANGALORE, KARANATAKA

                                                                  REPORTABLE

                        IN THE SUPREME COURT OF INDIA
                        CIVIL APPELLATE JURISDICTION

                       CIVIL APPEAL NO. 9931   OF 2014
                 (Arising out of SLP (Civil) No.11990/2008)


NEW MANGALORE PORT LISTED WORKERS        ..Appellant
MANAGING COMMITTEE NOW REPRESENTED
BY NEW MANGALORE PORT TRUST

                                   Versus

THE REGIONAL DIRECTOR,                      ..Respondent
ESI CORPORATION, BANGALORE,
KARANATAKA



                               J U D G M E N T

R. BANUMATHI, J.

            Leave granted.
2.          Whether or  not  New  Mangalore  Port  Listed  Workers  Managing
Committee is an integral  part  of  New  Mangalore  Port  Trust  (NMPT)  and
whether State Government is  the  “appropriate  government”  to  extend  the
applicability of provisions of Employees  State  Insurance  Act,  1948  (ESI
Act) to the New Mangalore Port Listed Workers  Managing  Committee  are  the
points falling for consideration in this appeal.
3.          Brief facts  leading  to  the  filing  of  this  appeal  are  as
follows:-  Section 1(5) of the ESI Act enables the   appropriate  government
to issue notification in respect of any  other  establishment  or  class  of
establishments, industrial,  commercial,  agricultural   or  otherwise.   In
exercise of its power under Section 1(5) of  the  ESI  Act,  a  notification
dated 22.1.1986 was issued by the Government  of  Karnataka  to  extend  the
provisions of the ESI Act to certain  areas,  in  and  around  the  city  of
Mangalore.  The said notification specified that the provisions of  the  Act
inter-alia would apply to certain shops  and  establishments.  Appellant-New
Mangalore Port  Listed  Workers  Managing  Committee,  Panambur  (for  short
“Workers Managing Committee”) was established on 1.3.1983.   The  object  of
the said Committee was to deploy listed workers for  loading  and  unloading
of the import/export of cargo in the Mangalore Port Premises. In  accordance
with the above notification, ESI Corporation by its letter  dated  5.5.1987,
directed the appellant to submit Form No.1 saying  that  the  provisions  of
the ESI Act stood attracted against the appellant.    The  Committee  raised
objections, claiming that the  appellant  is  engaged  in  the  loading  and
unloading operations in the premises of NMPT and  that  the  appellants  and
their workmen were neither a “shop” nor an “establishment” so as to  attract
the  provisions  of  the  ESI  Act.   Rejecting  the  said  objections,  ESI
Corporation  issued  Show  Cause  Notice  dated  14.8.1987  to  the  Workers
Managing  Committee  calling  upon  them  to  make  the  contribution.   The
Appellant approached the ESI Court  under  Section  75(g)  of  the  ESI  Act
claiming that the provisions of the ESI Act were not applicable to  them  as
they were governed by the provisions of Major Port Trust Act, 1963 and  that
the Central Government is the appropriate government  with  respect  to  the
appellant-Committee.  The petition filed by the appellant was  dismissed  by
the ESI Court by the order dated 16.4.1993.  Aggrieved by  the  said  order,
the appellant filed  appeal before the High Court of  Karnataka  in  and  by
which, the High Court  remanded the matter back to the  ESI Court,   with  a
direction to frame preliminary issue regarding  the applicability  of  State
Government’s notification to the Committee.
4.           ESI  Court  by  order  dated   31.12.2001,    held   that   the
notification of the State Government was not applicable   to  the  Committee
as the “appropriate government” to extend the provisions of the ESI  Act  to
the said Committee is the Central Government. Aggrieved by the  said  order,
respondent-Corporation preferred appeal before the High Court of  Karnataka.
 The High Court set aside the findings of the ESI Court and  held  that  the
Managing Committee is covered within the purview of the notification  issued
by the State Government.   Aggrieved by the said order,  the  appellant  has
filed this appeal by way of special leave.
5.          Taking us through the evidence of AWs 1 and 2,  learned  counsel
for the appellant contended that the workmen of the Committee were  required
to function under the supervision and control of  the  NMPT  and  since  the
NMPT was a Major Port governed  by  the  Major  Port  Trust  Act  1963,  the
“appropriate government” is the  Central  Government  and  the  notification
extending the provisions of ESI Act were not applicable  to  the  appellant.
It was submitted that since  the  Central  Government  had  not  issued  any
notification with regard to the premises of NMPT, the action  of  the  State
Government was uncalled for. It was also argued by the  appellant  that  the
social security measures and other benefits as provided to  the  workers  of
the Managing Committee at par with NMPT  employees,  were  better  than  the
ones envisaged under ESI Act and therefore, the demand  of  ESI  Corporation
is not sustainable and the High Court erred in saying that the appellant  is
covered under the notification.
6.          Per contra, learned counsel for the respondents  contended  that
at the time of issuance  of  the  notification  in  1986,  Workers  Managing
Committee was an independent entity merely  rendering  services  of  loading
and unloading to the NMPT and the said Committee was not  an  integral  part
of  NMPT  and  the  State  Government   had   legitimately   exercised   its
jurisdiction in extending the provisions of  the  ESI  Act  to  the  Workers
Managing Committee.  It was further contended that only  in  the  year  1990
workmen were absorbed by NMPT and prior to that, appellant was  not  a  part
of NMPT governed by Major Port Trust.  It  was  urged  that  ESI  Act  is  a
welfare legislation whose object is to extend  the  welfare  coverage  to  a
vast segment of the employees and the notification has  to  be  meaningfully
interpreted in the light of the objects of the welfare legislation.
7.          We have considered the submissions of the  learned  counsel  for
the appearing parties and perused the materials on record.
8.          In terms of  Indian Ports Act 1908, “Major Port” means any  port
which the Central Government may by notification  in  the  official  gazette
declare,  or may under any law for the time being in  force,  have  declared
to be a Major Port.  By notification dated 4.5.1974, New Mangalore Port  was
declared as a Major Port.  By notification dated 27.3.1980,  the  provisions
of Major Port Trusts Act 1963 were made applicable to the Major Port of  New
Mangalore from 1.4.1980 and New Mangalore Port is thus a Major Port.
9.          NMPL Workers Managing Committee was formed in the year 1983  and
it continued till 15.3.1990 on  which  date  the  workers  of  the  Managing
Committee were absorbed by  NMPT  and  they  became  NMPT  Registered  Cargo
Handling Wing.  This NMPT Cargo Handling Wing is  attached  to  the  Traffic
Wing of NMPT.  After the workmen  of  the  Committee  were  so  absorbed  as
workers of NMPT Cargo Handling Wing, the appellant-  Managing  Committee  is
no longer in existence and New Mangalore  Port  Trust  is  now  said  to  be
pursuing this matter.
10.         It is seen from the affidavit sworn in by the Secretary of  NMPT
before this Court that in terms of Government of  India  notification  dated
20.7.2009, the provisions of the ESI Act were made applicable  to  all  port
trusts including the New Mangalore  Port  Trust,  so  that  the  casual  and
contract employees working in the NMPT have  been  brought  under  the  said
Act.  The employees of the New Mangalore Port Trust inclusive of   its  Auto
Garage, Workshop, Registered Cargo Handling Workers Wing have been  exempted
from the applicability of  the provisions of  the ESI Act vide  Notification
dated 3.9.2010 of the Government of India.  It  is  stated  that  NMPT   had
filed an application for extending  the   exemption  for  a  further  period
from  30.9.2010.
11.         The point to  be  considered  is  between  1983  till  15.3.1990
whether the rendering of services of loading  and  unloading  by  appellant-
Management Committee to NMPT was an integral part of NMPT  and  whether  the
State Government is the “appropriate government” to issue the  notification.

12.         Mr. S.N. Bhat,  learned  counsel  appearing  for  the  appellant
submitted that prior  to  15.3.1990  workers  were  employed  as  registered
Stevedores for  carrying  on  loading  and  unloading  work  and  they  were
considered in a single pool on a single roll and they were allowed to  enter
the dock only on the passes issued by the CISF at  port.    Learned  counsel
further submitted that AW1-Secretary of New Mangalore  Port  Listed  Workers
Committee and AW2 had clearly spoken  that  even  prior  to  15.3.1990,  the
workers were under the administrative control of NMPT and about the  various
medical facilities extended to the workers of the  Committee  and  also  the
insurance policies (LIC) and other benefits made available  to  the  workers
by NMPT and that they were provided  with  various  medical  facilities  and
other benefits and the evidence of AWs 1  and 2 was not  at  all  considered
by the High Court.
13.         By a perusal of the judgment of the High Court, it appears  that
the High Court has not examined the testimony  of  AW-1,  Secretary  of  New
Mangalore Port Listed Workers Committee and AW-2, Deputy Secretary  of  NMPT
and their evidence that prior to  15.3.1990   the  workers  were  under  the
administrative   control   of   the   NMPT.    The   questions   viz.:   (i)
whether the workers of the Managing Committee were registered as  Stevedores
engaged in loading and unloading  work of NMPT and whether they  were  under
the administrative control of NMPT; (ii) whether the  services  rendered  by
the workers of the Managing Committee was an integral part of  NMPT  and  if
that be so, whether the “appropriate government” is the  Central  Government
and (iii)  whether  the workers of  the  Managing  Committee  were  extended
medical facilities  and other benefits on par with other  employees  of  the
NMPT and other relevant questions remain  unanswered.    In  our  view,  the
High Court has not considered the  above  questions  in  the  light  of  the
evidence of AWs 1 and 2.  That apart,  High Court did not have  the  benefit
of considering the notification issued by  the  Government  of  India  dated
20.7.2009, extending  the  provisions  of  the  ESI  Act  to  NMPT  and  the
exemption granted by the Government  of  India  by  its  notification  dated
3.9.2010.  Instead of this Court itself examining the  above  questions,  in
our view, the matter be remitted back to  the  High  Court  to  examine  the
same.
14.         In the result, the appeal is allowed and the  impugned  judgment
dated 5.10.2007 passed by the  High  Court  in  Miscellaneous  First  Appeal
No.1379/2002 (ESI) is set aside and the matter is remitted back to the  High
Court for consideration of the matter afresh  in  the  light  of  the  above
discussion and  in  accordance  with  law.   The  High  Court  shall  afford
sufficient   opportunity   to    both    parties    to    file    additional
affidavits/counter affidavits and additional documents if any,  and  proceed
with the matter in accordance with law as expeditiously as possible.

                                                                …………………………J.
                                                               (T.S. Thakur)


                                                                …………………………J.
                                                              (R. Banumathi)
New Delhi;
October 28, 2014
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