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Seth Nand Lal Bajaj Educational Charitable Society Chandigarh Vs. State of Punjab and Another - Court Judgment

LegalCrystal Citation
CourtPunjab and Haryana High Court
Decided On
AppellantSeth Nand Lal Bajaj Educational Charitable Society Chandigarh
RespondentState of Punjab and Another
Excerpt:
.....agricultural, as alleged and asserted by counsel for the appellant. it was rightly said that the words “establishments”. do not take colour from the word “industrial”., “commercial”., “agricultural”., as used in the above said provision. otherwise also, the act being a social legislation, is to be interpreted in a way that it helps the teachers/employees and not the management. by making reference to the provisions of section 1 (5) of the act, it was said that the government has ample power to apply provisions of the act to any establishment, including the educational institutions. to say so, reference was made to the definition of word “otherwise”. in 'advance law lexico.dictionary'. in that regard, it was observed as under :- “advanced law lexico.defines.....
Judgment:

CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ***** CM No.5434 of 2010 in/and 1.

LPA No.1807 of 2010 (O & M) Date of decision : 28.1.2014 Seth Nand Lal Bajaj Educational Charitable Society, Chandigarh ........Applicant-Appellant versus State of Punjab and another ....Respondents 2.

LPA No.1651 of 2010 (O & M) Ideal Private Schools Association (Regd.).Faridabad ........Appellant versus State of Haryana and another ....Respondents 3.

LPA No.1652 of 2010 (O & M) Sarvhitkari Educational Society (Regd.) Chandigarh, Jalandhar ........Appellant versus State of Punjab and another ....Respondents 4.

LPA No.1653 of 2010 (O & M) Association of the PSEB Affiliated Schools (Punjab) (Regd.).Ludhiana ........Appellant versus State of Punjab and another ....Respondents 5.

LPA No.1678 of 2010 (O & M) Haryana Progressive School's Conference (Regd.).Faridabad ...Appellant versus State of Haryana and others ....Respondents Kumar Ashwani 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -2- 6.

LPA No.1778 of 2010 (O & M) New Daffodil Public School, Patiala and others ........Appellants versus State of Punjab and another ....Respondents 7.

LPA No.1792 of 2010 (O & M) Haryana Schools Welfare Association (Regd.).Bilaspur ........Appellant versus State of Haryana and another ....Respondents 8.

LPA No.1810 of 2010 (O & M) Haryana Engineering College, Jagadhri ........Appellant versus State of Haryana and another ....Respondents 9.

CWP No.7306 of 2013 (O & M) St.

Xavier's Sr.Secondary School, SiRs.........Petitioner versus State of Haryana and another ....Respondents 10.

CWP No.7335 of 2013 (O & M) Vivekanand Bal Mandir, SiRs.and others ........Petitioners versus State of Haryana and another ....Respondents CORAM: Hon'ble Mr.Justice Jasbir Singh Hon'ble Mr.Justice Harinder Singh Sidhu Kumar Ashwani 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -3- Present:- Mr.V.K.Sachdeva, Advocate (in LPAs No.1807 and 1810 of 2010).Mr.Chitwan Prabhakar, Advocate (in LPA No.1792 of 2010).Mr.Rajesh Sethi, Advocate (in CWPs No.7306 and 7335 of 2013).Mr.Rakesh Gupta, Advocate (in LPA No.1778 of 2010).Mr.Ashish Chopra, Advocate (in LPA No.1678 of 2010).Mr.Dhiraj Jain, Advocate (in LPAs No.1652 and 1653 of 2010) Mr.Lekhraj Nandal, AAG, Haryana Mr.K.K.

Gupta, Addl.

AG, Punjab Mr.Vikas Suri, Senior Standing Counsel, for ESIC --- Jasbir Singh, J.

(Oral) CM No.5434 of 2010 After hearing counsel for the parties, application is allowed.

Delay of 95 days in filing this appeal stands condoned.

LPA No.1807 of 2010 (O & M) : This order will dispose of 10 cases bearing LPAs No.1807, 1651, 1652, 1653, 1678, 1778, 1792 and 1810 all of the year 2010 and CWPs No.7306 and 7335 of the year 2013, as common questions of law and facts are involved therein.

To dictate order, facts are being taken from LPA No.1807 of 2010.

It is a case where Educational Institutions earning money like any other businessman, are trying to avoid their social liability to look after the medical needs of their teacheRs.In the past, as and when any educational institution was opened, there used to be element of social Kumar Ashwani 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -4- service.

Presently, it is missing.

Now the main aim of some educational institutions is only to extract money by any mean and in any manner.

Some institutions have become like corporate companies.

Children of poor persons cannot even think of entering into such like institutions.

It is very surprising that these institutions are objecting to giving benefit to its employees/teachers under the provisions of the Employees' State Insurance Act, 1948 (in short 'the Act').The earning of these institutions is not so small that these institutions cannot contribute for the benefit of their teacheRs.The appellant is a society and is running various colleges in the field of Engineering, like, Swami Permanand College of Engineering and Technology at Village Jaulan Kalan, Lalru, District Mohali, Parmanand Polytechnic etc.Presently, the strength of students in the three colleges is approximately more than 3000.

The institutions run by the appellant are unaided, however, affiliated with and recognized by the Punjab Technical University at Jalandhar and other competent institutions.

The appellant filed CWP No.18004 of 2009 laying challenge to a Notification dated 2.6.2009 (P-1).extending provisions of the Act to the Educational Institutions (private, aided or partially aided).run by individuals, trusts, societies or other organisations.

It was provided that the provisions of the Act shall be applicable to those institutions wherein 20 or more persons or workers are employed, on any day of preceding 12 months.

Further challenge has been laid to notice dated 11/18.8.2009 Kumar Ashwani (P-2).issued by the Assistant Director, Regional Office, Employees' State 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -5- Insurance Corporation at Chandigarh, directing the appellant institution to comply with the provisions of the Act and make necessary contribution as is mandatory under that Act.

At that stage, the above writ petition was filed.

Learned Single Judge dismissed the writ petition on 17.8.2010.

Hence, this appeal.

Counsel for the appellants has vehemently contended that the provisions of the Act would not apply to the educational institutions, as the teachers would not fall within the definition of an 'employee', as envisaged under Section 2 (9) of the Act.

After hearing counsel for the parties, we are not in agreement with the argument raised.

Before the learned Single Judge, following question was posed for answer :- “Whether the Employee's State Insurance Act, 1948 can be made applicable to unaided institutions?.”.

After taking note of the provisions of the Act and the Notification under challenge in that writ petition, question was answered in the positive.

The contention raised by the petitioners was negatived.

Before proceeding further, it is necessary to note down the provisions of Section 2 (9) of the Act, which reads thus :- “2(9) “employee”.

means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and - (i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or Kumar Ashwani 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -6- (ii) who is employed by or through an immediate employer, on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or (iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entere into a contract of service; and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment or any person engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961).and includes such person engaged as apprentice whose training period is extended to any length of time but does not include - (a) any member of the Indian Naval, military or air forces; or (b) any person so employed whose wages (excluding remuneration for overtime work) exceed such wages as may be prescribed by the Central Government.

Provided that an employee whose wages (excluding remuneration for overtime work) exceed such wages as may be prescribed by the Central Government at any time after (and not before) the beginning of the contribution period, shall continue to be an employee until the end of the period.”

.

It is also necessary to reproduce the provisions of Section 1 (5) of the Act, envisaging under what circumstances and on what institutions the Act can be made applicable.

It reads thus :- “1 (5) The appropriate Government may, in consultation with the Corporation and where the appropriate Government is a State Government, with the approval of the Central Kumar Ashwani 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -7- Government, after giving one months' notice of its intention of so doing by notification in the Official Gazette, extend the provisions of this Act or any of them, to any other establishment or class of establishments, industrial, commercial, agricultural or otherwise: Provided that where the provisions of this Act have been brought into force in any part of a State, the said provisions shall stand extended to any such establishment or class of establishments within that part if the provisions have already been extended to similar establishment or class of establishments in another part of that State.”

.

It is contention of counsel for the appellant that word “otherwise”.

needs to be read ejusdem generis with the earlier words i.e.“establishments”., “industrial”., “commercial”., agricultural”.An attempt has been made to say that only in the above fields, this Act can be made applicable.

Learned Single Judge, by making reference to ratio of the judgment in “Bangalore Water Supply and Sewerage Board v.

A.Rajappa, (1978) 2 SCC213 has come to a conclusion that 'educational institutions' have been held to be industrial establishments under the provisions of the Industrial Disputes Act.

Reference was also made to a Division Bench judgment of the Kerala High Court in the case of “CBSE School Management's Association v.

State of Kerala', 2010-II-LLJ240.

By relying upon ratio of the judgment mentioned above, it was observed as under :- “At the outset, it may need a notice that the identical issue Kumar Ashwani 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -8- arose for consideration before a Kerala High Court, where applicability of such notification issued under Section 1(5) of the ESI Act was under challenge.

The said challenge to the notification was on identical ground as is raised in the present petitions and the same was negated by the Division Bench of the Kerala High Court.

This recent decision is reported as CBSE School Management's Association v.

State of Kerala, 2010-II-LLJ240 Similar is the view taken by Allahabad High Court in case reported as Maharishi Shiksha Sansthan and another v.

State of UP and another, 2008 (119) FLR935 The word “otherwise”.

used in Section 1 (5) of the ESI Act has been held to be of wide amplitude covering all other establishments, including educational institutions.

The court has accordingly held that educational institution including minority educational institutions could be brought under the ESI Act.

Division Bench of Kerala High Court in CBSE School's case (supra) has accepted with approval the law laid down by Allahabad High Court in the case of Maharishi Shiksha Sansthan (supra).In fact, the challenge before the Division Bench of the Kerala High Court was by un-aided but recognised and self financing colleges.

The submission that word “or otherwise”.

must be understood by following ejusdem generis and, thus, to exclude educational institution being not similar to industrial, commercial or agricultural establishment is rejected in these cases.

It is observed that educational institutions like schools were industrial establishments and word “or otherwise”.

in Section 1 (5) of ESI Act is to be given widest possible meaning and not restrictive meaning by applying principle of ejusdem generis.”

.

It was specifically stated that educational institutions cannot Kumar Ashwani be excluded from the operation of Section 1(5) of the Act.

Not only that, 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -9- notwithstanding the ratio of the judgment of the Kerala High Court and Allahabad High Court, as referred to above, the learned Single Judge further tried to look into the matter and after discussing various judgments on the subject cited for and against proposition, it was rightly said that the words “or otherwise”.

appearing in Section 1 (5) of the Act, would cover the situation in dispute.

To say so, reliance was placed upon a judgment of the Bombay High Court in the case of 'Mumbai Kamgar Sabha v.

State of Maharashtra, 1991 LAB I.C.1206'.

For reference, following para of the judgment was reproduced in the judgment under challenge :- “..............The government can extend the Act or any portion thereof.

It can do so vide any other establishment (in contra distinction to factories other than seasonal factories) or class of establishments.

The class contemplated may be industria, commercial, agricultural or otherwise.

That there can be establishments of a character other than industrial, commercial or agricultural cannot be disputed.

An example of this a travel agency.

That being the position, it will be erroneous to hold that the words “or otherwise”.

are to be read in a restricted sense and take their colour from the three words preceding them.

These preceding words cannot supply the idea of a genus.

Indeed the genus lies in the words “any other establishment or class of establishment”.The three words which follow each represent a species.

But the legislature did not want to restrict the operation of the Act to these 3 species and therefore used the catch all words “or otherwise”.As per law laid down in the judgments, referred to above, it was observed that it is not justifiable to say that there cannot be any Kumar Ashwani 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -10- establishments of a character other than industrial, commercial or agricultural, as alleged and asserted by counsel for the appellant.

It was rightly said that the words “establishments”.

do not take colour from the word “industrial”., “commercial”., “agricultural”., as used in the above said provision.

Otherwise also, the Act being a social legislation, is to be interpreted in a way that it helps the teachers/employees and not the management.

By making reference to the provisions of Section 1 (5) of the Act, it was said that the Government has ample power to apply provisions of the Act to any establishment, including the educational institutions.

To say so, reference was made to the definition of word “otherwise”.

in 'Advance Law LexiCo.Dictionary'.

In that regard, it was observed as under :- “Advanced Law LexiCo.defines “otherwise”.

as “By other like means; contrarily; different from that to which it relates; in a different manner; in another way; in any other way; differently in other respects in different aspects; in some other like capacity”.The word is defined in the standard dictionary as meaning “in a different manner, in another way, differently in other respects”.As per Webster, the word is defined to mean “in a different way or manner, in other respects”.The counsel appearing for the respondents, thus, are justified in submitting that word “otherwise”.

as appearing in this section cannot be read ejusdem generis.

In Smt.Lila Vati Bai versus State of Bombay, AIR1957SC521again word “or otherwise”.

was under consideration in the light of the Explanation (a) to Section 6 of the Bombay Land Requisition Act in the context of provision reading “ceasing to be in Kumar Ashwani 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -11- occupation upon termination of his tenancy, eviction, or assignment or transfer in any other manner of his interest in the premises or otherwise”.It is observed that “the argument proceeds further to the effect that in the instant case admittedly there was no termination, eviction, assignment or transfer and that the words “or otherwise”.

must be construed as ejusdem generis with the words immediately preceding them: and that therefore on the facts as admitted even in the affidavit filed on behalf of the Government there was in law no vacancy.

In the fiRs.place, as already indicated, we cannot go behind the declaration made by the Government that there was a vacancy.

In the second place, the rule of ejusdem generis sought to be pressed in aid of the petitioner can possibly have no application.

The legislature has been cautious and thorough-going enough to bar all avenues of escape by using the words “or otherwise”.Those words are not words of limitation but of extension so as to cover all possible ways in which a vacancy may occur.

Generally speaking, a tenant's occupation of his premises ceases when his tenancy is terminated by acts of parties or by operation of law or by eviction by the landlord or by assignment or transfer of the tenant's interest.

But the legislature, when it used the words “or otherwise”., apparently intended to cover other cases which may not come within the meaning of the preceding clauses, for example, a case where the tenant's occupation has ceased as a result of trespass by a third party.

The legislature, in our opinion, intended to cover all possible cases of vacancy occurring due to any reasons whatsoever.

Hence, far from using those words ejusdem generis with the preceding clauses of the explanation, the legislature used those words in an all inclusive sense.

No decided case of any court, holding that the words “or otherwise”.

have ever been Kumar Ashwani used in the sense contended for on behalf of the petitioner, has 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -12- been brought to our notice.”

.

In Skinner & Co.versus Shew and Co.(1893) 1 Ch 413, words of Section 32 of the Patents, Designs & Trade Marks Act, 1883 are to the following effect:- “Where any person claiming to be the patentee of any invention, by circulaRs.advertisements or otherwise threatens any other person with any legal proceedings...”

.

Their Lordships repelled the contention that the words “or otherwise”.

occurring in the section had to be read ejusdem generis with words “circulars”., and “advertisement”.It is observed that by so doing it will be cutting down the intendment of the provisions of the statute when clearly the words “or otherwise”.

had been used with a contrary intention.

The rule of ejusdem generis is intended to be applied where general words have been used following particular and specific words of the same nature on the established rule of construction that the legislature presumed to use the general words in a restricted sense' that is to say, as belonging to the same genus as the particular and specific words.

Such a restricted meaning has to be given to words of general import only where the context of the whole scheme of legislation requires it.

But where the context and the object and mischief of the enactment do not require such restricted meaning to be attached to words of general meaning.

It is held that in the context of the object and mischief of the enactment there is no room for the application of the rule of ejusdem generis.

Hence, it follows that the vacancy as declared by the order impugned in this case, even though it may not be covered by the specific words used, is certainly covered by the legal import of the words “or otherwise”.The counsel would make reference to the beneficial nature of this legislation to urge that the word should not be given any restrictive meaning and rather should be given an Kumar Ashwani 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -13- expanding meaning to achieve the socio economic goal, which was the aim for enacting the said legislation.

This Act aims to attain the goal of socio economic justice as are enshrined in some of the directive principles of our Constitution.

Article 41 requires of a State to develop and make effective provision for securing right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want.

Article 42 says that the State shall make provision for securing just and humane conditions of work and for maternity relief, whereas Article 43 requires of the State to make an endeavour to secure, by suitable legislation or economic organisation or in any other way, to all workeRs.agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities.

These provisions are aimed at establishing a socialistic state as envisaged which would endeavour to secure additional standard of life and economic to the working people.

The appellant is an educational institution running many colleges.

It is very surprising that when situation arise to give some additional facilities to the teacheRs.it becomes so miserly and lays challenge to the provisions of the Notification.

May be, originally, the provisions of the Act were applied to factories etc.but in the changing scenario, it has rightly been held that the provisions are applicable to educational institutions as well.

To say that the educational institutions would fall under the definition of “establishment”., the learned Single Judge observed as under : “The counsel have made reference to few of the precedents to Kumar Ashwani 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -14- highlight the meaning of word “establishment”.Reference is made to the word “establishment”.

as given in Webster's Encyclopedic Unabridged Dictionary, where, inter-alia, establishment is defined as “a place of business together with its employees, merchandise, equipment etc., a permanent civil, military, or other force or organization, an institution, as a school, hospital etc.The term “establishment”.

was also considered by the Division Bench of Kerala High Court in Thankamma Baby versus Employees Provident Fund Appellate Tribunal New Delhi and another, 2010-III-LLJ439 In this case, the court observed that it is the cardinal rule of interpretation that the court should always adopt a purposive interpretation, particularly in a welfare statute.

A provision in a Statute has to be understood, interpreted and applied keeping in mind the object of Statute.

If two interpretations are possible, the interpretation favouring the object of the statute has to be adopted.

The Hon'ble Supreme Court in Transport Corporation of India versus Employees' State Insurance Corpn.

and another, (2000) 1 Supreme Court Cases 332 has also referred to the meaning of term “establishment”.It is observed that the word is not defined under the Act, but the term “employee”.

as defined under the Act has a direct connection with the term “establishment”.

in which he or she may be employed for wages in or in connection with the work of the establishment.

There would not be a much need to make reference to the case law like in the case of M/S.Cochin Shipping Co.versus Employees State Insurance Corporation, 1992(3) S.C.T.481, where the provisions of ESI Act were noticed to claim benefits to the employees in the case of sickness, maternity and employment injury.

It was also observed that at the fiRs.instance, it was made applicable to all factories under Section 1(4) of the ESI Kumar Ashwani Act.

The Act had envisaged the extension of benefit to the 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -15- employees of other establishments or class of establishments and such establishments may be industrial, commercial or agricultural or otherwise.

It can, thus, be observed that the benefit conferred by the Act covered a large area of employees than what the Factories Act and the akin legislations intended therein.

Accordingly, endeavour has to be to place a liberal construction so as to promote the object of the Act.

Again in Whirlpool of India LTD.versus E.S.I.Corporation, (2000) 3 SCC185 it is held that Act is a social legislation enacted to provide benefits to employees in case of sickness, maternity and employment injury.

Accordingly, it is observed that the words and expressions used but not defined are to be given a meaning which would advance the purpose of the Act.

If any provision of which two interpretations may be possible, it would deserve such construction as would be beneficial to the working class and the courts would give a go-by to the plain language of the provision.

The submission made by some of the counsel that the provisions can not be applied to unaided institutions is being noticed to be rejected.

The Schedule attached clearly mentions “Education Institutions”.

without specifying the institution but has inclusively referred to private, public, aided or partly aided in all compassing term `Educational Institution'.

There is no substance in the submission made.”

.

We feel that view taken by the learned Single Judge is perfectly justified and need no interference.

The provisions of the Act have rightly been interpreted to say that these can be made applicable to the privately run educational institutions (aided or partially aided).Otherwise also, there is nothing on record to show that the financial condition of the appellant is such that it will not be in a position Kumar Ashwani 2014.02.19 16:56 I attest to the accuracy and integrity of this document CM No.5434 of 2010 in/and LPA No.1807 of 2013 (O & M) and connected matters -16- to bear very small financial burden to provide medical and insurance facilities to its employees.

Nothing has been brought on record to say that if the scheme is implemented qua the appellant institution, it would not be in a position to run educational activities.

No case is made out for interference in the order under challenge.

Dismissed.

(Jasbir Singh) Judge (Harinder Singh Sidhu) Judge 28.1.2014 Ashwani Kumar Ashwani 2014.02.19 16:56 I attest to the accuracy and integrity of this document


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