MANAGALORE PORT TRUSTversusTHE REGIONAL DIRECTOR, ESI CORPORATION, BANGALORE, KARNATAKA

A
                      [2014) 11 S.C.R. 428

        NEW MANGALORE PORT LISTED WORKERS
    MANAGING COMMITTEE NOW REPRESENTED BY NEW
                                                                  •
              MANAGALORE PORT TRUST
                                v.
       THE REGIONAL DIRECTOR, ESI CORPORATION,
B               BANGALORE, KARNATAKA
              (Civil Appeal No. 9931 of 2014)
                      OCTOBER 28, 2014
           [T.S. THAKUR AND R. BANUMATHI, JJ.]
c
       Employees State Insurance Act, 1948~ ss.1(5), 75(g) -
  Major Port - Appel/ant-Committee established on 1.3.1983
  with a purpose to deploy listed workers for loading and
  unloading of the cargo in the Mangalore Port Premises - It
o continued till 15.3.1990 on which date the workers of the
  Managing Committee were absorbed by NMPT - Applicability
  of ES/ Act to the appellant-Committee - Question whether
  between 1983 and 15.3.1990 the rendering of services of
  loading and unloading by appellant-Management Committee
E to NMPTwas an integral part of NMPT and whether the State
  Government is the "appropriate government" to issue the
  notification - High Court did not examine the said question
  in the light of evidence of Secretary and Deputy Secretary of
  the appellant-Committee - Matter remitted to High Court to
F examine same.

        Allowing the appeal and remitting the matter to the ·
    High Court, the Court
      HELD: 1. By notification dated 4.5.1974, New
G Mangalore Port was declared as a Major Port. 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
  New Mangalore Port Trust (NMPT) and they became
H                              428
•     NEW MANGALORE PORT LISTED WORKERS MAN. COMM. v. . 429
               REG DIR., ESI CORP, BANGALORE

    NMPT Registered Cargo Handling Wing. After the A
    workmen of the Committee were so absorbed, the
    appellant-Managing Committee was no longer in
    existence and NMPT was said to be pursuing this matter.
    In terms of Government of India notification dated
    20.7.2009, the provisions.of the ESI Act were made B
    applicable to all port trusts including the NMPT, 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 c
    Wing were exempted from the applicability of the
    provisions of the ESI Act by Notification dated 3.9.2010
    of the Government of India. [Para 8, 9, 1O] [433-B-D-H]
         2. The High Court did not examine the testimony of
    AW-1, Secretary of New Mangalore Port Listed Workers D
    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 E
    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 F
    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. The
     High Court did not consider these questions in the light G
     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. [para 13] [434-E-H; 435-A-B]  H
    430      SUPREME COURT REPORTS                [2014] 11 S.C.R.
                                                                       •1
A       CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    9931 of 2014.

      From the Judgment & Order dated 05.10.2007 in
  Miscellaneous First Appeal No. 1379 of 2002 (ESI), of the High
B Court of Karnataka at Bangalore.

        Rakesh K. Sharma, Sanjay Kunur, R.N. Keshwani, S.N.
    Bhat for the Appellant.

C       Mahesh Srivastava, Vaibhav M. Srivastava, P.N. Puri,
    Murari Kumar, Yakesh Anand, Vijay Pratap Singh, Sanjeev
    Anand for the Respondent.

          The Judgment of the Court was delivered by

D         R. BANUMATHI, J. 1. 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
E "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.

F      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
G 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
H establishments. Appellant-New Mangalore Port Listed Workers
•     NEW MANGALORE PORT LISTED WORKERS MAN. COMM. v.            431
        REG DIR, ESI CORP, BANGALORE [R BANUMATHI, J.]

    Managing Committee, Panambur (for short "Workers Managing           A
    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    B
    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       c
    "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
                                                                        0
    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        E
    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.                         F

          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      G
    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.     H
    432      SUPREME COURT REPORTS                 [2014] 11 S.C.R.      •


A   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
B Committee were required to function under the supervision and
   control of the NMPT and since the 1NMPT was a Majo1r 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
C 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 t~e
   Managing Committee at par with NMPT employees, were better
D 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 und1er the
   notification.

E      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
F 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
G legislation whose object is to extend the welfare coverage to a
  vast segment of the employees af1d the notification has to be
  meaningfully interpreted in the ligllt of the objects of the welfare
  legislation.

H         7. We have considered the submissions of the learned
•     NEW MANGALORE PORT LISTED WORKERS MAN. COMM. v.             433
        REG DIR, ESI CORP, BANGALORE [R. BANUMATHI, J.]

     counsel for the appearing parties and perused the materials          A
     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      B
     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             C
     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,                 D
     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             E
     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
                                                                          F
      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      G
      the ESI Act vide Notification dated 3.9.201 O 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             H
A
    434     SUPREME COURT REPORTS              (2014] 11 S.C.R.


    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.

B      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
C 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
D 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.

E      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
F 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
G 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
H
•                                          .
    · NEW MANGALORE PORT LISTED WORKERS MAN. COMM. v.
        REG DIR, ESI CORP, BANGALORE [R BANUMATHI, J.]

High Court has not considered the above questions in the light
                                                                   435


                                                                           A
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            B
of this Court itself examining the above questions, in our view,
the matter be remittefl back to the High Court to examine the
same.

      14. In the result, the appeal is allowed and the impugned            C
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           D
affidavits/counter affidavits and additional documents if any, and
proceed with the matter in accordance with law as
expeditiously as possible.

    Devika Gujral   Appeal allowed & matter remitted back to High Court.