MUNICIPAL COMMITIEE, ABOHARversusREGIONAL COMMISSIONER, E.S.I. CORPN. AND ANR.
- Citation
- 1996 INSC 174
- Decided
- 2 February 1996
- Disposal
- Appeal(s) allowed
Holding
Employees of a municipal corporation are not covered by the Employees' State Insurance Act, 1948; such coverage is per se illegal.
Summary
The Municipal Committee of Abohar operates the Patel Water Works and sought to exclude its water‑department employees from the Employees' State Insurance Act, 1948. The Committee objected when a notice under Section 45‑A of the Act was issued, leading to an appeal under Section 75 after the Insurance Court affirmed the employees’ coverage. The Punjab & Haryana High Court dismissed the first appeal, and the matter reached the Supreme Court by special leave. The Court examined whether municipal corporation employees are deemed ‘employees’ under the Act, noting that they receive a health scheme and medical reimbursements. It concluded that, despite statutory rules, extending the Act’s coverage to these employees is per se illegal. Consequently, the appeal was allowed, rejecting the applicability of the Act to the municipal workers.
Issues considered
- Whether employees of a municipal corporation engaged in water works are covered under the Employees' State Insurance Act, 1948.
Legislation cited
- Employees' State Insurance Act, 1948s. 45-A, s. 75
Subjects
Judgment
MUNICIPAL COMMITIEE, ABOHAR A
v.
REGIONAL COMMISSIONER, E.S.I. CORPN. AND ANR.
FEBRUARY 2, 1996
[K. RAMASWAMY AND G.B. PATIANAIK, JJ.] B
Labour laws :
Employee's State Insurance Act, 1948 :
S.45-A-Employees of Municipal Corporati01t-Working in water works C
department-Provided with health schem~Eligible to medical facilities and
reimbursement of amounts spent-Therefore coverage of the employees under
the Act is per se illegal.
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3508 of D
1996.
From the Judgment and Order dated 5.10.93 of the Punjab &
Haryana High Court in F.A.O. No. 589 of 1993.
P.N. Puri for the Appellant.
E
V.K. Mehta for the Respondents.
The following Order of the Court was delivered :
Leave granted.
F
This appeal by special leave arises from the order of the High Court
of Punjab and Haryana dated 5.10.1993 in F.A.O. No. 589/93 dismissing
the appeal as usual in limine. The admitted facts are that the appellant-
Municipal Committee has been running water works known as Patel Water
Works. The employees working in the Water Department are now sought
to be covered under the provisions of the Employees' State Insurance Act, G
1948 (for short 'the Act'). When notice was issued to the appellant, they
objected to the coverage of employees under the Act. Therefore, an order
has been passed under Section 45-A of the Act. Challenging thereto, an
appeal was filed under Section _75 of the Act. The insurance Court has
confirmed that the employees are covered under the Act. Accordingly, H
83
):
84 SUPREME COURT REPORTS (1996) 2S;C.R. I
A · when challenged, the high Court in the first appeal dismissed the same.
Thus this appeal by special leave.
-
The question is whether the employees of the Municipal Corporation
are also covered under the Act? The employees of the Corporation are
governed by the statutory rules made under the Act and in some cases in
- B other States the benefits of the Govt. scales of pay etc. have been extended.
However, the fact remains that they are provided with the health scheme
and also eligible to medical facilities and reimbursement of the ·amounts
1
spent by the concerned employees. Under these circumstances, the
coverage of e_mployees under the Act per se illegal.
I
c The appeal is accordingly allowed. No costs. /
G.N. Appeal allowed.
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