ZUARI CEMENT LTD.versusREGIONAL DIRECTOR E.S.L.C. HYDERABAD & ORS.

                        [2015) 6 S.C.R. 474


A                      ZUARI CEMENT LTD.
                                  v.
     REGIONAL DIRECTOR E.S.l.C. HYDERABAD & ORS.
             (Criminal Appeal Nos .5138-40 OF 2007)
B                          JULY02,2015
            [T.S. THAKUR AND R. BANUMATHI, JJ.]
         Employees State Insurance Act, 1948- ss. 75(1)(g)
C and 87 - Power to grant exemption from applicability of the
  Act- Whether lies uls. 87 with appropriate government or u/
  s. 75(1)(g) with ES/ Cowt-Held: In terms of s.87, appropriate
  Government alone has power to grant or refuse exemption
  - ES/ Court uls. 75, has power to decide disputes between
D employer and the Corporation - Grant or refusal of exemption
  cannot be said to be a dispute between employer and the
  Corporation - In the present case, order of the ES/ Court
  granting exemption was without jurisdiction and hence non-
  est -Jurisdiction.
E          Jurisdiction - Conferment of- Held: The parties, by
    consent, cannot agree to vest jurisdiction in the court to try
    the dispute, when the court does not have the jurisdiction.

          Practice and Procedure - Objection as to want of
F jurisdiction - Held: Such objection can be raised at any stage.

           Interpretation of Statutes - Where the statute
    prescribes the procedure, it should be done in the manner
    prescribed and in no other way.
G
           Dismissing the appeals, the Court

        HELD: 1. In terms of Section 87 of the Act, only
  the appropriate Government has the power to grant
H exemption to a factory or establishment or class of
                                474
ZUARI CEMENT LTD. v. REGIONAL DIRECTOR E.S.l.C. 475
             HYDERABAD & ORS.

factories or establishments from the operation of the A
Act. In fact, the appellant-factory itself has obtained
exemption from the appropriate Government-State
Government under Section 87 of the Employees State
Insurance Act, 1948, for the period from 1986 to 1993.
Likewise, the rejection of exemption was also under B
Section 87 of the Act. While so, seeking the relief of
declaration from the ESI Court that the appellant is
entitled to exemption from the operation of the Act is
misconceived. Contrary to the scheme of the statute,
the High Court cannot confer jurisdiction upon the ESI C
Court to determine the issue of exemption. (Para 12]
(484-E-G]

       2. The Employees Insurance Court is a tribunal
specially constituted for the purpose of deciding any        D
controversy that may arise on the matters enumerated
 in Section 75 of the Act. A reading of Section 75 of the
Act would show that the ESI Court has full jurisdiction
to decide all the matters arising between the employer
and the Corporation under the Act. The expression "any       E
other matter" occurring in Section 75(1) (g) only means
any other dispute between an employer and corporation
or a person and Corporation pertaining to the
contribution or benefit or other dues payable under the      F
Act or any other matter required to be decided by ESI
Court under the provisions of the Act. Grant or refusal
of exemption by the appropriate government cannot be
said to be a dispute between the employer and the
Corporation. For grant or refusal of exemption, a specific   G
provision is prescribed under the Act, it cannot be
brought within the ambit of "any other matter" required
to be decided by the Employees' Insurance Court under
this Act. [Para 13] [484-H; 485·A·B, D·E]
                                                             H
476        SUPREME COURT REPORTS             [2015] 6 S.C.R.


A      3. Where a statute provides that a particular thing
   should be done, it should be done in the manner
   prescribed and not in any other way. As per the
   scheme of the Act, appropriate government alone
   could grant or refuse exemption. When the statute
 B prescribed the procedure for grant or refusal of
   exemption from the operation of the Act, it is to be
   done in that manner and not in any other manner.
   [Para 14] [486-A-B; 485-G-H]

C         State of Jharkhand and Others vs. Ambay Cements
      and Another 2004 (6) Suppl. SCR 125: (2005) 1 SCC 368;
      Babu Verghese and Others vs. Bar Council of Kera/a and
      Others 1999 (1) SCR 1121: (1999) 3 SCC 422 - relied
      on.
D
         4. It is correct that the High Court directed the
  appellant to approach the ESI Court constituted under
  Section 74 of the Act for the relief which the appellant
  had claimed in the writ petitions. Both, the appellant
E as well as the ESI Corporation did not challenge the
  order of the High Court but subjected themselves to
  the jurisdiction of the ESI Court. Neither the order of
  the High Court nor the act of Corporation, subjecting
  itself to the jurisdiction of ESI Court would confer
F jurisdiction upon ESI Court to determine the question
  of exemption from the operation of the Act. By
  consent, parties cannot agree to vest jurisdiction in the
  Court to try the dispute when the Court does not have
  the jurisdiction. The objection, as to want of
G jurisdiction, can be raised at any stage, when the Court
  lacks jurisdiction, the fact that the parties earlier
  acquiesced in the proceedings is of no consequence.
  [Paras 11 and 12] [484-A-D, G-H]
H
ZUARI CEMENT LTD. v. REGIONAL DIRECTOR E.S.l.C. 477
      HYDERABAD & ORS. [R. BANUMATHI, J.]

       5. Where there is want of jurisdiction, the order A
passed by the court/tribunalis a nullity or non-est. ESI
Court did not have the jurisdiction to consider the
question of grant of exemption, order passed by the ESI
Court granting exemption and consequently setting
aside the demand notices is non-est [Para 15)(486-G- B
H; 487-A]
                   Case Law Reference
2004 (6) Suppl. SCR 125 relied on.                Para 14
                                                                 c
1999 (1) SCR 1121           relied on.            Para 14
      CIVILAPPELLATE JURISDICTION: Civil Appeal No.
5138-40 of 2007

       From the Judgment and Order dated 21.09.2007 in D
Appeal Nos. 4045 of 2003, 266 of 2005 and 89 of 2006 of
Division Ben.ch of the High Court of Andhra Pradesh

      Debal Kumar Banerji, Rishi Maheshwari, Shally
Bhasin for the appellant                                         E

       M.N. Krishnamani, Mahesh M. Srivastava, Vaibav M.
Srivastava, P. N . Puri for the respondents.

       The Judgment of the Court was delivered by
                                                                 F
       R. BANUMATHI, J. These appeals are preferred
against the judgment dated 21.09.2007 passed by the High
Court of Andhra Pradesh allowing Civil Miscellaneous
Appeals and thereby setting aside the or,der of ESI Court
granting exemption to the appellant from the operation of G
Employees State Insurance Act, 1948 (for short 'the Act').

       2. Brief facts which led to the filing of these appeals
are as under:- The appellant is engaged in the business of
                                                                 H
478      SUPREME COURT REPORTS                [2015] 6 S.C.R.


A manufacture and sale of cement situated at Yerraguntla in
  Cuddapah District. The said area was brought under the
  purview of ESI Scheme with effect from 1. 03.1986. The
  Government of Andhra Pradesh granted exemption to the
  appellant-cement factory from the operation of the Act by
B various orders for the period from 1.03.1986 to 31.03.1993.
  The State Government rejected appellant's application for
  exemption for the period from 1.04.1993 to 31.03.2001.
  Following rejection of claim for exemption, the Regional
  Director, ESI Corporation, issued various demand notices
C cumulatively demanding a sum of Rs. 65,38,537/- towards
  contributions for the period from 1.04.1993 to 31.03.1999.
  Challenging the order of appropriate government rejecting
  its claim for exemption and also challenging the demand
  notices, the appellant filed number of writ petitions before
0
  the High Court.The High Court disposed of those writ
  petitions with direction to the appellant to approach the ESI
  Court constituted under Section 74 of the Act. The appellant
  filed the review petition before the High Court, interalia,
E praying to remit the matter back to the government to rehear
  the representation of the appellant-company pertaining to
  its exemption of ESI Scheme under Section 87 of the Act for
  the period from 01.04.1993 to 31.03.1999 by affording
  personal hearing to the appellant. The review petition was
F dismissed observing that the appellant has an alternative
  remedy before the ESI Court constituted under Section 74
  of the Act and therefore the question of remanding the matter
  back to the State Government does not arise.

G        3. The appellant again filed number of writ petitions
  before the High Court expressing apprehension that ESI
  Court may not have the power to grant the relief of exemption
  from the scheme of the Act and therefore prayed that the
  appropriate government be directed to consider the issue of
H exemption by personal hearing to the appellant and by
ZUARI CEMENT LTD. v. REGIONAL DIRECTOR E:S.l.C. 479
      HYDERABAD & ORS. [R. BANUMATHI, J.]

 conducting an inquiry. However, vide order dated 11.10.2001        A
 those writ petitions were disposed of holding that ESI Court
 has jurisdiction to decide the issue and all questions including
 the applicability of the Act can be raised before the ESI Court.
 The appellant then approached the ESI Court, Hyderabad
 under Section 75(1)(g) of the Act challenging the demand           B
 notice. The ESI Court appointed an Advocate Commissioner
 to submit a report as to the medical benefits made available
 to the workmen in the industry. An affirmative report was
 filed by the Court Commissioner stating that appellant is
 providing all the due benefits. On the basis of the report,        C
 vide Order dated 18.10.2004, the petitions filed by the
 appellant as well as by the workmen union were allowed
 and the ESI Court granted future exemption to the appellant
from the coverage of the ESI Scheme and the ESI Court               D
also set aside the impugned demand notices for the period
 between 1993 to 2001 and the interest thereon. Assailing
 the said order, the ESI Corporation filed appeal before the
 High Court contending that ESI Court does not have power
 under Section 75 of the Act and it is only the appropriate         E
government which has got the power under Section 87 of
 the Act to exempt anyone from the application of the Act.
By the impugned judgment dated 21.09.2007, the High Court
allowed the appeals of the Corporation holding that ES,1 Court
does not have the power to grant exemption under Section            F
75(1)(g) of the Act. In these appeals, the appellant assails
the correctness of the above judgment.

        4. Mr. Debal Kumar Banerji, learned Senior Counsel
for the appellant contended that the appellant approached G
the ESI Court pursuant to the directions of the High Court
issued in different writ petitions that the ESI Court has the
jurisdiction to decide the issue of exemption and in the
second round of litigation, the High Court was not right in
saying that ESI Court has no jurisdiction. Learned Senior H
480       SUPREME COURT REPORTS                 [2015) 6 S.C.R.


A Counsel for the appellant further contended that Section
  75(1)(g) of the Act specifically empowers the ESI Court to
  decide the matter which is in dispute between the principal
  employer and the Corporation in respect of any contribution
  or benefit or other dues payable or recoverable under the
B Act and thus ESI Court has been conferred wide jurisdiction
  under Section 75(1 )(g) of the Act to adjudicate any dispute
  under the Act and while so, the High Court erred in observing
  that ESI Court has no jurisdiction. It was interalia urged
  that the appellant has a full-fledged hospital with medical
C officers and para medical staffs and has spent around 4.09
  crores towards establishment of hospital and the appellant
  is providing better medical and other benefits to the workers
  than available under the Act and considering those aspects,
  ESI Court rightly directed grant of exemption and set aside
0
  the demand notices and the High Court erred in reversing
  the order of the ESI Court.

         5. Mr. M.N. Krishnamai, learned Senior Counsel
  appearing for the respondent-Corporation contended that
E as per Section 87 of the Act, only the appropriate government
  can grant exemp_tion under the Act and under Section 75 of
  the Act, ESI Court has no jurisdiction to grant exemption
  and since ESI Court has acted beyond its jurisdiction, High
F Court rightly reversed the said order of ESI Court. It was
  contended that the jurisdiction can be conferred only in
  accordance with the statute and neither the order of the High
  Court nor the consent of the parties can confer the jurisdiction
  in the ESI Court.
G        6. We have carefully considered the rival contentions
  and perused the impugned judgment and also the order
  passed by the ESI Court and the material placed on record.
  The appellant actually is paying the ESI contribution from
H 1.04.1999. The dispute in these appeals, therefore, pertains
  only to the period from 1.04.1993 to 31.03.1999.
ZUARI CEMENT LTD. v. REGIONAL DIRECTOR E.S.l.C. 481
      HYDERABAD & ORS. [R. BANUMATHI, J.]

       7. Before adverting to the contention put forth by the A
learned counsel appearing for the parties, it would be
appropriate to refer to Section 87 and Section 75(1 )(g) of
the Act which are relevant for considering the various
contentious points urged. The power to grant exemption is
specifically dealt with under Section 87 of the Act. Section B
87 of the Act reads as follows:-

   "87. Exemption of a factory or establishment or
   class of factories or establishments.-The
   appropriate Government may by notification in the              C
   Official Gazette and subject to such conditions as
   may be specified in the notification, exempt any
   factory or establishment or class of factories or
   establishment in· any specified area from the
   operation of this Act for a period not exceeding               D
   one year and may from time to time by like
   notification renew any such exemption for periods
   not exceeding one year at a time."

        A close perusal of Chapter VIII of the ESI Act i.e.       E
 Sections 87 to 91A of the Act will show that only the
appropriate government has been empowered to .exempt
any factory or establishment or class of factories or
establishments in any specified area from the operation of
the Act for a period not exceeding one year and may from          F
time to time renew such exemption for a period not exceeding
one year at a; time. Under Section 89, the appropriate
Government shall not grant exemption under Section 87 or
Section 88 unless a reasonable opportunity has been given
to the Corporation to make any representation it may wish         G
to make in this regard. A combined reading of Sections 87,
88 and 89 would go to show that it is a two tier consideration,
namely, a factory or establishment as the case may be,
submits an application seeking exemption and the                  H
appropriate government would scrutinize the application and
482         SUPREME COURT REPORTS                  [2015] 6 S.C.R.


A     afford an opportunity to the Corporation and then grant an
      orde~ of exemption or reject the same as the case may be.

             8. Section 75 of the Act deals with the matters to be
      decided by the ESI Court constituted under Section 74 and
B     the relevant provision of Section 75(1)(g) of the Act reads as
      under:-

         "75. Matters to be decided by the Employees'
        Insurance Court. - (1) If any question or dispute
c       arises as to -

        (a) to (ee) ........ .

        g) any other matter which is in dispute between a
        principal employer and the Corporation, or between
D       a principal employer and an immediate employer,
        or between a person and the Corporation or
        between an employee and a principal or immediate
        employer, in respect of any contribution or benefit
        or other dues payable or recoverable under this Act,
E       or any other matter required to be or which may be
        decided by the Employees' Insurance Court under
        this Act. Such question or dispute subject to the
        provisions of sub-section (2A) shall be decided by
        the Employees' Insurance Court in accordance with
F
        the provisions of this Act."

          A reading of the above would show that the question
  or dispute can be adjudicated as is provided for in clauses
  (a) to (ee) of sub-section (1) of Section 75. Section 75(1)
G (g) of the Act essentially deals with any other matter/dispute
  between the employer and the Corporation or in respect of
  any contribution or benefit payable or recoverable under the
  Act in respect of an establishment covered by it. Section
H 75(1)(g) of the Act does not speak of a dispute between the
  employer and the appropriate government which only has
ZUARI CEMENT LTD. v. REGIONAL DIRECTOR E.S.l.C. 483
      HYDERABAD & ORS. [R. BANUMATHI, J.]

got the plenary power to consider the question of grant of A
exemption.

        9. As per the scheme of the Act, the power to grant
exemption is a plenary power given to an appropriate
government. It follows that the ESI Court constituted under B
Section 74 of the Act has no jurisdiction to take up the
question of grant of exemption. The Court constituted under
Section 74 of the Act cannot decide such matters including
the validity of an exemption notification. The order granting
or denying exemption is certainly open to judicial review under C
Article 226 of the Constitution of India. But the question of
exemption under Section 87 cannot be raised under Section
75 of the Act and the ESI Court constituted under Section
74 of the Act, cannot decide the legality or otherwise of an
order relating to exemption passed by the appropriate D
government.

        10. Learned Senior Counsel for the appellant
vehemently contended that grant of exemption to a factory
 or establishment from the operation of the Act falls within E
the jurisdiction of ESI Court under Section 75(1 )(g) of the
Act which specifically empowers the ESI Court to decide
any matter which is in dispute between a principal employer
and the Corporation in respect of any contribution or benefit
or other dues payable or recoverable under the Act. It was F
submitted that only pursuant to the orders of the High Court,
the appellant approached the ESI Court and the ESI Court
has exercised its power to grant exemption on the basis of
the orders of the Division Bench of the High Court. It was
submitted that ESI Corporation submitted itself to the G
jurisdiction of ESI Court and while so, it cannot turn round
and raise objection as to its jurisdiction to consider the issue
of exemption and in support of his contention, learned Senior
Counsel for the appellant placed reliance upon the decision H
of this Court in Sohan Singh & Ors. vs. G.M. Ordnance
484       SUPREME COURT REPORTS                 (2015] 6 S.C.R.


A Factory & Ors., (1984) Supp. SCC 661.

          11. While disposing the writ petitions, of course, the
   High Court directed the appellant to approach the ESI Court
  constituted under Section 74 of the Act for the relief which
B the appellant had claimed in the writ petitions. Notably, both
  the appellant as well as the ESI Corporation did not challenge
  the order of the High Court but subjected themselves to the
  jurisdiction of the ESI Court. In our view, neither the order of
  the High Court nor the act of Corporation subjecting itself to
C the jurisdiction of ESI Court would confer jurisdiction upon
  ESI Court to determine the question of exemption from the
  operation of the Act. By consent, parties cannot agree to
  vest jurisdiction in the Court to try the dispute when the Court
  does not have the jurisdiction.
D
          12. As discussed earlier, in terms of Section 87 of the
  Act, only the appropriate government has the power to grant
  exemption to a factory or establishment or class of factories
  or establishments from the operation of the Act. In fact, the
E appellant-factory itself has obtained exemption from the
  appropriate Government-State Government under Section
  87 of the Act for the period from 1986 to 1993. Likewise, the
  rejection of exemption was also under Section 87 of the Act.
  While so, seeking the relief of declaration from the ESI Court
F that the appellant is entitled to exemption from the operation
  of the Act is misconceived. Contrary to the scheme of the
  statute, the High Court, in our view, cannot confer jurisdiction
  upon the ESI Court to determine the issue of exemption.
  ESI Corporation, of course, did not· raise any objection and
G subjected itself to the jurisdiction of the ESI Court. The
  objection as to want of jurisdiction can be raised at any stage
  when the Court lacks jurisdiction, the fact that the parties
  earlier acquiesced in the proceedings is of no consequence.

H          13. The Employees Insurance Court is a tribunal
  ZUARI CEMENT LTD. v. REGIONAL DIRECTOR E.S.l.C. 485
        HYDERABAD & ORS. [R. BANUMATHI, J.]

  specially constituted for the purpose of deciding any             A
   controversy that may arise on the matters enumerated in
   Section 75 of the Act. A reading of Section 75 of the Act
  would show that the ESI Court has full jurisdiction to decide
   all the matters arising between the employer and the
  Corporation under the Act. Section 75 of the Act sets out         B
  the matters to be decided by the ESI Court. As per Section
  75(1 )(g) of the Act, ESI Court is empowered to decide any
  matter which is in dispute between the employer and the
· Corporation in respect of any contribution or benefit or' other
  dues payable or recoverable under the Act or any other            C
   matter required to be or which may be decided by the ESI
  Court under the Act and such question or dispute subject to
  the provisions of sub-section (2-A) shall be decided by the
   ESI Court in accordance with the provisions of the Act. When     D
  considered in the light of clauses (a) to (d) in Section 75 (1)
  of the Act, the expression "any other matter" occurring in
  Section 75(1) (g) only means any other dispute between an
  employer and corporation or a person and Corporation
  pertaining to the contribution or benefit or other dues payable   E
  under the Act or any other matter required to be decided by
  ESI Court under the provisions of the Act. Grant or refusal
  of exemption by the appropriate government cannot be said
  to be a dispute between the employer and the Corporation.
  For grant or refusal of exemption, a specific provision is        F
  prescribed under the Act, it cannot be brought within the
  ambit of "any either matter" required to be decided by the
  Employees' Insurance Court under this Act.

        14. As per the scheme of the Act, appropriate G
 government alone could grant or refuse exemption. When
 the statute prescribed the procedure for grant or refusal of
 exemption from the operation of the Act, it is to be done in
 that manner and not in any other manner. In State of
 Jharkhand and Others vs. Ambay Cements and Another, H
486      SUPREME COURT REPORTS                 [2015] 6 S.C.R.


A (2005) 1 SCC 368, it was held that "It is the cardinal rule of
  interpretation that where a statute provides that a particular
  thing should be done, it should be done in the manner
  prescribed and not in any other way". In Babu Verghese
  and Others vs. Bar Council of Kera/a and Others, (1999) 3
B sec 422, it was held as under:

      "31. It is the basic principle of law long settled that
      if the manner of doing a particular act is prescribed
      under any statute, the act must be done in that
C     manner or not at all. The origin of this rule is
      traceable to the decision in Taylor v. Taylor, (45
      LJCH 373) which was followed by Lord Roche in
      Nazir Ahmad v. King Emperor, (AIR 1936 PC 253)
      who stated as under:
D
      "[W]here a power is given to do a certain thing in a
      certain way, the thing must be done in that way or
      not at all."

E     32. This rule has since been approved by this Court
      in Rao Shiv Bahadur Singh v. State of V.P., (AIR 1954
      SC 322 and again in Deep Chand v. State of
      Rajasthan (AIR 1961SC1527). These cases were
      considered by a three-Judge Bench of this Court
F     in State of U.P. v. Singhara Singh (AIR 1964 SC 358)
      and the rule laid down in Nazir Ahmad case (AIR
      1936 PC 253) was again upheld. This rule has since
      been applied to the exercise of jurisdiction by
      courts and has also been recognised as a salutary
G     principle of administrative law."

          15. Where there is want of jurisdiction, the order
  passed by the court/tribunal is a nullity or non-est. What is
  relevant is whether the Court had the power to grant the
H relief asked for. ESI Court did not have the jurisdiction to
ZUARI CEMENT LTD. v. REGIONAL DIRECTOR E.S.l.C. 487
      HYDERABAD & ORS. [R. BANUMATHI, J.]

consider the question of grant of exemption, order passed A
by the ESI Court granting exemption and consequently
setting aside the demand notices is non-est. The High Court,
in our view, rightly set aside the order of ESI Court and the
impugned judgment does not suffer from any infirmity
warranting interference.                                      B

        16. Since the order passed by the ESI Court is a non-
est, which was rightly set aside by the High Court, we are
not inclined to go into the merits of the appellant's contention
that they have a full-fledged hospital and are providing C
various medical facilities and better health schemes to its
employees and their family members.

       17. In the result, all the appeals are dismissed. In the
facts and circumstances of the case, we make no order as           D
to costs.

Kalpana K. Tripathy                           Appeals dismissed.



                                                                   E