High Court of KeralaSingle Judge2012-02-29Original petition dismissed.

P. Natarajan v. Regional Director, Employees' State Insurance Corporation, Thrissur; Recovery Officer, Employees' State Insurance Corporation, Thrissur

Case / Petition Number:OP(LC) No.3752 of 2011

Case Details & Bench

Court: High Court of Kerala
Hon'ble Judges: P. N. Ravindran
Judgment Date: 2012-02-29
Court Decision / Holding: The original petition fails and is accordingly dismissed.
Final Disposition: Original petition dismissed.

Parties to the Case

Appellants / Petitioners

P. Natarajan, Proprietor, M/s N.C.C Chemicals

Respondents

Regional Director, Employees' State Insurance Corporation, Thrissur
Recovery Officer, Employees' State Insurance Corporation, Thrissur

Legal Representation & Advocates

Counsels for Petitioners

• Adv. Sri. B. Pramod

Counsels for Respondents

• Adv. Sri P. Sankarankutty Nair, SC, ESI Corporation

Case Synopsis & Summary

This is an OP(LC) petition filed by P. Natarajan, proprietor of M/s N.C.C. Chemicals, challenging whether his Varkala establishment falls within the Employees' State Insurance Act, 1948 and seeking a declaration that the establishment is not covered, with consequential reliefs. The petitioner also sought transfer of Insurance Case No.21/2010 from Kollam to the Employees' Insurance Court at Alappuzha under sub-section (2) of section 76, arguing that hearings were conducted at a camp sitting in Trivandrum while his residence and business had shifted to Alappuzha, and that the Alappuzha court would be more convenient. The judgment discusses the transfer power under section 76 and the place-of-suing provisions in Rule 16 of the Kerala Employees Insurance Courts Rules, 1958, and cites authorities such as Panickaveettil Sir Sebastian Public School to illuminate the scope of Rule 16. The court also relies on the Supreme Court authorities that workmen concerned by proceedings under the Act must be parties (FACT v. E.S.I. Corporation; Bhakra Beas Management Board). Ultimately, the judge concludes that transferring the case would prejudice the rights of workmen and that Ext.P4 denial stands, holding that there is no merit in the transfer petition. The petition is dismissed, leaving the original forum’s jurisdiction intact.

Provisions of Law Cited

Employees State Insurance Act, 1948 - Section 75Employees State Insurance Act, 1948 - Section 76(2)Employees State Insurance Act, 1948 - Section 76(1)Kerala Employees Insurance Courts Rules, 1958 - Rule 16Employees State Insurance Act, 1948 - Section 96

Legal Doctrines & Maxims

Workmen in proceedings under the ESI Act must be represented/parties (as held by Supreme Court in FACT v. E.S.I. Corporation and Bhakra Beas Management Board)
Rule 16 is to be applied with limitation to cases not under sub-section (1) of section 76 (as discussed in Panickaveettil Sir Sebastian Public School)

Submissions & Arguments

Contentions of Appellants / Petitioners

The petitioner contends that section 76(2) authorizes transfer of Insurance Case No.21/2010 from Kollam to another ESI Court (Alappuzha) in light of the establishment’s location and the petitioner’s residence in Alappuzha, combined with the status of the business. He argues that the single ESI Court at Kollam conducts proceedings via camp sittings at Trivandrum and Alappuzha, creating inconvenience, and that transfer would better reflect the place of business and residence; he also argues that workmen’s rights require participation and that the Court should apply Rule 16 and section 76(2) in a manner that avoids prejudice to workers.

Contentions of Respondents

The respondents oppose transfer, contending Kollam is the proper forum given the local jurisdiction of the establishment and that transferring to Alappuzha would impose hardship on workmen, contrary to the Act’s objectives. They invoke the principle that workmen must be parties and emphasize maintaining current forum arrangements. They rely on statutory provisions and authorities about the proper place of suing and the necessity of workmen’s representation in ESI proceedings.

Cited Precedents (3)

Case Name	Citation	Treatment	Explanation
Employees' State Insurance Corporation v. Panickaveettil Sir Sebastian Public School	2010 (4) KLT 987	Positive	Cited to discuss the scope and applicability of Rule 16 in relation to section 76(1)/(2) and transfer; used to support limiting the rule’s application in this context.
FACT v. E.S.I. Corporation	2009 (3) KLT 946 (SC)	Positive	Supreme Court held that workmen must be necessarily made parties to ESI proceedings, underpinning the court’s view on the involvement of workmen in such cases.
E.S.I. Corporation v. Bhakra Beas Management Board and another	(2009) 10 SCC 671	Positive	Supreme Court decision reinforcing the necessity of including workmen as parties where rights are affected.

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Extracted Judgment Text

Exact text extracted from official judgment records.

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:** ## **THE HONOURABLE MR.JUSTICE P.N.RAVINDRAN** ## **WEDNESDAY, THE 29TH DAY OF FEBRUARY 2012/10TH PHALGUNA 1933** ## **OP(LC).No. 3752 of 2011 (O)** **---------------------------** **PETITIONER(S)/PETITIONER: --------------------------------------------** **P.NATARAJAN, PROPRIETOR, M/S.N.C.C CHEMICALS, CHAVARKODE, VARKALA, RESIDING AT LAKSHMI NIVAS, PAZHAVEEDU.P.O., ALAPPUZHA.** **BY ADV. SRI.B.PRAMOD** **RESPONDENT(S):** **----------------------------** **1. THE REGIONAL DIRECTOR, EMPLOYEES STATE INSURANCE CORPORATION,THRISSUR.680 609.** **2. THE RECOVERY OFFICER, THE EMPLOYEES STATE INSURANCE CORPORATION, THRISSUR.PIN-680 609.** **BY ADV. SRI.P.SANKARANKUTTY NAIR, SC, ESI CORPORATION** **THIS OP (LABOUR COURT) HAVING BEEN FINALLY HEARD ON 29-02-2012, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **sts** ## **OP(LC)NO.3752/2011** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** - **P1 COPY OF THE PETITION IN I.C.NO.21/2010 PENDING IN THE CAMP SITTING AT ALAPPUZHA OF EMPLOYEES' INSURANC COURT,KOLLAM.** - **P2 COPY OF THE M.P.NO.29/2011 IN I.C.NO.21/2010 OF THE EMPLOYEES' INSURANCE COURT.** - **P3 COPY OF THE OBJECTION FILED BY THE RESPONDENTS.** - **P4 COPY OF THE ORDER DATED 23/08/2011 C.M.P.NO.29/2011 IN I.C.NO.21/2010 OF THE EMPLOYEES' INSURANCE COURT, KOLLAM.** ## **RESPONDENT'S EXHIBITS: NIL** ## **/TRUE COPY/** ## **P.A.TO.JUDGE** **sts** ## **P.N.RAVINDRAN,J.** ----------------------------------- O.P (L.C) No.3752 of 2011 ----------------------------------------Dated this the 29[th] day of February, 2012 ## **JUDGMENT** The petitioner is the applicant in Insurance Case No.21 of 2010 on the file of the Employees' Insurance Court, Kollam, an application filed by him under section 75 of the Employees State Insurance Act, 1948 (hereinafter referred to as the Act for short) for a declaration that his establishment is not covered under the provisions of the Act. He has also sought consequential reliefs therein. 2. The petitioner’s business establishment is situate at Varkala in Thiruvananthapuram District. He is presently residing in Alappuzha District. He filed an application under sub-section (2) of section 76 of the Act before Employees Insurance Court, Kollam to transfer Insurance Case No.21 of 2010 to the file of the Employees' Insurance Court, Alappuzha. It was contended that though the case was filed in the Employees' Insurance Court, Kollam, it is being considered in the camp sitting at Trivandrum where the petitioner was initially residing and his business establishment was situate, that he is presently residing in O.P(L.C) No.3752 of 2011 2 Alappuzha and the business establishment is no longer functioning and therefore, there is no reason why the case should not be transferred to the Employees Insurance Court, Alappuzha. The petitioner contended that as the case filed in Kollam was being heard at Trivandrum there is no reason why it cannot be transferred to Alappuzha with in the jurisdiction of another court. 3. By Ext.P4 order passed on 23.8.2011, the Employees Insurance Court, Kollam rejected that application. It was held that the applicant had initially filed the case before the Employees Insurance Court at Alappuzha on 14.6.2010, that it was returned on the very same day to the applicant to be presented in the Employees Insurance Court, Kollam and therefore, as it was properly presented in the Employees Insurance Court, Kollam after it was wrongly presented in the Employees Insurance Court, Alappuzha, the applicant cannot seek a transfer of the case to the Employees Insurance Court, Alappuzha on the ground that he and his family members are residing within the jurisdiction of the Employees Insurance Court, Alappuzha. Hence this original petition challenging Ext.P4 and seeking an order transferring O.P(L.C) No.3752 of 2011 3 Insurance Case 21 of 2010 from the file of the Employees Insurance Court, Kollam, which is being considered in the camp sitting at Trivandrum to the camp sitting at Alappuzha. 4. The writ petition proceeds on the basis that there is only one Insurance Court at Kollam, that it holds camp sittings at Trivandrum and Alappuzha and therefore, there is no reason why instead of considering the case in the camp sitting at Trivandrum, it should not be considered in the camp sitting at Kollam. However during the course of arguments, the learned counsel appearing for the petitioner contended that even assuming that the case could have been filed only in the Employees Insurance Court at Kollam in view of the stipulations in sub-section (1) of section 76 of Act, sub-section (2) of section 76 empowers the court to transfer the case to such other court for disposal, if the court where the case is pending is satisfied that any matter arising out of any proceeding pending before it can be more conveniently dealt with by any other Employees Insurance Court in the same State and therefore, as the officials of the Employees State Insurance Corporation are the sole respondents in the insurance O.P(L.C) No.3752 of 2011 4 case, there is no reason why the prayer for transfer should not have been allowed. 5. The Government of Kerala have in exercise of the power conferred on it under section 96 of the Act framed the Kerala Employees Insurance Courts Rules, 1958. Rule 16 thereof reads as follows: "Place of Suing- In cases not falling under sub-section (1) f Section 76, a proceeding against any person shall be instituted in the Court within the local limits of whose jurisdiction. (a) the opposite party or each of the opposite parties where there are more than one, at the time of the commencement of the proceedings, actually and voluntarily resides, or carries on business, or personally works for gain, or (b) any of the opposite parties where there are more than one, at the time of the commencement of the proceedings, actually and voluntarily resides, or carries on business, or personally works for gain, provided that in such case either the leave of the court is given, or the opposite parties who do not reside, carry on business or personally work for gain, as aforesaid, acquiesce in such institution; or (c) the cause of action, wholly or in part arose". A learned single judge of this Court considered the scope of rule 16 referred to above in **Employees State Insurance** **Corporation v. Panickaveettil Sir Sebastian Public School** O.P(L.C) No.3752 of 2011 5 **[2010 (4) KLT 987]** and hold that rule 16 would apply only in cases not falling under sub-section (1) of section 76 of the Act. In the instant case, as the petitioner’s establishment was situate at Varkala in Thiruvananthapuram District, the court having jurisdiction is the Employees Insurance Court, Kollam. It is the court appointed for the local area in which the insured person namely the employees of the petitioner were working. The Apex Court has in **FACT v. E.S.I. Corporation [2009 (3) KLT 946 (SC)] and E.S.I. Corporation v. Bhakra Beas Management Board and another [(2009) 10 SCC 671]** held that the workmen or at least some of them in a representative capacity have to be necessarily made parties to proceedings instituted under the provisions of the Act. Therefore, notwithstanding the fact that the petitioner has not joined the workmen or some of them in a representative capacity, the workman whose rights will be affected in the event of the relief sought by the petitioner in Insurance Case No.21 of 2010 being granted, can seek impleadment as parties to the insurance case. Therefore, if for the mere reason that it will be convenient for petitioner, the case is O.P(L.C) No.3752 of 2011 6 transferred to the Employees Insurance Court, Alappuzha, the workmen who were employed in the petitioner’s establishment at Varkala in Thiruvananthapuram District will be forced to travel to Alappuzha to participate in the proceedings before the Employees State Insurance Court and for the purpose of seeking impleadment as parties to the case. In such circumstances, as the rights of the workman to protect whose interest the Act has been enacted is also involved, I am of the opinion that in the absence of the workman on the party array, the relief sought by the petitioner cannot be granted. I accordingly hold that there is no merit in the challenge to Ext.P4. The original petition fails and is accordingly dismissed. Sd/- **P.N.RAVINDRAN JUDGE** /TRUE COPY/ P.A. To JUDGE vpv