JUNIORS, IT'S TIME TO GO ONLINE

 

(By Justice M.R. Hariharan Nair)

 

The Bandwagon of BPO is to arrive shortly. Are the Junior Lawyers in Kerala ready to get in?

 

News Reports have it that New Jersey Law Firms like Sills, Cummis, Epstein, etc. are seriously considering outsourcing of part of their work. The assistance expected is in the matter of preparing Deeds and pleadings and even for proof reading of the pleadings already prepared. Depending upon one's capacities he can opt for the work; perfection and punctuality being the sine qua non. The expectation abroad is that the highly educated work force in India would work for less (going by their standards) and get legal research and other support work done here while the American Lawyer is asleep after the day's work. When he reaches his office the next morning the required work, in completed form, should be on his computer through E-mail. Of course, the remuneration will be in dollars or its equivalents. Needless, therefore to say that the young lawyer in India who may find it difficult to find an adequate clientele in his early days and with lot of spare time at his disposal, can find a gold mine in this new field. What is required appears to be a firm will to do hard work and that too within strict time restraints. As in the case of any other commercial export, the caution is that once your product is found to be sub standard, that will be the end of the show. A black listed person may find it very hard to get another work whatever be his justification for the alleged lapse. Perfect work, and that too within the time allotted, is the demand. If you can do that without affecting your regular practice, get ready to reap this very beneficial bye-product of globalization.

 

Investment and other requisites? A knodding acquaintance with cybernetics would certainly be required. Thanks to the policies of our Government, price of Computers have reached an all time low, if not the rock bottom. With an investment of about Rs.25,000/- you can now own one with essential qualities and features. Our commercial Banks of both sectors have already transformed themselves and now evince a liberal and positive attitude to those inclined to borrow. Interest rates are minimal. So why not prepare yourself for the challenge now itself? Why not launch a web site of your own so that people abroad can know of your talents, equipment and availability? To succeed, that you are there should certainly be let known to the possible takers. Perhaps the early bird catches the prey. So why not give it a trial? Are you ready to go online? If not atleast get ready straightaway. Time will not wait for you.

 

Investigation And Chargesheeting by Detecting

Official (From Naushad to J Ay a Paul)

 

(By Justice M.R. Hariharan Nair)

 

Many an accused involved in NDPS and Abkari cases have walked away with acquittal under cover of Naushad (2000( 1) KLT 785). The argument that a Police Officer who detected and registered a case should not investigate it and that a charge laid violating this principle would lead to prejudice the interests of the accused and enable him to get an acquittal found favour with many Courts. The situation assumed great significance in NDPS and Abkari cases where detection of the offence by empowered officer would essentially lead to completion of almost the entire investigation. Receiving of information, recording of the same, intimating the matter to the higher authority, actual seizure in the presence of competent witnesses, sampling from the seized contraband, preparation of scene mahazar, if any; (very often the seizure mahazar itself would contain the details ordinarily noted in a scene mahazar) etc. would all be done before removing the accused to the police station by one and the same Police Officer and in such a case all that would remain for laying the Final Report would be moving the court for sending the sample for analysis, and collection of the report from the Laboratory. Questioning of the mahazar witnesses and other occurrence witnesses, if any, would also be required. The stand that the completion of investigation and laying of charge sheet should invariably be by an officer different from the one who detects the offence might stand in the way of successful prosecution in such cases, notwithstanding the fact that the detecting officer himself is an officer, senior in rank.

 

The above decision was rendered on the basis of the decision of the Apex Court in Megha Singh's case (AIR 1995 SC 2339) where a Head Constable who had arrested the Accused and recovered a Pistol and cartridges from his possession proceeded to give formal FIR and thereafter proceeded to examine the witnesses also. The Court treated him as the complainant and observed that he should not have carried on the investigation, since such a practice would give room for suspicion about the fairness and impartiality of the investigation. Gyan Chand (1993 Crl. L.T 3716) which was also relied on by the learned Judge was one where the Officer who got source information proceeded to make a search and recovered opium and continued with investigation. The Court held that the officer can be treated as a complainant only and as such he cannot be the sole agency of investigation; that this infirmity would go to the root of the matter and vitiate the investigation justifying acquittal of the Accused.

 

In Xavier v. Gopalan (1938(1) KLT 686) which was the third decision referred to by the learned Judge who decided Naushad’s case, it had been found by his Lordship himself that where Complainant-Police Officer conducts investigation.

 

"the accused and the prosecution will be deprived of their valuable rights of contradicting and corroborating the previous informations recorded under Ss. 154 or 155 Crl. P.C. and previous statement of the witness, being a police officer, complaint recorded under S. 161 Cr. P.C. enjoined in S.145 and 157 of the Indian Evidence Act and proviso of S.162 Cr. P.C."

 

A Division Bench of the Kerala High Court, in Kader v. State of Kerala (2001 (2) KLT 407), over ruled the said view taken in Naushad's case and held that the decision in Xavier (supra) does not lay down the correct law. It was also held that the NDPS Act is a special enactment; that under the decision in Balbir Singh's case (AIR 1994 SC 1872), once the empowered officer comes across a person in possession of contraband, he has to follow thereafter the procedure prescribed in the various provisions of the NDPS Act and continue investigation as provided thereunder and that in such circumstances, in cases under the NDPS Act there is no taboo for continued investigation by the detecting official. It was also held that there is also no likelihood of any prejudice being to the Accused in such cases in so far as by the time of arrest, main part of the investigation would have been completed. It was specifically held that continued investigation by the detecting officer and filing of final report by him would not vitiate the proceedings under the NDPS Act.

 

With the above decision the position became clear, as far as this State is concerned; but that is with respect to NDPS cases alone. In States other than Kerala Megha Singh continued to operate. Even within the State the operation of the dictum in Kader's case was confined to NDPS cases and as far as other criminal cases are concerned, Megha Singh continued to operate.

 

It was while this position was prevailing that the Apex Court pronounced its decision on 22/3/2004 on the above aspects in State v. Jayapaul (2004 SCCL.Com 297 -Crl. Appeal.. 359/2004) holding that no broad proposition that a detecting officer shall not make further investigation can be laid down . Decision in Megha Singh was distinguished as follows:

 

" 10. In Megha Singh's case, PW3, the Head Constable, found a country-made pistol and live cartridges on search of the person of the accused. Then, he seized the articles, prepared a recovery memo and a 'rukka' on the basis of which FIR was recorded by the S.I. of Police. However, P.W.3 - the Head Constable himself, for reasons unexplained, proceeded to investigate and record the statements of witnesses under Section 161 Cr. P.C. The substratum of the prosecution case was sought to be proved by the Head Constable. In the appeal against conviction under Section 25 of the Arms Act and Section 6( 1) of the TADA Act, this Court found that the evidence of PWs 2 & 3 was discrepant and unreliable and in the absence of independent corroboration, the prosecution case cannot be believed. Towards the end, the Court noted 'another disturbing feature in the case'. The Court then observed:

 

"PW3, Siri Chand, Head Constable arrested the accused and on search being conducted by him a pistol and the cartridges were recovered from the accused. It was on his complaint a formal first information report was lodged and the case was initiated. He being complainant should not have proceeded with the investigation of the case. But it appears to us that he was not only the complainant in the case but he carried on with the investigation and examined witnesses under Section 161, Cr. P.C. Such practice, to say the least, should not be resorted to so that there may not be any occasion to suspect fair and impartial investigation."

 

11. The conviction was set aside by this Court for the above reasons.

 

12. At first blush, the observations quoted above might convey the impression that the Court laid down a proposition that a Police Officer who in the course of discharge of his duties finds certain incriminating material to connect a person to the crime, shall not undertake further investigation if the FIR was recorded on the basis of the information furnished by him. On closer analysis of the decision, we do not think that any such broad proposition was laid down in that case. While appreciating the evidence of the main witness, i.e., the Head Constable (PW3), this Court referred to this additional factor-namely, the Head Constable turning out to be the investigator. In fact, there was no apparent reason why the Head Constable proceeded to investigate the case bypassing the Sub-Inspector who recorded the FIR. The fact situation in the present case is entirely different. The appellant-Inspector of Police, after receiving information from some sources, proceeded to investigate and unearth the crime. Before he did so, he did not have personal knowledge of the suspected offences nor did he participate in any operations connected with the offences. His role was that of investigator- pure and simple. That is the obvious distinction in this case. That apart, the question of testing the veracity of the evidence of any witness, as was done in Megha Singh's case, does not arise in the instant case as the trial is yet to take place. The High Court has quashed the proceedings even before the trial commenced.

 

13. Viewed from any angle, we see no illegality in the process of investigation set in motion by the Inspector of Police (appellant) and his action in submitting the final report of the Court of Special Judge."

 

In the aforesaid case (State v. Jayapaul) the S.C. also referred to yet another precedent of its own viz. Bhagwan Singh vs. State of Rajasthan (AIR 1976 SC 985) and distinguished that also. That was a case where the Head Constable to whom the offer of bribe was allegedly made, had seized the currency notes offered to him and gave the first information report. Thereafter, he himself took up the investigation. But, later on, when it came to his notice that he was not authorized to do so, he forwarded the papers to the Deputy Superintendent of Police. The Dy. SP then reinvestigated the case and filed the charge sheet against the accused. The Head Constable and the accompanying Constables were the only witnesses in that case. Taking note of this fact scenario, the Apex Court held in State v. Jayapaul:

 

"This Court found several circumstances which cast a doubt on the veracity of the version of the Head Constable and his colleagues. This Court observed that 'the entire story sounds unnatural'. While so holding, this Court referred to 'a rather disturbing feature of the case' and it was pointed out that

 

'Head Constable Ram Singh was the person to whom the offer of bribe was alleged to have been made by the appellant and he was the informant or complainant who lodged the first information report for taking action against the appellant. It is difficult to understand how in these circumstances, Head Constable Ram Singh could undertake investigation?... This is an infirmity which is bound to reflect on the credibility of the prosecution case?"

 

8. It is not clear as to why the Court was called upon to make the comments against the propriety of the Head Constable - informant investigating the case when the reinvestigation was done by the Deputy Superintendent of Police. Be that as it may, it is possible to hold on the basis of the facts noted above, that the so called investigation by the Head Constable himself would be a mere ritual. The crime itself was directed towards the Head Constable which made him lodge the FIR. It is well nigh impossible to expect an objective and undetached investigation from the Head Constable who is called upon to check his own version on which the prosecution case solely rests. It was under those circumstances the Court observed that the said infirmity 'is bound to reflect on the credibility of the prosecution case'. There can be no doubt that the facts of the present case are entirely different and the dicta laid down therein does not fit into the facts of this case."

 

With the clarifications as above the Apex Court held that the facts of Megha Singh and Bhagwan Singh did not justify the particular observations made in the judgments concerned. The basis of the earlier decisions in Naushad and the other cases is thus gone. The position that prevails after State v. Jaya Paul, therefore, appears to be that except where the Police Officer is himself the defacto complainant eg. where in the course of discharging official duty he is abused, attacked, manhandled, defamed, attempted to be bribed or otherwise obstructed from work, etc. (the common element in these situations being that the occurrence actually offends the Officer personally or officially in the sense, in the course of official duties; and he is, to that extent, biassed and prejudiced against the Accused and also liable to be cross examined during trial from that perspective with reference to his earlier statements recorded during investigation) there is no taboo for the same officer (if competent under law otherwise) to proceed with the investigation in the case and the Accused cannot be acquitted merely because the same officer completed the investigation and laid the Final Report. More so in cases under the NDPS and Abkari Acts. The importance of the decision in State v. Jayapaul lies, on the fact that the Megha Singh and Bhagwan Singh have been watered down.

 

JUSTICE  A.  LEKSHMIKUTTY         Tel. office: 2393901 to

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JUDICIAL DISCRETION

 

(By O.V. Radhakrishnan)

 

1. Introduction

 

Administrative law is abranch of law which deals with afundamental doctrine of the'rule of law' that Government in all its activities and manifestations should be brought within the penumbra of Judicial Review vested with the Courts and Tribunals. A simple defenition of Administrative Law given in Garner's Administrative Law is "the law relating to the administration of Government". Administrative law is more concerned with the procedures and processes by which Governmental actions are regulated. The Governmental responsibility to protect and to care for its citizens in providing with education, employment, training, houses, medical services, pensions and the like requires very huge administrative apparatus. While enacting laws and making rules all problems of detail and disputes that may crop up in different situations cannot be anticipated and necessarily the administrators are to be conferred with discretionary powers to deal with the problems that may arise in implementation of the law and the rules. The management of Administrative Laws dealing with the administrative actions and decisions is done by the Courts and Tribunals in exercise of the power of Judicial Review. The Courts and Tribunals while adjudging the legality or otherwise of the action or inaction on the part of the administrators exercises the power of Judicial Review. The remedy of Judicial Review is provided to ensure that the rights of the people are determined according to law. The power of Judicial Review would be meaningful and effective only if the power is exercised by the Court or Tribunal applying judicial reasoning. The Governmental power and powers of all other public authorities are subject to the law and any violation or transgression of the law by the Government or public authorities are amenable to the power of Judicial Review vested with the Courts and Tribunals. The Courts and Tribunals are to act within the frame-work of law and according to the self-imposed restrictions and limitations. The expression 'judicial discretion' comprehends the duty to enforce the standards laid down in the laws and the rules in general public interest and the power to strike down illegal decisions and orders. The Courts and Tribunals shall always remain impartial, unbiased and reasonable. The Judicial discretion should be founded on fairness and impartiality and on sound reasoning and cannot be exercised according to one's own whims and fancies. In exercising judicial discretion the Courts and Tribunals cannot act in defeasance of or step beyond the bounds of permissible judicial reasoning. The predictability of judicial decisions is the hallmark of the rule of law.

 

2. Definition and Perspective of 'Judicial Discretion'

 

In legal parlance the meaning of the word 'discretion' is "the power to decide, within the limits allowed by the positive rules of law, as to punishments, remedies or cause, and generally to regulate matters of procedure and administration". 'Discretionary power' in the rhetoric language of Coke is 'the golden and straight metwand' of law, as opposed to 'the uncertain and crooked cord of discretion' (Administrative Law by H.W.R. Wade & C.F. Forsyth, 7th Edition). Coke delineated discretion as science or understanding to discern between falsity and truth, between right and wrong, between shadows and substance, between equity and colourable glosses and pretences, and not to do according to their will and private affections (Rooke's case (1958) 5 Co. Rep. 139a, 140a). Lord Mansfield refined the concept of judicial discretion by importing a duty to be "fair, candid and unprejudiced; not arbitrary, capricious or biased; much less warped by resentment or personal dislike" (R. Vs. Askew (1768) 4 Burr. 2186). Lord Halsbury trimmed the notion of judicial discretion as a requirement to act "according to the rules of reasonand justice, not according to private opinion......according to law, and not humour......notarbitrary, vague and fanciful, but legal and regular" (Sharp Vs. Wakefiled(1891) AC 173. One of the important facets of the Rule of law is that decisions should be predictable. In Jaisinghani 's case (AIR 1967 SC 1427) the Supreme Court has held that "if a decision is taken without any principle or without any rule it is unpredictable and such a decision is antithesis of the decision taken in accordance with the ruleoflaw". In United States Vs. Wunderlich ((1951)342US98). Douglas J. has observed that "Law has reached its finest moments when it has freed man from the unlimited discretion of some ruler......Where discretion is absolute man has always suffered".

 

It is a truism that all legal power is inevitably discretionary and all power has legal limits. The term 'discretion' lacks descriptive precision. A pedantic insistence on exercising the discretionary power within its true limits is the call of the day. The Courts have evolved self-created rules of limitation in exercise of the discretionary power vested with them. The standards and norms set by the Courts through long standing precedents enslaves them in exercising the judicial discretion in the decision making process and any efforts to escape from vitiates the decision as one reached arbitrarily and unreasonably. A normative Order must necessarily to be followed by Courts and Tribunals in exercising judicial discretion in the context and perspective of the facts and circumstances of each case. It is necessary therefore, that the Court and the Tribunal must exercise a conscientious and lively discretion and it cannot fly off at a tangent to reach any conclusion that it thinks is just and proper.

 

3. The decisions expounding on Judicial Review and Judicial Discretion

 

Judicial Review and Judicial Discretion are given una flatu and the one cannot be dissociated from the other. Both are intertwined judicial powers. There is a long procession of judicial decisions attempting to define and lay down the scope and perspective of judicial review and judicial discretion. Both the powers defy defenition with precision and exactitude. Lord Scarman in Nottinghamshire County Council Vs. Secretary of State for the Environment (1986 (1) ALL ER 199) has penned '"Judicial Review' is a great weapon in the hands of the judges; but the judges must observe the Constitutional limits set by our parliamentary system upon the exercise of this beneficial power".

 

In Lonrho plc Vs. Secretary of State for Trade and Industry (1989 (2) ALL ER 609). Lork Keits observed:

 

"Judicial Review is a protection and not a weapon"

 

In Amin, Re(1983(20 ALL ER 864). Lord Fraser explained that:

 

"Judicial Review is concerned not with the merits of a decision but with the manner in whichthe decision was made......Judicial Review is entirely different from an ordinary appeal, it is madeeffective by the Court quashing administrative decision without substituting its own decision, and is to be contrasted with an appeal where the appellate tribunal substitutes its own decisions on the merits for that of the administrative officer."

 

In Asif Hameed Vs. Slate of Jammu and Kashmir (1989 Supp. (2) SCC 364), the Supreme Court observed "Judiciary has no power over sword or the purse; nonetheless it has power to ensure that the aforesaid two main organs of State function within the constitutional limits and if it is not so, the Court must strike down the action. It is the sentinel of democracy. Judicial Review is a powerful weapon to restrain the unconstitutional exercise of the power by the legislature and executive. The expanding horizon of judicial review has taken in its fold the concept of social and economic justice. While exercise of powers by the legislature and executive is subject to judicial restraint, the only check on our own exercise of power is the self-imposed discipline of judicial restraint." It has been further held that" while exercising power of judicial review of administrative action, the Court is not an appellate authority. The Constitution does not permit the Court to direct or advise, the executive in matters of policy or to sermonize qua any matter which under the Constitution lies within the sphere of legislature or executive, provided these authorities do not transgress their constitutional limits or statutory powers"

 

The locus classicus decision in Associated Provincial Picture Houses Vs, Wednesbury Corporation (1947 (2) ALL ER 680 (CA), popularly known as 'The Wednesbury case' had set down various basic principles relating to judicial review of administrative decision and statutory direction. Lord Greene dealt with the concept of reasonableness in exercise of judicial review power and explained that "a person entrusted with a discretion must, so to speak, direct himself properly in law. He must call his own attention to the matters which he is bound to consider. He must exclude from his considerations, matters which are irrelevant to what he has to consider. If he does not obey those Rules, it may truly be said and often is said, to be acting unreasonably. Similarly, there may be something so absurd that no sensible person could even dream that it lay within the powers of the authority.... In another it is taking into consideration extraneous matters. It is unreasonable that it might almost be described as being done in bad faith; and in fact, all these things run into one another".

 

Lord Greene also observed that'".... it must be proved to be unreasonable in the sense that the Court considers it to be a decision that no reasonable body can come to. It is not what the Court considers unreasonable...."

 

In G.B. Mahajan and others Vs. Jalgaon Municipal Council and others ((1991) 2 SCC 91). Venkitachellai J, applied 'reasonableness' as the test of validity of administrative action. It has been held therein that" a thing is not unreasonable in the legal sense merely because the Court thinks it is unwise.....the reasonableness in administrative law must distinguish between proper use and improper abuse of power". The Supreme Court applied the Wednesbury Principles in Tata Cellular Vs. Union of India ((1994) 6 SCC 651), and catalogued the principles of limitation as (1) whether decision-making authority exceeded its powers? (2) Committed an error of law, (3) committed a breach of the rules of natural justice, (4) reached a decision which no reasonable Tribunal would have reached or, (5) abused its powers.

 

In a recent decision Indian Railway Construction Company Vs. Ajaykumar ((2003) 4 SCC 579), rendered by the Supreme Court in the year 2003 it has been held by placing reliance on the weighty reasonings in the decision in 'the Wednesbury case' that"... to arrive at a decision on 'reasonableness' the Court has to find out if the administrator has left out relevant factors or taken into account irrelevant factors. The decision of the administrator must have been within the four corners of the law and not one which no sensible person could have reasonably arrived at, having regard to the above principles and must have been a bonafide one. The decision could be one of many choices open to the authority but it was for that authority to decide upon the choice and not for the Court to substitute its view". It went on to hold that "to characterise a decision of the administrator as 'irrational' the Court has to hold, on material, that it is a decision 'so outrageous' as to be in total defiance of logic or moral standards".

 

A decision which is perverse, that is to say, a decision reached without any evidence or material in support of or a decision shown to be vitiated by any error of law apparent on the face of the record is amenable to the power of judicial review and the Court/Tribunal is bound to interfere with that decision. In the decision in Kerala Solvent Extractions Ltd. Vs. Unnikrishnan (1994 (1) KIT 651), the Supreme Court dealing with the submission that the laxity of judicial reasoning will imperceptibly introduce slackness and unpredictability in the legal process and in the final analysis, corrode legitimacy of the Judicial Process has held that "in recent times, there is an increasing evidence of this, perhaps well-meant but wholly unsustainable tendency towards a denudation of the legitimacy of Judicial Reasoning and process. The reliefs granted by the Courts must be seem to be logical and tenable within the framework of the law and should not incur and justify the criticism that the jurisdiction of Courts tends to degenerate into misplaced sympathy, generosity and private benevolence. It is essential to maintain the integrity of legal reasoning and the legitimacy of the conclusions. They must emanate logically from the legal findings and the judicial results must be seen to be principled and supportable on those findings. Expansive judicial mood of mistaken and misplaced compassion at the expense of the legitimacy of the process will eventually lead to mutually irreconcilable situations and denude the judicial process of its dignity, authority, predictability and respectability".

 

Recently, Arijit Pasayat J. in a vintage decision in Uma Devi Nambiar and Others Vs. T.C. Sidhan (2004 (2) KLT 75 (SC) = (2004) 2 SCC 321), has held that "the word 'discretion' standing single and unsupported by circumstances signifies exercise of judgment, skill or wisdom as distinguished from folly, unthinking or haste; evidently therefore a discretion cannot be arbitrary but must be a result of judicial thinking. The word itself implies vigilant circumspection and care; therefore, where the legislature concedes discretion it also imposes a heavy responsibility". In the above judgment the observation of Lord Camden, LCJ., in Hindson and Kersey, (1680) 8 How, St. Tr. 57 that "the discretion of a Judge is the law of tyrants; it is always unknown. It is different in different men. It is casual and depends upon constitution, temper, passion. In the best it is often times caprice; in the worst it is every vice folly and passion to which human nature is liable." has been quoted to expose the in-built danger within the power. The Supreme Court has elucidated the judicial discretion that "If a certain latitude or liberty is accorded by statute or rules to a judge as distinguished from a ministerial or administrative official, in adjudicating on matters brought before him, it is judicial discretion. It limits and regulates the exercise of the discretion, and prevents it from being wholly absolute, capricious or exempt from review. Judicial discretion is the concomitant of the power of Judicial Review and the exercise of the power of Judicial Review is controlled by the restrictions and limitations that are the concomitance of judicial discretion. The parameters for adjudging the legality or otherwise of an administrative decision are equally applicable for the exercise of judicial discretion which is vouched by an impressive array of authorities.

 

4. Judicial Decorum

 

Judicial decorum is a facet of judicial discretion and both should go in tandem. It must be the endeavour of both the judges and lawyers to maintain the dignity and decorum of the Court. In the decision in Chetak Construction Ltd. Vs. Om Prakash (1998 (4) SCC 577, it has been observed that "The judges are obliged to decide cases impartially and without any fear or favour.......It is of utmost importance to remember that Judges must act as impartial referees and decidecases objectively, uninfluenced by any personal bias or prejudice. A Judge should not allow his judicial position to be compromised at any cost. This is essential for maintaining the integrity of the institution and of public confidence in it. The credibility of this institution rests on the fairness and impartiality of the Judges at all levels. It is the principle of highest importance for the proper administration of justice that judicial powers must be exercised impartially and within the bounds of law. Public confidence in the judiciary rests on legitimacy of judicial process. Sources of legitimacy are in the impersonal application by the Judge of recognised objective principles which owe their existence to a system as distinguished from subjective moods, predilections, emotions and prejudices." In State of Karnataka Vs. Registrar General, High Court of Karnataka ((2000) 7 SCC 333), the Supreme Court exhorted that" Judicial decorum requires that Judgments and Orders should confine to the facts and legal points involved in the particular cases which Judges deal with. May be, sometimes Judges would, perhaps wittingly or even unwittingly, jut outside the contours of litigation, but even such overlappings should be within the bounds of propriety and sobriety. But there is no justification for traversing so far beyond the canvass as was done by the High Court in this case or to cover areas which are grossly extraneous to the subject-matter of the case". It is, therefore, necessary that the Courts and Tribunals should avoid embarking on unchartered oceans of justice and equity but should exercise discretion vested with it in accordance with judicial considerations and well established principles.

 

5. Abuse of Discretion

 

Abuse of power is often referred to in contradistinction to fairness in action. Obligation to act fairly was evolved to ensure the rule of law and to prevent failure of justice. Administrative authorities as also the Courts and Tribunals cannot abuse or pervert the discretionary power merely because the power is discretionary. The discretionary power vested with the Courts and Tribunals should be exercised legitimately without fear or favour. Discretionary power should not be exercised malafide or with oblique motives or to favour a person or body of persons. The discretionary power should be exercised to grant relief to a person to which he is legally entitled and to refuse relief by giving a distorted sense to the rule or law applicable is abuse of power. Non-exercise of power vested with the Courts or Tribunals is also an instance of abuse of power and the expression 'abuse of power' comprehends a variety of conduct and the endeavour of the Courts and Tribunals should be to render justice and not to deny it on extraneous or irrelevant considerations. If the power has been exercised on a non-consideration or non-application of mind to relevant factors, the exercise of discretionary power falls within the mischief of 'abuse of power'. "Judicial discretion when facts for its exercise are present, has a mandatory import" ((1980) 4 SCC162). "Discretion becomes aduty when the beneficiary brings home the circumstances for its benign exercise" ((1980) 4 SCC 162).

 

6. Exercise of Discretion on equitable grounds

 

The judicial rule of law for administering justice is to bring out the value judgments incorporated in the statutes. In the decision in AT.S. Bhoir's ((2001) 10 SCC 264), case the Supreme Court held that "Adjusting equities in exercise of extraordinary jurisdiction under Article 226 is one thing, and the High Court assuming the role of the Central Government and the Medical Council under Section 10A of the Act is a different thing. The Court cannot direct to waive the mandatory requirement of law in exercise of its extraordinary powerunder Article 226. It is not permissible for the High Court to di rect an authority under the Act to act contrary to the statutory provisions. The power conferred on the High Court by virtue of Article 226 is to enforce the rule of law and ensure that the State and other statutory authorities act in accordance with law." Again the Supreme Court reiterated the legal position in an emphatic language that "The High Court under Article 226of the Constitution is required to enforce rule of law and not pass an Order or direction which is contrary to what has been injuncted by law" ((2002) 2 SCC 560).

 

The unfortunate consequence that a person would suffer by reason of the setting aside of his appointment after a long period cannot be avoided on any equitable considerations as has been held in K. Shekhar Vs. V. Indiramma and others ((2002) 3 SCC 586).

 

7. Discretion of the Courts and Tribunals in entertaining petitions without exhausting anterior remedies

 

Alternative remedy is not an absolute bar for entertaining petitions. It is one of discretion and does not touch upon the jurisdiction of the Court or Tribunal. It is now well settled that the want of jurisdiction if is patent on the face of it, the alternative remedy will not stand in the way of entertaining the petition and granting relief. Likewise, if the proceedings complained of are vitiated by non-observance of the principles of natural justice, then the decision would be void and the alternative remedy cannot be barricaded off the entrance to the Court or Tribunal. If it is a fact that the alternative remedy is too costly, or ineffective or is cumbersome, the alternative remedy would be unavailing. There is a plethora of case-law on the point. A specific and clear rule has been laid down in State of UP Vs. Mohd. Nooh (AIR 1958 SC 86) as follows:

 

"But this rule requiring the exhaustion of statutory remedies before the writ will be granted is a rule of policy, convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued inspite of the fact that the aggrieved party had other adequate legal remedy."

 

A Constitution Bench of the Supreme Court has affirmed the above decision in. A. V. Venkiteswaran, Collector of Customs Vs. Ram Chand Shobraj Wadhwani (AIR 1961 SC 1506)."......We needonly add that the broad lines of the General Principles on which the Courtshould act having been clearly laid down, their application to the facts of each particular case must necessarily be dependent on a variety of individual facts which must govern the proper exercise of the discretion of the Court, and that in a matter which is thus pre-eminently one of discretion, it is not possible or even it were, it would not be desirable to lay down inflexible rules which should be applied with rigidity in every case which comes up before the Court."

 

In Whirlpool Corporation Vs. Registrar of Trade Marks ((1998) 8 SCC1), the Supreme Court held and observed "Much water has since flown under the bridge, but there has been no corrosive effect on these decisions which though old, continued to hold the field with the result that the law as to the jurisdiction of the High Court in entertaining a writ petition under Article 226 of the Constitution inspite of the alternative statutory remedies, is not affected, specially in a case where the authority against whom the writ is filed is shown to have had no jurisdiction or had purported to usurp jurisdiction without any legal foundation."

 

In the decision in Harbanslal Sahnia and another Vs. Indian Oil Corporation Ltd. and others ((2003) 2 SCC 107) the Supreme Court has held that "The rule of exclusion of writ jurisdiction by availability of an alternative remedy is a rule of discretion and not one of compulsion. In an appropriate case, inspite of availability of alternative remedy the High Court may still exercise its writ jurisdiction in at least three contingencies: i) where the writ petition seeks enforcement of any of the fundamental rights; ii) where there is a failure of principles of natural justice or iii) where the orders or proceedings are wholly without jurisdiction or the virus of an Act is challenged." In T.K. Rangarajan Vs. Government of Tamilnadu and others (2003 (3) KLT 86 (SC) = (2003) 6 SCC 581), the Supreme Court reiterated that under Article 226 of the Constitution, the High Court is empowered to exercise its extraordinary jurisdiction in unprecedented extraordinary situation having no parallel and that extraordinary powers are required to be sparingly used and the facts of the case revealed that it was an extraordinary case, which call for interference by the High Court, as the State Government had dismissed about two lakh employees for going on strike.

 

8. Conclusion

 

This survey is an endeavour to indicate the extent of the range of judicial discretion. In popular thought and speech 'judicial discretion' is unlimited and unbridled. However, the power of judicial discretion can be exercised only within the confines of the standards of judicial fairness and within the frame work of law. To summarise:-

 

i) It is not legally permissible, in discretion, to act contrary to the well established principles of law and procedure. The decisions of Court or Tribunal cannot be delphic or oracular but must be predictable which is the quintessence of rule of law. Any unjustifiable departure therefrom would strike at the legitimacy of judicial process.

 

ii) Judicial discretion does not encompass the power to modify or qualify the law. A Court or Tribunal is legally obliged to follow reasonable reasoning and to apply judicially approved rules of conscience.

 

iii) The power of judicial discretion is coupled with the duty to act judicially, fairly and reasonably.

 

iv) The power of the Court is not only injunctive in ambit but is also remedial in scope and it is the solemn duty of a Court or a Tribunal to grant relief if the conditions do exist for granting it and refusal of relief, in discretion, can be done only if relief can be obtained by any other process of law.

 

Above all, 'impartiality' is the lodestar of judicial discretion.

 

Joseph Addison had said.-

 

" Justice discards party, friendship, kindred and is, therefore, always represented as blind".

 

"Justice carries a balance. The balance has always been the symbol of even-handed justice."

 

Lord Denning in Johnes Vs. National Coal Board (1951) 2QB 55 at 64 said that "Let the advocates one after the other put the weights into the scale- nicely calculated less or more- but the judge at the end decides which way the balance tilts, be it ever so lightly"

 

A fair administration of justice is the goal of our Constitution and the Judicial discretion must be applied with increasing sophistication to render even-handed justice to uphold the rule of law.

 

2015(2) KLT 1 (SC) -- Shreya Singal v. Union of India–
Expressive  Overreach

 

(By P. Rajan, Advocate, Thalassery)

 

Accolades galore, lauded with- Superlatives like land mark, historic, momentous – are only few, described by netizens and media the judgment rendered by Supreme Court, when it struck down Section 66A of the Information Technology Act, 2000 as it is violative of Article 19 (1) (a) of the Constitution – also Section 118(d) of the Kerala Police Act, 2011 by the same verdict as the provision is vague having a chilling effect on freedom of free speech. The judgment was relating to a public interest litigation, when two cases registered under Section 66A of the I.T.Act stirred a hornet’s nest some time back- arrest of two girls from Maharashtra for posting and liking a face book comment criticizing the shutdown of Mumbai Markets due to the death of Shiv Sena Supremo, Bal Thackerray and arrest of a Jadavpur University Professor for posting a cartoon in Cyber Network, Satirical though, allegedly ridiculed West Bengal Chief Minister Mamata Banerjee. 

 

Apex Court in the judgment considered mainly the principles laid down regarding freedom of speech as envisaged under the Constitution and the reasonable restriction theory detailed in Article 19(2), basing on case laws.  It is to be noted that the twin cases stated above registered under the I.T.Act as the facts revealed, it was nothing but police’ ignorance rather excess without scrutinizing the legal requirement to press in to service Section 66A of the I.T.Act, the comments allegedly made so also the contents. It is fundamental that, if the message or tweet became viral, intention was to cause annoyance or having menacing character under cyber law, Section 66A is the relevant provision to be applied against the offender and no protection can be claimed in the guise of constitutional rights.  Freedom of speech does not mean, liberty to propagate anything, one likes, by any means. I.T.Act 2000 was introduced after proper study of similar laws prevalent in countries like U.S.A., U.K. and Australia and after due consultation with several stake holders- standing committee of the Parliament also scrutinized before presenting the relevant bill.

 

Supreme Court in the verbose ruling considered identical provisions in the Penal Code when an offensive or known to be false message is published with the aid of computer resource, ie. Sections 294 and 499 I.P.C..  Section 499 I.P.C. is meant for two types of offences coming within the ambit of that provision, libel and slander.  The former can be proved with documentary evidence but the later is harder to prove by the aggrieved but cyber crime cannot be brought within the purview  of Section 499 I.P.C. because I.T.Act is strictly meant for cyber crimes only and no specific law is enacted to regulate and control cyber space use, like internet, face book being accessed by savy persons (paras. 42, 43).  In prosecutions under 499 I.P.C. if the subject matter is a printed material like news paper report there is P.R.B Act,  Press Council of India Regulations too, to monitor and favour  fair journalism.  Apart from I.T.Act there is only intermediary guidelines Rules 2011 to oversee cyber crimes, not meant to strangle fair practice of freedom of expression. To matters published in print media, access is not available to all but internet, face book, etc. can be accessed even by an illiterate as just a click is required.  Manifold increase of electronic media pave way for use and misuse by several and even national security would be affected unless mendacious messages are checked and men behind it are brought to book. Posts and tweets derogatory, black mailing affect even tolerant groups resultantly negative fallout would be the outcome. If there is no requisite penal provision to prosecute cyber crime offenders it would be a fear free period for imposters and persons who are active on social media with questionable intention.

 

In the two cases registered under Section 66A of the I.T.Act, mentioned earlier legality and maintainability were the issues came up for consideration before the Supreme Court. As stated, both the cases were registered not on legal grounds but on misconception of law or on extraneous considerations. The Court could have ordered termination of further proceedings in those cases on the ground of abuse of process of law, desirable to direct for re visit of the provision of law in question instead of scrapping the section as such, in effect thrown the baby away with the bath water.

 

Expressions in Section  66A are open ended and undefined according to the Apex Court, but the wordings of the sub clauses would go to show that the provision as a whole is self explanatory and by visualizing facts of each case, cases can be registered and proved by scientific evidence. Even simple messages through handsets are being stored in servers first and data could be procured by getting the details from mobile phone companies. Identical provision in the Kerala Police Act, Section 118 being in a state enactment words seem to be vague and in a way Section 66 A overrides Kerala Police Act, Section 118. The observations made by the Apex Court regarding this provision of Police Act are just and legal as it appeared to be not well defined, on the other hand Section 66A is self serving, satisfactorily worded capable of proper application.  As the provision is erased, masqueraders and imposters can avail social media as they wish for wrong reasons by spreading incorrect messages, to black mail persons, relating to national security matters also as no law regarding violation of cyber laws is available to bring to book such persons.

 

A lie can travel half way around the world, while the truth is putting on its shoes.                                                                                                                                 -- Mark Twain

 

What Everybody Should Know About

Employees' State Insurance Act & Scheme

 

(By Advocate H.L. Kumar)

 

The Employees' State Insurance Corporation has enhanced the wage ceiling for the purpose of coverage of employees under the ESI Scheme from the existing Rs.6,500 to Rs.7,500 per month. The new wage ceiling came into force from 1.4.2004.

 

The enhancement of wage ceiling follows the notification dated 4th March, 2004 by the Central Government subsequent to the decision taken by the Corporation at its meeting on December 16. The upward revision of the wage ceiling by Rs.1,000 is expected to recover over four lakh additional employees who had gone out of the social security net over the last few years. The existing wage ceiling of Rs.6,500 that had been in force since January 1. 1997.

 

The proposed decision of ESIC for widening the coverage of factories and the establishments with 10 employees has not been notified since it will be possible only when the Employees' State Insurance Act would be amended by the Parliament.

 

Steps to be taken by the Employers

 

•To submit a list of employees who become coverable alongwith their Declaration Forms (Form-1) to the Local/Branch Office of the ESI Corporation.

 

•To obtain the registration of those employees revalidated who had gone out of coverage with the crossing of wage limit, by submitting their necessary particulars and ESI identity cards and also apply for issuance of fresh family photo identity cards for them from the ESIC Branch Office concerned.

 

•To deduct ESI contribution @ 1.75% from the wages of such employees regularly from April, 2004 onward and deposit the same alongwith Employer's share of contribution (@ 4.75% of the wages) with the already specified Banks within 21 days of the month following in which the wages fall due.

 

Procefure for coverage of an eligible employee

 

The Employer shall submit Employees Declaration Form (Form 1) in respect of every individual employee separately for further necessary action by the ESIC Local Office/Regional Office ensuring that -

 

• All particulars in each column are legibly and properly filled.

 

•The details of family viz, name, age, relationship, mark of identification etc. should invariably be indicated to enable the members of family obtain medical care.

 

•The particulars of 'nominee' must be given in all the cases.

 

•The Declaration Form of female employee must be rubber stamped 'Female'.

 

•When the Declaration Form has been filled up and signed by an employee, it is to be countersigned by the employer and forwarded to an 'appropriate office' with a statement in duplicate known as the Return of Declaration Forms, separately for male and female employees.

 

•The Declaration Form must be submitted within 10 days of the date of entry of an employee into insurable employment.

 

•Two postcard size family photographs of every individual employee should be furnished along with the Declaration Form.

 

•The appropriate office of ESI will allot the Insurance No. and return one copy of Declaration Form indicating Insurance Numbers along with the Temporary Identification Certificates. The employer shall enter the Insurance Nos. in the register in Form 7 maintained under Regulation 32 of ESI (General) Regulations, 1950.

 

•On receipt of the documents mentioned above, the employer shall hand over the Temporary Identification Certificates to the employees to enable them to avail medical treatment from designated ESI dispensary or panel clinic, etc. This certificate would, however be, valid for three months and can be revalidated for a further period of three months by the appropriate office/employer, in case the Permanent Identity Card is not received within three months.

 

•On receipt of Permanent Identify Cards from the appropriate office, the employer will hand over the same to those employees continuing in employment for three months or more and obtain their signature/thumb impression on Identity Card in the space provided. The Temporary Identification Certificate/ Permanent Identity Card of a person who leaves service before three months should be returned to the local office of registration.

 

•If the Temporary Identification Certificate is also not received and any insured person or his/her family member needs medical treatment, Form ESIC-86 may be issued by the employer which also remains valid for three months.

 

IMPORTANT CLARIFICATIONS

 

Continuous Applicability of the Act

 

By an amendment of the ESI Act in 1989, it has been provided that a factory or an establishment shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time falls below the limit specified by or under this Act or the manufacturing process therein ceases to be carried on with the aid of power.

 

Advantages of employers on coverage under ESI

 

•The employers will be absolved of all their liabilities of providing medical facilities to employees and their dependants in kind or in the form of fixed cash allowance, reimbursement of actual expenses, lump sum grant or opting for any other medical insurance policy of limited scope unless it is a contractual obligation of the employer.

 

•There will be exemption from the applicability of the Maternity Benefit Act and the Workmen's Compensation Act in respect of employees covered under the ESI Scheme.

 

•The employers will absolved of any responsibility in times of physical distress of workers such as sickness, employment injury or physical disablement resulting in loss of wages, as the responsibility of paying cash benefits shifts to the Corporation in respect of insured employees.

 

•The sum paid by way of contribution is deducted in computing 'income' under the Income Tax Act.

 

Apprentices/Trainees

 

Under S.2(9) of the ESI Act inter alia providing that any person engaged as apprentice. not being an apprentice engaged under the Apprentices Act, 1961, or under the standing orders of the establishment will be covered under the Act.1 Even unpaid trainees provided with boarding and lodging will also be covered under the ESI.2

 

Clubbing of branches for coverage

 

The ESI Act will apply on all branches of an establishment when total number exceeds 203.

 

ESI Act will be applicable upon the employees working in sales depots and offices of The Bata India since its factory is covered the Act4.

 

Employees engaged by a contractor

 

The employees engaged by a contractor are squarely to be covered under ESI Act and the Scheme thereto. A Division Bench of the Bombay High Court has held that the employees of the contractors engaged for repairs, site clearing, construction of buildings, etc. are engaged in an activity which is essentially required for the running of the factory and is ancillary or incidental to and has relevance to or link with the object of the factory.

 

Kirloskar Pneumatic Company Ltd. v. Employees' State Insurance Corporation, 1987 ILLN  906 (Bom.HC).

 

Partner of a firm

 

The Supreme Court has held that a partner engaged for the work of the factory or establishment and being paid monthly will not come within the purview of an 'employee' as defined in S. 2(9) of the ESI Act

 

Employees' State Insurance Corporation v. Apex Engineering (P) Ltd., 1997 LLR 1097 (SC).

 

Managing Director

 

Managing Director of a Company will be covered under the Act if his salary is below prescribed ceiling.

 

E.S.I. Corporation v. Apex Engineering (P) Ltd., 1997 LLR 1097 (SC).

 

Casual/Temporary Employee

 

Casual or temporary employees will be liable to be covered under the Act from the date of their joining the service.

 

Regional Director, E.S.I. Corporation v. Fashion Fabrics, 1991 LLR 324 (Ker. HC).

 

Professional Consultants

 

The professionals engaged are of regular nature and being paid monthly, hence they will be covered under the Scheme. However, the payment made to Labour Consultants, Lawyers, Engineers, Counsels, Chartered Accountants does not constitute wages and no contribution is payable on such amount.

 

Commission Agents

 

The commission agents are not coverable under the ESI Act. But they are employed as representatives and incurring other expenses besides commission, such persons are coverable under the provisions of ESI Act.

 

Loaders & Unloaders

 

Merely because the loaders & unloaders have not been able to get the benefit, it will not be a ground for non coverage under ESI Act.

 

E.K. Haj Mohamniadmeera Sahib and Sons v. Regional Director, Employees' State Insurance Corporation, 2003 LLR 308 (Mad. HC).

 

Availability of ESI benefits away from the place of work

 

If an insured person who is temporarily away on leave for a period of up to three months from his place of employment to another area where medical care under the Scheme is available, he can get medical treatment if he takes a certificate of temporary residence from his employer.

 

Procedure for availing sickness benefits

 

The employee is issued medical certificate from ESI Dispensary/Hospital. The medical certificate issued by the dispensary is deposited with the local office of the ESI Corporation from where the employee gets the payment.

 

Entitlement of sickness benefits

 

Entitlement to sickness benefit depends on the entry of the employee in a contribution period and subject to the payment of contribution for half the number of days in one contribution period and duration of sickness benefit is 91 days in two consequent benefit periods. The benefit periods corresponding to contribution periods are as follows :

 

Contribution Period                                  Benefit Period

April to September                                    January to June

October to March                                       July to December

 

Entitlement of medical benefit to family members

 

The Medical Benefits i.e. treatment in the dispensary and hospital is available and provided not only to the insured person but also to the family members of the insured person from the date of employment itself. However, sickness benefit is not provided to the members of the family as sickness benefits are cash benefits provided to the insured person for the loss of wages during sickness. For the purpose of obtaining medical treatment, the family consists of the following:

 

(a) A spouse

 

(b) Minor legitimate or adopted child dependent upon the insured person.

 

(c) Child who is wholly dependent on the earnings of insured person and who is

       (i) receiving education, till he or she attains the age of 21 years.

       (ii) an unmarried daughter.

 

(d) An infirm child - Physical, Mental or Accidental - so long as the infirmity lasts.

 

(e) Dependent parents.

 

Non availability of disability benefit

 

Benefit of disablement under ESI Act will not be available to an employee who has crossed the wage ceiling at the time of injury even though contributions for that period have been paid.

 

Employees' State Insurance Corporation (represented by Regional Director), Cliennai v. M. Ganesan, 2003 LLR 781:2003-11LLN 646:2003-11LLJ 895 (Mad. HC).

 

Availability of benefits - Even when contributions are not paid

 

Non-payment of contributions won't affect for availing of ESI benefits by an employee.

 

Bharaqgath Engineering v. R. Ranganayaki & Ann, 2003 LLR 227 (SC).

 

Medical benefit to superannuated employee

 

An insured person who leaves the insurable employment on attaining the age of superannuation would to entitled to medical benefit for himself and his spouse provided he pays the contribution at the rate Rs.10 per month in lump sum for one year. However, employee must have been member of ESI for 5 years before his superannuation to avail medical benefit after retirement.

 

Common Came v. Union of India & Ann, 1998 LLR 577:1998 (79) FLR 954 (Del. HC).

 

Liability for compensation - An accident to and fro of the premises

 

Entitlement of accident compensation to an employee to and fro of his place of work. ESI Corporation will not be liable to pay compensation to an injured employee in an accident of a distance of beyond one km. from the premises of the establishment.

 

Regional Director, ESI Corporation & Ann v. Francis De Costa & Anr., 1996 LLR 953 (SC).

 

Availability of benefits - When contributions are not paid

 

Non-payment of contributions won't affect for availing of ESI benefits by an employee.

 

Bharaqgath Engineering v. R. Ranganayaki & Anr., 2003 LLR 227 (SC).

 

On coverage - Sick leave can be discontinued

 

An employer can withdraw the sick leave being granted to the employees covered under ESI Scheme. However, in case the management so desire, they may continue this privilege as an additional incentive.

 

Voluntary coverage of an establishment

 

Unlike Employees' Provident Funds & MP Act, under ESI Scheme, there is no provision for voluntary coverage of an establishment.

 

Non-availability of funds - No excuse for non-payment of contribution

 

There is no provision to waive off the amount due on account of contribution, interest and damages. However, the damages can be waived off in relation to a factory or establishment which is declared as sick industrial company and in respect of which a rehabilitation scheme has been sanctioned by the board for industrial and financial reconstruction. The quantum of relief is mentioned in Regulation 31-C of ESIC (General) Regulation, 1950.

 

Continuation of coverage of employee - After his wages are above prescribe ceiling

 

In case the average wage for the month i.e. daily rate multiplied by 26 is more than Rs.7500 the employee is not coverable under the scheme but in case the employee is already covered under the scheme, he/she will continued to be covered till the end of contribution period.

 

Interest and damages for late deposit of contribution

 

The interest and damages are calculated after 21 days from the date of C-18 (demand notice) issued by the ESIC.

 

Period of delay in payment of contribution            Rate of damages on the amount due

i)Upto less than 2 months                                        5%

ii)2 months and above but less than 4 months    10%

iii)4 months and above but less than 6 months   15%

iv)6 months and above                                             25%

 

ESIC debarred in making claim after 5 years

 

The ESI Corporation will be debarred from making any claim after 5 years from the date on which it has arisen by virtue of S.77(la)(b) proviso. Hence, the Full Bench set aside the judgment of Division Bench in holding that by a legal fiction contained in proviso (b), the cause of action in respect of claim by the Corporation from the principal employer arises on the date on which the Corporation makes the claim for the First time.

 

E.S.I. Corporation v. Excel Glasses Ltd., 2003 LLR 987:2003-IIILLN 1142 (Ken HC Full Bench)

 

Coverage of a Club

 

A Club may not be a 'shop', but for the coverage of ESI it would certainly be so.

 

The Bangalore Turf Club Limited v. Regional Director, ESI Corporation, 2003 LLR 178 : 2003-1LU 73 (Karn. HC).

 

Difference between Contribution & Benefit Period

 

Contribution Period                               Corresponding Benefit Period

April to September                                 January to June

October to March                                    July to December

 

For getting the Sickness Benefit, it is necessary that the insured person should have paid the contribution for half the number of days in one contribution period, only then the insured person will be eligible to get sickness benefit in the corresponding benefit period only and not earlier. Some other benefits like Disablement Benefit, Dependent Benefit, Medical Benefit and Funeral Benefit are available to the insured person from day one of his/her employment and the criteria of contribution period vis-a-vis benefit period is not applicable in these benefits. Similarly, an insured person is also eligible for vocational rehabilitation and physical rehabilitation from day one. For availing the Maternity Benefit, an insured woman must have paid contribution for a minimum of 80 days in one or two consecutive contribution periods.

 

Manufacturing process - Interpretation of

 

The term 'manufacturing process' is not restricted to an activity which may result into outcome of processed product or manufacturing any item hence a petrol pump will be covered under the ESI Act.

 

Qazi Noorul Hasan Hamid Hussain Petrol Pump & Ann v. Dy. Director, Employees' State Insurance Corporation, Kanpur, 2003 LLR 476 (AH. HC).

 

Aids to ESI record keeping

 

                                                        Rubber Stamps

(i).Rubber stamp of abour 1" size       For affixing in all correspondence, returns, forms

     for employer's Code Number          and documents

 

(ii).Rubber stamp showing the            To be affixed on the Declaration Forms, Temporary

     name and designation of the          Identification certificates Officer who has to

     the various documents                    countersign Return of declaration Forms, Return

                                                                  of Contributions, Accident Reports

 

(iii).Rubber stamp showing                  To be affixed on the Declaration Forms, Temporary

     name, address and Code                Identification Certificates, Return of Declaration

     No. of the employer                          Forms, Return of Contributions, Accident Reports,

                                                                  etc.

 

(iv).A rubber, stamp with                       For affixing on Declaration Forms Return of

     the word 'FEMALE'                           Declaration Forms and other documents

                                                                   in respect of female employees.

 

Procedure for availing maternity benefit

 

Maternity benefits are available under the provisions of ESI Act. Duration of maternity benefit is 12 weeks in case of normal delivery and 6 weeks in case of miscarriage. The period can be extended by 4 weeks on medical advice. Maternity benefit is available subject to the condition of payment of contribution for a minimum of 80 days in one or two consecutive contribution periods and the rate of payment is double the standard benefit rate i.e. approximate full wages. The benefits can be claimed on the basis of medical certificate issued by the dispensary which has to be deposited in local office and local office will make payment.

 

Principal employer - Who is

 

An occupier of the factory under the Factories Act need not necessarily be the principal employer under the ESI Act, who can be even an officer or the manager of the factory.

 

Regional Director, ESlC v. Fact Engineering Works & Ors., 2003 LLR 619:2003 (97)FLR 308(Ker. HC).

 

Deposit of ESI contribution does not depend on disbursement of wages

 

Timely payment of ESFs contributions is the responsibility of the employer and does not depend upon actual disbursement of wages and, as such, an employer cannot escape its obligation by taking the plea that the Company has become sick and the scheme for its rehabilitation has been sanctioned by BIFR.

 

Employees' State Insurance Corporation, Sub-Regional Office, Hubli v. A.P.S. Star Industries Ltd., Dliarwad, 2003 LLR 972:2003-l 11 LLJ 411:2003 (98) FLR 1207 (Karn. HC).

 

Maintenance of record

 

An employer is required to maintain -

 

(i) Attendance Register in respect of all the employees including employees engagedimmediate employer/contractor;

 

(ii) Wage Register;

 

(iii) Register under Regulation-32;

 

(iv) Accounts Book;

 

(v) Cash Book/Books of Account, Ledgers, petty cash book including bills and vouchers;

 

(vi) Other relevant records to show the labour charges paid to the labour engaged in

construction, repair & maintenance etc.;

 

(vii) Inspection Book.

 

Prosecution for violation of Act & Scheme

 

The Chairman and Director of a company being employer cannot escape prosecution for non-payment of ESI contributions5. However, when an accused in the capacity of the Director of a Company was not overall incharge, his prosecution for failure to pay EPF contributions will be quashed.6

 

Wages & Allowances for Contributions

 

The definition of 'wages' under Sub-s.22 of S.2 of the Act starts with the words 'all remuneration' and as such it has been attracting controversy more particularly when it does not clarify which of the allowances or perks will form the part of 'wages'. Although the definition is inclusive and exclusive both, yet this issue has repeatedly gone to courts for interpretation in innumerable cases.

 

In view of the above, it becomes imperative to know the implications of judicial interpretations of the term 'wages' besides clarification made by ESI Corporation.

 

 

To be deemed as wages                                   Not to be deemed as wages

• Basic Pay• Dearness allowance• • City           Contribution paid by the employer to any pension

compensatory allowance • Overtime                 /provident fund or under ESI Act . • Any travelling

wages (but not to be taken into account            allowance or the value of any travelling Concession

for determining the coverage of an                   conveyance allowance. ' Sum Paid to defray special

employee) • Payment for day of rest •               expenses entailed by the nature of employment Daily

Payment for any day/ period of                        allowance paid for the period spent on tour. • Benefits

Authorized leave • Bonus: other than                 paid under the ESI Scheme. •  Encashment of leave •

statutory bonus  • Payment for                         • Payment of ‘Inam’ which does not form part of the

unsubstituted  holidays • Meal /Food                terms of employment. • Washing allowance for livery

tea allowance if Paid •Payment for any             Meal /Food allowance in kind • Entertainment

• out/strike period of lock which is not               allowance • Contribution to saving scheme •

illegal • Children education allowance (not         Re-imbursible actual school fee.

being reimbursement for actual tuition fee)       

• Medical Allowance • Driver's. Allowance

• Interim Relief • Wages  for Gazetted

Holidays • Amount Paid as Compensation

at the closure of  business.

 

                                                                      

 

Further Clarification                                             Further Clarification

 

1.Conveyance Allowance                                     1Production/Incentive Bonus

Notification No.T-11/13/53 21.3.2002.                   Notification No.S-11/12/1/2002 However, the Kerala High

Regional Director ESIC, Madras                          Court has distinguished the Supreme Court

v., Sundram Clayton Ltd. & TVS.                        ruling in Whirlpool of India, LLR 431 (SC) wherein it was

Suzuki, Madras, 2004  (1) LLN 630                       Held that such payment beyond span of two months will

(Mad.HC-DB).                                                     not be wages. The High Court clarified that the

                                                                          periodicity for such payment will be immaterial. United

                                                                          Breweries Ltd. v. ESI Corpn. 2003 LLR 272 (Ker. HC)

 

2.Good work wages                                            2. Annual bonus

ModernThreads (1) Ltd. v. ESIC,

2003 LLR 861(Raj. HC)

 

3. Suspension Allowance/                                   3. Production Bonus

Subsistence Allowance                                       Instructions were issued vide letter4(2)/13/74 -lns.

                                                                                                  IV dated 2.9.1985.

 

4. Overtime Allowance Indian                               4. Canteen subsidies

Drugs & Pharmaceuticals Ltd. v.

Employees' State Insurance Corporation,

1997 LLR 1 (SC)

 

5. Layoff Compensation Vide                              5. Service Charges

instructions issued in 1968                                  Instructions Issued vide letter 4(2) 13/79- lns.

                                                                          Desk.1 dated 18.9.1979.

 

6. House Rent Allowance                                     6. Newspaper Allowance

Harihar Poly fibres v. Employees' State

Insurance Corpn., Bangalore,1984

 (49) FLR 371(SC).

 

7. Night Shift/Heat/Gas &                                    7. Saving Scheme

Dust Allowance                                                   issued vide letter No. P. 12/ 18.9.1979 . Instructions

Hariliar Pohfibres v. ESIC                                    issued Vide Memo No. P. 12/11/4/77- lns. lV

FLR 371 (SC).                                                     dated 15.1.1980

 

8. Wages and Dearness                                      8. Payment made to Rickshaw Pullers, Hathrairy Pullers

Allowance for                                                     and Truck Operators (IncludingLoading & Unloading

Unsubsiituted Holidays                                       Charges when the Loaders/Unloaders are the

                                                                          employees of the Truck Operators or Thelawalas

                                                                          supplying gas cylinder ESIC v. Technico

                                                                          , 2001 LLR358(Gau. HC)

 

9. Interim Relief                                                   9. Commission to Dealers/Agents

 

10. Attendance Bonus                                         10. Payment made to Labour Consultants, Lawyers,

                                                                          Engineers,Counsels, Chartered Accountants.

 

11 Life Insurance Premium

subsidy

 

12. Medical Allowance

Vide letter No.lns.5(5)/68-lns.III

& lns.ni /2(2)2/68 dated 24.6.1971

 

13. Bata Damoclaran v. Employees' State

Insurance Corpn., 2003 LLR 373 (Ker.HC).

 

14. Other Allowances which are                            11. Other Allowances which are not

deemed Wages:                                                 deemed wages-

(i) Matinee allowance which is being paid to         (i) Payment made on account of unavailed leave at the

employees in Cinema House,                              time of discharge.

 

 (ii) Shift allowance paid to employees who          (ii) Commission on advertisement secured for

work on shift duty at odd shifts,                          Newspapers, if not paid to the regular employee

 

(iii) Location allowance paid, In addition to           (iii) Fuel allowance/Petrol allowance

Dearness Allowance to meet the high

house rent.

 

(iv) Compensatory allowance                               (iv) Entertainment allowance

 

(v) Cash handling allowance paid to cashier         (v) Shoes allowance

 

(vi) Supervisory allowance                                   (vi) Payment made on account gratuity on discharge

                                                                                /retirement.

 

(vii) Additional pay paid to training staff               (vii) Payment made on encashment of leave.

 

viii) Charge allowance

 

(ix) Steno/Typist allowance

 

(x) Plant allowance,

 

(xi) Honorarium for looking after the hospital

/dispensary

 

(xii) Computer allowance

 

(xiii) Gestetner/Photocopier/Printer allowance

 

 (xiv) Personal/Special allowance

 

(xv) Machine allowance

 

(xvi) Convassing allowance

 

(xvii) First-aid allowance

 

(xviii) Personal allowance - Pay over and

above the basic wage and Dearness Allowance

for skill, efficiency or past good  records,

 

(xix) Area allowance - given to employees living

 in a particular area to meet the high cost of

living in that area

 

(xx) Ex-gratia payment if made within an interval 

of two monts.

 

_________________________________________________________________________________________________________________________

Food Note

1. Andhra Pradesh (P) Ltd., Hyderabad v. Employees' State Insurance Corporation, Hyderabad, 1996 LLR 827 (APHC).

2. Regional Director, ESIC, Mumbai v. Golden Gate Restaurant, 2002 LLR 341 : 2002 LIC 1570 : 2002 (92) FLR 1078 : 2002-I LLJ 972 : 2002-I LLN 957 (Bom.HC)

3. Dvent Fans (P) Ltd. v. Regional Director, ESI Corporation, Bangalore, 2001 LLR 783 (Karn. HC).

4. Bata India Ltd. Calcutta v. Employees' State Insurance Corporation & Ors., 2003 LLR 1018 : 2003-III LLJ 716 (Cal.HC)

5. Rama Kant sharma & Anr. Union of India through REGIO, 2003 LLR 166 : 2003 - 1 LLJ 689 (Pat.HC)

6. R. Dhandayuthapani v. C.R. Kaleel, 2004 LLR 369 (Mad.HC)