NEW MANGALORE PORT LIST.WORKERS MAN.COM. Vs. REG.DIR.,ESI CORP.,BANGALORE

MAJOR PORT TRUSTS ACT, 1963

Employees\' State Insurance Act, 1948

Supreme Court of India (Division Bench (DB)- Two Judge)

Appeal (Civil), 9931 of 2014, Judgment Date: Oct 28, 2014

REPORTABLE

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9931 OF 2014
(Arising out of SLP (Civil) No.11990/2008)

NEW MANGALORE PORT LISTED WORKERS ..Appellant
MANAGING COMMITTEE NOW REPRESENTED
BY NEW MANGALORE PORT TRUST

Versus

THE REGIONAL DIRECTOR, ..Respondent
ESI CORPORATION, BANGALORE,
KARANATAKA

J U D G M E N T

R. BANUMATHI, J.

Leave granted.
2. Whether or not New Mangalore Port Listed Workers Managing
Committee is an integral part of New Mangalore Port Trust (NMPT) and
whether State Government is the “appropriate government” to extend the
applicability of provisions of Employees State Insurance Act, 1948 (ESI
Act) to the New Mangalore Port Listed Workers Managing Committee are the
points falling for consideration in this appeal.
3. Brief facts leading to the filing of this appeal are as
follows:- Section 1(5) of the ESI Act enables the appropriate government
to issue notification in respect of any other establishment or class of
establishments, industrial, commercial, agricultural or otherwise. In
exercise of its power under Section 1(5) of the ESI Act, a notification
dated 22.1.1986 was issued by the Government of Karnataka to extend the
provisions of the ESI Act to certain areas, in and around the city of
Mangalore. The said notification specified that the provisions of the Act
inter-alia would apply to certain shops and establishments. Appellant-New
Mangalore Port Listed Workers Managing Committee, Panambur (for short
“Workers Managing Committee”) was established on 1.3.1983. The object of
the said Committee was to deploy listed workers for loading and unloading
of the import/export of cargo in the Mangalore Port Premises. In accordance
with the above notification, ESI Corporation by its letter dated 5.5.1987,
directed the appellant to submit Form No.1 saying that the provisions of
the ESI Act stood attracted against the appellant. The Committee raised
objections, claiming that the appellant is engaged in the loading and
unloading operations in the premises of NMPT and that the appellants and
their workmen were neither a “shop” nor an “establishment” so as to attract
the provisions of the ESI Act. Rejecting the said objections, ESI
Corporation issued Show Cause Notice dated 14.8.1987 to the Workers
Managing Committee calling upon them to make the contribution. The
Appellant approached the ESI Court under Section 75(g) of the ESI Act
claiming that the provisions of the ESI Act were not applicable to them as
they were governed by the provisions of Major Port Trust Act, 1963 and that
the Central Government is the appropriate government with respect to the
appellant-Committee. The petition filed by the appellant was dismissed by
the ESI Court by the order dated 16.4.1993. Aggrieved by the said order,
the appellant filed appeal before the High Court of Karnataka in and by
which, the High Court remanded the matter back to the ESI Court, with a
direction to frame preliminary issue regarding the applicability of State
Government’s notification to the Committee.
4. ESI Court by order dated 31.12.2001, held that the
notification of the State Government was not applicable to the Committee
as the “appropriate government” to extend the provisions of the ESI Act to
the said Committee is the Central Government. Aggrieved by the said order,
respondent-Corporation preferred appeal before the High Court of Karnataka.
The High Court set aside the findings of the ESI Court and held that the
Managing Committee is covered within the purview of the notification issued
by the State Government. Aggrieved by the said order, the appellant has
filed this appeal by way of special leave.
5. Taking us through the evidence of AWs 1 and 2, learned counsel
for the appellant contended that the workmen of the Committee were required
to function under the supervision and control of the NMPT and since the
NMPT was a Major Port governed by the Major Port Trust Act 1963, the
“appropriate government” is the Central Government and the notification
extending the provisions of ESI Act were not applicable to the appellant.
It was submitted that since the Central Government had not issued any
notification with regard to the premises of NMPT, the action of the State
Government was uncalled for. It was also argued by the appellant that the
social security measures and other benefits as provided to the workers of
the Managing Committee at par with NMPT employees, were better than the
ones envisaged under ESI Act and therefore, the demand of ESI Corporation
is not sustainable and the High Court erred in saying that the appellant is
covered under the notification.
6. Per contra, learned counsel for the respondents contended that
at the time of issuance of the notification in 1986, Workers Managing
Committee was an independent entity merely rendering services of loading
and unloading to the NMPT and the said Committee was not an integral part
of NMPT and the State Government had legitimately exercised its
jurisdiction in extending the provisions of the ESI Act to the Workers
Managing Committee. It was further contended that only in the year 1990
workmen were absorbed by NMPT and prior to that, appellant was not a part
of NMPT governed by Major Port Trust. It was urged that ESI Act is a
welfare legislation whose object is to extend the welfare coverage to a
vast segment of the employees and the notification has to be meaningfully
interpreted in the light of the objects of the welfare legislation.
7. We have considered the submissions of the learned counsel for
the appearing parties and perused the materials on record.
8. In terms of Indian Ports Act 1908, “Major Port” means any port
which the Central Government may by notification in the official gazette
declare, or may under any law for the time being in force, have declared
to be a Major Port. By notification dated 4.5.1974, New Mangalore Port was
declared as a Major Port. By notification dated 27.3.1980, the provisions
of Major Port Trusts Act 1963 were made applicable to the Major Port of New
Mangalore from 1.4.1980 and New Mangalore Port is thus a Major Port.
9. NMPL Workers Managing Committee was formed in the year 1983 and
it continued till 15.3.1990 on which date the workers of the Managing
Committee were absorbed by NMPT and they became NMPT Registered Cargo
Handling Wing. This NMPT Cargo Handling Wing is attached to the Traffic
Wing of NMPT. After the workmen of the Committee were so absorbed as
workers of NMPT Cargo Handling Wing, the appellant- Managing Committee is
no longer in existence and New Mangalore Port Trust is now said to be
pursuing this matter.
10. It is seen from the affidavit sworn in by the Secretary of NMPT
before this Court that in terms of Government of India notification dated
20.7.2009, the provisions of the ESI Act were made applicable to all port
trusts including the New Mangalore Port Trust, so that the casual and
contract employees working in the NMPT have been brought under the said
Act. The employees of the New Mangalore Port Trust inclusive of its Auto
Garage, Workshop, Registered Cargo Handling Workers Wing have been exempted
from the applicability of the provisions of the ESI Act vide Notification
dated 3.9.2010 of the Government of India. It is stated that NMPT had
filed an application for extending the exemption for a further period
from 30.9.2010.
11. The point to be considered is between 1983 till 15.3.1990
whether the rendering of services of loading and unloading by appellant-
Management Committee to NMPT was an integral part of NMPT and whether the
State Government is the “appropriate government” to issue the notification.

12. Mr. S.N. Bhat, learned counsel appearing for the appellant
submitted that prior to 15.3.1990 workers were employed as registered
Stevedores for carrying on loading and unloading work and they were
considered in a single pool on a single roll and they were allowed to enter
the dock only on the passes issued by the CISF at port. Learned counsel
further submitted that AW1-Secretary of New Mangalore Port Listed Workers
Committee and AW2 had clearly spoken that even prior to 15.3.1990, the
workers were under the administrative control of NMPT and about the various
medical facilities extended to the workers of the Committee and also the
insurance policies (LIC) and other benefits made available to the workers
by NMPT and that they were provided with various medical facilities and
other benefits and the evidence of AWs 1 and 2 was not at all considered
by the High Court.
13. By a perusal of the judgment of the High Court, it appears that
the High Court has not examined the testimony of AW-1, Secretary of New
Mangalore Port Listed Workers Committee and AW-2, Deputy Secretary of NMPT
and their evidence that prior to 15.3.1990 the workers were under the
administrative control of the NMPT. The questions viz.: (i)
whether the workers of the Managing Committee were registered as Stevedores
engaged in loading and unloading work of NMPT and whether they were under
the administrative control of NMPT; (ii) whether the services rendered by
the workers of the Managing Committee was an integral part of NMPT and if
that be so, whether the “appropriate government” is the Central Government
and (iii) whether the workers of the Managing Committee were extended
medical facilities and other benefits on par with other employees of the
NMPT and other relevant questions remain unanswered. In our view, the
High Court has not considered the above questions in the light of the
evidence of AWs 1 and 2. That apart, High Court did not have the benefit
of considering the notification issued by the Government of India dated
20.7.2009, extending the provisions of the ESI Act to NMPT and the
exemption granted by the Government of India by its notification dated
3.9.2010. Instead of this Court itself examining the above questions, in
our view, the matter be remitted back to the High Court to examine the
same.
14. In the result, the appeal is allowed and the impugned judgment
dated 5.10.2007 passed by the High Court in Miscellaneous First Appeal
No.1379/2002 (ESI) is set aside and the matter is remitted back to the High
Court for consideration of the matter afresh in the light of the above
discussion and in accordance with law. The High Court shall afford
sufficient opportunity to both parties to file additional
affidavits/counter affidavits and additional documents if any, and proceed
with the matter in accordance with law as expeditiously as possible.

…………………………J.
(T.S. Thakur)

…………………………J.
(R. Banumathi)
New Delhi;
October 28, 2014

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