Allowed

Nagar Nigam Allahabad Thru Municipal Commissioner v. Employees State Insurance Corp. Ltd. and Another

Allahabad HC25 Oct 2021WRIC/14971/2009

Case brief

AI extract

What is this about?

This Court held that the Employee State Insurance Act 1948 does not apply to Nagar Nigam Allahabad, following its own precedent in Nagar Palika Parishad, Saharanpur that municipal bodies are exempt. The impugned notice was quashed and recovered amounts were ordered to be refunded.

What did the court decide?

The notice dated 03.02.2009 was quashed, and the amount recovered by the Corporation was directed to be refunded to the petitioner within three months.

Nagar Nigam Allahabad Thru Municipal… — Pension and Retirement Benefits | Allahabad HC (2021)

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Court No. - 6

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Case :- WRIT - C No. - 14971 of 2009

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Petitioner :- Nagar Nigam Allahabad Thru Municipal Commissioner Respondent :- Employees State Insurance Corp. Ltd. And Another Counsel for Petitioner :- S.D. Kautilya Counsel for Respondent :- Rajesh Tiwari,Manoj Mishra

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Hon'ble Ajay Bhanot,J.

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Heard Sri Satyavrat Sahai, learned counsel for the petitioner and Sri Rajesh Tiwari, learned counsel for the corporation.

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In this writ petition, the question raised is whether the employees of Nagar Nigam, Allahabad are covered under the Employee State Insurance Act 1948 or not.

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This Court in Nagar Palika Parishad, Saharanpur and another Vs. Deputy Director/Regional Director Employees State Insurance registered as Writ Petition No. 5473 of 2006 has held thus:

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"List revised. No one appears for respondent. Heard Sri C.K. Parekh, learned counsel for the petitioners.

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The question involved in this case is whether Employees' State Insurance Act 1948 (E.S.I. Act) applies on Municipal Corporations/Municipalities or not? Recovery Officer, ESI Corporation, Kanpur had already recovered an amount of about Rs.16 lacs from the petitioner and issued notice for payment of further amount of about Rs.17 lacs. Neither any counter affidavit has been filed nor any one is present for respondents Deputy/ Regional Director and Recovery Officer, ESI Corporation, Kanpur. Learned counsel for the petitioner has cited two authorities, one of Hon'ble Supreme Court and the

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other of Uttrakhand High Court. The Hon'ble supreme Court in its authority reported in 1996(7) SCC 488, Municipal Committee, Abohar Vs. Regional Commissioner, E.S.I. Corporation and another held that ESI Act does not apply on a Municipal corporation. That case was from Punjab. Following that judgment Uttarakhand High Court decided the case of Nagar Palika Hardwar through its Administrator Vs. E.S.I. reported in 2011 (2) LLJ 256 (UC) Corporation and others and applying the said judgment of Hon'ble Supreme Court held that Municipalities constituted under U.P. Municipalities Act are also exempted from the operation of ESI ACt. Learned counsel for the petitioners states that Nagar Palika Saharanpur which is petitioner in this writ petition has now become Corporation with effect from October 2010.

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In view of above authorities ESI Act does not apply to the petitioner; neither it applied when it was Municipality nor it applies after it became corporation. Accordingly all the orders passed and notices issued against petitioner by the authorities under ESI Act including orders and notices dated 07.12.2005, 22 or 23.12.2005, 06.12.2005, 23/28.09.2005, 20.01.2006 are set aside. The amount of Rs. 16 lacs recovered by E.S.I.Corporation from the petitioner shall be returned to the petitioner within three months from date of service of certified copy of this order upon the authority concerned of ESI Corporation.

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Writ petition is allowed.

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Learned counsel for respondents Employees State Insurance corporation (E.S.I.) and its authorities has argued that unless petitioner municipal corporation had applied for exemption under Section 90 of ESI Act and that exemption had been granted, it can not claim that it is not covered by E.S.I. Act and in this regard reference has also been made to Section 46. Learned counsel has argued that purpose of E.S.I. Act is to provide medical facilities to the employees of organised or unorganised sectors who are otherwise not having proper medical facilities.

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The judgment of the Supreme Court reported in Municipal Committee, Abohar Vs. Regional Commissioner, E.S.I. Corpn. 1996(7) SCC 488 categorically held that E.S.I. Act is not applicable upon Municipal Corporations.

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In the body of the judgment "Rs.16 lacs are replaced by "Rs.16 lacs and odd."

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Accordingly, writ petition is again allowed on the same terms on which it was allowed earlier. "

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It could not be disputed that the judgment of this Court rendered in Nagar Palika Parishad, Saharanpur (supra) is squarely applicable to the facts and this case. This case shall be governed by the holdings of this Court in Nagar Palika Parishad, Saharanpur (supra).

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Clearly in light of the laid down in Nagar Palika Parishad, Saharanpur (supra) the respondents have acted in excess of jurisdiction vested by law by issuing the impugned notice dated 03.02.2009.

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The notice dated 03.02.2009, Annexure-1 to the writ petition cannot be sustained and is liable to be quashed and is quashed.

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The amount already realized by the respondent Corporation shall be refunded to the petitioner within three months from the receipt of copy of this order downloaded from the official website of the High Court of Judicature at Allahabad. The concerned Court/ Authority/ Official shall verify the authenticity of such computerized copy of the order from the official website of High Court

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Allahabad and shall make a declaration of such

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verification in writing

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The writ petition is allowed.

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Order Date :- 25.10.2021 Nadeem

Nagar Nigam Allahabad Thru Municipal Commissioner v. Employees State Insurance Corp. Ltd. and Another

Case brief

What is this about?

What did the court decide?

Nagar Nigam Allahabad Thru Municipal Commissioner v. Employees State Insurance Corp. Ltd. and Another

Case brief

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