Dismissed¶250

Dr K Raviprakash v. Union of India Rep by

Karnataka HC25 Jan 2025WP/11417/2015

Case brief

AI extract

What is this about?

Karnataka High Court (K.S. Hemalekha J, 25-01-2025), W.P. No.11417/2015 (L-ESI), dismissed. Constitutional validity of Sections 57 and 59 ESI Act 1948 upheld; no Article 14/19/21 violation; no insured-employee right to choose hospital (ESIC v. Workmen of ITI Ltd., ILR 1997 KAR 1433, relied on); locus standi denied to hospital managing partner; ESI scheme held distinct from Insurance Act 1938/IRDA framework; emergency reimbursement via Regulation 96-A; alternative remedies under Sections 45AA and 75 ESI Act; other precedents: Kirloskar Brothers, CESC v. Subhash Chandra Bose, Ram Lubhaya Bagga, Bandhua Mukti Morcha.

What did the court decide?

No substantive relief; the petitioner is at liberty to avail the statutory remedy under the ESI Act, if so advised, in accordance with law. ¶250

Dr K Raviprakash Vs Union of India Rep by — Karnataka HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

No substantive relief; the petitioner is at liberty to avail the statutory remedy under the ESI Act, if so advised, in accordance with law.

¶250

Issue for consideration

Whether the petitioner has locus-standi to maintain the present writ petition. +2 more

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Court's answer

The petitioner, a managing partner of the hospital who is not an insured employee or beneficiary under the ESI Act and has not impleaded the affected insured employees, lacks locus standi; the rule of locus standi cannot be relaxed in his favour and the petition is liable to be rejected on that count.

¶210

Ratio / Principle

The requirement under Sections 57 and 59 of the ESI Act that insured persons take treatment in ESI facilities or referral hospitals is reasonable and such regulation is permissible in law, the facilities available today being comparatively superior to those available when the Act came into force in 1948.

¶225

Key takeaways

The ESI Act does not discriminate among insured employees; every insured employee is given the same benefit and treatment as and when the claim is made, and it is difficult to fathom how the provisions contravene the equality provisions.ratio¶206
The right to health and medical care recognised under Article 21 cannot be stretched to a right to choose any hospital; that contention is no longer res integra, having been considered by the Division Bench of this Court in ESIC v. The Workmen of ITI Ltd., whose reasoning this Court adopts.ratio¶214

Detailed headnote1 paragraphs

Single-judge writ petition (Art. 226) dismissed. The petitioner, managing partner of a private hospital registered under the ESI Act, sought free choice of hospitals for insured employees, administration of ESIC under the Insurance Act 1938/IRDA regime, and striking down of Sections 57 and 59 ESI Act as violative of Articles 14, 19 and 21. Held: (i) the petitioner, not being an insured person or beneficiary and not having impleaded the affected employees, has no locus standi; (ii) Sections 57 and 59 impose reasonable, permissible regulation — Article 21 does not confer a right to choose any hospital, as settled by the Division Bench in ESIC v. Workmen of ITI Ltd. (ILR 1997 KAR 1433); there is no discrimination among insured employees, and emergency treatment outside the network is reimbursable at government rates (Regulation 96-A); (iii) the ESI scheme is self-contained welfare legislation under Central Government supervision, distinct from contractual insurance, so IRDA supervision, indemnity and quid pro quo concepts do not apply; (iv) the petitioner avoided covering his employees for ten years and did not come with clean hands. Liberty to pursue statutory remedies under Sections 45AA and 75 ESI Act was reserved.

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 25^TH DAY OF JANUARY, 2025

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BEFORE

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THE HON’BLE MRS. JUSTICE K.S. HEMALEKHA

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WRIT PETITION No.11417/2015 (L-ESI)

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BETWEEN:

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DR. K. RAVIPRAKASH S/O. KAJE TIMMANNA BHAT, AGED 48 YEARS, MANAGING PARTNER, OF M/S. DHANVANTHARI HOSPITAL, DURBE, PUTTUR, DAKSHINA KANNADA DIST.–574202.

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... PETITIONER

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(BY SRI S.P. SHANKAR, SENIOR COUNSEL FOR SMT. MAMATA G. KULKARNI, ADVOCATE)

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AND:

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UNION OF INDIA REP. BY MINISTRY OF LABOUR AND EMPLOYMENT SHRAMSHAKTI BHAVAN, RAFI MARG, NEW DELHI – 110 001.

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EMPLOYEES STATE INSURANCE CORPORATION REP. BY REGIONAL DIRECTOR AND ADDL. COMMISSIONER, REGIONAL OFFICE NO.10, BINNI FIELDS, BINNIPET, BANGALORE–28.

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INSURANCE REGULATORY AND DEVELOPMENT AUTHORITY, REP. BY ITS CHAIRMAN, PARISHRAM BHAVAN, 3^RD FLOOR, BASHEER BAGH, HYDERABAD–500004. ... RESPONDENTS

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(BY SRI ARAVIND KAMAT, ASG FOR R-1; SMT. GEETHADEVI M.P., ADVOCATE FOR R-2; SRI SRIRANGA, SENIOR COUNSEL FOR SMT. SUMANA NAGANAND, ADVOCATE FOR R-3)

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THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT TO RESPONDENT NOS.1 AND 2 TO PROVIDE FOR THE CHOICE OF HOSPITALS /NURSING HOMES / CLINICS IN THE MATTER OF AVILAING MEDICAL RELIEF/HELP/TREATMENT TO THE EMPLOYEES OF THE INSURED UNDER ESI ACT 1948 AS AMENDED FROM TIME TO TIME AND TO DISPENSE AND DISCONTINUE WITH THE PROCEDURE FOLLOWED BY RESPONDENT NOS.1 AND 2 IN DIRECTING THE EMPLOYEES OF THE INSURED TO GO TO SPECIFIED / NETWORKED HOSPITAL OF THE CHOICE OF 2^ND RESPONDENT AND FURTHER TO DIRECT RESPONDENT NOS.1 AND 3 TO TAKE CONTROL OF AND ADMINISTER THE AFFAIRS OF 2^ND RESPONDENT ESIC, AS ONE OF THE GENERAL INSURERES IN TERMS OF INSURANCE ACT 1938, INSURANCE REGULATORY AND DEVELOPMENT ACT 1939, GENERAL INSURANCE BUSINESS ACT, 1972 AND FURTHER PLEASE TO STRIKE DOWN PROVISIONS OF SECTION 57 AND 59 OF ESI ACT, 1948 AS BEING UNREASONABLE, OPPRESSIVE AND BEING VIOLATIVE OF ARTICLES 14, 19 AND 21 OF CONSTITUTION OF INDIA.

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THIS WRIT PETITION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 25/10/2024, COMING ON FOR PRONOUNCEMENT THIS DAY, THE COURT MADE THE FOLLOWING:

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CORAM: HON'BLE MRS JUSTICE K.S. HEMALEKHA

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CAV O R D E R

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The petitioner a Managing Partner of the Dhanavanthari Hospital, Puttur, seeking to issue a writ of

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mandamus/direction to respondent Nos.1 and 2 to provide for the choice of hospitals/nursing homes/clinics in the matter of availing medical relief/help/treatment to the employees of the insured under the Employees State Insurance Act, 1948 (‘the ESI Act’ for short) as amended from time to time and to dispense and discontinue with the procedure followed by respondent Nos.1 and 2 in directing the employees of the insured to go to specified/networked hospital of the choice of respondent No.2, further to direct respondent Nos.1 and 3 to take control of and administer the affairs of respondent No.2 –ESI Corporation, as one of the general insurers in terms of Insurance Act, 1938 (‘the Insurance Act, 1938’ for short), the Insurance Regulatory and Development Authority Act, 1939 (‘IRDA Act’ for short), General Insurance Business Act, 1972 and to strike down provisions of Section 57 and 59 of the ESI Act, as being

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unreasonable, oppressive and being violative of Articles 14, 19 and 21 of the Constitution of India.

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The petitioner avers that the hospital of the

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petitioner has earned reputation for providing high quality treatment at competitive price and is a hospital registered under the ESI Act to provide medical benefits to its employees and has followed all necessary procedures for compliance. That Sections 57 and 59 of the ESI Act are inconsistent with the intent of the insurance framework and that the employees should have more autonomy in selecting hospitals and clinics. the provisions of these Sections which mandates that the insured employees under the ESI Scheme must seek treatment only from the hospital or health care providers that are part of the ESI Corporation network infringes the fundamental rights of the insured employees. That the ESI Corporation is functioning as a statutory insurer akin to a general insurance company governed by the Insurance Act, 1938 and should therefore allow the insured employees to choose their treatment providers freely. That

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the hospital has been making a contribution to the ESI Corporation as required by the law and that the medical treatment and medical care is not a relief to be thrust upon but chosen by the insured patients/employees or to collect the amount demanded by respondent No.2 insofar as the petitioner is concerned. That the impugned notice issued by the ESI Corporation-respondent No.2 is without allowing the employees to go to any hospital of their choice.

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3. Statement of objections filed by respondent

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No.1:

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i. That the petitioner has no locus-standi to file

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this writ petition, petitioner being the partner of an hospital is not directly affected by the issues raised in the petition, the employees whose rights are being claimed have not been made as parties to the petition.

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ii. There is an alternative statutory remedy under

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Section 75 of the ESI Act, which pertains to the dispute about the employer's contribution.

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iii. That petitioner is not entitled for the relief of

¶37

writ of mandamus, as the prayer sought is a statutory right under the ESI Act, which vest with the insured employees .

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iv. That respondent Nos.1 and 2 have time and again taken steps to improvise the nature of benefits provided to the insured under the ESI Scheme.

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v. The Ministry of Labour and Employmentrespondent No.1, in order to give effect to the constitutional obligation vested upon it under Articles 41, 42 and 47 of the Constitution of India, adopted the pre-constitutional law enacted by the then Government and has carried out necessary amendment as and when required for effective implementation of the Scheme.

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vi. ESI Corporation is also continuously discharging its statutory obligation vested upon it by the Act, the ESI Corporation acts has a monetary agency for the ESI Funds, ESI Corporation and ESI Scheme Hospital to make provisions for medical

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facilities to the employees and has also laid down 11 contingencies situation when the employees can avail reimbursement of the medical facility from non-ESI/ESI

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Scheme hospitals.

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vii. That to the insured employee and to his/her family members provides cashless treatment which is significant and unique feature of ESI Scheme and for the said purpose, ESI Hospitals, ESI Scheme hospitals, Dispensaries are established and maintained and provisions for multi-specialty treatment for public sector and private sectors are made, several benefits given to the ESI employees.

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viii. The scope and scheme of the ESI Act is different from the Insurance Act, 1938, IRDA Act, General Insurance Business Act, 1972.

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ix. ESI Act is a beneficial legislation with social welfare as its essence and there is a stark difference between the general insurance and the ESI Scheme. As in private insurance contracts, the relationship

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between the insured person and the insurer is contractual and it is at the option of the contracting parties, whereas, in the case of ESI Corporation and the insured employee , the relationship is statutorily mandated under Section 38 of the ESI Act.

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x. The claim of the petitioner that Sections 57 and 59 of the ESI Act are unconstitutional, is unfounded as these sections served the purpose of providing medical treatment to the insured employees through designated hospitals and maintaining medical facilities, which are essential for the functioning of the ESI.

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xi. The petitioner has not made out any constitutionally tested grounds for challenging the validity of a law and has not questioned the legislative competence of the parliament to make the law under challenge and fails to demonstrate as to how the impugned law violates its fundamental right.

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4. Statement Objections by respondent No.2

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i. Writ petition is not maintainable as the matter

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pertains to the issues under the ESI Act, which has to be adjudicated before the Employees Insurance Court under Section 75 of the ESI Act.

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ii. The petitioner has access to the statutory remedy through ESI Courts, especially to challenge the issues concerning the hospital coverage under the ESI Act, the petitioner is covered under the ESI Act, despite being informed of coverage, the hospital allegedly failed to comply with the ESI Act, leading to recovery notices for unpaid contributions and in the guise of challenging the constitutional validity of Sections 57 and 59 of the ESI Act, the recovery notices issued to the hospital has been challenged when there is an alternative efficacious remedy provided.

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iii. Sections 57 and 59 are designed to ensure that the employees receive benefits in line with the scheme's objectives as the scheme provides

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comprehensive social medical facilities to the workers and their employees.

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iv. That the ESI Scheme provides medical benefits

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through a network of hospitals and dispensaries across India and in emergency or when specialized treatment is required, the insured employees are entitled for treatment at private hospital, which they are entitled for reimbursement and the outline reimbursement procedure for medical expenses has been made by the said respondent ensuring timely treatment without financial burden on insured employees.

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v. The ESI is a statutory welfare scheme, not governed by the Insurance Act, 1938, IRDA Act, as it is distinct from commercial insurance, and it does not involve traditional insurance policies or hospital choice

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in the same way as private insurance schemes do.

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5. Statement of objections by respondent No.3-Insurance Regulatory and Development Authority (IRDA)

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i. It is stated that the ESI Act and IRDA have

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different purposes, the ESI Act being focused on social security and medical benefits for employees and IRDA Act regulating insurance companies, it is stated that IRDA’s role does not extend to administering the affairs of the ESI Act, which operates under the ESI Act.

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ii. The provisions of the Insurance Act, 1938 and IRDA Act, do not apply to the ESI Act.

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iii. Taking a specific stand that the provisions of

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Insurance Act, 1938 or the IRDA Act, cannot be made applicable in the case of ESI Scheme, as in terms of the ESI Act, it is not contractual, but statutory in nature, as such, they do not fall within the purview of “Health Insurance Business” as defined vide Section 2(6c) of the Insurance Act, 1938.

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Heard Sri S.P. Shankar, learned senior counsel for Smt. Mamata G. Kulkarni, learned counsel for the petitioner

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and Sri Aravind Kamat, learned ASG for respondent No.1, Smt. Geethadevi M.P., learned counsel for respondent No.2

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and Sri Sriranga, learned senior counsel for Smt. Sumana Naganand, learned counsel for respondent No.3.

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Learned Senior counsel for the petitioner would urge the following grounds:

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i. Sections 57 and 59 of the ESI Act impose unreasonable and arbitrary restrictions on insured employees' choice of healthcare providers, thereby violating their fundamental rights under Articles 14, 19(1)(g), and 21 of the Constitution of India.

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ii. That the restriction of healthcare choices for ESI beneficiaries creates an unfair and irrational classification between insured and non-insured persons.

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The insured employees are unjustly deprived of the freedom to choose medical care from private healthcare providers, while individuals who are not part of the ESI scheme enjoy that right.

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iii. The mandatory provision to receive treatment only from ESI Corporation-approved hospitals infringes upon the Insured employee's right to have the right of

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hospital of their choice, as it curtails their right to choose a healthcare provider or access better or specialized treatment elsewhere.

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iv. That the right to health is an integral part of the right to life. Denying insured employees the right to choose their healthcare provider violates their right to receive adequate, quality medical care and hampers their access to timely and effective treatment.

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v. That the ESI Act, particularly its provisions concerning restricted healthcare access, is outdated in the current context of India's rapidly evolving healthcare sector. Private hospitals and specialized care centers offer superior and more modern treatment options compared to the hospitals within the ESI Corporation network.

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vi. That the ESI Corporation network may not be equipped with the latest medical technologies or specialized care, which limits the choice and quality of healthcare available to insured employees.

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vii. That an insured person, like any individual purchasing health insurance, should have the right to select the healthcare provider based on their needs. The restriction of healthcare provider options goes against the fundamental principles of freedom of choice and the policyholder's autonomy.

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viii. Arguing that health insurance is meant to protect individuals by giving them the freedom to select healthcare providers that best meet their needs.

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ix. That the provisions of the ESI Act contradict modern Insurance law principles, particularly those under the Insurance Act, 1938 and the IRDA Act, which allows policyholders the liberty to choose healthcare providers.

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x. As a statutory body, ESI Corporation must align its policies with general insurance law and practices, which uphold the policyholder's right to choose providers within their insurance network.

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xi. The ESI corporation’s existing system, by limiting

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access to treatment only within the network, hampers the ability of employees to receive the most effective medical care available. This restriction not only undermines the quality of healthcare services but also raises concerns about the efficiency of the public health system.

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xii. Reliance is placed on the following decisions:

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a. Deep Chand Vs. The State of Uttar Pradesh and others¹ (Deep Chand)

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b. The State of West Bengal Vs. Anwar Ali Sarkar² (Anwar Ali Sarkar)

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c. Bharat Heavy Electricals Ltd. Vs. M.

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Chandrasekhar Reddy and Others³ (Chandrasekhar Reddy)

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d. Joginder Kumar Vs. State of Uttar Pradesh and Others⁴ (Joginder Kumar)

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1 AIR 1959 SC 648

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2 AIR 1952 SC 75

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3 2005 (28) AIC 793

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4 AIR 1994 SC 1349

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Learned counsel for the respondents would urge

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the following grounds:

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i. The writ petition is not maintainable as the petitioner, who is registered under the ESI Act, in the guise of challenging the constitutional validity has obtained the interim order against the recovery of the contribution as per the order passed under Section 45A

¶106

of the ESI Act, there is an alternative efficacious remedy, which is a statutory remedy under Section 45AA and Section 75 of the ESI Act and the petitioner has successfully coverage to its employees under the ESI Act for the past ten years and in the process, the eligible insured employees are denied of protection and benefits that are available under the ESI Act.

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ii. The petitioner has no locus-standi to file this petition as the petitioner is not an insured employee or the beneficiary under the ESI Act and the writ petition needs to be dismissed on the ground of locus-standi as well.

¶108

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iii. The petitioner has not included the insured

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employees who would be affected by this order and the writ petition is not maintainable on this ground as well.

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iv. That Sections 57 and 59 of the ESI Act are constitutionally valid, as they are enacted with the objective of providing comprehensive healthcare benefits to insured employees within a controlled and regulated framework. The restrictions on healthcare provider choices are a necessary and legitimate means to ensure that it is affordable, standardized, and quality healthcare to employees under the ESI scheme.

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v. The legislative intent behind these provisions is to maintain a uniform system of healthcare that benefits all insured employees across the country, irrespective of their location or financial status. The limitation of choices to ESI-approved hospitals ensures that there is no exploitation of the insurance scheme by private providers, who may offer services at inflated costs.

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vi. The ESI scheme was designed to safeguard the well-being of low-income workers by providing medical benefits, including hospital treatment and other healthcare services. The restrictions are in place to ensure the efficient utilization of public funds and to avoid fraudulent or unnecessary claims.

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vii. The ESI Act's purpose is to provide healthcare that is economically feasible and equitable for all insured employees. By controlling the network of healthcare providers, the ESI Corporation is able to ensure consistency in the quality and cost of medical treatment, which protects the collective interests of the insured population.

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viii. The ESI Act, as it stands, ensures insured employees' right to health under Article 21 of the Constitution by guaranteeing access to necessary medical services through ESI Corporation-approved hospitals. The healthcare services provided by ESI

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Corporation-approved hospitals are well-structured, systematic, and cost-effective.

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ix. The right to health does not extend to the right

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to choose any healthcare provider. The provision of healthcare through a network of approved hospitals is consistent with the social welfare nature of the ESI scheme, designed to provide affordable healthcare to a large section of the population.

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x. That limiting access to ESI-approved hospitals

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allows for better control over the quality of healthcare provided. This ensures that healthcare providers comply with ESI standards for medical treatment, equipment, and personnel. It also helps to avoid over utilization of services, misuse of medical insurance benefits, and ensures that insured employees receive treatment at rates regulated by ESI Corporation.

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xi. That not all private hospitals may be equipped

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to provide the level of medical care required under the ESI scheme. ESI-approved hospitals are vetted to meet

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the necessary standards of care, ensuring that insured employees are treated by qualified medical professionals.

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xii. That the ESI system relies on careful financial management to ensure its sustainability. Allowing insured persons unrestricted access to private healthcare providers could lead to an increase in the overall cost of the scheme, burdening the system and potentially making it unsustainable in the long run. The restrictions ensure that the scheme remains financially viable for all employees covered under the Act.

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xiii. Places reliance on State of Punjab and others Vs. Ram Lubhaya Bagga⁵ and Bandhua Mukti Morcha Vs. Union of India and others⁶ , where the Court recognized the government's duty to provide adequate and affordable healthcare within a regulated system, without extending the right to

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5 AIR 1998 SC 1703

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6 1984 AIR 802

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absolute freedom of choice. Further reliance is placed

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on the following decisions:

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a. Kirlosker Brothers Ltd. Vs. Employees’ State

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Insurance Corporation⁷ (Kirlosker)

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b. Bangalore Turf Club Limited Vs. Regional Director, Employees’ State Insurance

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Corporation⁸ (Turf Club)

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c. Transport Corporation of India Vs. Employees’ State Insurance Corporation and another⁹ (Transport Corporation of India)

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d. Buckingham and Carnatic Co. Ltd. Vs. Venkataiah and another¹⁰ (Venkataiah)

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e. Royal Talkies, Hyderabad and others Vs. Employees State Insurance Corporation¹¹ (Royal Talkies)

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7 (1996) 2 SCC 682

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8 (2014) 9 SCC 657

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9 (2000) 1 SCC 332

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10 (1963) SCC Online SC 79

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11 (1978) 4 SCC 204

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f. Regional Director E.S.I. Corporation and another Vs. Francis De Costa and another¹²

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(Francis De Costa)

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g. C.E.S.C. Limited and others Vs. Subhash Chandra Bose and others¹³ (Subhash Chandra Bose)

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Having heard the learned counsel on both sides the question that falls for consideration is;

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“1. Whether the petitioner has locus-standi to maintain the present writ petition ?

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2. Whether sections 57 and 59 of the ESI Act is unreasonable and violative of Articles 14,19 and 21 of the Constitution?”

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3. Whether the petitioner has legal statutory right under the statute to seek writ of mandamus directing respondent Nos.1 and 3 to take control of and administer the affairs of ESI Corporation?”

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This Court has given thoughtful consideration to

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the material on record and rival contentions.

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12 1993 Supp (4) SCC 100

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13 (1992) 1 SCC 441

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The statement of object of the ESI Act, reads as

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under:

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“The introduction of a scheme of Health Insurance for Industrial Workers has been under the consideration of the Government of India for a long time. The necessity for such a scheme has become more urgent in view of the conditions brought about by war. The scheme envisaged is one of compulsory State Insurance providing for certain benefits in the event of sickness, maternity and employment injury to workmen employed in or in connection with the work in factories other than seasonal factories.

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A scheme of this nature has to be planned on an all-India basis and administered uniformly throughout the country. With this object, the administration of the scheme is proposed to be entrusted to a Corporation constituted by central legislation.

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The functions of the Corporation will be performed by a Central Board constituted of representatives of Central and Provincial Governments, and of employers, workers and the medical profession. The Board will also include certain members elected by the Central Legislative Assembly. A Standing Committee of the Board will act as the Executive of the Board, and a Medical Benefit Council

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will also be set up to advise on matters relating to the administration of medical benefit.

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The insurance fund will be mainly derived from contributions from employers and workmen. The contributions payable in respect of each workman will be based on his average wages and will be payable in the first instance by the employer. The employer will be entitled to recover the workman’s share from the wages of the workman concerned. Workmen whose earnings do not exceed 10 annas a day will be totally exempt from payment of any share of the contribution, the entire contribution on account of such workmen being met by employer. Provision has been made for the preparation of proper budgets and the audit of accounts.

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The insured workman will be entitled to the following benefits:–

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(a) Sickness Cash Benefit. –A workman, if certified

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sick and incapable of working will receive for a period not exceeding 8 weeks in any continuous 12 monthly period a cash allowance equal approximately to half average daily wages during previous six months. He will also be entitled to receive medical care and treatment at such hospitals, dispensaries or there institutions

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to which the factory in which he is employed may be allotted.

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(b) Maternity Benefit. –Women workers will be entitled to receive a maternity benefit at 112 annas a day for 12 weeks. They will also be entitled to medical aid at the aforesaid medical institutions

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(c) Disablement and Dependents’ Benefit. –A workman disabled by employment injury will receive for the period of disablement of life depending on whether the disablement is temporary or full and permanent, as the case may be a monthly pension equivalent to half his average wages during the previous twelve months, subject to a maximum and minimum. Where disablement is partial, the pension will be proportionately reduced. In case of death resulting from employment injury the pension will be payable to the widow or widows’ minor sons and minor and unmarried daughters or in case there are no widow and legitimate children, to other dependents of the deceased workman. The workman will also be entitled to medical care and treatment.

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Medical care and treatment to insured workman will be provided by Provincial Governments at such

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hospitals, dispensaries and other institutions as may be prescribed for the purpose. The cost of the medical benefit will be shared between the Provincial Government and the Corporation in such proportions as may be agreed upon between them. In case the average incidence of sickness cash benefit in any Province is in excess of the all-India average, Provincial Government will also bear such share of the cost of the excess incidence as may be agreed upon between it and the Corporation.”

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(Emphasis supplied)

¶178

ESI Act is social welfare legislation. The scheme

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envisaged is one of compulsory State Insurance providing for certain benefits in the event of sickness, maternity and employment injury to workmen employed in or in connection with the work in factories other than seasonal factories. ESI Act is a Pre-Constitutional Act but it's a post independent measure giving effect to the Directive Principles of the State Policies, Articles 38, 39, 41, 42, 43 and 43(A) of the Constitution of India. This legislation comes directly under Entries 23 and 24 of List III of VII Schedule of the Constitution, i.e., social security and social insurance, welfare of the labourer,

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conditions of work, PF, workmen compensation, old-age benefits and maternity benefits.

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Sections 57 and 59 of the ESI Act reads as under:

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“ 57. Scale of medical benefit.– (1) An insured person and (where such medical benefit is extended to his family) his family shall be entitled to receive medical benefit only of such kind and on such scale as may be provided by the State Government or by the Corporation, and an insured person or, where such medical benefit is extended to his family, his family shall not have a right to claim any medical treatment except such as is provided by the dispensary, hospital, clinic or other institution to which he or his family is allotted, or as may be provided by the regulations.

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(2) Nothing in this Act shall entitle an insured person and (where such medical benefit is extended to his family) his family to claim reimbursement from the Corporation of any expenses incurred in respect of any medical treatment, except as may be provided by the regulations.

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59. Establishment and maintenance of hospitals, etc., by Corporation.– (1) The

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Corporation may, with the approval of the State Government, establish and maintain in a State such hospitals, dispensaries and other medical and surgical services as it may think fit for the benefit of insured persons and (where such medical benefit is extended to their families) their families.

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(2) The Corporation may enter into agreement with any local authority, private body or individual in regard to the provision of medical treatment and attendance for insured persons and (where such medical benefit is extended to their families) their families, in any area and sharing the cost thereof.”

¶189

Section 57 provides for a situation where in an insured person and his family members shall be entitled to receive ESI medical benefit within framework of the ESI Act,

¶190

and they shall not have a right to claim any medical treatment except as is provided by the dispensary, hospital, clinic or other institution to which he or his family is allotted, or as may be provided by the regulations. Section 57(2) however meets the need for exigencies wherein, an insured person and his family is entitled to claim reimbursement, from the ESI Corporation, of any expenses incurred in

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respect of any medical treatment, as may be provided by the regulations. Regulation 96A and 96 B of the Employees State Insurance (General) Regulations, 1950 details down on situations when and how the insured may claim reimbursement of his medical treatments availed at non ESI Corporation/ESI Scheme Hospitals.

¶193

Section 59 empowers the ESI Corporation to establish and maintain in a State, hospitals, dispensaries and other medical and surgical services for the benefit of insured persons. Sub-section (2) enables the Corporation to enter into agreement with any local authority, private body or individual in regard to the provision of medical treatment and attendance for insured persons and their families, in any area and sharing the cost thereof. Sub-section (3) enables the Corporation to enter into agreement with any local authority, local body or private body for commissioning and running Employees' State Insurance hospitals through third party participation for providing medical treatment and attendance to insured persons and to their families. This

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section is an enabling provision which empowers the ESI Corporation to create and maintain a network of hospitals, dispensaries and multi-specialty medical units. This is the very purpose for which ESI Corporation was incorporated under the Act to regulate, monitor and implement the ESI Scheme.

¶196

Petitioner is a private industry/establishment.

¶197

petitioner is not an insured employee or the beneficiary under the ESI Act, the petitioner being one of the managing director of the hospital, the duty is cast to ensure that they cover their establishment and their employees benefits under the ESI Act or made available to their employees by covering the establishment and paying the requisite contribution which the petitioner has not paid and successfully avoided the coverage of his employees under the ESI Act for the past ten years.

¶198

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The Apex Court in Kirloskar’s case has mandated

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that the Private establishment also has to ensure the safety of the workers and at paragraph No.10 has held as under:

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“10. In expanding economic activity in liberalised economy Part IV of the Constitution enjoins not only the State and its instrumentalities but even private industries to ensure safety to the workman and to provide facilities and opportunities for health and vigour of the workman assured in relevant provisions in part IV which are integral part of right to equality under Article 14 and right to invigorated life under Article 21 which are fundamental rights to the workman. Interpretation of the provisions of the Act, therefore, must be read in the light not only of the objects of the Act but also the constitutional and fundamental and human rights referred to hereinbefore .”

¶202

Relying upon the earlier Judgment in Subhash Chandra Bose’s case , the Apex Court at para No.33 has held as under:

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“The Act aims at relieving the employees from health and occupational hazards. The interpretation calls for in this case is of the meaning of the meanings ‘supervision’ and ‘agent’ in Section 2(9)(ii) of the Act.

¶204

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The legal interpretations is not an activity sui generis. The purpose of the enactment is the touchstone of interpretation and every effort would be to give effect to it. The judge acts as a vehicle of communication between the authors and the recipients. The end result is to promote rule of law and to enliven social order and humane relations.”

¶206

The petitioner contends that provisions in Section 57 and 59 of the ESI Act are unreasonable and violate the constitutional rights of the insured employees , by limiting the choice of treatment providers to a network of hospitals or doctors chosen by ESI Corporation, the employees fundamental right to choose their health care provider is restricted and according to the petitioner, it is an infringement on their right to health under Article 21 as well as their right to equality and freedom of occupation under Articles 14 and 19. The ESI Act does not discriminate the insured employee, every insured employee shall be given the same benefit and treatment as and when the claim is made and there is no discrimination whatsoever made by the Corporation and thus, it is difficult to fathom how the

¶207

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provisions of the ESI Act are contravening the equality provisions or right to privacy.

¶209

The settled principle is that the person who is

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affected, can knock on the doors of the Court of justice. The petitioner claims to be one of the three partners of the hospital, alleging violation of the rights of the Hospital employees, which clearly demonstrate his attempt to espouse the cause of someone else. Neither the petitioner has established that he has suffered any specific injury, harm, or that he has direct interest in the present facts in order to possess the Locus to initiate the writ proceedings. The petitioner has not impleaded any insured employees of their Institutions who would be affected. The rule of locus standi cannot be relaxed in favor of the petitioner and the petition is liable to be rejected on that count as well.

¶211

The petitioner is unable to highlight how and which provision violates his rights. The decision relied on by the petitioner pertains to the issues of discriminatory

¶212

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practices and action and no such acts are being carried out by the Corporation for the petitioner to make the decisions applicable to the facts and circumstances of this case. The objectives of the ESI Act and the employees right to the best medical care do not in any way establish as to how Article 14 has been violated while implementing the ESI Act.

¶214

Right to choice for medical services is no longer res integra as this contention was considered by the Division Bench of this Court in the case of Employees’ State Insurance Corporation and others Vs. The Workmen of

¶215

ITI Ltd. and others¹⁴ and at paragraph No.7.7 has held as under:

¶216

“7.7. It is true that the workers are necessarily to be provided with proper environment and working conditions from the point of view of hygiene as also proper medical care. But, to contend that the workmen should have a right of medical aid of their choice which is not there even under the existing settlements, is to stretch this right to the extreme. Even in Surjit Sing’s case (supra) the employee was held entitled to expenses that the Escort Heart

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14 ILR 1997 KAR 1433

¶218

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Institute, New Delhi, would have charged, though he had undergone operation abroad, for the reason that the Escort Heart Institute was one of the hospitals recognised by the employer. Even under the settlements between the workmen and the Managements, certain hospitals are specifically referred to by name, and the workmen have the choice of going to one or the other of the said hospitals. It is true that now, by the amendments concerned herein, they are covered by the services rendered by the ESI hospitals. An awful picture of the condition of medical aid that is being given in the said ESI hospitals is presented in the course of arguments. This submission of the Learned Counsel for the workmen is in utter disregard to the very services that are now being availed of by those employees each of whose monthly wages do not exceed Rs.3,000/-. The petitioners workmen have no tears to shed for those poor workmen/employees whose wages are low. If the argument of the Learned Counsel for the workmen in those proceedings with regard to the said workmen having a right of choice of any hospital for medical care is to be accepted, then such right would amount to be recognised only in respect of those workmen of highbracketed incomes. While right to health and medical care is recognised under Article 21 of the Constitution, it cannot be stretched to the point of

¶220

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holding that the workmen have a choice of approaching any hospital of their choice. The medical services available in the ESI hospitals is as much compliance with Article 21 as any other private medical service. ESI Corporation is a statutory authority. It is under obligation to provide efficient medical service to the employees covered by the Act. If the conditions in the ESI hospitals are awefully bad, as submitted in course of arguments, there are ways and means of forcing the said Corporation in appropriate proceedings to make services in its hospitals meaningful and effective and not to render the right to medical care under Article 21 of the Constitution an illusion. That is altogether a different aspect of the matter. Sorry state of affairs in the ESI hospitals by itself does not amount to deprivation of the workmen's right under Article 21 of the Constitution when they are brought under the purview of the Act. This is in so far as the workmen's complaint with regard to their fundamental right under Article 21 of the Constitution is concerned.”

¶222

The provisions of Sections 57 and 59, which

¶223

specifies that the treatment has to be taken in the facilities provided by the ESI hospital or its referral hospitals is also based on the financial means of the State. The facilities that

¶224

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are made available today are comparatively superior to those facilities that were available when the Act came into force in 1948 as rightly contended by the respondents. The ESI Corporation is making all its endeavour to make available all super specialty treatment even in their hospitals to all insured persons who are economically not so sound without driving them to go to the private hospital which would be a dent in their pocket. Thus, this requirement under Sections 57 and 59 are reasonable and such regulation is permissible in law.

¶226

The claim of the Petitioner that the Petitioners must be given a choice of their own cannot be sustained , which is a statutory right under the ESI Act vest with the Insured employees, from the pleadings and arguments, it is not stated which action and which provisions are unguided. This contention is also not substantiated and also does not arise in the present case.

¶227

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The provisions of ESI Act are self-contained and its implementation is directly under the supervision of the Central Government and therefore, the argument that the ESI has to be under the supervision of another agency under the IRDA is liable to be rejected. The Parliament in its wisdom has enacted Insurance Regulatory and Development Authority (IRDA) and created a body to regulate and supervise the functioning of the private agency which provides Insurance services which are in the nature of the contract unlike the Scheme under the ESI Act.

¶229

The ESI Corporation has adopted a flexible approach in cases where treatment is taken under emergency circumstances from medical institutions other than those setup/recognized hospitals and the amount incurred by the insured persons will be reimbursed at government rate as per the provisions made under regulation 96-A of the ESI Act.

¶230

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The Petitioner has attacked only the medical

¶232

facilities and on that ground the Petitioners want to avoid coverage under the ESI Act. It may be pointed out here that the ESI Act provides for benefits other than medical treatment, which includes sickness benefits, maternity benefits, disablement benefits, dependants benefits, funeral expenses (Section 56-F) and medical benefits. The ESI Act provides for medical benefits to their retired insured persons. This Scheme envisages that the insured persons and its members have taken care from the cradle to the grave and also protects the employees against dismissal and punishment during period of sickness. The benefits under the ESI Scheme are comprehensive and more advantageous to the employees.

¶233

The Scheme provided under the Act is a huge proportion and is monitored by a statutory body. The facilities under the ESI Act are adequate and infact, its efficiency was clearly demonstrated during COVID-19

¶234

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pandemic where the ESI hospitals and dispensaries were extended even to the general public.

¶236

The ESI Act, the Rules and Regulations framed

¶237

under the ESI Act are in itself a policy and a separate policy is not required as contended by the Petitioner. These are statutory rights and are legally enforceable, unlike the private insurance, which is a contract that requires detailing out the terms and conditions. Thus, the concept of indemnity as claimed by the Petitioner is also not applicable for claiming the right under the ESI Act.

¶238

The concept of qud pro quo does not apply to ESI scheme. The contributions paid by the insured employees goes to a Fund known as "ESIC Fund", which is utilized for the benefits to be given to the employees under the Act. The expenditure towards the benefits provided under the Act are borne from this fund and not from the general revenue of the State. The insured employee becomes eligible provided under the Act immediately upon his enrolment but the

¶239

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benefit may be postponed as and when the need occurs. Unlike in the individual contract, medical insurance, the benefit is provided only to the person who is insured, as the private insurance is a contract, whereas ESI Corporation is a Scheme envisaged under the Act.

¶241

Petitioner who is registered under the ESI Act, in the guise of challenging the constitutional validity, has obtained an interim order against recovery of contributions as per the order passed under Section 45 A of the ESI Act, (Annexure-G). The ESI Act provides for a statutory remedy under Section 45 AA and section 75 of the ESI Act. The Petitioner is aware of the same and they make a reference to appeal as provided under Section 45- AA of the ESI Act. The Petitioner has successfully avoided coverage of his employees under the ESI Act for the past 10 years. In the process, the eligible Insured employees are thus denied protection and benefits that are available under the ESI Act.

¶242

The petitioner has a statutory remedy under the ESI Act. The Petitioner is not an insured employee or beneficiary under

¶243

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the Act, but one of the managing partners of the hospital and

¶245

their duty to ensure that they cover their establishment and their employees benefits under the ESI Act are made available to their employees by covering the establishment and paying the requisite contributions, which they have not done so far. The Petitioners are thus guilty of denying the benefits for the insured employees and they have not come

¶246

to the Court with clean hands and the point framed for

¶247

consideration is answered accordingly.

¶248