Case Note & Summary
The Petitioner, The Indian Coffee Workers' Coop. Society Ltd. Indian Coffee House SDF Canteen, Seepz, Andheri (East), Mumbai, is a cooperative society of workers engaged in catering. The workmen are shareholders and manage the society's affairs. The Petitioner has been rendering services for about 54 years and annually applied for exemption from the Employees' State Insurance Act, 1948 (ESI Act) under Section 87. The State Government, being the appropriate Government, had granted exemptions in the past, albeit belatedly. For the period 01/04/2008 to 31/03/2009, exemption was granted up to 31/03/2009. For the period 01/04/2009 to 31/03/2010, the Petitioner applied on 01/04/2009 but no exemption was granted. Similarly, for 01/04/2010 to 31/03/2011, an application was made on 01/04/2010 with no favorable response. In the interregnum, the provisions relating to exemption were amended. The Petitioner filed a writ petition under Article 226 of the Constitution of India challenging the letter/communication dated 15/05/2013 from the State of Maharashtra, Industries, Energy and Labour Department, which communicated that exemption could not be granted for the claimed period. The Petitioner argued that the State Government failed to consider its application properly and that the reasons given were not justified. The Respondents, including the State Government and the Employees' State Insurance Corporation, defended the decision. The High Court, after hearing arguments, found that the impugned communication did not demonstrate proper application of mind by the State Government. The Court noted that the Petitioner had been granted exemptions in the past and that the Government must consider the application on its merits. The Court quashed the communication dated 15/05/2013 and directed the State Government to reconsider the Petitioner's application for exemption for the period 01/04/2009 to 31/03/2010 and 01/04/2010 to 31/03/2011 afresh, in accordance with law, within a period of three months from the date of the judgment. The writ petition was allowed.
Headnote
A) Employees' State Insurance - Exemption under Section 87 - Cooperative Society of Workers - The Petitioner, a cooperative society of workers, sought exemption from the ESI Act for its employees who are also shareholders. The State Government rejected the application without proper consideration. The High Court held that the Government must apply its mind to the facts and circumstances, and the impugned communication was quashed with a direction to reconsider. (Paras 1-12) B) Administrative Law - Non-application of Mind - Duty to Consider - The State Government's letter dated 15/05/2013 merely stated reasons without demonstrating application of mind to the Petitioner's case. The Court held that the Government must consider the application on its merits and pass a reasoned order. (Paras 8-12) C) Constitutional Law - Writ Jurisdiction under Article 226 - The High Court exercised its writ jurisdiction to quash the impugned communication and direct the State Government to reconsider the exemption application afresh, in accordance with law. (Paras 1, 12)
Issue of Consideration
Whether the State Government's refusal to grant exemption under Section 87 of the Employees' State Insurance Act, 1948 to the Petitioner Cooperative Society was valid and in accordance with law.
Final Decision
The writ petition is allowed. The impugned communication dated 15/05/2013 is quashed and set aside. The State Government is directed to reconsider the Petitioner's application for exemption for the period 01/04/2009 to 31/03/2010 and 01/04/2010 to 31/03/2011 afresh, in accordance with law, within a period of three months from the date of the judgment.
Law Points
- Exemption under Section 87 of ESI Act
- 1948
- Cooperative Society of workers
- Appropriate Government
- Duty to consider application
- Non-application of mind
- Writ jurisdiction under Article 226
