N. Marappan v. Employees State Insurance Corporation Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 13.02.2009CORAMTHE HON'BLE Mr. JUSTICE S.PALANIVELUC.M.A.No.943 of 2003 Employees State InsuranceCorporation Ltd100, Cross Cut Road,Gandhipuram, Coimbatore...Appellant/1st Respondent Vs.1. N. Marappan ..1st Respondent/Petitioner2. The Management M/s. Ganapathy Engineering Manufacturers Company Ltd., Ganapathy Post, Coimbatore ...2nd Respondent/2nd Respondent This civil miscellaneous appeal has been filed under Section 82of ESI Act, 1948 to set aside the decree and judgment of theEmployees State Insurance cum Labour Court, Coimbatore passed inE.S.I.O.P.No.36 of 2001 dated 17.08.2001.For Appellant: Mr.K.C.RamalingamFor Respondents: Mr.A. Sivaji [for R-1] J U D G M E N T 1. The following averments are found in the petition filed bythe first respondent, filed under section 75 (e) and (g) of theEmployees' State Insurance Act, 1948: 1.(i) The petitioner was employed as porcelain moulder in thesecond respondent company as a permanent worker. On 21.12.1991, atabout 5.00 p.m., while he was in employment, he met with an accident.While he was working in Hydraulic Press at Procelain Section, hesuffered crush injury in his left hand and was immediately removed toSri Ramakrishna Hospital, Coimbatore. On 25.12.1991, the crushedparts of the left hand were removed and the left hand was amputatedbelow elbow. The permanent disablement is due to the amputationbelow elbow of the left hand. The petitioner's E.S.I. Number is 51-1402359. He submitted accident report in Form 16 (Regulation 68) on21.12.1991 itself to the first respondent (ESI Corporation). Heapproached the E.S.I. Local office, for sanction of permanent https://hcservices.ecourts.gov.in/hcservices/ disablement benefit. Since they refused, he sent letters throughTrade Union, namely, National Labour Organisation on 23.06.1992. On30.06.1992 a reply was sent by the Corporation that he was not anemployee under Section 2(9) of the E.S.I. Act on the date of accidenti.e., on 21.12.1991. By means of a letter dated 3.7.1992 theManagement also sent a letter to him that he was not employee as perSection 2(9) of the E.S.I. Act, as his monthly wages exceededRs.1,600/- per month since 1.4.1991.1.(ii) His contribution period was from 1.10.1990 to 31.03.1991and his benefit period was between 1.7.1991 and 31.12.1991. Accidenttook place on 21.12.1991 within the benefit period. He was providedwith sickness benefit and hence he is also eligible for disablementbenefit. Hence the Management may be directed to send the petitionerto Medical Board for assessing the loss of earning capacity due tothe injury caused to him in the course of the employment on21.12.1991, to declare him that he is entitled for permanent partialdisablement and also to sanction permanent partial disablementbenefit from the date of accident i.e, from 21.12.1991. 2. In the counter filed by the first respondent (Corporation)thefollowing are stated:2.(i) It is true that the petitioner is an employee. But it isnot admitted that he sustained injuries in the course of theemployment. No doubt the petitioner is entitled all medical benefitsin case if he suffers any injury in the course of the employment andnot otherwise. As on 21.12.1991 he cannot be termed to be anemployee as per Section 2(9) of the E.S.I. Act. On the date of thealleged accident, he was drawing a salary of Rs.1600/- per month.Hence he will not come under the definition of Section 2(9) of theE.S.I. Act, and so he is not entitled for disablement benefit. From1.4.1991 onwards his salary exceeded Rs.1600/- per month, he is noteligible for disablement benefit, since he was working as an employeeon 1.4.1991 and the accident occurred on 21.12.1991. As he was not anemployee as defined under Section 2 (9) of E.S.I. Act., no questionto refer him to the Medical Board would arise. Hence the petitionhas to be dismissed.2.(ii) In the Counter filed by the Corporation, it is statedthat the petitioner is not entitled for any benefit from thisrespondent and if he is eligible, he has to claim the same from hisManagement. This respondent is not a necessary party to thispetition. The petition is not maintainable as far as this respondentis concerned.3. After considering the pleadings and oral evidence on record,the authority below viz., the Employees State Insurance Court cumLabour Court, Tribunal, (Labour Court), Coimbatore allowed theapplication and the order is under challenge before this Court.4. It is not debatable that the first respondent is an employeeunder the second respondent Management and he suffered the employmentinjury during the course of the employment on 21.12.1991. But his https://hcservices.ecourts.gov.in/hcservices/ very entitlement to get the disablement benefit under the E.S.I. Actis much disputed. Concededly, the contribution period was from1.10.1990 to 31.3.1991 and the benefit period commences on 1.7.1991and ended with 31.12.1991 and in the meanwhile, on 21.12.1991 theaccident took place, resulting in the amputation of the firstrespondent's left hand below elbow. 5. It is the back-bone contention of the appellant that he isnot at all entitled to the disablement benefit since he would notcome under the purview of Section 2(9) of E.S.I. Act. The secondrespondent, in addition to this plea, also contends that since hissalary exceeded Rs.1,600/- with effect from 01.04.1991 and theaccident has been taken place on 21.12.1991, he could not getdisablement benefit.6. Learned Presiding Officer of the Labour Court, placedreliance upon the decision reported in 2001 (1) LLJ 1662 [RegionalDirector, Employees' State Insurance Corporation v. M. Ganesan] andheld that even though the employee has crossed the stage of hissalary exceeding the statutory ceiling, since he suffered injuryduring the benefit period, he has to be made eligible for gettingdisablement benefit. 7. A decision in 1988 (1) LLN 688 [Tirupur Textiles (P) Ltd.,Ammapalayam, Tirupur v. E.S.I. Corporation (By the Regional Director,Madras) and other] an identical view has been expressed.8. As far as the availability of sickness benefit is concerned,there is no quarrel between the parties. It has been held in 2001(2)KLT 115 [E.S.I. Corporation v. Ouseph].9. The learned counsel for the respondent placed reliance upon adecision of the Kerala High Court in 2007-III-LLJ 1076 [E.S.I.Corporation v. Suresh Babu] wherein the learned single Judge has heldthat even though if an employee was drawing salary, which exceeds thelimit prescribed by the Act, if he suffered injury during the benefitperiod he was covered employee. The relevant portion of the Judgmentis as follows:"3. ...... the respondent also did notdispute the fact that on the date of accident he wasdrawing more than Rs.3,000/- as salary. But accordingto him, in view of proviso to Section 2(9) of theE.S.I. Act, he is entitled to get the disablementbenefit. Till September 30, 1994 the respondent was acovered employee. The salary was increased only fromOctober 1, contribution period was from April 1, 1994to June 30, 1995. As already found, the accidentoccurred on May 16, 1995, which was within the benefitperiod. So, the fact that there was increase in thesalary as the date of accident was not a ground toreject the claim put forward by the appellant. Theorder passed by the Insurance Court does not call forany interference and I confirm that order." https://hcservices.ecourts.gov.in/hcservices/

10. This Court on 09.02.2009, in an order passed inC.M.A.No.2806 of 2002 [The Deputy Regional Director, E.S.I.C. Ltd.,Coimbatore v. Chinnasamy and another], has decided that when it isshown that the employee ceases to be an "employee" for the purpose ofthe Act and could not be brought within the purview of Section 2(9)of the Act, when his statutory limit of salary exceeds the limitduring the contribution period, he could not claim disablementbenefit,on the strength of the Division Bench decision of this Court reportedin 2003 (II) LLJ 895 [Employees' State Insurance Corporation (rep. byRegl. Director), Chennai and M.Ganesan]. The relevant portion in theJudgment goes thus: "10. For claiming the disability benefit, it is a pre-condition that the employment injury should have beensustained at a time when the person was an employee. Thefact that such an employee had made contribution during thepreceding contribution period and would be entitled to thesickness, maternity and other benefits provided under theother sub-clause of Section 46(1) would not on that scoreenable that employee to claim the disability benefit aswell for an employment injury sustained during the benefitperiod. To hold otherwise would do violence to the clearlanguage employed in Section 46(1)(c). A person whocrosses the prescribed wage limit after the commencement ofa contribution period is deemed to be an employee till theend of that contribution period and not beyond. Though heis allowed to enjoy certain benefits during thecorresponding benefit period he does so not as an'employee', but as a person who was an employee during therelevant contribution period. An employment injurysustained during such benefit period, when he had ceased tobe an employee on account of crossing the prescribed wagelimit and the contribution period during which he crossedthe wage limit also having ended, will not be an injurysustained by him as an 'employee'. Disability benefitwould not become payable to such a person."11. Following the principles set out in the Division Benchdecision of this Court, it is held that as the salary of the firstrespondent had crossed the statutory limit much earlier to the dateof accident, he is not entitled to receive the disablement benefit.Such being the position, the order impugned, passed by the learnedPresiding Officer of the Labour Court is not sustainable and has tobe necessarily disturbed, which is accordingly set aside. https://hcservices.ecourts.gov.in/hcservices/

12. In view of the above, the Civil Miscellaneous Appealdeserves to be allowed and accordingly it is allowed. No costs. Sd/Asst.Registrar/true copy/Sub Asst.Registrar ggsToThe Presiding Officer,Employees State Insurance Court,(Labour Court), Coimbatore.+1cc to Mr.K.C.Ramalingam, Advocate Sr 6104+1cc to Mr.A.Sivaji, Advocate Sr 6157KM(CO)km/25.2.C.M.A.No.943 of 2003