The Hindu : Worker entitled to ESI benefits from date of employment: SC

Online edition of India's National Newspaper
Tuesday, Jan 07, 2003

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Worker entitled to ESI benefits from date of employment: SC

By Our Legal Correspondent

NEW DELHI Jan. 6 . The Supreme Court, in an important ruling, has held that a worker covered under the Employees State Insurance (ESI) Act would be entitled to the benefits from the date of his employment and not from the date of registration after contribution by the employer.

A Bench, comprising Justice S.S.M. Quadri and Justice Arijit Pasayat, allowing an appeal from Bharagath Engineering against a judgment of the Madras High Court, made it clear that the date of payment of the contribution by the employer to the ESI was not material to the issue.

The Bench was of the view that the provisions of the ESI Act cast a statutory obligation on the employer to insure its employees and that being a statutory obligation, the date of commencement had to be from the date of employment.

According to the appellant, Balakrishnan was employed on May 20, 1987, and shortly thereafter he lost his life in an accident. When the worker's family claimed compensation under the Workmen's Compensation Act, the company maintained that he was covered under the ESI and entitled to ESI benefits.

The Madras High Court rejected the company's stand after noticing that the registration for the purpose of insurance was granted after the death of the employee.

The application was submitted by the company to the ESI only after his death.

The High Court held that the employee would be covered by the benefits of the Act only when registration was granted and not at an anterior point of time. The special leave petition in the apex court was directed against this judgment.

Counsel for the appellant company, K.V. Viswanathan, contended that under the ESI Act it was clear that the employer was obliged to make its contribution even before an employee was registered for the purpose of insurance with the Corporation.

The Bench agreed with this submission and observed that merely because the contribution had not been paid by the time the employee died, the liability of the Corporation was not any less.

The Bench observed that the scheme of the ESI Act and its Rules and Regulations spelt out that the insurance under the Act was distinct and different from the contract of insurance in general, as the contribution made was not paid back if an employee did not avail himself of any benefit.

Holding that the deceased employee was an ``insured person'' within the meaning of the ESI Act, the Bench said the payment or non-payment of contributions and action or non-action prior to or subsequent to the date of accident was inconsequential.

The Bench directed the Corporation to work out the benefits due to the respondent and extend them to all the eligible persons.

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