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Judgment
R. Balasubramanian, J.—As early as 30.4.1997, a learned Judge of this Court ordered notice of motion. It continues to be in the same state
of affairs. Admit.
The respondent herein passed an order dated 7.7.1989 u/s 45-A of the Employees'' State Insurance Act, hereinafter referred to as ""the Act
determining the contribution payable by the appellant for the period from July 1981 to May 1988 at Rs.34,473 with interest. The appellant went
before the Employees'' State Insurance Court, hereinafter referred to as the ""Insurance Court"", Chennai, in E.I.O.P. No. 63/1989 to quash the
order and for a declaration that the appellant''s establishment and the three independent companies namely, Modern Radio Service - Fridge,
Modern Radio Service -Fan and Vijayalakshmi and Company are not one establishment and therefore should not be covered as such under the
E.S.I. Act. The E.S.I. Court by order dated 31.7.1996 in E.I.O.P. No. 63/1989 directed the Registry to return to the appellant the proceedings
for presentation before the proper Court. It is this order which is in challenge in this appeal filed before this Court.
Learned counsel for the appellant would submit that in view of Rule 16 of the Tamil Nadu Employee''s Insurance Court Rules, 1951, hereinafter
referred to as ""the Rules"", the impugned order cannot be sustained. According to him, under the Rules referred to above, the Court at Chennai
would have jurisdiction, since admittedly a part of the cause of action has arisen. Learned counsel would also submit that though there is a reported
judgment of this Court namely, Sree Karpagambal Mills Ltd. v. First Additional City Civil Court and Anr. 1996 (3) LLJ (Supp.) 410 and an
unreported judgment dated 1.9.1997 in Arokia Match Factory v. The Regional Director, E.S.I. Corporation, C.M.A. No. 1098/1988, which lend
support to the view taken by the Insurance Court in this case, yet in view of the fact that the above referred to two judgments have not taken into
account the impact of Rule 16 of the Rules referred to above, this Court can safely hold that the above referred to two judgments are not in
accordance with law. Learned counsel, relying upon another judgment of this Court Sree Lakshmi Medicals, etc. v. The Regional Director, ESI
Corporation 1999 (1) LW 204 would contend that a contrary view had been taken in the latter judgment and though it is contrary to the earlier
two judgments of this Court, yet in view of the fact that the latter judgment had taken note of Rule 16 of the Rules referred to above, this Court
may be inclined to confirm that latter judgment alone. Learned counsel for the respondent would admit the existence of the case laws as referred to
above and she would also state that the existence of Rule 16 was not brought to the notice of the learned Judges, who dealt with the first two
cases. Since the point involved turns on the question of jurisdiction of the Insurance Court at Chennai, we are of the considered opinion that we
need not go into the merits or otherwise of the claim of the parties before the Insurance Court.
u/s 74 of the Act, the State Government is empowered, by Notification in the Official Gazette, to constitute an Employees'' Insurance Court for
such local area as may be specified in the Notification. The Insurance Court at Chennai is one such Court notified by the State Government for a
specified area. There are similar such notified Courts for various other areas in this State. Institution of proceedings is governed by Section 76 of
the Act. That Section makes it clear that subject to the provisions of the Act and any Rule made by the State Government, all proceedings before
the Employees'' Insurance Court shall be instituted in the Court appointed for the local area in which the insured person was working at the time
the question or dispute arose. The insured, person is defined u/s 2(14) of the Act ""as a person who is or was an employee in respect of whom
contributions are or were payable under this Act and who is, by reason thereof, entitled to any other benefits provided by this Act"". Admittedly, in
this case the appellant is at Kumbakonam. Therefore in normal circumstances, u/s 76 of the Act and in the absence of any provision under the Act
itself or any Rules made by the State Government, the Insurance Court, within whose local area Kumbakonam comes, alone would be the
Insurance Court to deal with the dispute, since admittedly the insured persons were working only there at the time the dispute arose. Section 75 of
the Act enumerates matters to be decided by the Insurance Court. In our considered opinion, Section 75 of the Act is a comprehensive and
exhaustive one and it covers all disputes that are likely to arise under the provisions of the Act. Whether the Act applies to an establishment or not;
or whether the quantum of contribution demanded is correct or not or whether there is still any contribution payable by the establishment or not,
are all questions, which can be brought u/s 75 of the Act, so that the Insurance Court constituted u/s 74 of the Act would be competent to enquire
into the same and resolve it. At the risk of repetition, we state that in the absence of any provision in the Act or any Rule made by the State
Government taking away the jurisdiction of the Insurance Court appointed for a particular local area, in which the insured person was working at
the relevant time, there is no escape from the conclusion that any dispute arising under the Act in respect of such insured person shall be only
before that Court appointed for that local area in question. Since Section 76 of the Act is made operational, subject to the provisions of the Act
and any Rules made by the State Government, it is clear that proceedings can be instituted in any Court, other than the Court appointed for the
local area in question, provided there is an enabling provision. As rightly contended by the learned counsel for the appellant, the existence of Rule
16, was not brought to the notice of the learned Judge, who decided the case Sree Karpagambal Mills Ltd. v. First Additional City Civil Court and
Anr. 1996 (3) LLJ (Supp.) 410. In the unreported judgment dated 1.9.1997 in Arokia Match Factory v. The Regional Director, E.S.I.
Corporation, C.M.A. No. 1098/1988 of this Court also (rendered by one of us - Justice R. Balasubramanian), it is seen that the existence of Rule
16 referred to above was not brought to the notice of the Court. A reading of the unreported judgment shows that the earlier reported judgment of
this Court was followed in dismissing that appeal.
In the above context, we perused the latter judgment of this Court in the case Sree Lakshmi Medicals, etc. v. The Regional Director, ESI
Corporation 1999 (1) LW 204 where a learned Judge, taking into account the impact of Rule 16 of the Rules referred to above, took the view
that the earlier two judgments of this Court were rendered without reference to Rule 16 of the Rules and therefore if a proceeding is initiated in
accordance with the territorial jurisdiction prescribed under Rule 16 of the Rules, then it would be in order. We perused the Rules. Section 96 of
the Act enables the State Government to make Rules. u/s 96(1)(h), the State Government is empowered to make a Rule in ""any other matter
which is required or allowed by this Act to be prescribed by the State Government"". We have already referred to Section 76 of the Act, which
enables the State Government to make a Rule with reference to the territorial jurisdiction of the Insurance Courts. Therefore the Rule framed by
the State Government is strictly in accordance with Section 96(1)(h) of the Act. We went through the Rules referred to above. Rule 16 deals with
place of suing. It reads as hereunder:
Place of suing.-- In cases not falling under Sub-section (1) of Section 76, a proceeding against any person shall be instituted in the Court within
the local limits of whose jurisdiction:
(a) The opposite party or each of the opposite parties where there are more than one, at the time of commencement of the proceedings, actually
and voluntarily resides, or carries on business, or personally works for gain; or
(b) any of the opposite parties, where there are more than one, at the time of the commencement of the proceeding, actually and voluntarily
resides, or carries on business, or personally works for gain, provided that in such case, either the leave of the Court is given, or the opposite
parties who do not reside, or carry on business or personally work for gain, as aforesaid, acquiesce in such institution; or
(c) the cause of action, wholly or in part, arose.
The Rule starts with the words ""in cases not falling under Sub-section (1) of Section 76"". We have already expressed our opinion that Section 75
of the E.S.I. Act is comprehensive and exhaustive and it takes into its fold all disputes that are likely to arise under the Act. Therefore it is clear that
except the Insurance Court constituted u/s 74 of the Act, no other Court would have jurisdiction to take upon any issue/dispute arising under the
Act for consideration. If the territorial jurisdiction is confined only to the Court appointed for the local area in which the insured person was
working at the relevant time as per Section 76 of the Act, then Rule 16, prescribing Courts before which the proceedings can be instituted, has no
meaning at all. It is needless to state that a harmonious reading of the various provisions of law is a sound interpretation of Statute. If we read
Section 76 of the Act as an absolute requirement with no exception whatsoever, then there is no legal necessity for the Legislature to insert a
provision u/s 76 enabling the State Government to make any Rules in regard to the matter covered under that Section. If there is no contra
provision in the Act or in the absence of Rules made by the State Government, the Court mentioned in Section 76 of the Act alone would be the
competent Court. In other words, it is clear to us that a reading of Section 76 of the Act and Rule 16 of the Rules and striking a balance, we are of
the opinion that the normal Rule is to institute a proceeding before the Court appointed for the local area in which the insured person was working
at the relevant time and the exception is Rule 16. Under Rule 16, the place of suing may be in the place where the cause of action, wholly or in
part, arose. In this case, the order impugned was passed by the respondent within the jurisdiction of the Insurance Court at Chennai. Therefore it is
clear that definitely a part of the cause of action has arisen here and as such the Insurance Court at Chennai would have territorial jurisdiction.
Therefore we hold that the judgment Sree Lakshmi Medicals, etc. v. The Regional Director, ESI Corporation 1999 (1) LW 204 had correctly laid
down the law and the contra view taken in the other two judgments i.e., Sree Karpagambal Mills Ltd. v. First Additional City Civil Court and Anr.
1996 (3) LLJ (Supp.) 410 and Arokia Match Factory v. The Regional Director, E.S.I. Corporation, C.M.A. No. 1098/1988, are not correct. As
a result of our discussion and for the reasons stated above, we are inclined to set aside the impugned order and E.I.O.P. No. 63/1989 is remitted
back to the file of the Insurance Court for disposal in accordance with law. Consequently, connected C.M.P is closed.