Employees’ State Insurance Act,

1948: details you must know

Diva Rai November 19, 2019

Image source - https://bit.ly/2qu8MgS

This article is written by Neelabh Keshav Sinha, a first-year student from

Symbiosis Law School, Noida who is pursuing BBA LLB. The article
provides an overview of the Employees’ State Insurance Act and its
different provisions, along with a few landmark judgments.

Introduction
The Employees’ State Insurance Act incorporates a number of sections,

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 these sections provide for medical benefits and insurance for any
employees working under factories registered under the ESI Corporation.
This is an exciting prospect from both an employee’s and a legal
perspective as the beginning of a formal social security program in India.

This article will explain the highlight sections of the Act, as well as
elaborate landmark cases that prove the authenticity of the scheme, and
how it worked for the benefit of its employees at times of need.

Application and scope of the Act

The Employees’ State Insurance Act, 1948 (ESI), enables the financial
backing and support to the working class in times of medical distress such
as:

Sickness.
Maternity Leave.
Disorders(mental or physical).
Disability.
Death.

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 It is a self-financed initiative, which serves as a type of social security
scheme, to prevent the working class from any financial problems arising
out of the above medical issues.

Constitutionality of the Act

The ESI Act serves as a constitutional instrument because of its practice of
providing insurance and medical insurance. While the ESI Act is mostly
executed through the ESI Corporation, the Central Government takes
control of most of the proceedings.

This control by the Central Government largely contributes to the

constitutionality of the Act, because Insurance, be it public or private, is
listed in the Seventh Schedule of the Indian Constitution as a Union List
subject i.e. it can only be legislated by the Central Government.

Corporation, Standing Committee & Medical

Council

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 What are some landmark judgments on the ESI Act?

Establishment of Employees’ State Insurance

Corporation
The ESI Act exercises its function through the Employees’ State Insurance
Corporation, established via Section 3, a body created to maintain social
security. It was established on 24 February, 1952. The corporation is
supposed to grant relief to the employees in case of medical emergencies.

Constitution of Corporation
The composition of the ESIC is defined in Section 4, and it is as follows:

The Director-General.
Chairman, appointed by the Central Government.
Vice-Chairman appointed by the Central Government.

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 Not more than 5 persons nominated by the Central Government.
1 person to represent each state.
1 person representing the Union Territories.
10 persons representing employers.
10 persons representing employees.
2 persons representing the medical profession.
3 members of parliament (2: Lok Sabha and 1: Rajya Sabha).

Term of office of members of the Corporation

Via Section 5, the following members are appointed for up to a 4 year
period:

Director-General.
Chairman.
Vice-Chairman.
The 5 people nominated by Central Government.
The members representing each state.
The members representing each Union Territory.

Eligibility for re-appointment or re-election

An outgoing member of ESIC, the Standing Committee of ESIC, or the
Medical Benefit Council is automatically eligible for re-appointment or re-
election into office as the case may be, at the pleasure of the appointing
Central Government.

Authentication of orders, decisions, etc.

The signature of the Director-General of ESIC is the only necessary
requirement to authenticate an outgoing order or a decision, there is no
other way to authenticate or enforce an order.

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 The Director-General can also temporarily delegate his authority to any
other officer. In this case, the signature of the authorised officer will also
suffice to authenticate an order.

Constitution of Standing Committee

The composition of the Standing Committee of ESIC is as follows:

A chairman appointed by Central Government.

3 members within the corporation representing 3 state governments.
3 members within the corporation representing employers.
3 members within the corporation representing employees.
1 member within the corporation representing the medical profession.
One MP belonging to the corporation.
The Director-General.

Terms of office of members of Standing

Committee
The following members are appointed for a two year period:

The Chairman.
The 3 members representing the states.

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 Medical Benefit Council
The Medical Benefit Council is an advisory body on matters related to the
administration of medical benefits under the ESI scheme. It consists of:

The Director-General of ESIC as Chairman.

The Director-General of Health Services as co-Chairman.
The Medical Commissioner of ESIC.
One member for each state appointed by State Government.
Three members representing employers.
Three members representing employees.
Three members including one woman representing the medical
profession.

Tenure of the members of the Medical Benefit council

The following members of the Medical Benefit Council are appointed for
a period of 4 years, these are:

The Director-General of ESIC as Chairman.

The Director-General of Health Services as co-Chairman.
The Medical Commissioner of ESIC.
One member for each state appointed by State Government.

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 Click Above

Resignation of membership
The resignation of a member of the Corporation is complete when a notice
for the same, in writing, is delivered to the Central Government, and his
seat shall fall vacant upon acceptance of his resignation.

Cessation of Membership
A member of the ESIC shall cease to be a member of his respective body
(Corporation, Standing Committee or Medical Council) upon failing to
attend three consecutive meetings. However, the same member can be
restored by the concerned body via the rules made by the Central
Government.

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 If in the opinion of the Central Government, any employer, employee or
medical representative fails to represent their qualification, they shall
cease to be members of ESIC.

Disqualification
A person can be disqualified as a member of ESIC if:

If he is declared to be of unsound mind by a qualified court.

If he is an undischarged insolvent.
If at any time, he has been convicted of an offence regarding moral
turpitude.

Filling of vacancies
Any vacancy in the office of ESIC shall be filled by appointment or
election, as the case may be.

A member of ESIC can only hold the ex-member’s spot in the respective
committee, if the original holder of that position was found to be eligible
for the same. Otherwise, the position is void.

Fees and allowances

The fees which are payable to the members of the ESIC for their services
can be payable at any time, at the discretion of the Central Government.
There is no definitive schedule.

Principal Officers
The Principal Officers referred to under this Section are the Director-
General and/or Financial Commissioner, to act as the CEO for ESIC.

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 They serve as whole-time officers and are not permitted to undertake any
work outside of office jurisdiction without the sanction of the Central
Government.

The time period for the appointment of any principal officer may not
exceed 5 years.

The operation of their fees, disqualification, and cessation of seats operate

in the same manner as that of their subordinates.

Staff
ESIC has the jurisdiction to employ staff of officers as may be necessary
for the optimum running of the corporation, however, according to the
prerequisites in Section 17, the sanction for creating any staff position has
to be acquired from the Central Government. Their salary shall be
prescribed by the Central government within a particular range, which
cannot be exceeded.

The scale of pay will be determined on the basis of their educational

qualifications, method of recruitment, duties, and responsibilities, etc.

Powers of the Standing Committee

The Standing Committee, with its powers defined in Section 18, shall
administer the affairs of the Corporation and may exercise any of the
powers and perform any of the functions of the Corporation, while
authorised and under the jurisdiction of the corporation.

The Standing Committee shall submit for the consideration and decision
of the Corporation all such cases and matters as may be specified in the
regulations made in this behalf.

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 The Standing Committee also, in its discretion, may submit any other case
or matter for the decision of the Corporation.

Corporation’s Power to promote measures for

the health of insured persons
ESIC, in its jurisdiction, may take initiatives that promote health and
welfare amongst its employees, while also promoting rehabilitation and re-
employment for past employees who were injured or disabled in the
course of employment.

The funding and expenditure for such initiatives is at the discretion of the
Central Government.

Meetings
ESIC, its Standing Committee, and its Medical Council shall meet
periodically to observe rules and procedures in regard to the efficient
functioning of the corporation. Such observations can be specified as per
the regulations in regard to the meeting.

Supersession of the Corporation and Standing

Committee
The supersession of the Corporation and the Standing Committee occurs
when there is a persistent failure to perform the duties prescribed to both
parties. In such a case, the Central Government, via a notification in the
Official Gazette, can take the place of the corporation, or with the
consultation of the corporation, can take the place of the Standing
Committee.

The supersession of the corporation will take place by rendering all of the
seats of the corporation, previously occupied by the members, as vacant.

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 In the case of the Standing Committee, a new one shall be constituted
immediately as per Section 8 of the ESI Act.

Duties of the Medical Benefit Council

The Medical Council’s functions are as follows:

Advise the other two ESIC bodies on matters relating to the

implementation that would be beneficial in the medical field. It
acquires certification for the grant of medical benefits.
Investigate against complaints lodged against medical practitioners
with relevance to the medical relief offered.

Duties of Director General and the Financial

Commissioner
The duties of the Director-General and Financial Commissioner are
prescribed by the ESI Act itself in accordance with the Central
Government. These tasks may concern various arenas from management
to miscellaneous tasks.

Validity of the act of the Corporation

No act of any ESIC body shall be termed as invalid with respect to their
own rules and regulations. Invalidity cannot be claimed on the eligibility
or ineligibility of a particular member of that office.

Regional Boards, Local Committees, Regional

and Local Medical Benefit Council
The Corporation may appoint Regional Boards, Local Committees and
Regional and Local Medical Benefit Councils in such areas and in such
manner, and delegate to them powers and functions.

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 Finance and Audit
Employees’ State Insurance Fund
The Employees’ State Insurance Fund is the primary monetary source for
the ESIC to perform its functions. All contributions paid under this Act
and all other money received on behalf of the Corporation shall be paid
into this fund to be held and administered by the Corporation.

These could be in the form of grants, donations or gifts by the

government.

Expenses of the fund

The ESI Fund is responsible for maintaining the expenses of ESIC, which
are as follows:

Payment of benefits and provision of medical treatment and

attendance to insured persons and their families, if required.
Payment of fees and allowances to members of the Corporation, the
Standing Committee and the Medical Benefit Council, the Regional
Boards, Local Committees and Regional and Local Medical Benefit
Councils.
Payment of salaries, leave and joining time allowances, travelling
and compensatory allowances, gratuities and compassionate
allowances, pensions, etc.
Establishment and maintenance of hospitals, dispensaries, and other
institutions and the provision of medical and other ancillary services
for the benefit of insured persons and their families, if required.
Payment of contributions to any State Government, local authority or
any private body or individual, towards the cost of medical treatment
and attendance provided to insured persons and their families, if

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 required.

Administrative expenses

Administrative expenses are termed so, those expenses which cover the
costs of administration of ESIC, prescribed by the Central Government.

Holding of Property
ESIC is subject to conditions prescribed by the Central Government, in
terms of acquiring, hold, sell or transfer any property, movable or
immovable, vested in or acquired by it, so as to fulfill the purposes of the
corporation. The ESIC also has the ability to invest in property as and
when required, under the jurisdiction of the Central government. It can
also delegate property for the benefit of its staff.

Vesting of the property in the Corporation

Any and all property acquired by ESIC, before its establishment, will be
brought into the accounting books of the corporation.

Budget Estimates
Every year, ESIC frames and projects a potential budget showcasing how
much expenditure it proposes to incur, and how it will discharge its
liabilities during the following year. This is then submitted to the Central
Government for approval.

Accounts
The Corporation shall maintain correct accounts of its income and
expenditure in such form and in such manner as may be prescribed by the
Central Government.

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 Audit
The Corporation prepares accounts regularly which are audited annually
by the comptroller and Auditor-General of India, and any audit which
leads to an expenditure will be payable to the above parties.

Any person appointed by the Comptroller and Auditor-General to act on

their behalf will temporarily have the same powers as the above parties
and are authorised to demand the production of books, accounts,
connected vouchers, and other documents and papers. They shall also be
authorised to inspect any offices of ESIC at any time.

The accounts of the Corporation, before being forwarded to the Central

Government, have to be verified by the Comptroller and Auditor-General,
or any of their representatives. After verification, the accounts can be
forwarded to the Central Government along with any comments on the
report, given by the above parties.

Annual report
The Corporation shall submit an annual report of its work and activities to
the Central Government.

Budget etc. to be placed before Parliament

The annual report, the audited accounts of the Corporation along with the
report of the Comptroller and Auditor-General of India, and the comments
of the Corporation on such report under section 34 and the budget, as
finally adopted by the Corporation, shall be placed before the Parliament.

Valuation of assets and liabilities

The Corporation shall, at intervals of three years, have a valuation of its

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 assets and liabilities made by a valuer appointed with the approval of the
Central Government: Provided that it shall be open to the Central
Government to direct a valuation to be made at such other times as it may
consider necessary.

Contributions
All employees to be insured
All employees employed in the factories which meet ESIC prescribed
rules (under Section 2) are insured for all the benefits offered by it.

Contribution
The contribution is a determinable amount of money payable by both
the employer and the employee, as per the situation, to the
corporation.
The rates, while usually prescribed by the government, are not set in
stone, and are subject to change. Rates defined by the government are
mostly set as the unit standard for the contribution payable by the
employer.
In the case of the employee’s contribution, the wage period in
relation to the respective employee shall be held as a unit to
determine the compensation payable, and are normally due on the
last day of the wage period.
Failure to pay contributions by the employer will make him liable to
pay an interest rate of 12%.

Principal employer to pay contribution in the

first instance
The primary employer has to collectively pay the contribution, both

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 his own and that of his employees, regardless of whether they are
directly employed under him or are working through an immediate
employer.
If a directly employed employee fails to pay his contributions, then
the employer can recover that contribution only by deducting the
wages of said employee.
The employer bears all the transfer costs of the payment to the
Corporation.

Recovery of contribution from the immediate

employer
In the case of an employee who is indirectly employed under the principal
employer, via an immediate employer, the principal employer shall be
entitled to recover the payment made on behalf of an indirect employee,
from the immediate employer, as a debt payable to him.
The immediate employer also has to prepare a list of all the employees
under him and submit the same to the principal employer, before paying
his dues.

General provisions as to payment of contribution

In case an employee’s wage falls below the prescribed wage range
prescribed by the Central Government, the employee shall not be liable for
his contribution and it shall not be payable.

Method of payment of contributions

The manner for payments which the Act provides regulations for, has been
elaborated in the following conditions:

The nature and time of contribution being paid.

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 Payment which involves the usage of stamps or other adhesives fixed
upon the books of accounts, or any other documents.
The evidence of the contributions, which reaches the Corporation, is
to be dated.
The different entries in the books of accounts along with the details
of the insured persons.
The replacement of documents which have been lost, destroyed or
defaced.

Employers to furnish returns and maintain

registers in certain cases
According to the provisions given as per the ESI Act, the principal and
immediate employers are to submit all the investment profits, as well as
any and all details relating to their employees in any factory under their
jurisdiction. In case of failure to submit a return, that the corporation had
reasonable cause to believe, should have been submitted, the corporation
can require the employers to present all the details.

Social Security Officers and their functions

ESIC has the power to appoint persons as Social Security Officers. Their
functions are mostly to serve a role in inspecting the function of the
corporation.

If required, he can acquire any information from any employer as he

sees fit.
He can enter any corporation at any time and can get all the accounts,
books and other employment documents presented to him without
any due notice. This can include information like wages, expenses,
etc.
He can inspect and look into any matter regarding the employers and

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 employees as and when required under the jurisdiction of the court.
He can make copies or take extracts from any register or account
back as per his discretion.

Determination of Contribution in certain cases

A Social Security offer is restricted from exercising his functions and

discharging his duties, if the accounting statements of the
factory/establishment are not submitted, or not maintained in accordance
with Section 44 of the ESI Act. As such, the Corporation may, with the
available information, determine the contribution(defined under Section
39) amount payable to employees. However, this procedure will not take
place until after the person in charge has been given a reasonable
opportunity to be heard regarding the absence of such records.

Appellate Authority

In the scenario specified in Section 45A, once the employer in charge is

heard, and he is not satisfied with the verdict given by the corporation, he
may prefer an appeal to an appellate authority as may be provided by
regulation, within sixty days of the date of the verdict. He must also pay a
sum of 25% of his calculated contribution, in order to file the appeal. In
case he is successful, the corporation will also refund the contribution paid
by him.

Recovery of contributions

Any and all contributions which are payable under the provisions of ESI
Act, can be recovered, termed as ‘arrears of land revenue’.

Issue of certificate to the Recovery Officer

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 In lieu of Section 45B, where the contribution is to be recovered, an
authorised officer of the corporation issues a certificate bearing his
signature and the amount to be recovered, to a Recovery Officer, who then
proceeds to recover the amount specified from the factory where the
default took place. He does this via:

Attachment or sale of the property of the factory, or the employer, as

per the situation.
The arrest of the employer and getting him detained in prison.
Appointing a receiver for the management of the property acquired,
be it from the factory or the employer.

Recovery Officer to whom the certificate is to be

forwarded

For the contribution certificate to be forwarded to the Recovery Officer,

the factory employer must be under the jurisdiction of the Officer in the
following ways:

The location where the employer carries on his business and where
the factory is located.
The location where the employer resides or he has any personal
property situated within the Officer’s jurisdiction.
The inability to recover the amount solely through the sale of
property alone.

The inability to recover the amount solely through the

sale of property alone

The analysis of the recovery amount, as per the certificate issued to the
Recovery Officer, operates on his word only. The factory or any authority
related to it cannot question the Officer on the correctness of the mount,

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 and no objection shall be entertained. However, with a prior intimation, an
arithmetical mistake can be corrected by an authorised officer, along with
any orders about withdrawal or cancellation of a certificate.

Stay of proceedings under certificate and amendment or

withdrawal thereof

It is at the discretion of the Recovery Officer, within the boundaries of the

ESI Act, to halt legal proceedings if the time he has allocated for the
recovery of an amount, has expired.
The Recovery Officer is also entitled to receive constant updates about the
status of payment of any due amount.
If, as a result of an appeal, the amount due is decreased, then the Recovery
Officer temporarily halts the recovery of the now decreased amount.

Other modes of recovery

Some of the other modes of recovery are elaborated within Section 45G.
These are rarer modes of recovery, due to the primary modes of recovery
often being preferred:

The defaulting employer may be required to pay a sum which was

deducted from the arrears after the sale of the property.
There might not be any penalty issued but the defaulting employer
would be required to pay the entire outstanding amount directly to
the Director-General of the Corporation.
Any joint shareholders who held money with the defaulting employer
might be forced to give up their shares to the Corporation until they
are equal to the defaulting employer’s shares, as compensation.

Application of certain provisions of the Income-tax Act

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 The arrears of the amount of contributors, which are to be sold to cover
the remaining costs, can be affected by decisions from the Assessing Tax
Officer or Tax Recovery Officer. They can make changes which shall
apply to all the interests and damages.

Benefits
Section 46 of the ESI Act grants benefits to employees as social security
in case of injury, which can be availed during the course of employment.
There are 6 types of benefits that can be availed:

Medical benefit.
Sickness benefit.
Maternity benefit.

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 Dependants’ benefits.
Disablement benefits.
Other benefits.

Medical Benefits
These benefits are guaranteed to the employee as soon as he/she is hired,
with the benefits extending to their family members as well.

This benefit covers the payment of all treatment expenses in lieu of

medical issues faced by the employee

Sickness Benefits
The employees covered by the ESI Act can avail periodical payments in
case of sickness as per Section 46(1)(a), as long as the medical condition
is verified by the appointed medical practitioner.

The compensation is approximately 70% of their wages, with the upper

limit for availing compensation being 91 days in a year.

In a period of 6 months of employment, the employee must have been

working for a minimum of 78 days, else the benefit cannot be claimed.

Maternity Benefits
As per Section 46(1)(b) of the ESI Act, an insured woman can claim
periodical payments in case of occurrence of any of the following
situations:

confinement (labour leading to birth or birth after 26 weeks)

miscarriage
sickness arising out of pregnancy

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 premature birth of child

The benefit is payable for three months, with an extension of one month, if
required. The minimum work duration must be 70 days in the year
preceding the year of pregnancy.

Dependants’ Benefits
Section 46(1)(d) prescribes periodical payments(often made monthly) to
the dependants/family members of the person who dies during the course
of employment, with the cause of death being an employment injury or an
occupational hazard. Compensation is generally 90% of the employee’s
wages.

Disablement Benefits
In case an employee suffers an injury during the course of employment
which results in their disablement. The nature of the disablement may be
temporary or permanent. Unlike the other benefits, there is no minimum
work contribution required to avail the disablement benefit, although
eligibility for the same will be determined by the Medical Board.

This determination also affects the amount of compensation granted, if

any, with the general percentage of wages granted being around 90%.

Other Benefits
‘Other benefits’ refer to the miscellaneous benefits apart from the five
major benefits that can be availed by the employees. These are as follows:

Funeral Expenses: Compensation of Rs. 10,000 is granted to the

eldest surviving member of an employee’s family to perform his last
rites.

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 Vocational Rehabilitation: The benefit is payable to disabled
employees undergoing rehabilitation.
Old age medical care: This benefit is available for retired employees,
or those who eft employment after suffering an injury, with general
compensation being Rs. 120 p/m.

Scheme for other beneficiaries

Scope of Section 53 and 61
Section 53 of the ESI Act acts as a deterrent for employees, in order to
prevent them or their families from claiming benefits provided under the
scope of Workmens’ Protection Act, so long as they are still insured under
the reliefs offered by the ESI Act.

Section 61 acts like an extension to Section 53, in the sense that while
Section 53 only bars employees from receiving compensation under the
Workmens’ Compensation Act, Section 61 bars employees from receiving
compensation from any other enactment so long as they are still insured
under the ESI Act.

Power to frame scheme

The Central Government holds the power to frame schemes for other
beneficiaries and their family members, mostly for providing medical
facilities in ESI hospitals. However, this must be within the framework of
the ESI Act and must be notified in the Official Gazette.

Scheme for other beneficiaries

Schemes implemented for beneficiaries may cover for a number of matters
such as:

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 The time and nature of the usage of medical facilities.
The presentation of particulars and details about the beneficiary and
his family as per the needs of the Corporation.
Miscellaneous matters which may be necessary to fully implement
the scheme.

Power to amend schemes

Via a notification in the Official Gazette, the Central Government may add
to, amend, introduce variations, or rescind the scheme.

Adjudication of Disputes and Claims

Click Above

Constitution of Employees’ Insurance Court

Via a notification in the Official Gazette, an Employees’ Insurance Court
will be constituted by the State Government, with a set amount of judges

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 as per the decision of the State Government.

The same court may be appointed for two or more local areas, or two
courts or more courts may be appointed for the same local area.

Power of Employees’ Insurance Court

The Employees’ Insurance Court will function with the same powers as
that of a Civil Court, in which, to enforce the provisions of the ESI Act, it
can enforce witness attendance, compel document and material evidence
to be presented, it can administer an oath and can record evidence.

All expenses incurred before a proceeding are subject to the discretion and
liability of the court itself.

Reference to High Court

An Employees’ Insurance Court, according to Section 81 may submit any
question of law for the decision of the High Court and if it does so, the
answer to the question shall hold precedence before any judgment.

Appeal
Section 82 defines that no appeal can be laid down as against an order
from the Employees’ Insurance Court. However, appeals from the High
Court can stand if they involve a substantial question of law.

Penalties
Punishments
Sections 84, 85, and 85A cover all the punishments for default listed
within the ESI Act.

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 False Statement: Any person caught increasing the payment or
benefit to avoid payment by himself is known to make a false
statement. Punishable with up to six months and/or with fine not
greater than Rs. 2000. Insured persons convicted of this will not be
entitled to cash benefits.
Failure to pay contribution: Persons failing to pay the contribution,
unlawfully deducts wages or benefits, unfairly punishes an employee,
obstructs inspector’s duties, etc. can be punishable for up to three
years, no less than one year with a fine up to Rs. 10000.
Subsequent Punishment: If a person is found committing the same
offence twice, he shall be punished with imprisonment for a term
extending up to two years with a fine of Rs. 5000 for each
subsequent offence.

Power to recover damages

If an employer fails to pay the contributions due in any aspect, whether it
be from his side or his employee’s side, the Corporation can recover the
deficit from him by way of penalty.
However, this recovery of contribution will not take place until after the
person in charge has been given a reasonable opportunity to be heard
regarding the failure to pay the contribution.

Power of Court to make orders

Along with the power of the court to recover damages, it also has
provisions to enforce judicial orders. If the defaulting employer fails to
meet the time conditions for payments that have been stated by the Court,
the employer will be deemed to have committed another offence, which
can be punishable with imprisonment and/or fines.

Prosecution

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 Section 86 dictates that any sort of prosecution cannot take place under the
provisions of ESI Act unless it has previously obtained the sanction of the
Insurance Commissioner or any other authorised authority such as the
Director-General of the Corporation. No court lower than a First Class
Magistrate can try an offence under the ESI Act, and no Court will take
cognizance of any offence reported under this Act.

Offences by companies
Taking inference from the concept of business entity, where every
company is its own individual i.e. it is a separate legal entity of its own
and can sue or be sued in a court of law accordingly.

As such, when an offence is said to have been committed by a company,

all of its managerial employees, who were responsible for the company at
the time, will be tried along with the company, deemed to be guilty of the
same offence. They are liable for punishment accordingly.

Miscellaneous
Exemptions
Sections 87, 88, 90, 91 and 91A list the criteria under which certain
exceptions to benefits can be made under ISA. Via a notification in the
Official Gazette, the appropriate government(appropriate here meaning the
government exercising more authority, in a closer proximity), can exempt
the following from the benefits of the ESI Act(if they were enjoying those
same benefits before):

Factory/establishment or a class of factories/establishments.

Persons or classes of persons.
Factories or establishments belonging to the Government or any local

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 authority.
Any of the above from a particular provision of the Act.
Any of the above to be exempted prospectively for a specified time
period.

Misuse of benefits
In case of any misuse of benefits by the insured persons, the Central
Government can, at its discretion, publish a notice in the Official Gazette
that disentitles such persons from their benefits that they have under ESI
Act.

Delegation of powers
The bodies of ESIC possess authority that they can delegate to authorised
personnel, at their discretion. These authorised personnel can exercise the
powers given to them by their specific ESIC bodies, but only for a
temporary period.

Medical care for the families of insured persons

Medical care is guaranteed for family members of the insured person,
covered at the cost of the Corporation if the funds at the time permit the
coverage.

Judicial Precedences
Mr. A. Tehan V/S M/S. Associated Electrical
Agencies & Anr.
In this case, the plaintiff was under the employment of defendant 1 for
carrying out television repairs. On July 17, 1987, he was injured during

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 the course of employment while repairing a television set, when a
component burst and he suffered injuries on his face.

After claiming relief from the ESIC Corporation under Section 46 of the
Act, he then filed an appeal asking for compensation under the Workmens’
Compensation Act, which required an amount paid by the defendant.

This was challenged by the defendant in the Bombay High Court via an
appeal, which contested their payment of the compensation, and called
into usage Sections 38 and 46 of the ESI Act, which lay the foundation for
the insurance offered by the Act. (Section 38 guaranteeing that every
worker is insured and Section 46 defining the relief available to workers).

This was further verified by the High Court, whose Division Bench further
stated that the worker’s appeal for the amount to be paid by the plaintiff
could not be upheld. Instead, he would receive appropriate relief, to be
determined by the ESIC.

Western India Plywood Ltd V/S Shri. P.

Ashokan
In this case, the defendant, P. Ashokan, was appealing to claim damages
from the appellant, his employer, ‘Western India Plywood Ltd.’ as
compensation for an injury which he had suffered during the course of
employment. However, the defendant had already claimed compensation
from ESIC for his injuries as he was insured under the ESI Act.

The appeal was filed in lieu of the existence of Articles 53 and 61, the
former restricting compensation to be availed from the Workers’
Compensation Act, and the latter restricted compensation being availed
from any law or action other than the ESI Act. This bar would only hold if
the employee who had suffered the injury had received adequate
compensation for the same.

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 The Full Bench assigned to this judgment then attempted to define what
could constitute as ‘adequate compensation’ if an injury had been suffered,
for which the reliefs received by the ESIC under Sections 38 and 46 of the
ESI Act were eligible as ‘adequate compensation’.

The final judgment laid down by the bench was to both, restrict the
employee from getting double relief as compensation from his employer,
and to define the objective of Section 53, which was then laid down as not
only a bar to guarantee only the required amount of relief for an injury by
ESIC, but also to save the employer from facing more than one claim in
relation to the same accident, i.e. an indirect form of double jeopardy, in
which he may have to compensate twice for the same injury.

Kerala CBSE School Management vs State Of

Kerala
This is one of the premier landmark judgments in relation to the ESI Act
as the basis of this case is the determination of whether a particular
institution can be covered under the ESI Act or not.

The matter originally under contention was the release of a new

notification by the Kerala State Government in the Official Gazette, which
extended the scope of the ESI Act, i.e. which organisations could fall
under it, was extended to schools and other educational institutions. The
matter was then decided through the interpretation of the statute in Section
1 of the ESI Act.

It was held that educational institutions, while not being commercial in

nature, nor having the functions of a traditional factory, was not
completely excluded from the statute itself, and could still be applied as an
instrument under the ESI Act.

The deciding contention was when the final responsibility towards

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 educational institutions was discussed. Since the Central Government had
a priority to control and manage most educational institutions, the
notification which extended the provision of the ESI Act to schools was
held valid.

Conclusion
For a working-class employee in India, the ESI Act is an essential utility
that works in their favour, while also being beneficial for sectors outside
that of the working class.

The ESI Act is unique in the fact that it works in advantageous ways for
both employees and employers. While employees are insured under the act
and get financial aid in case of an injury, the employers are also protected
from being jeopardized twice in lieu of paying compensation to the
employees.

The Employees’ State Insurance Act, apart from medical benefits provided
to employees, also controls many more indirect aspects of efficiently
managing the Corporation established by the Act, be it its sales
proceedings, account management or separation of powers amongst its
various officers.

References
https://indiacode.nic.in/handle/123456789/1441?
view_type=browse&sam_handle=123456789/1362
https://indiankanoon.org/doc/1787127/
https://indiankanoon.org/doc/746330

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