R. B. Misra, J. - (1.) The question raised in this appeal concerns the vires of Chapter V-A of the Employees' State Insurance Act, 1948. The principal Act was enacted in 1948. Chapter V-A was inserted by Section 20 of Act No. 53 of 1951. The provisions of the Chapter, however, have ceased to have effect on and from July 1, 1973. That is the sequel to a notification issued under S. 73-I of the Act. Chapter V-A is headed "Transitory Provisions" and provides for the payment by the principal employer of a special contribution which shall. be in lieu of the employer's contribution payable under Chapter IV in the case of factories or establishments situate in areas in which the provisions of both Chapters IV and V are in force. The special contribution is required to be such percentage, not exceeding five per cent of the total wage bill of the employer, as the Central Government may specify. It is also provided that the employer's special contribution in the case of factories or establishments in areas in which the provisions' of both Chapters IV and V are in force shall be fixed at a rate higher than that in the case of factories or establishments situate in areas in which the provisions of the said Chapters are not in force.
(2.) The Employees' State Insurance Act, 1948 was enacted to provide for certain benefits to employees in the case of sickness, maternity and employment injury and to make provisions for certain other matters in relation thereto. It is an obvious social welfare legislation in tune with the Directive Principles of State Policy contained -in Articles 41, 42 and 43 of the Constitution. It is a legislation which comes directly under entries 23 and 24 of List III of the VIIth schedule of the Constitution, which are, "social security and social insurance; employment and unemployment", and "welfare of labour including conditions of work, provident funds, employers' liability, workmen's compensation, invalidity and old age pensions and maternity benefits". The Act extends to the whole of India and comes into force on such date or dates as the Central Government may appoint, different dates being permissible for different provisions of the Act and/or different States or for different parts thereof. It applies to all factories including factories belonging to the Government other than seasonal factories. Chapter II provides for the establishment of the Employees' State Insurance Corporation for administering the scheme of Employees' State Insurance in accordance with the provisions of the Act. The Corporation is to be a body corporate having perpetual succession and a common seal. There are detailed provisions for the constitution of a Standing Committee and a Medical Benefit Council. Chapter III provides for Finance and Audit. Section 26, in particular, provides for the establishment of a Fund called the Employees' State Insurance Fund into which all contributions paid under the Act and all other money received on behalf of the Corporation shall be paid. The Corporation is authorised also to accept grants, donations and gifts from the Central or any State Government, local authority or any individual or body whether incorporated or not for all or any of the purposes of the Act. Section 28 lists the purposes for which the Fund may be expended and it includes among other items, "(i) payment of benefits and provision of medical treatment and attendance to insured persons and, where the medical benefit is extended to their families, the provision of such medical benefit to their families, in accordance with the provisions of this Act and defraying the charges and costs. in connection therewith; and (ii) to (iii) ................... (iv) establishment and maintenance of hospitals, dispensaries and other institutions and the provisions of medical and other ancillary services for the benefit of insured persons and, where the medical benefit is extended to their families, their families;" Chapter IV provides for the manner of insurance of all the employees in factories or establishments to which the Act applies and the payment of contribution for that purpose. The contribution payable in respect of an employee shall comprise contribution payable by the employer called employer's contribution and contribution payable by the employee called employee's contribution. The contribution has to be paid at the rates specified in the first schedule. Detailed provision is made for the method. and payment of contribution. Chapter V deals with benefits.:Section 46 specifies the benefits to which the insured persons, their dependants and others shall be entitled. There are other detailed provisions indicating the manner of working out the various benefits.
(3.) Quite obviously the scheme could not be implemented straightway, throughout the country but could only be implemented by stages. It, therefore, became necessary for the Parliament to make certain transitory provisions, which it did by the introduction of Chapter V-A by Act 53 of 1951. The Statement of Objects and Reasons of Act 53 of 1951 may be usefully extracted here. The Statement is as follows:- "The Employees' State Insurance Act, 1948, was passed by the Dominion Legislature in April 1948. It provides for certain benefits to industrial employees in case of sickness, maternity and employment injury. The Act permits the implementation of the scheme by stages. It was intended that the scheme should be implemented in the first instance in Delhi and Kanpur, but regional implementation of such schemes is always attended with certain practical difficulties. The principal difficulties are the rise in the cost of production and the diminution of the competitive capacity of industries located in those regions. The main objections of the employers centred round, the former difficulty and those of the Uttar Pradesh Government have considered those objections and are anxious to avoid any competitive handicap, to any region. This may be best achieved by an equitable distribution of the employers contribution, even where implementation is effected only in certain areas, among the employers in the whole country-employers in regions where the scheme is implemented paying slightly higher contributions. This will minimise the contribution leviable from the employers and spread the incidence of the cost of the scheme equitably. This Bill is primarily intended to achieve this object.";