S.B.MAJMUDAR - (1.) THE Transport Corporation of India, which is a public limited company, incorporated under the Indian Companies Act, 1956, has brought in challenge the decision of Division Bench of the High Court of Judicature at Bombay, on grant of special leave to appeal. The question posed for our consideration in this appeal moved against the Respondents-Employees' State Insurance Corporation and its officers is a short one. It is the contention of the appellant that even though its head office, being a registered office, situated at Secunderabad in the State of Andhra Pradesh, was covered by the provisions of the Employees' State Insurance Act, 1948 (hereinafter referred to as 'the Act'), its branch office located at Bombay in the State of Maharashtra, was not governed by the provisions of the Act. According to the appellant the notification issued by the State of Andhra Pradesh, in exercise of its powers as an 'appropriate Government' under Section 1(5) of the Act extending the same to road motor transport establishments, cannot by itself, cover the appellant's branch at Bombay during the relevant time when the State of Maharashtra had not issued any such notification covering road motor transport establishments in the earmarked areas situated in that State. It is the case of the appellant that its Bombay branch was got covered by the Act only pursuant to the subsequent notification issued by the State of Maharashtra on 10-3-1989 whereunder road motor transport establishments situated in Bombay in the earmarked areas mentioned in Schedule-II of the said notification were subjected to the sweep of the Act.
(2.) THE dispute in the present case between the parties arose on account of the fact that on 29/07/1986, the Deputy Regional Director, Employees' State Insurance Corporation, Bombay served show cause notice upon the appellant to explain as to why the contributions should not be paid by it for a period commencing from May, 1981 and ending with November, 1985 in respect of its branch office at Bombay. The appellant filed reply claiming that the contribution was paid from 1/08/1985 onwards under protest but the branch of the appellant in Bombay was not covered by the Act during the relevant period. The Deputy Regional Director passed an order dated 8/09/1988 in exercise of powers under S. 15A of the Act assessing contribution for the period commencing from May, 198 1/07/1985. It was held that once the main establishment in Andhra Pradesh is covered by the notification issued by the State of Andhra Pradesh, then the branches of the establishment, wherever they are situated, also stood covered. Under the circumstances, the appellant moved the High Court of Bombay in Writ Petition No. 931 of 1989 challenging the legality of the order passed by the Employees' State Insurance Corporation. THE learned single Judge at Bombay High Court by his judgment dated 30-4-1993 held that the appellant's establishments in the State of Maharashtra were not covered by the notification issued under Section 1(5) of the Act by the State of Andhra Pradesh. Accordingly, the learned single Judge quashed the impugned order dated 8/09/1988 passed by the authorities functioning under the Act whereby the appellant was called upon to contribute Rs. 2,09,914.00 along with interest. The aforesaid decision rendered by the learned single Judge was carried in appeal by the Employees' State Insurance Corporation-Respondent No. 1, herein, before the Division Bench of the High Court by way of a writ in Appeal No. 732 of 1993. The Division Bench, speaking through Pendse, J. (as he then was), accepted the appeal and took the view on interpretation of the relevant provisions of the Act that once the head office was covered by the notification issued by the State of Andhra Pradesh, it being the main establishment, its branches which carried on the work of the main establishment, got covered by the sweep of the said notification and, therefore, the provisions of the Act were rightly pressed in service by the authorities functioning under the Act against the appellant so far as its Bombay branch employees were concerned. The writ appeal was, accordingly, allowed and the judgment of the learned single Judge was set aside. However, instead of entirely quashing the impugned order passed under Section 45-A of the Act by the Deputy Regional Director, the proceedings were remitted back to the Deputy Regional Director, only for the purpose of quantifying the amount of contribution and the amount of interest to be paid thereon by the appellant. As noted earlier, it is the aforesaid judgment of the Division Bench that is made the subject matter of the present appeal before this Court. Rival Contentions Shri Pai, learned senior counsel for the appellant, vehemently contended that the Division Bench of the High Court has patently erred in law in taking the view that the notification issued by the State of Andhra Pradesh under Section 1(5) for covering the appellant's establishments in Andhra Pradesh could have automatically made applicable the provisions of the Act to its branch at Bombay. That as the State of Maharashtra had not issued appropriate notification for covering the undertakings carrying on transport business in the State of Maharashtra as per Section 1(5) of the Act during the period, notification of Andhra Pradesh Government could not be pressed in service for covering the employees working in the Bombay branch of the appellant. That the view taken by the Division Bench, in substance, amounted to giving extra-territorial jurisdiction to the State of Andhra Pradesh enabling it to cover the establishments functioning in other States. It was also submitted by Shri Pai, that the term 'establishment' should be construed in the light of the term 'factory' as found in the very same Act and as factories governed by the Act have geographical nexus, similarly establishments functioning in different parts of the country had also geographical nexus. That merely because the head office of the company situated in Andhra Pradesh got covered by the Act, its branches functioning in various parts of the country could not automatically get covered by the Act. That the term 'establishment' envisages activities being carried out at a fixed location and which have a nexus with the geographical settings of such establishments in the concerned States and, accordingly, each branch of the establishment was a separate unit and hence the branches of the appellant functioning in different parts of the country had to be separately dealt with by independent notifications, if any, to be issued by the States concerned where these branches were located. That the State of Andhra Pradesh cannot be an 'appropriate government' for enabling it to issue any notification having extra-territorial operation so far as the Bombay branch of the appellant was concerned. Shri Pai, in support of his submission, relied upon various decisions of this Court to which we will make reference, hereinafter.
(3.) LEARNED counsel for the respondent, on the other hand, tried to support the decision under appeal. In the light of the aforesaid rival contentions, the following points arise for our consideration : 1. Whether the notification issued by the State of Andhra Pradesh under S. 1(5) of the Act covering the transport undertakings of the appellant, whose registered head office was situated in Secunderabad in the State of Andhra Pradesh, could automatically cover its branch located at Bombay in the State of Maharashtra; and 2. Whether for the purpose of applicability of the Act to the appellant's-Bombay branch, a separate and independent notification was required to be issued by the State of Maharashtra under S. 1(5) of the Act? For deciding the aforesaid points for consideration, it is necessary to have a look at the relevant statutory provisions holding the field. STATUTORY FRAMEWORK ;