TRANSPORT CORPORATION OF INDIA Vs. EMPLOYEES STATE INSURANCE CORPN

JUDGEMENT

(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.

(3.) LEARNED counsel for the respondent, on the other hand, tried to support the decision under appeal.