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CASE NO.: Appeal (civil)  6497 of 2001

PETITIONER: P.B.Krishnankutty Nair

RESPONDENT: The Regional Director,ESI Corpn. & Anr

DATE OF JUDGMENT: 07/03/2008

BENCH: TARUN CHATTERJEE & HARJIT SINGH BEDI

JUDGMENT: J U D G M E N T

CIVIL APPEAL NO.6497  OF 2001

HARJIT SINGH BEDI,J.

1.      This appeal arises out of the following facts.

2.      The appellant who was a covered employee under the ESI  scheme met with an accident in the course of his employment  on 15th June 1990.   An accident report was sent by the  employer respondent No.2 in the present appeal to the  respondent Corporation.   The Corporation however refused to  treat the injuries sustained, as injuries suffered during  employment on the plea that on the date of the accident the  employee was not covered under the ESI scheme.  It was also  communicated to the employee by a communication dated 4th  December 1990 that he had ceased to be an employee with  effect from 1st October 1989 and therefore he would not be  entitled to any benefit for the disability but would be eligible  for sickness benefits for the period 16th June 1990 to           30th June 1990.  The employee thereupon filed an application  before the Employees Insurance Court,  Alappuzha claiming  the benefit of disability on account of the injuries that he had  suffered.  In the counter statement filed by the Corporation, it  was pointed out that the employee as an insured person had  made contributions up to 30th September 1989 and that he  ceased to be an employee with effect from 1st October 1989 as  his salary had exceeded Rs.1600/- per month from 1st October  1989 and as such was not entitled to any benefit towards  disability.  The Employees Insurance Court in its order dated  14th November 1991  examined the various provisions of the  Employees State Insurance Act 1948 (hereinafter called the  "Act") and in particular the definition of ’employee’ and  ’insured person’ under section 2(9) and 2(14) respectively as  well as section 46 that dealt with ’benefits’ and ultimately  concluded that although the claimant ceased to be an  employee with effect from 30th September 1989 he was  nevertheless an "insured person" in terms of section 2(14) as  he had paid contributions towards his insurance which would  cover his case from 1st April 1989 to 30th September 1989  though he continued to be an insured person up to 30th June  1990 and as such his claim for the injury  on 15th June was  fully justified under the Act. 3.      Aggrieved by the order of the Employees Insurance Court,  the Corporation preferred an appeal before the High Court of

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Judicature at Kerala.  The High Court in its judgment dated  28th February 2000 noted that the facts of the case were not  disputed and relying on a decision of the Division Bench of  that very court in MFA 621/1986 (Regional Director, ESI  Corporation vs. K.K.Surendra Babu) observed that if a person  was not an employee during a particular contribution period  and an accident had taken place during such period, he would  not be entitled to ESI benefits.  Having held above, the court  further concluded that as the accident in the present case had  also occurred after the claimant had ceased to be an employee,  though within the contribution period, he was not entitled to  the benefit of the payment of insurance from the Corporation.   The appeal was accordingly allowed and the order of the  Employees Insurance Court dated 14th November 1991 was set  aside.  It is in this situation that the matter is before us in  appeal at the instance of the employee. 4.      Certain facts are admitted on record:  the date of  accident 15th June 1990, and that the contribution had been  made for the period 1st April, 1989 to 30th September 1989  which brought  the contribution period to 30th June 1990.  In  these admitted facts, the learned counsel for the appellant has  raised several arguments before us with reference to the  statutory provisions.  He has referred us to the definitions of  ’employee’ in section 2(9) of the Act and to ’insured person’ in  Section 2 (14) of the Act and to section 46 which talks about  the benefits for an insured person in case of injury or  sickness, and has argued that as the claimant was an insured  person up to the end of the contribution period i.e. up to 30th  June 1990,  the accident having taken place within that  period, the Corporation was liable to make payment to him.   As against this,   the learned counsel for the respondent has  argued that the sine qua non for determining the eligibility for  the payment of insurance under the Act was that a person was  required to be an employee on the date of the accident and the  claimant had admittedly ceased to be an employee with effect  from 1st October 1989 and thus, he was not entitled to the  payment of any disability benefit. 5.      At the very outset, we may point out that the judgment  relied upon by the Division Bench in reaching the impugned  decision has not been cited before us by any of the counsel.   We, therefore, do not have the benefit of the wisdom of the  Division Bench in those cases and have accordingly examined  the matter ourselves.    6.      The matter must hinge on the various provisions brought  to our notice by the learned counsel.  We produce hereinbelow.  Section 2(9), 2 (14) and Section 46 of the Act: "Sec.2(9) "employee" means any person  employed for wages in or in connection with  the work of a factory or establishment to which  this Act applies and \026

(i) who is directly employed by the  principal employer on any work of, or  incidental or preliminary to or connected  with the work of, the factory or  establishment, whether such work is  done by the employee in the factory or  establishment or elsewhere; or

(ii) who is employed by or through an  immediate employer on the premises of  the factory or establishment or under the  supervision of the principal employer or  his agent on work  which is ordinarily

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part of the work of the factory or  establishment or which is preliminary to  the work carried on in or incidental to the  purpose of the factory or establishment;  or

(iii) whose services are temporarily lent  or let on hire to the principal employer by  the person with whom the person whose  services are so lent or let on hire has  entered into a contract of service;

Sec.2(14) "insured person" means 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 of the benefits provided by this Act.

Sec.46.Benefits. \026 (1) Subject to the provisions  of the Act, the insured persons [their  dependants or the persons hereinafter  mentioned, as the case may be,] shall be  entitled to the following benefits, namely \026

(a)     periodical payment to any insured person  in case of his sickness certified by a duly  appointed medical practitioner [or by any  person possessing such qualifications and  experience as the Corporation may, by  regulations, specify in this behalf  (hereinafter referred to as sickness benefit);  

(b)     periodical payments to an insured woman  in case of confinement or miscarriage or  sickness arising out of pregnancy,  confinement premature birth of child or  miscarriage, such woman being certified to  be eligible for such payments by an  authority specified in this behalf by the  regulations (hereinafter referred to a  maternity benefits);]

(c)     periodical payments to an insured person  suffering from disablement as a result of an  employment injury sustained as an  employee under this Act and certified to be  eligible for such payments by an authority  specified in this behalf by the regulations  (hereinafter referred to as disablement  benefit);

(d)     periodical payments to such dependants of  an insured person who dies as a result of  an employment injury sustained as an  employee under this Act, as are entitled to  compensation under this Act (hereinafter  referred to as dependants’ benefit);

(e)     medical treatment for an attendance on

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insured persons (hereinafter referred as to  medical benefit; and  

(f)     payment to the eldest surviving member of  the family of an insured person who has  died, towards the expenditure on the  funeral of the deceased insured person, or,  where the insured person did not have a  family or was not living with his family at  the time of his death, to the person who  actually incurs the expenditure on the  funeral of the deceased insured person (to  be known as [funeral expenses]  

Provided that the amount of such payment  shall not exceed [such amount as may be prescribed  by the Central Government] and the claim for such  payment shall be made within three months of the  death of the insured person or within such extended  period as the Corporation or any officer or authority  authorized by it in this behalf may allow.]

(2) The Corporation may, at the request of the  appropriate Government, subject to such conditions  as may be laid down in the regulations, extend the  medical benefits to the family of an insured person."

7.              An examination of the provisions would show that  the claimant was an employee up to 30th September 1989  and ceased to be so on the next day as his salary had  exceeded Rs.1600/- per month which was the cut off wage  fixed under the Act at that time.  Admittedly, also the  claimant was an insured person and the only difference  between the two contesting parties is with regard to the  significance of the contribution period which was to end on  30th June 1990.  For determining as to whether an  employee was entitled to the benefit under the Act,  reference has to be made to section 46(c) which would cover  the present case.  Section 46(c) specifically provides for two  cumulative conditions for its applicability i) the claimant  must be an insured person and ii) that such an injury must  be sustained when he was an employee.   We therefore find  that as the injury had been suffered after the claimant  ceased to be an employee, he would not be entitled to any  benefit of disablement notwithstanding the fact that his  contribution period and his status as an insured person  continued up to 30th June 1990.  The Corporation has been  taken pains to point out that certain benefits which would  accrue to the claimant such as the benefit of sickness, has  already been given to him.  In this view of the matter, we  find no merit in the appeal.  It is accordingly dismissed.  No  costs.