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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 9931   OF 2014 (Arising out of SLP (Civil) No.11990/2008)

NEW MANGALORE PORT LISTED WORKERS        ..Appellant MANAGING COMMITTEE NOW REPRESENTED BY NEW MANGALORE PORT TRUST        

Versus

THE REGIONAL DIRECTOR,          ..Respondent ESI CORPORATION, BANGALORE,  KARANATAKA      

J U D G M E N T

R. BANUMATHI, J.

Leave granted.

2. Whether or not New Mangalore Port Listed Workers  

Managing Committee is an integral part of New Mangalore Port  

Trust  (NMPT)  and  whether  State  Government  is  the  

“appropriate  government”  to  extend  the  applicability  of  

provisions of Employees State Insurance Act, 1948 (ESI Act) to

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the New Mangalore Port Listed Workers Managing Committee  

are the points falling for consideration in this appeal.

3. Brief facts leading to the filing of this appeal are as  

follows:-  Section 1(5) of the ESI Act enables the  appropriate  

government  to  issue  notification  in  respect  of  any  other  

establishment  or  class  of  establishments,  industrial,  

commercial, agricultural  or otherwise.  In exercise of its power  

under  Section  1(5)  of  the  ESI  Act,  a  notification  dated  

22.1.1986  was  issued  by  the  Government  of  Karnataka  to  

extend the provisions of the ESI Act to certain areas, in and  

around the city of Mangalore.  The said notification specified  

that the provisions of the Act inter-alia would apply to certain  

shops  and  establishments.  Appellant-New  Mangalore  Port  

Listed  Workers  Managing  Committee,  Panambur  (for  short  

“Workers Managing Committee”) was established on 1.3.1983.  

The object of the said Committee was to deploy listed workers  

for loading and unloading of the import/export of cargo in the  

Mangalore  Port  Premises.  In  accordance  with  the  above  

notification,  ESI  Corporation  by  its  letter  dated  5.5.1987,  

directed the appellant to submit Form No.1 saying that the  

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provisions of the ESI Act stood attracted against the appellant.  

The Committee raised objections, claiming that the appellant  

is  engaged  in  the  loading  and  unloading  operations  in  the  

premises of NMPT and that the appellants and their workmen  

were neither a “shop” nor an “establishment” so as to attract  

the provisions of the ESI Act.  Rejecting the said objections,  

ESI Corporation issued Show Cause Notice dated 14.8.1987 to  

the Workers Managing Committee calling upon them to make  

the  contribution.   The Appellant  approached the  ESI  Court  

under Section 75(g) of the ESI Act claiming that the provisions  

of  the  ESI  Act  were  not  applicable  to  them  as  they  were  

governed by the provisions of Major Port Trust Act, 1963 and  

that  the Central  Government is  the appropriate government  

with respect to the appellant-Committee.  The petition filed by  

the appellant was dismissed by the ESI Court by the order  

dated 16.4.1993.  Aggrieved by  the said order, the appellant  

filed  appeal before the High Court of  Karnataka in and by  

which, the High Court  remanded the matter back to the  ESI  

Court,  with a direction to frame preliminary issue regarding  

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the  applicability  of  State  Government’s  notification  to  the  

Committee.    

4. ESI Court by order dated 31.12.2001,  held that the  

notification of the State Government was not applicable  to the  

Committee  as  the  “appropriate  government”  to  extend  the  

provisions of the ESI Act to the said Committee is the Central  

Government.  Aggrieved  by  the  said  order,  respondent-

Corporation  preferred  appeal  before  the  High  Court  of  

Karnataka.  The High Court set aside the findings of the ESI  

Court  and  held  that  the  Managing  Committee  is  covered  

within  the  purview  of  the  notification  issued  by  the  State  

Government.   Aggrieved by the said order, the appellant has  

filed this appeal by way of special leave.  

5. Taking us through the  evidence of  AWs 1 and 2,  

learned counsel for the appellant contended that the workmen  

of  the  Committee  were  required  to  function  under  the  

supervision and control of the NMPT and since the NMPT was  

a Major Port governed by the Major Port Trust Act 1963, the  

“appropriate government” is the Central Government and the  

notification  extending  the  provisions  of  ESI  Act  were  not  

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applicable to the appellant.  It was submitted that since the  

Central  Government  had  not  issued  any  notification  with  

regard  to  the  premises  of  NMPT,  the  action  of  the  State  

Government  was  uncalled  for.  It  was  also  argued  by  the  

appellant that the social security measures and other benefits  

as provided to the workers of the Managing Committee at par  

with NMPT employees,  were better  than the ones envisaged  

under ESI Act and therefore, the demand of ESI Corporation is  

not sustainable and the High Court erred in saying that the  

appellant is covered under the notification.

6. Per  contra,  learned  counsel  for  the  respondents  

contended that at the time of issuance of the notification in  

1986,  Workers  Managing  Committee  was  an  independent  

entity merely rendering services of loading and unloading to  

the NMPT and the said Committee was not an integral part of  

NMPT and the State Government had legitimately exercised its  

jurisdiction in extending the provisions of the ESI Act to the  

Workers Managing Committee.  It was further contended that  

only in the year 1990 workmen were absorbed by NMPT and  

prior to that, appellant was not a part of NMPT governed by  

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Major  Port  Trust.   It  was  urged  that  ESI  Act  is  a  welfare  

legislation whose object is to extend the welfare coverage to a  

vast segment of the employees and the notification has to be  

meaningfully  interpreted  in  the  light  of  the  objects  of  the  

welfare legislation.  

7. We have considered the submissions of the learned  

counsel for the appearing parties and perused the materials  

on record.   

8. In  terms of   Indian  Ports  Act  1908,  “Major  Port”  

means  any  port  which  the  Central  Government  may  by  

notification  in the official gazette declare,  or may under any  

law for the time being in force, have declared to be a Major  

Port.  By notification dated 4.5.1974, New Mangalore Port was  

declared as a Major Port.  By notification dated 27.3.1980, the  

provisions of Major Port Trusts Act 1963 were made applicable  

to the Major Port of New Mangalore from 1.4.1980 and New  

Mangalore Port is thus a Major Port.

9. NMPL Workers Managing Committee was formed in  

the year 1983 and it continued till 15.3.1990 on which date  

the  workers  of  the  Managing  Committee  were  absorbed  by  

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NMPT  and  they  became  NMPT  Registered  Cargo  Handling  

Wing.   This  NMPT Cargo Handling  Wing is  attached to  the  

Traffic Wing of NMPT.  After the workmen of the Committee  

were so absorbed as workers of NMPT Cargo Handling Wing,  

the appellant- Managing Committee is no longer in existence  

and New Mangalore Port Trust is now said to be pursuing this  

matter.   

10. It  is  seen  from  the  affidavit  sworn  in  by  the  

Secretary  of  NMPT  before  this  Court  that  in  terms  of  

Government  of  India  notification  dated  20.7.2009,  the  

provisions  of  the  ESI  Act  were  made  applicable  to  all  port  

trusts  including the New Mangalore Port  Trust,  so that  the  

casual  and  contract  employees  working  in  the  NMPT  have  

been brought under the said Act.  The employees of the New  

Mangalore Port Trust inclusive of  its Auto Garage, Workshop,  

Registered Cargo Handling Workers Wing have been exempted  

from the applicability of  the provisions of  the ESI Act vide  

Notification dated 3.9.2010 of the Government of India.  It is  

stated that NMPT  had filed an application for extending  the  

exemption for a further period from  30.9.2010.  

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11. The  point  to  be  considered  is  between  1983  till  

15.3.1990 whether  the  rendering  of  services  of  loading  and  

unloading by appellant-Management Committee to NMPT was  

an integral part of NMPT and whether the State Government is  

the “appropriate government” to issue the notification.    

12. Mr.  S.N.  Bhat,  learned  counsel  appearing  for  the  

appellant  submitted  that  prior  to  15.3.1990  workers  were  

employed as registered Stevedores for carrying on loading and  

unloading work and they were considered in a single pool on a  

single roll and they were allowed to enter the dock only on the  

passes issued by the CISF at port.   Learned counsel further  

submitted that AW1-Secretary of New Mangalore Port Listed  

Workers  Committee  and AW2 had clearly  spoken that  even  

prior to 15.3.1990, the workers were under the administrative  

control  of  NMPT  and  about  the  various  medical  facilities  

extended  to  the  workers  of  the  Committee  and  also  the  

insurance policies (LIC) and other benefits made available to  

the workers by NMPT and that they were provided with various  

medical facilities and other benefits and the evidence of AWs 1  

and 2 was not at all considered by the High Court.  

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13. By a perusal of the judgment of the High Court, it  

appears that the High Court has not examined the testimony  

of  AW-1,  Secretary  of  New  Mangalore  Port  Listed  Workers  

Committee  and AW-2,  Deputy  Secretary  of  NMPT and their  

evidence that prior to 15.3.1990  the workers were under the  

administrative  control  of  the  NMPT.   The  questions  viz.:  

(i)  whether  the  workers  of  the  Managing  Committee  were  

registered  as  Stevedores  engaged  in  loading  and  unloading  

work of NMPT and whether they were under the administrative  

control  of  NMPT;  (ii)  whether  the  services  rendered  by  the  

workers of the Managing Committee was an integral part of  

NMPT and if that be so, whether the “appropriate government”  

is the Central Government and (iii)  whether  the workers of  

the Managing Committee were extended  medical facilities  and  

other benefits on par with other employees of the NMPT and  

other relevant questions remain unanswered.   In our view, the  

High Court has not considered the above questions in the light  

of the evidence of AWs 1 and 2.  That apart,  High Court did  

not have the benefit of considering the notification issued by  

the  Government  of  India  dated  20.7.2009,  extending  the  

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provisions of the ESI Act to NMPT and the exemption granted  

by the Government of India by its notification dated 3.9.2010.  

Instead of this Court itself examining the above questions, in  

our view, the matter be remitted back to the High Court to  

examine the same.

14. In  the  result,  the  appeal  is  allowed  and  the  

impugned  judgment  dated  5.10.2007  passed  by  the  High  

Court in Miscellaneous First Appeal No.1379/2002 (ESI) is set  

aside and the matter is remitted back to the High Court for  

consideration of  the matter  afresh in the light  of  the above  

discussion and in accordance with law.  The High Court shall  

afford sufficient opportunity to both parties to file additional  

affidavits/counter affidavits and additional documents if any,  

and  proceed  with  the  matter  in  accordance  with  law  as  

expeditiously as possible.

               …………………………J. (T.S. Thakur)

…………………………J.  (R. Banumathi)

New Delhi;   October 28, 2014       

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