The Employees Insurance Court

Section 49: what the Court decides

Section 49(1) lists thirteen matters, clauses (a) to (m). The safest way to hold them is in four groups.

Who and how much, the definitional questions:

• (a) whether any person is an employee within the meaning of the Chapter, or whether he is liable to pay the employee's contribution;
• (b) the rate of wages or average daily wages of an employee for the purposes of the Chapter;
• (c) the rate of contribution payable by an employer in respect of any employee;
• (d) who is or was the employer in respect of any employee.

Entitlement:

• (e) the right of any person to any benefit, and its amount and duration;
• (f) any direction issued by the Corporation on a review of any payment of dependants' benefit.

Money claims:

• (h) a claim for recovery of contributions from the employer;
• (i) a claim under section 41(8) for recovery of the value or amount of benefits received when not lawfully entitled;
• (j) a claim against an employer under section 42;
• (l) a claim by an employer to recover contributions from a contractor;
• (m) any other claim for the recovery of any benefit admissible under the Chapter.

Everything else, and an appeal:

• (g) any other matter in dispute between an employer and the Corporation, between an employer and a contractor, between a person and the Corporation, or between an employee and an employer or contractor, in respect of any contribution, benefit or other dues payable or recoverable under the Chapter;
• (k) an order of the appellate authority under section 126 in respect of Chapter IV.

Section 49(2), the fifty per cent deposit. No matter in dispute between an employer and the Corporation in respect of any contribution or other dues shall be raised by the employer in the Court unless he has deposited with that Court fifty per cent of the amount due from him as claimed by the Corporation.

The proviso is essential and is often forgotten. The Court may, for reasons to be recorded in writing, waive or reduce the amount to be deposited.

Three limits on that deposit are worth marking. It binds only the employer, so a worker raising a dispute deposits nothing. It applies only to a dispute with the Corporation about contributions or dues, not to every matter in section 49(1). And it is waivable or reducible by the Court for recorded reasons, which is what distinguishes it from the pre-deposit in section 23(3).

Section 49(3), the bar on civil courts. No Civil Court shall have jurisdiction to decide or deal with any question or dispute specified in sub-section (1), or to adjudicate on any liability which under the Chapter is to be decided by a medical board, a medical appeal tribunal or the Employees' Insurance Court.

Section 50: powers

Section 50(1). The Court has all the powers of a Civil Court for summoning and enforcing the attendance of witnesses, compelling the discovery and production of documents and material objects, administering oaths and recording evidence; and it is deemed to be a Civil Court within the meaning of section 195 and Chapter XXVI of the Code of Criminal Procedure 1973.

Section 50(2). It follows such procedure as the State Government prescribes.

Section 50(3). All costs incidental to a proceeding are in the discretion of the Court, subject to State Government rules.

Section 50(4). An order of the Court is enforceable by it as if it were a decree passed in a suit by a Civil Court.

The deeming in section 50(1) is narrow and specific. It makes the Court a Civil Court for section 195 and Chapter XXVI of the Code of Criminal Procedure, which govern prosecutions for offences relating to documents and to the administration of justice, such as giving false evidence before it. It does not turn the Court into a Civil Court for all purposes.

Section 51: proceedings

Section 51(1). The manner of commencing proceedings, the fees and the procedure are prescribed by the appropriate Government.

The first proviso is the limitation period. Learn it. The limitation for initiating proceedings by the aggrieved person in the Employees' Insurance Court shall be three years from the date on which the cause of action arises.

The second proviso leaves to the regulations when the cause of action arises for a claim by the Insured Person or dependants, for a claim by the Corporation to recover contributions including interest and damages from the employer, and for a claim by an employer to recover contributions from a contractor, and the time within which those claims and recoveries may be made.

Section 51(2), who may appear. Any application, appearance or act required to be made or done before the Court, other than the appearance of a person required for examination as a witness, may be made or done by:

• a legal practitioner; or
• an officer of a registered trade union authorised in writing by that person; or
• with the permission of the Court, any other person so authorised.

That middle limb matters practically. A worker need not brief an advocate; his union officer may appear for him as of right.

Section 51(3), reference to the High Court. The Court may submit any question of law for the decision of the High Court, and if it does so shall decide the question pending before it in accordance with that decision.

Section 52: appeal to the High Court

Section 52(1). Save as expressly provided in the section, no appeal shall lie from an order of an Employees' Insurance Court.

Section 52(2). An appeal lies to the High Court from an order of the Court if it involves a substantial question of law.

Section 52(3). The appeal shall be filed within sixty days from the date of the order.

Section 52(4). Sections 5 and 12 of the Limitation Act 1963 apply to such appeals. Section 5 permits condonation of delay on sufficient cause; section 12 excludes certain periods, such as the time taken to obtain a copy of the order, in computing the period.

Section 52(5). Where the Corporation has appealed, the Employees' Insurance Court may, and if so directed by the High Court shall, withhold payment of any sum directed to be paid by the order appealed against, pending the decision of the appeal.

Note the asymmetry in section 52(5). It operates only where the Corporation is the appellant. There is no corresponding power to withhold where an employer appeals.

Distinguishing the two forums

Chapter III and Chapter IV each have a forum, and they are not the same. This is a standard distinctions question.

A worked example

The Corporation claims 8,00,000 rupees of arrear contributions from Sunrise Textiles, which says most of the people counted were a contractor's employees and not its own.

Which forum? The Employees' Insurance Court. Whether a person is an employee is section 49(1)(a), who the employer was is section 49(1)(d), and a claim to recover contributions from the employer is section 49(1)(h).

Can Sunrise go to the civil court instead? No. Section 49(3) bars the civil court from any question or dispute specified in section 49(1).

What must Sunrise do before raising the dispute? Deposit with the Court fifty per cent of the amount claimed by the Corporation, that is 4,00,000 rupees: section 49(2). But it may apply to have that waived or reduced, and the Court may do so for reasons to be recorded in writing.

A worker in the same establishment disputes the rate of his disablement benefit. Must he deposit anything? No. Section 49(2) binds only an employer raising a dispute with the Corporation.

Who may appear for him? A legal practitioner, or an officer of a registered trade union authorised by him in writing, or with the Court's permission any other authorised person: section 51(2).

By when must he begin? Within three years from the date the cause of action arose: the first proviso to section 51(1).

The Court decides against Sunrise. Can it appeal? Only to the High Court, and only if the order involves a substantial question of law, within sixty days, with sections 5 and 12 of the Limitation Act 1963 available: section 52.

The Court orders the Corporation to pay a worker and the Corporation appeals. Must the money be paid meanwhile? The Employees' Insurance Court may, and if the High Court so directs shall, withhold payment pending the appeal: section 52(5).

A pure question of law arises midway and the Court is unsure. It may submit that question to the High Court and must then decide in accordance with the High Court's decision: section 51(3).

What this does NOT mean

The fifty per cent deposit is not absolute. The proviso to section 49(2) allows the Court to waive or reduce it for reasons recorded in writing.

The deposit does not apply to employees. It binds an employer raising a dispute with the Corporation about contributions or dues.

An appeal to the High Court is not available as of right on the facts. Section 52(1) bars appeals except as the section provides, and section 52(2) allows one only where a substantial question of law is involved.

Section 50(1) does not make the Employees' Insurance Court a Civil Court generally. It gives it the listed civil court powers and deems it a Civil Court for section 195 and Chapter XXVI of the Code of Criminal Procedure 1973.

Section 49(3) does not bar the civil court from everything. It bars the questions in section 49(1) and liabilities to be decided by the medical board, the medical appeal tribunal or this Court.

Limits and criticism

A fifty per cent deposit is a high price for access to justice, even with the waiver. An employer with a good defence and no cash is in difficulty until the Court exercises the discretion.

No time limit binds the Court. The Tribunal under section 23(4) is at least told to endeavour to decide within a year; nothing equivalent appears in sections 48 to 52.

The qualification for a Judge is low. A legal practitioner of five years' standing may be appointed to decide questions on which a worker's disablement pension depends.

Section 52(5) is one sided, allowing payment to be withheld only where the Corporation appeals.

Quick revision

• Section 48: the State Government shall constitute the Court for a local area; as many Judges as it thinks fit; qualification is a judicial officer, present or past, or a legal practitioner of five years' standing; one Court may serve several areas and several Courts one area, with business distributed by order.
• Section 49(1): thirteen matters, including who is an employee, wages, rate of contribution, who the employer is, the right to a benefit and its amount and duration, a review direction on dependants' benefit, recovery of contributions, a section 41(8) claim, a section 42 claim, an order of the appellate authority under section 126, an employer's claim against a contractor, and any other dispute between the parties named in clause (g).
• Section 49(2): fifty per cent deposit by an employer disputing contributions or dues with the Corporation, waivable or reducible for reasons recorded in writing.
• Section 49(3): the civil court is ousted.
• Section 50: civil court powers of summons, discovery, oath and evidence; deemed a Civil Court for section 195 and Chapter XXVI of the Code of Criminal Procedure 1973; procedure prescribed by the State Government; costs in its discretion; orders enforceable as a decree.
• Section 51: limitation three years from the cause of action; a registered trade union officer may appear; the Court may refer a question of law to the High Court and is bound by the answer.
• Section 52: appeal to the High Court only on a substantial question of law, within sixty days; sections 5 and 12 of the Limitation Act 1963 apply; payment may be withheld pending appeal only where the Corporation appeals.

Test yourself

1. Who constitutes the Employees' Insurance Court, and who may be its Judge? The State Government, by notification, for a specified local area: section 48(1). A person who is or has been a judicial officer, or who is a legal practitioner of five years' standing: section 48(3).

2. An employer wants to dispute a claim for 10,00,000 rupees of contributions. What must he do first, and is there any relief? He must deposit fifty per cent, that is 5,00,000 rupees, with the Court: section 49(2). The Court may waive or reduce that amount for reasons to be recorded in writing, under the proviso.

3. Can a worker sue in the civil court for a benefit he says the Corporation wrongly refused? No. The right of any person to a benefit and its amount and duration is a matter for the Employees' Insurance Court under section 49(1)(e), and section 49(3) bars the civil court from any question specified in section 49(1).

4. Within what time must proceedings be begun in the Employees' Insurance Court? Three years from the date on which the cause of action arises: the first proviso to section 51(1).

5. Must an injured worker engage an advocate? No. Under section 51(2) an officer of a registered trade union authorised in writing may appear for him, as may any other authorised person with the permission of the Court.

6. On what ground does an appeal lie to the High Court, and within what time? Only where the order involves a substantial question of law, within sixty days of the order: section 52(2) and (3), with sections 5 and 12 of the Limitation Act 1963 applying.

7. Distinguish the deposit under section 49(2) from that under section 23(3). Section 49(2) requires an employer to deposit fifty per cent of the amount claimed by the Corporation before raising a dispute in the Employees' Insurance Court, and the Court may waive or reduce it for recorded reasons. Section 23(3) requires an employer to deposit twenty-five per cent of the amount determined under section 125 before the Tribunal will entertain his provident fund appeal, and no power of waiver is stated.