Radha Mohan Prasad, J.
1. As in both the writ applications the grievances of the petitioners arc common and the question to be decided is also common, the same have been heard together and arc being disposed of by this common judgment.
2. In both the writ applications, the petitioners have prayed for quashing of the Memorandum dated July 23, 1987 (Annexure 3 to C.WJ.C No. 10014 of 1992 and Annexure-12 to C.WJ.C No. 8682 of 1992) issued by the Insurance Commissioner, Employees' Stale Insurance Corporation, 'ESIC' Building, New Delhi to the Regional Director, ESI Corporation and the consequential orders dated September 10, 1992 (Annexure 1 to C.W.J.C. No. 10014 of 1992) and dated August 19, 1992 (Annexure 2), issued by the Regional Director of the Employees' Slate Insurance Corporation at Patna to the Manager of the local office for payment of cash benefits to the insured employees through Account Payee Cheque instead of making cash payment as provided under Regulation 52(4) of the Employees' State Insurance (General) Regulation, 1950, framed under Section 97 of the Employees' State Insurance Act, 1948 (hereinafter referred to as 'the Regulation and 'the Act' respectively).
3. The petitioner in the first case is a registered Union of workers and employees of factories situated at Katihar through its Joint General Secretary representing the interest of the workers and employees working in the factories whereas the petitioner in the second case is the Secretary of Gulfurbari Mazdoor Union, which as, claimed, is a registered Union, of workers and employees of factories situated at Dhanbad and is entitled to represent the interest of the workers and employees working in the factories.
4. The Employees' State Insurance Act, 1948 was enacted to provide for certain benefits to employees of the factories or establishment in case of sickness, maternity and employment injury and to make provisions for certain other matters in relation thereto. The Employees' State Insurance Corporation was set up with its Regional and Branch Offices in every State of the country to fulfill the object of the Act regarding the workers and employees working in the factories and other establishments. The Act has been amended from time to time to advance the cause of the workers and the employees covered by it. Under the said Act, provisions were made for payment of cash benefits to the workers and the employees in the recognised contingencies of sickness, maternity and employment injury. Section 60(2) of the Act provides for protecting the payment of cash benefit as it shall not be liable to attachment or sale in execution of any decree or order of any court.
5. Section 4 of the Act provides for constitution of a Corporation and Section 8 of the Act provides for constitution of Standing Committee. The powers of the Standing Committee are provided under Section 18 of the Act which are as follows:-
'18. Powers of the Standing Committee-(1) Subject to the general superintendence and control of Corporation, the Standing Committee shall administer the affairs of the Corporation and may exercise any of the power and perform any of the functions of the Corporation.
(2) The Standing Committee shall submit for the consideration and decision of the Corporation all such cases and matters as may be specified in the regulations made in this behalf
(3) The Standing Committee may, in its discretion submit any other case or matter for the decision of the Corporation,'
6. According to the petitioners, from the very beginning the mode of payment to the workers and employees was cash payment and the same was to serve the interest of the workers in the best form and any other mode of payment could defeat the object of the Act. The petitioners claimed that the workers and the employees were satisfied with the cash payments, inasmuch as the said benefits were to meet the economic distress of the employees and the workers who drew the salary of Rs. 1,000/- to Rs. 3,000/- per month. It is stated that the workers and the employees are low-paid employees and are not expected to maintain any Bank Account nor they can be compelled for the same. Thus, according to the petitioners, the said benefits in the form of cash payment would serve the purpose of the low-paid employees in the best manner.
7. It appears that the Standing Committee of E.S.I. Corporation, in its meeting held on August 1, 1986, approved the payments of cash benefits to the insured persons for an amount of Rs. 100/- and above to be made through Account Payee Cheques in the local offices located in A B & C Class cities. Further, it was decided that this system may be first introduced in U.P., M.P. and Bihar Regions with effect from September 1, 1987. Accordingly, the Insurance Commissioner, vide Instruction No. 2/ESI dated July 23, 1987 (Annexure 3 to the first writ - application) circulated the decision of the Standing Committee that the local offices, including the pay offices attached to it in the said cities will adopt the said system of payments of cash benefits to the insured persons and in compliance of the same, the Regional Director, ESI, Bihar, vide his letter dated August 1, 1992 (Annexure 2 to the first writ-application) issued direction to the Managers of four local offices of E.S.I. Corporation, namely, Kumar Dhubi, Samastipur, Katiliar and Digha, for implementing the payment of cash benefits by cheque system from September 1, 1992 and report about the same.
8. Further, it appears that the cheque system was introduced on an experimental basis in Madhya Pradesh Region in accordance with the instructions aforementioned and in pursuance of the demand from the E.S.I.C. Employees, Federation Management Service Unit of the Corporation have since evolved the norms for admissibility of Staff and Officers in local offices under cheque system. A copy of the said norms, duly approved'by the Director-General was circulated to the Regional Directors of Uttar Pradesh, Bihar and Madhya Pradesh, vide Memorandum dated August 16, 1990 (Annexure 4 to the first case), issued by the Section Officer of the Corporation, In the said Memorandum it was also mentioned that the said system will be implemented in local offices in Uttar Pradesh. Madhya Pradesh and Bihar Regions. Thereafter, vide letter dated September 10, 1992 (Annexure 1 to the first case) the Central Directorate issued direction to the Regional Director of Bihar for implementation of the aforesaid system in the other local offices also.
9. However, it appears that the representations filed by various employees union of different factories were all forwarded to the Joint Insurance Commissioner, New Delhi, vide letter dated November 7, 1990 of the Regional Director (Annexure 5). In the meantime, some writ petitions were filed in the Allahabad High Court and till further orders, the operation of circular dated February 25, 1992 was stayed. Thereafter, the Regional Director of Allahabad (U.P.), vide letter dated April 3, 1992, sent intimation to the Insurance Commissioner of the Corporation at New Delhi that suitable directions have been issued to all the local offices of Uttar Pradesh to stay the payment by cheque system to the beneficiaries and start payment of cash benefits immediately. A photo copy of the said letter has been annexed as Annexure 9. Thereafter the petitioners filed the present writ applications challenging the validity of various orders introducing the aforementioned system and the same were admitted and pending hearing the payments were directed to be made as it was being done before September 1, 1992 on proper identification.
10. A counter-affidavit has been filed on behalf of the Standing Committee (respondent No. 2), the Director-General (respondent No. 3) and the Regional Director, Employees, State Insurance Corporation (respondent No. 4), in which it is stated that the record will show that the system of cash payment through 'Account Payee Cheque' has been coming throughout the country for the cash benefits and that the impugned circulars and orders are neither illegal nor without jurisdiction. There is no departure of the policy for the payments nor there is any interference with the mode of payment prescribed by the provisions, of the Act,, Rules and Regulation. According to the respondents, the aforementioned system is the best mode for the benefit of the workers for immediate assistance and there is no monetary loss to the workers and/or the employees. In paragraph 16 of the counter-affidavit the respondents have denied that the payment through cheque will not serve the purpose and the same will cause irreparable injury to the workers. It is also contended that the impugned circulars have been issued on the basis of the resolution of the Standing Committee and thus, they are neither arbitrary nor illegal nor against the provisions of the Act, Rules and Regulation.
11. Mr. Hariji Upadhyay, learned Counsel appearing for the petitioners in both the cases contended that the change in the mode of payment by the Standing Committee was not within its power and thus, the same is wholly without jurisdiction. It was also contended that the decision of the Standing Committee defeats the aim and objects of the provision. In support of the first contention learned counsel referred to Section 97 of the Act which deals with the power of the Corporation to make regulations. According to the learned counsel, the Corporation in exercise of the said power framed regulations and regulation 52 of the Regulations deals with benefits when payable. Under Regulation 52(4) of the Regulations the benefits under the Act is to be paid hi cash at a local office on such days and working hours, as may be fixed by the Director-General, or such other Officer of the Corporation, as may be authorised by him from time to time in this behalf, or at the option of the claimant and subject to deduction of the cost of remittance, by means of postal money orders or other orders, payable through a post office, or by any other means, which the appropriate office may in the circumstances of any particular case consider appropriate. Clause (5) of the said regulation takes further precaution and provides that where the payment of benefits is to be made at a local office such office may insist upon the production of the identity card or other document issued in lieu thereof in respect of the insured person.
12. As already stated above, Section 8 of the Act deals with constitution of the Standing Committee and Section 18 of the Act deals with the powers of the Standing Committee, Chapter V of the Act provides for the benefits, for which the insured persons, their dependents, etc, are entitled. Learned counsel contended that under Section 95 and 96 of the Act, the power to even make rule vests in the Central Government or in the State Government and not in the Standing Committee. According to the learned Counsel, the Standing Committee has only been vested with the power to administer the affairs of the Corporation. The exercise of any power and performance of any function of the Corporation in the Standing Committee is subject to consideration and decision of the Corporation.
13. Mr. Sachita Nand Sahay, learned Counsel for the respondents contended that under Section 97 of the Act, the Corporation has been vested with the power to make regulations for the administration of the affairs of the Corporation and for carrying in effect the provisions of the Act but this power is subject to the condition that such regulations should not be inconsistent with the provisions of the Act and the Rules made thereunder. Learned Counsel submitted that Rule 23 or the Employees' State Insurance (Central) Rules, 1950 (hereinafter referred to as 'the Rules') framed by the Central Government by virtue of powers conferred by Section 95 of the Act, provides that the accounts of the fund shall be operated on by such Officers as may be authorized by the Standing Committee with the approval of the Corporation. Sub-rule (3) provides that any payment in excess of one hundred rupees shall be made by means of a cheque signed as aforesaid and not in any other way unless specifically authorised by the Standing Committee, except the payment of salaries to the employees of the Corporation drawing a basic salary, not exceeding rupees two hundred and fifty a month which may be made in cash and under Regulation 52(4) of the Regulations, benefits under the Act are to be paid in cash at a local office by the authority mentioned therein or at the option of the claimant and subject to deduction of the cost of remittance, by means of postal money orders or other orders, payable through a post office, or by any other means, which the appropriate office may in the circumstances of any particular case consider appropriate. According to Mr. Sahay the said Regulation 52(4), which provides for payment of benefits under the Act in cash, is in conflict with Sub-rule (3) of Rule 23 of the Rules which provides that any payment in excess of the hundred rupees shall be made by means of a cheque and not in any other way unless specifically authorised by the Standing Committee. It is contended that even under Sub-rule (3) of Rule 23 of the Rules the power regarding manner or payment in excess of one hundred rupees other than by means of a cheque vests in the Standing Committee. According to the learned Counsel, from reading of the said provisions, it is quite clear that the Standing Committee has been vested with the absolute power to determine the manner of payment in excess of one hundred rupees except in regard to the payment of salaries to the employees of the Corporation drawing a basic salary, not exceeding rupees two hundred and fifty a month which may be made in cash. It is, therefore, contended that regulation 52(4) of the Regulations, being in conflict with the provisions of Rule 23 of the Rules in ultra vires Section 97 of the Act and the petitioners cannot derive any benefit out of the said regulation and, further, that the impugned decision of the Standing Committee and the consequential orders issued thereunder are legal and justified.
14. On the other hand, Mr.Hariji Upadhyay, learned counsel for the petitioner, contended that Rule 23 of the Rules in general deals with the manner of payment out of the fund of the Corporation whereas second proviso to Sub-rule (4) of Rule 23 of the Rules specifically provides for payment of benefits to insured persons under the provisions of the Act. Regulation 52(4), which has been framed in exercise of the power conferred by Section 97 of the Act, prescribes the mode for payment of benefits, as envisaged under second proviso to Rule 23 and thus there is no repugnancy or inconsistency in Rule 23 and Regulation 52 (4).
15. In my opinion, learned counsel for the petitioners is right in his aforesaid submission. It is true that Sub-rule (3) of Rule 23 of the Rules provides that any payment in excess of one hundred rupees shall be made by means of a cheque and not in any other way unless specifically authorised by the Standing Committee but Regulation 52 of the Regulations specifically deals with the manner of payment of benefits under the Act. Under Sub-rule (3) of Rule 23 the Standing Committee has been vested with the power to provide any oilier way also than by means of cheque signed by such Officers as may be authorised under Sub-rule (1). According to the provisions contained in Section 18 of the Act which deals with the powers of the Standing Committee, the Standing Committee cannot function beyond the area of regulation and for that also the approval of the Corporation is essential under Section 18 of the Act the Standing Committee is to administer the affairs of the Corporation and may exercise any of the powers and perform any of the functions of the Corporation, subject to the general superintendence and control of the Corporation Thus, in my opinion, when the Standing Committee cannot function beyond the area of regulation and its decision is subject to the general superintendence and control of the Corporation, the Regulation 52(4) which has been made by the Corporation by virtue of the power under Section 97 of the Act cannot be held to be inconsistent with Rule 23 of the Rules.
16. It is well settled that while interpreting the law the Court should read different provisions of an Act in a manner that no part thereof is held to be superfluous or surplusage unless the language of the two provisions of the statute leads to manifest contradictions. It is also a well-settled rule of construction that the provisions of a statute should be so read as to harmonise with one another and the
provisions of one section cannot be used to defeat
those of another unless it is impossible to effect
reconciliation between them. The Supreme Court in
its decision in the case of D. Sanjeevayya v. Election
Tribunal, Andhra Pradesh, AIR 1967 S.C. 1211 in
this regard quoted a principle stated in Crawford's
Statutory Construction at P.260, which is as
follows:-
'Hence, the Court should, when it seeks the legislative intent, construe all of the constituent parts of the statute together, and seek to ascertain the legislative intention from the whole Act, considering every provision thereof in the light of the general purpose and object of the Act itself, and endeavouring to make every part effective, harmonious, and sensible. This means, of course, that the Court should attempt to avoid absurd consequences in any part of the statute and refuse to regard and word, phrase, clause or sentence superfluous, unless such a result is clearly unavoidable.'
The Supreme Court in the case of Municipal Corporation of City of Hubli v. Subha Rao Hanumantharao Prayag and Ors., AIR 1976 S.C.1398 held that the statute must be read as a whole and every provision in the statute must be construed with reference to the context and other clauses in the statute so as, as far as possible, to make a consistent enactment of the whole statute.
17. It has rightly been contended by the learned Counsel for the petitioners that the Standing Committee constituted under Section 8 of the Act has only been given the power of administering the affairs of the Corporation under Section 18 of the Act but not to frame or to go against the regulation made by the Corporation under the Act by virtue of the power under Section 97 of the Act which has the effect as is enacted in the Act and thus the Standing Committee exceeded its jurisdiction by passing the impugned resolution directing therein to make payment of cash benefits to the insured persons and/ or their dependents etc. through Account Payee Cheque and consequently, the order issued by the Regional Office is also bad on that count.
18. It is further contended by the learned Counsel for the petitioners that there is no substance in the submission of the learned Counsel for the respondents that mere is inconsistency in Rule 23 and Regulation 52 (4), both framed under the Act, also on the ground that after the regulation is framed, then by virtue of Sub-section (3) of Section 97 of the Act, the said regulations have the effect as if enacted in the Act itself and thus, even if the rule is found to be inconsistent with Regulation 52 (4), the same cannot be held to be ultra vires. In my opinion, the said submission of the learned Counsel for the petitioners is wholly misconceived and untenable. Under Sub-section (4) of Section 97 of the Act, regulation made by the Corporation is to be forwarded to Central Government which shall cause a copy of the same to be laid before each House of Parliament and after its approval by the House, it has to be published in the Gazette of India, whereafter it shall have the effect as if enacted in the Act. Similar is the position with respect to a rule framed under Section 95 of the Act. Thus, the validity of regulation with reference to the rule is to be judged before it validily assumes the effect of an enactment under Sub-section (3) of Section 97 of the Act. However, in view of the law laid down as above that Regulation 52 (4) is not inconsistent with Sub-rule (3) of Rule 23 of the Rules The aforesaid submission of the learned Counsel for the petitioners may not be very much relevant except for the purpose that a regulation cannot be changed either by the Corporation or by the Standing Committee except in accordance with Sub-section (4) of Section 97 of the Act, which provides for placing it before each House of Parliament and its publication in the Gazette of India.
19. Mr. Sahay, learned Counsel for the respondents also ventured to submit that Regulation 52(4) of the Regulations having not been forwarded to the Central Government and laid before each House of Parliament and published in the Gazette of India as required under Sub-section (4) of Section 97 of the Act, the same cannot be held to be valid and have effect as if enacted in the Act itself. In my opinion, the said submission of Mr. Sahay is equally misconceived and untenable. Regulation 52(4) was framed in the year 1972 by Notification No. GenI/ Amdt./32, dated April 25, 1972 whereas Sub-section (4) of Section 97 of the Act was inserted by Act 45 of 1984 with effect from January 27, 1985. Thus, when the said regulation was framed, there was no such requirement as envisaged under Sub-section (4) of Section 97 of the Act nor the said provision has been given retrospective effect.
20. Now it takes me to consider the other submission of the learned Counsel for the petitioners that the impugned decision of the Standing Committee defeats the aims and objects of the provisions itself.
21. Act No. 34 of 1948 was modified by A.O. 1950, A.O.(No. 3) of 1956 and A.O. (No. 4) of 1957 and amended by Acts Nos. 53 of 1951, 44 of 1966, 51 of 1970, 38 of 1975, 45 of 1984 and Act 29 of 1989, which was an Act to provide for certain benefits to employees in case of sickness, maternity and employment injury and to make provisions for certain other matters in relation thereto. The objects and reasons of Amendment Act 29 of 1989 mentions about grant of benefit in cash. Clause 6 of the Amending Act 29 of 1989 gives the objects and reasons for the said amendment. The relevant portion of die same reads as follows :-
'6. The Bill seeks to achieve the aforesaid object.
Statement of Objects and Reasons of Amending Act 29 of 1989.- The Employees' State Insurance Act, 1948 provides for grant of cash benefits to the employees in the recognised contingencies of sickness, maternity and employment injury. It also provides for medical benefits, in kind, to the employees and their families. The Act is at present applicable to non-seasonal factories and certain other establishments. The provisions of the Act are being extended, area-wise, in a phased manner. As on December 31, 1988, the Act covered about 61.68 lakhs employees in 580 industrial centres in the country. The total number of beneficiaries including family members for medical care about 2.73 crores.'
22. Section 60 of the Act provides that the benefit shall not be transferable or assignable and that no cash benefit payable under the Act shall be liable to attachment or sale in execution of any decree or order of any Court. Section 62 further prohibits any person from commuting for a lump sum any disablement benefit admissible under the Act. Under Sub-section (2) of Section 70 of the Act, which deals with repayment of benefits improperly received the benefits of cash payments have been protected. Section 71, which deals with benefit payable up to any including day of death, also provides for payment of benefits in cash. Other provisions of Chapter V of the Act, which deals with benefits also, mention payment of such benefits in cash. Thus, regulation 52(4) which has been framed in exercise of the power conferred by Section 97 of the Act prescribing the mode for payment of benefits is consistent with the objects and reasons of the Act, as aforementioned. Any other meaning or interpretation given to the provisions contained in Rule 23 which would make Regulation 52(4) inconsistent with each other would defeat the object of the Act itself.
23. The Supreme Court in the case of Seventilal Maneklal Sheth v. Commissioner of Income-tax (Central), Bombay AIR 1968 S.C. held that it is a sound rule of interpretation that a statute should be so construed as to prevent the mischief and to advance the remedy according to the true intention of the maker of the statute.
24. The benefits admissible to employees in case of sickness, maternity and employment injury under the Act have been given to meet the emergent situation and the payment of the same by Account Payee Cheque to such workers/employees who draw a meagre amount towards wages is bound to cause unnecessary harassment and delay in getting it encashed causing irreparable injury to the workers/employees. Moreover, it has rightly been submitted by the learned Counsel for the petitioners that it will be too much to expect from a low-paid wage earner to maintain an account in a Bank and to face all kinds of problems in complying with the formalities of the complicated rules of the Bank for withdrawal of the amount, particularly when many such workers/ employees are illiterate and cannot even sign.
25. Accordingly, the impugned memorandum and the consequential orders cannot be sustained and the same are quashed.
26. In the result, the writ applications are allowed but without costs.