NEW MANGALORE PORT LIST.WORKERS MAN.COM. v. REG.DIR.,ESI CORP.,BANGALORE INSC 778

NAME OF THE CASE New Mangalore Port List.WorkersMan.com v Reg.Dir., ESI Corp., Bangalore INSC 778

FACTS The appellant New Mangalore Port Listed Workers Managing Committee was concerned with managing workers performing terminal activities particularly the loading and unloading within the New Mangalore Port Trust (NMPT). The factual background of the appellant is that in the year 1987 the Employees’ State Insurance Corporation directed the appellant to implement the Employees’ State Insurance (ESI) Act, 1948 in view of a Government of Karnataka notification extending provisions of the Act to certain establishments. In response to this directive the appellant challenged its authority stating non applicability and jurisdiction of the ESI Act asserting that the appellant was not a “shop” or an “establishment”, and that the appropriate government to issue such notification was the Central Government, not the State Government. The ESI Court reversed the decision in favor of the appellant; however, the High Court of Karnataka upset this decision and therefore brought the current appeal to the Supreme Court.

ISSUE In light of these arguments, the two queries which arise are, whether the appellant is governed by the ESI Act based on the impugned notification of the State Government and whether the State Government is competent to extend the applicability of the Act to the appellant.

HOLDING Yes, because the type of operation conducted by the appellant comes under the definition of “establishment” under the ESI Act and the State Government has power to bring such other establishment within the ambit of Act within its territory.

RATIONALE Several issues were reflected in the constitution of the appellant and after analyzing on the kind of activities that the appellant has been involving in loading or unloading activities in the port, the Supreme Court held that loading and unloading activities amounted to institution of an “establishment” within the purview of the ESI Act. The Court also ruled that the State Government was the right authority under the ESI Act to issue the notification to extend ESI Act to such establishments in the state. Therefore, the appellant was compelled to avail the provisions of the ESI Act as per the notification of the State Government.