ARMY INSTITUTE OF LAW

FAMILY LAW PROJECT

TOPIC : STUDY ON FAMILY COURTS

SUBMITTED TO- SUBMITTED BY-

Mrs. Kirandeep Kaur Nritika Sangwan

Roll No. 1604

 2

ACKNOWLEDGEMENT

I take the opportunity to express my profound gratitude and deep regard to my guide Mrs. Kirandeep
Kaur for her exemplary guidance, monitoring and constant encouragement throughout the course of
the project. The blessing, help and guidance given by her time to time shall carry me a long way in
the journey of my life on which I am about to embark. I also take this opportunity to express a deep
sense of gratitude to literary staff for the cordial support, valuable information and guidance, which
helped me in completing this task at various stages.

Lastly, I am obliged to this institution for the constant encouragement which made the project
possible.
 3

TABLE OF CONTENTS

1. Introduction
2. The Employees’ State Insurance Corporation
3. Contributions
4. Duties of Employer
5. Types of Benefits
6. Salient Features
7. Important Cases
 4

Introduction

The Employee State Insurance act was promulgated by the Parliament of India in the year 1948.
To begin with the ESI scheme was initially launched on 2nd February 1952 at just two industrial
centers in the country namely Kanpur and Delhi with a total coverage of about 1.20 lakh
workers. There after the scheme was implemented in a phased manner across the country with
the active involvement of the state governments.

The Employees’ State Insurance Act was enacted in 1948 with the object, as stated in its
preamble, “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
act introduced an integrated social insurance scheme covering health, maternity and accident
insurance. The scheme was introduced as compulsory state insurance scheme for the benefit of
the workers working in Indian industries.1

1
www.esic.nic.in
 5

The Employees’ State Insurance Corporation

Administration:

The administration of the scheme of insurance contained in the act is vested in the employees’
state Insurance Corporation created by the act. The corporation is a body corporate having
perpetual succession and a common seal. It can sue be sued by its name.

Constitution and Functions:

According to the Act, the corporation consists of the following members;

1. A chairman to be nominated by the Central Government ;

2. A vice – Chairman to be nominated by the Central government;

3. Not more than five person to be nominated by the Central Government

4. One person each representing each of states in which this act is in force to be nominated
by the central government

5. One person to be nominated by the central government to represent the Union territories;

6. Five person representing employers to be nominated by the central government in

consultation with such organization of employees as may be recognized for the purpose
by the central government;

7. Three members of Parliament of whom two shall be members of the Lok sabha and one
shall be a member of the Rajya Sabha elected respectively by the two houses;

8. The director General of the corporation , ex – officio;

- The term of office of members is ordinarily four years but nominated member holds
office during the pleasure of the government nominating them.
 6

Contributions

As per section 2(4) " contribution" means the sum of money payable to the Corporation by the
principal employer in respect of an employee and includes any amount payable by or on behalf
of the employee in accordance with the provisions of this Act.

ESI scheme is financed by contribution raised from employees covered under this scheme and
their employers as a fixed percentage of wages. Rates of contribution are as follows:

 Employees contribution 1.75% of wages ( Employees earning up to Rs. 50 per day are
exempted from payment of their contribution)

 Employer’s contribution 4.75% of wages.

Duties of Employer

1. An employer shall apply in Form-01 for coverage under the ESI Act, within 15 days after
the Act becomes applicable to a factory or establishment.

2. The employer shall submit Declaration Form in respect of all coverable employees in the
unit.

3. The employer shall deposit both employees’ and employers’ contribution as per specified
rates within 21 days of the following month.

4. The Employer shall maintain all such records and registers as are required under the Act
and produce them for verification / inspection before the authorised officers of the
Corporation.

5. The employer shall submit half-yearly Return of Contributions (RC) by

12thMay/11th November every year with all columns properly filled.

6. The employer will report any change in business activity, address, ownership or the
management to ESIC authorities forthwith.

7. An employer will also ascertain the liability towards ESI dues, while taking over the
ownership of a factory/establishment through purchase, gift, lease, licence or otherwise as
the new owner is liable to discharge past liabilities.
 7

8. An employer will also ascertain the liability towards ESI dues, while taking over the
ownership of a factory / establishment through purchase, gift, lease, licence or otherwise
as the new owner is liable to discharge past liabilities.

Types of benefits under the act

The act provides for six types of benefit to insured workmen:

1. Sickness benefit
2. maternity benefit
3. disablement benefit
4. dependent's benefit
5. medical benefit
6. funeral benefit.

Benefits are receivable during the benefit period, which is defined as follows.

Benefit period means such period, being not less than 25 but not more than 27 consecutive weeks
or 6 consecutive months corresponding period a s may be specified in the regulation framed
under the act. For the first benefit period a shorter or longer period may be fixed.

1. Sickness benefit

Sickness benefit represents periodical payments made to an insured person for the period of
certified sickness after completing nine months insurable employment. To quality for this
benefits, contribution should have been paid for at least78 days in the relevant contribution
period. The maximum duration for availing sickness benefit is 91 days in two consecutive
benefit periods. There is waiting period of 2 days which I waived if the insured person is
certified sic within 15 days of the last spell for which sickness benefit period was last paid. The
daily rate of sickness benefit in respect of a person during any benefit period shall be 20 percent
more than “ standard benefit rate”2

2. Maternity benefit

Maternity benefit implies cash payment to an insured woman in case of confinement or

miscarriage or sickness arising out of pregnancy, premature birth of child as certified by a duly
appointed medical officer or midwife. For entitlement to maternity benefit, the insured woman
should have contributed for not less than 70 days in the immediately preceding two consecutives
contribution periods corresponding to the benefit period in which the confinement occurs or is
2
www.ilo.org
 8

expected to occur. The daily rate of benefit double the standard sickness benefit rate i.e full
wages.

Maternity benefit is normally payable for a maximum period of 12 weeks in case of confinement
, 6weeks in case of miscarriage or medical termination of pregnancy which can be extended up
to one additional month in case of sickness arising out of confinement and duly certified by an
authorized medical officer. Maternity benefit continues to be payable even in the event of the
death of an insured woman, during her confinement, or during the period of 6 weeks
immediately following her confinement leaving behind a child for the whole of that period , and
in case the child also dies, during the said period, until the death of the child.

3. Disablement benefit

In case of temporary disability arising out of an employment injury, disablement benefit is

admissible to an insured person for the entire period so certified by an insurance medical officer/
practitioner for which the insured person does not work for wages. the benefit is not subject to
any contributory condition and is payable at the daily rate of 15 percent more than the standard
benefit rate. The benefit is, however, not payable if the incapacity is less than 3 days excluding
the rate date of accident.3

4. Dependent’s benefit

Periodical pension is paid to the dependent of a deceased insured person where death occurs as a
result of an employment injury or occupational diseases. The daily rate of dependent’s shall be
15 percent more than the standard benefit rate. The widow receives monthly pension for life or
until remarriage, at a fixed rate equivalent to 3/5th of the disablement benefit rate and each
dependent child is paid an amount equivalent 2/5th there of until he/she attains 18 years of ages,
provides that , in case of infirmity, the benefit continues to be paid till infirmity.

However, it is subject to the condition that the total dependents’ benefit distributed among the
widow and legitimate or adopted children of the deceased insured persons, does not exceed , at
any time, the full rate of disablement benefit. In case it exceeds the given ceiling, the share of
each of the dependents is, proportionately reduced. The benefit is not payable to married
daughter.

In case the insured person does not leave behind any widow or child, the benefit is payable to
other dependents including parents.4

5. Medical benefit

3
www.blogspot.com
4
www.hp.gov.in
 9

An insured person and his family member become entitled to medical care from the date he
enters the insurable employment and the entitlement continues as long as the insured person is in
insurable employment or is qualified to claim sickness, maternity, or disablement benefit. The
entitlement to medical care is extended up to two years to persons suffering from any specified
chronic or long-term diseases. medical treatment to persons , who go out of coverage during the
period of treatment, is not discontinued till the spell of sickness ends. All insured persons and
member of there are entitled to free, full and comprehensive medical care under the scheme.

The package covers all aspects of health care from comprehensive medical care facilities, such
as:

 Out- patient treatment.

 X- ray and laboratory investigation.

 Ambulance service or conveyance.

 Family welfare services and other national health programmes services.

 Medical certification and

 Special provision including super-specialty treatment

6. Funeral benefit:

Funeral expenses are in the nature of a lump sum payment up to three thousand rupees made to
defray the expenditure of the funeral of deceased insured person. The amount is paid either to the
eldest surviving member of the family or, in his absence , to the person who actually incurs the
expenditure on the funeral
 10

Salient Features of Employees’ State Insurance Act, 1948

The salient features of the act are as follows:

1. Facilitating coverage of smaller factories;

2. Enhancing age limit of dependant children for eligibility to dependants benefit;

3. Extending medical benefit to dependant minor brother/sister in case of not having own
family and whose parents are also not alive;

4. Streamlining the procedure for assessment of dues from defaulting employers;

5. Providing an Appellate Authority within the Corporation against assessment to avoid

unnecessary litigation;

6. Continuing medical benefit to insured persons retiring under VRS scheme or taking
premature retirement;

7. Treating commuting accidents as employment injury;

8. Streamlining the procedure for grant of exemptions;

9. Third party participation in commissioning and running of the Hospitals;

10. Opening of medical/dental/paramedical/nursing colleges to improve quality of medical

care;

11. Making an enabling provision for extending medical care to other beneficiaries against
payment of user charges to facilitate providing of medical care from under-utilised ESI
Hospitals to the BPL families covered under the Rashtriya Swasthaya Bima Yojana
introduced by the Ministry of Labour & Employment.

12. 12. Empowering State governments to set up autonomous Corporations for

administering medical benefit in the States for bringing autonomy and efficiency in the
working.
 11

Important Cases
1. ESIC v. M.M. Suri & Associates Pvt. Ltd5: It is not sufficient that 20 persons are employed in the
shop. They should be employee as per Section 2(9) of the Act, getting the wages prescribed
therein.

2. Regional Director, E.S.I. Corpn. v. L. Ranga Rao6: The accident may occur within or outside the
territorial limits of India. However, there should be a nexus or casual connection between the
accident and employment. The place or time of accident should not be totally unrelated to the
employment.

3. Regional Director ESI v. Francis de Costa7: In year 1997 Where an employee who is on his way
to factory meets with an accident, one K.M. from the place of employment, the Court held that
the injury cannot be said to be caused by accident arising out of and in the course of his
employment. Mere road accident on a public road while employee was on his way to place of
employment cannot be said to have its origin in his employment in the factory.

4. E.S.I. Corpn. Indore v. Babulal8: The M.P. High Court held that injury arose out of employment
where a workman attending duty in spite of threats by persons giving call for strike and was
assaulted by them while returning after his duty was over.

5. Jayanthilal Dhanji Co. v. E.S.I.C9: A worker was injured while knocking the belt of the moving
pulley, though the injury caused was to his negligence, yet such an injury amounts to an
employment injury.

6. Royal Talkies Hyderabad v. E.S.I.C10: There was a canteen and cycle stand run by private
contractors in a theatre premises. On the question of whether the theatre owner will be liable
as principal employer for the payment of E.S.I. contributions, the Supreme Court held that the
two operations namely keeping a cycle stand and running a canteen are incidental or adjuncts to
the primary purpose of the theatre and the workers engaged therein are covered by the
definition of employee as given in E.S.I. Act.

7. S. Ganesan v. The Regional Director, ESI Corporation, Madras11: Travelling allowance paid to
employees is to defray special expenses entitled on him by nature of his employment. It does

5
65 (1997) DLT 741
6
ILR 1981 KAR 1255
7
1992 SCR (3) 23
8
1982 L.I.C. 468
9
AIR 1963 AP 210
10
1978 AIR 1478
11
(2001) ILLJ 1662 Mad
 12

not form part of wages as defined under Section 2(22) of the E.S.I. Act. Therefore, employer is
not liable to pay contribution on travelling allowance.

Bibliography
Books Referred:

1. Practical Guide to Employees' State Insurance- Act, Rules & Regulations – H.L
Kumar
2. Employees’ State Insurance Act, 1948 Alongwith Central Rules, 1950 &
Regulations - Professional Book Publishers

Websites Referred:

1. www.esic.nic.in
2. www.ilo.org
3. www.hp.gov.in
4. www.blogspot.com

Legal Databases Referred

1. www.manupatra.com
2. www.scconline.com