Zuari Cement Ltd. v. Regional Director, E.S.I. Corporation & Ors.
Background
Zuari Cement, a cement manufacturer, had been granted exemption from the Employees' State Insurance (ESI) Act for 1986-1993 but was denied renewal for 1993-2001, after which the ESI Corporation issued demand notices for over Rs. 65 lakh in contributions. After a series of writ petitions, the Andhra Pradesh High Court had directed the company to approach the Employees' Insurance (ESI) Court instead, which then granted the company exemption from the Act's coverage and set aside the demand notices based on a report that it was already providing comparable medical benefits. The ESI Corporation appealed, and the High Court reversed the ESI Court, holding it had no power to grant such exemption, leading to this appeal by the company.
Decision Breakdown
The Supreme Court dismissed the appeals, holding that under the ESI Act's scheme, only the "appropriate Government" has the power to grant or refuse exemption under Section 87, while the Employees' Insurance Court under Section 75 can only decide disputes over contributions, benefits, or dues between an employer and the Corporation, not the separate question of exemption itself. The Court held that neither the High Court's earlier direction nor the parties voluntarily submitting to the ESI Court's jurisdiction could confer jurisdiction it did not statutorily possess, since consent cannot create jurisdiction where none exists by law. Because the ESI Court's exemption order was passed without jurisdiction, it was a nullity, and the High Court was right to set it aside, meaning the company's underlying claim that it provided superior facilities was never actually examined on its merits.
Lesson Learnt
A tribunal's order is void if it acts outside the specific powers granted to it by statute, even if all parties went along with the proceeding at the time: jurisdiction cannot be created merely because the parties agreed to it or a court earlier pointed them there.