HC stays recovery proceedings against private edu institutions

The Madras High Court on Thursday restrained the Employees State Insurance Corporation (ESIC) from initiating recovery proceedings against all private institutions in Tamil Nadu on the basis of a government order of 2010, extending the provisions of ESI Act to them.

The first bench comprising Chief Justice A P Sahi and Justice Subramonium Prasad passed the interim orders on a petition from All India Private Educational Institutions Association challenging the G.O issued on November 26, 2010.

The bench said the issue having been raised requires to be resolved after exchange of pleadings and the ESIC shall file their counter affidavit in the present writ petition within three weeks with the entire material on which they choose to rely for the purpose of raising defense in favour of the G.O.

"In the wake of the facts of the contentious issue which requires adjudication, we provide as an interim measure that until further orders of the Court, recovery proceedings against the members of the petitioner institutions shall remain stayed," it said.

The petitioners contended that the term establishment had not been defined under the ESI Act, and it doesn't cover the educational institution.

The teacher and staff can't be equated and brought within the definition of the word 'workman.'