On 31 March 2010, the Supreme Court of India, considering the cases of Dalco Engineering Private Ltd v. Shree Satish Prabhakar Padhye & Ors and Fancy Rehabilitation Trust & Anr v. Union of India & Ors, held that the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act 1995 was not applicable to private companies.
The two cases were brought jointly before the Supreme Court and sought to challenge the same point of law. In Dalco Engineering Private Ltd v. Shree Satish Prabhakar Padhye & Ors, an employee who had worked for Dalco as a telephone operator for over twenty years was dismissed after developing a hearing impairment.
In a previous ruling, the High Court had held that Dalco, though a private company, was an “establishment” under section 2(k) of the 1995 Act and had consequently acted unlawfully by dismissing S. S. P. Padhye. The High Court consequently ordered Dalco to re-instate the employee in an alternative position with the same benefits.
In the second case, Fancy Rehabilitation Trust & Anr v. Union of India & Ors, Fancy Rehabilitation Trust, a public trust which employed several people with disabilities, had entered into a house-keeping contract with a private company. The contract was terminated by the private company and the trust filed a writ petition before the High Court for the quashing of the notice terminating the contract. The High Court held that the private company was not an “establishment” within the meaning of section 2(k) of the 1995 Act and dismissed the writ petition.
Before the Supreme Court the major issue of contention, in both cases, was whether or not a company incorporated under the Companies Act 1956 fell within the definition of an “establishment” for the purposes of the 1995 Act, section 47 of which states that “no establishment shall dispense with, or reduce in rank an employee who acquires a disability during his service."
The Supreme Court made a distinction between companies established by an Act and those established under an Act, holding that companies were not established under the Companies Act, and therefore were not protected by the provisions of section 47.
The Court rejected arguments by the employees that the term “establishment” should be interpreted liberally, stating that “the courts cannot obviously expand the application of a provision in a socio-economic legislation by judicial interpretation, to levels unintended by the legislature, or in a manner which militates against the provisions of the statute itself or any constitutional limitations."
To read the ERT case summary, click here.
To read the full case, click here.
