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ADMINSTRATION OF THE SCHEME

The Employees state Insurance Scheme is being


administered by the Employees State Insurance Corporation
(E.S.I. Corpn.) which has been set up by the Central Government
under the Act. A standing Committee has been constituted from
among the members of the E.S.I. Corporation to act as an
executive body for the administration of the Scheme under the
general superintendence and control of the E.S.I. Corporation
9Sec. 8 and 18). A Medical Benefit Council has been set up to
advise the E.S.I. Corporation on medical questions (Sec. 10 and
22). Further the E.S.I. Corporation has been empowered to
appoint Regional Boards, Local Committees and Regional and
Local Medical Benefit Councils in such areas and in such manner,
and delegate to them such powers and functions as may be
provided by the regulations (Sec. 25). Further the E.S.I.
Corporation may appoint Inspectors for the purpose of the Act
(Sec. 45).
Employees State Insurance Corporation
A statutory body known as the Employees State Insurance
Corporation has been created under the Act to administer and
execute the scheme of Employees State Insurance [Sec. 3 (1)].
The E.S.I. Corporation is a body corporate having perpetual
succession and a common seal [Sec. 3 (2)].
Constitution of the E.S.I. Corporation (Sec. 4). The
E.S.I. Corporation shall consist of the following members, namely:
(a)
A chairman, a Vice-Chairman and not more than 5
persons to be appointed by the Central Government;
(b)
1 person each representing each of the State in which
the Act is in force to be appointed by the State Government
concerned;
(c)
1 person to be appointed by the Central Government to
represent the Union Territories;

(d)
10 persons representing employers to be appointed by
the Central Government in consultation with such
organizations of employers as may be recognized for the
purpose by the Central Government;
(e)
10 persons representing employees to be appointed by
the Central Government in consultation with such
organizations of employees as may be recognized for the
purpose by the Central Government;
(f) 2 persons representing the medical profession to be
appointed by the Central Government in consultation with
such organizations of medical practitioners as may be
recognized for the purpose by the Central Government;
(g)
3 members of Parliament of whom 2 shall be members
of the Lok Sabha and 1 shall be a member of the Rajya
Sabha elected respectively by the members of the Lok Sabha
and the members of the Rajya Sabha; and
(h)
The Director-General of the E.S.I. Corporation, exofficio.
Term of office of members of the E.S.I. Corporation. The
term of office of the members of the E.S.I. Corporation, other than
the members referred to in Clauses (a), (b) and (c) above, and
the ex-officio member, shall be 4 years [Sec. 5 (1)]. A member
of the E.S.I. Corporation shall, notwithstanding the expiry of the
said period of 4 year, continue to hold office even after the expiry
of the said period of 4 years, until the appointment or election of
his successor is notified. The members referred to in Clauses (a),
(b) and (c) above shall hold office during the pleasure of the
government appointing them [Sec. 5 (2)].
An outgoing member of the E.S.I. Corporation shall be
eligible for re-appointment or re-election (Sec-6).
Powers of the E.S.I. Corporation.
1. It may employ the necessary staff
transaction of its business [Sec. 17].

for

the

efficient

2. It may, in addition of the scheme of benefits specified in the


Act, promote measures for the improvement of the health
and welfare of insured persons and for the rehabilitation and
re-employment of insured persons who have been disabled
or injured. It may incur in respect of such measures
expenditure from its funds within such limits as may be
prescribed by the Central Government [Sec. 19]
3. It can acquire, hold and sell or otherwise transfer any
movable and immovable property [Sec. 29 (1)]
4. It can, from time to time, invest any moneys which are not
immedicately required [Sec. 29 (2)].
5. It may, with the previous sanction of the Central
Government, raise loans and take measures for discharging
such loans [Sec. 29 (3)].
6. It may constitute for the benefit of its staff provident or other
benefit fund [Sec. 29 (4)].
7. It may appoint such persons as Inspector, as it thinks fit, for
the purposes of the Act, within such local limits as it may
assign to them [Sec. 45 (1)].
8. It may on the basis of information available to it, by order,
determine the amount of contribution payable in respect of
employees of a factory or establishment in respect of which
no particulars, registers or records are submitted, furnished
or maintained.
All orders and decisions of the E.S.I. Corporation shall be
authenticated by the signature of the Director-General of the
E.S.I. Corporation. As regards other instruments issued by
the E.S.I. Corporation they shall be authenticated by the
signature of the Director-General or such other officer of the
E.S.I. Corporation as may be authorised by him [Sec. 7].
Duties of the E.S.I. Corporation
1. It shall in each year frame a budget showing probable
receipts and expenditure which it proposes to incur during
the following year. It shall submit a copy of the budget for

the approval of the Central Government before a specified


date [Sec. 32].
2. It shall maintain correct accounts of its income and
expenditure in such form and in such manner as may be
prescribed by the Central Government [Sec. 33]. Such
accounts shall be duly audited by auditors appointed by the
Central Government [Sec. 34 (1)].
3. It shall submit to the Central Government an annual report of
its work and activates (Sec. 35).
4. It shall, at intervals of 5 years, have a valuation of its assets
and liabilities made by a value appointed with the approval
of the Central Government [Sec. 34 (1)].
The annual report, the audited accounts of the E.S.I.
Corporation, together with the auditors report thereon, and
the budget as finally adopted by it, shall be placed before
Parliament and published in the Official Gazette [Sec. 36].
Standing Committee [Sec. 8]
Subject to the general superintendence and control of the
E.S.I. Corporation and to act as its executive body, a
Standing Committee has been constituted from among the
members of the E.S.I. Corporation. The Standing Committee
shall consist of
(a)
A Chairman, appointed by the Central Government;
(b)
3 members of the E.S.I. Corporation, appointed by the
Central Government;
(c)
3 member of the E.S.I. Corporation representing such 3
State Government thereon as the Central Government may,
by notification in the Official gazette, specify from time to
time.
(d)
8 members from among the members of the E.S.I.
Corporation representing employers ;
(i) 3 members from among the members of the E.S.I.
Corporation representing employers;

(ii)
3 members from among the members of the E.S.I.
Corporation representing employees;
(iii)
1 member from among the members of the 3 E.S.I.
Corporation representing the medical profession; and
(iv)
1 member from among the members of the E.S.I.
Corporation elected by Parliament;
(v)
The Director-General of the E.S.I. Corporation. exofficio.
Term of office of members of the Standing Committee. The
term of office of a member of the Standing Committee referred to
in Clause (d) shall be 2 years. But he shall, notwithstanding the
expiry of the said period of 2 years, continue to hold office until
the election of his successor is notified. Further, he shall cease to
hold office when he ceases to be a member of the E.S.I.
Corporation. the other members referred to in Clauses (a) to (c)
shall hold office during the pleasure of the Central Government
A member of the Standing Committee shall be eligible for reappointment or re-election [Sec.6]
Powers and duties of the Standing Committee [Sec. 18].
Subject to the general superintendence and control of the E.S.I.
Corporation, the Standing Committee shall administer the affairs
of the E.S.I. Corporation. Further, it may exercise any of the
powers and perform any of the:Right to require the company to circulate resolution [Sec. 188]
Right to have on request minute of proceedings of a general
meeting [Sec. 196]
Right to receive divided when declared [Sec. 206]
Right to receive copies of annual accounts of the company with
the auditors report [Secs. 210 and 219]

Right to participate in appointment of directors and auditors in


the annual general meeting [Secs. 224 and 225]
Right to make an application to the Tribunal for ordering an
investigation into the affairs of the company [Sec. 235]
Right to present a petition to the Tribunal for relief in cases of
oppression and mismanagement [Sec. 397 and 398]
Right to petition top the Tribunal for the winding up of the
company [Sec. 439]
Right to share in surplus on winding up [Sec. 511]
Documentary Rights. These are the rights given to the
members by the Memorandum and the Articles of Association.
Legal Rights. These are the rights which are given to members
by the general law, e, g., in case of any misstatement or
concealment of a material fact in a prospectus, a person who has
applied for shares on the faith of such prospectus and has been
allotted shares can avoid the con-tract and claim damages under
the general law.
Right of Shareholders to share in assets of a company. An
incorporated companys assets are the property of the company
and not that of its shareholders for the time being. No
shareholder, therefore, has any right to any item of property
owned by the company for he has no leal or equitable interest
therein. He is entitled to a share in the profits while the company
continues to carry on business and a share in the distribution of
the surplus assets when the company is wound up.

Liability of Members.
The liability of the members of a company depends on the nature
of the company.

Company with unlimited liability. Each member is liable in full


for all the debts contracted by the company during the period he
was a member.
Company limited by shares. Each member is liable to pay the
full nominal value of the shares held by him. If he has already
paid a part of the amount on the shares, his liability is limited to
the unpaid amount on the shares in respect of which he is a
member
Company limited by guarantee. Each member is liable to
contribute the amount guaranteed by him to be paid in the event
of the winding up of the company.