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Mercantile Laws – II

Notes 5.2.1 Employees’ State Insurance Corporation

Section 3 of this Act provides for the establishment of Employees’ State Insurance Corporation
by the Central Government for administration of the Employees’ State Insurance Scheme in
accordance with the provisions of Act. Such Corporation shall be body corporate having perpetual
succession and a common seal and shall sue and be sued by the said name.

Constitution

The Central Government appoints a chairman, a vice-chairman and other members representing
interests of employers, employees, state governments/union territories and medical profession.
Three members of the Parliament and the Director General of the Corporation are its ex-officio
members. [Section 4]

Powers and Duties of the Corporation

Section 19 empowers the Corporation, to promote (in addition to the scheme of benefits specified
in the Act), measures for the improvement of the health and welfare of insured persons and for
the rehabilitation and reemployment of insured persons who have been disabled or injured and
incur in respect of such measures expenditure from the funds of the Corporation within such
limits as may be prescribed by the Central Government.
Section 29 empowers the Corporation (a) to acquire and hold property both movable and
immovable, sell or otherwise transfer the said property; (b) it can invest and reinvest any
moneys which are not immediately required for expenses and or realise such investments; (c) it
can raise loans and discharge such loans with the previous sanction of Central Government; (d)
it may constitute for the benefit of its staff or any class of them such provident or other benefit
fund as it may think fit. However, the powers under Section 29 can be exercised subject to such
conditions as may be prescribed by the Central Government.

Appointment of Regional Boards, etc.

The Corporation may 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. (Section 25)

5.2.2 Wings of the Corporation

The corporation to discharge its functions efficiently has been provided with two wings:

Standing Committee

The Act provides for the constitution of a Standing Committee under Section 8 from amongst its
members.

Power of the Standing Committee

The Standing Committee has to administer affairs of the corporation and may exercise any of
the powers and perform any of the functions of the corporation subject to the General
Superintendence and control of the corporation. The standing Committee acts as an executive
body for administration of Employees’ State Insurance Corporation, Medical Benefit Council.

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