Partly allowed

M/S Jaiswal Auto Sales and Another v. State of U.P. and 4 Others

Allahabad HC2 Aug 2021WRIC/4354/2021

Case brief

AI extract

What is this about?

The High Court dismissed the writ petition challenging the ex parte determination and recovery proceedings under the Employees' State Insurance Act. While declining to quash the orders, the court directed the appellate authority to expedite the stay application and adjudication of pending proceedings regarding employer contribution.

What did the court decide?

The petitioner's application for stay on recovery proceedings is directed to be decided by respondent No.3 within one month without being influenced by the observations made in this judgment.

M/S Jaiswal Auto Sales and Another Vs… — Pension and Retirement Benefits | Allahabad HC (2021)

¶1

Court No. - 32

¶2

Case :- WRIT - C No. - 4354 of 2021

¶3

Petitioner :- M/S Jaiswal Auto Sales And Another Respondent :- State Of U.P. And 4 Others Counsel for Petitioner :- Arpit Agarwal,Sr. Advocate Shri. Chandra Kant Parekh Counsel for Respondent :- C.S.C.,Pranjal Mehrotra,Rajesh Tewari

¶4

Hon'ble Rohit Ranjan Agarwal,J.

¶5

Heard Sri C.K.Parekh, Senior Advocate, assisted by Sri Arpit Agarwal, learned counsel for the petitioners, learned Standing Counsel for respondents No.1 and Sri Pranjal Mehrotra, learned counsel for respondents No.2 to 2- Insurance Corporation.

¶6

The present writ petition has been filed assailing the order dated 01.01.2019 passed by respondent No.3 under Section 45A of the Employees' State Insurance Act, 1948 (hereinafter called as "Act") as well as recovery certificate dated 24.11.2020 and also for a direction on the respondent- Employees’ State Insurance Authorities not to recover any amount from the petitioners subject to final adjudication of Suit No.209 of 2011 pending before the Employees’ State Insurance Court/ Civil Judge (Senior Division) Mau, District Mau under Section 75 of the Act.

¶7

The facts, in nutshell, as disclosed in the petition are that petitioner No.1 is a Firm dealing in business of spare parts of Moped/Two Wheelers while petitioner No.2 is the owner of petitioner No.1-Firm. On 08.05.2007, an inspection was made by the officials of the Employees’ State Insurance Corporation (hereinafter called as "Corporation") and inspection note was prepared, which was signed by the brother of petitioner No.2. Acting on the inspection note, a notice was issued on 13.6.2007 by the office of respondent No.3 requiring the petitioners to furnish details of employees as well as the benefit of the Act being not passed on to the employees as there are 16 employees in the petitioner-Firm. On 14.06.2010, again a notice was issued by respondent No.4 for non-contribution of employer's share amounting to Rs.95,949/- towards Corporation. Against this notice, a reply was filed by the petitioner on 28.6.2010 and prayer was made for recalling the said notice on the ground that the business of the petitioners does not come within the ambit of the Act as there are only 5 employees at the showroom and remaining 3 employees were working in the service centre. According to the petitioners, the said notice provide for hearing on

¶8

¶9

30.06.2010 but when the petitioner visited the office alongwith all the documents, he was informed that the matter will be heard on some future date which will be intimated to him.

¶10

According to the petitioner, neither any date was fixed nor any communication was received and vide an ex parte order dated 29.9.2010 the reply was rejected and petitioner was required to deposit Rs.95,949/within 15 days. Against the ex parte order, petitioner preferred an appeal under Section 45AA of the Act, which was partly allowed vide order dated 28.01.2011 and the quantum of amount was reduced from Rs.95,949/- to Rs.46,032/-. The petitioner challenged the order dated 28.01.2011 by moving an application under Section 75 of the Act before the Employees’ State Insurance Court/Civil Judge (Senior Division) Mau, District Mau, respondent No.5, which was registered as Case No.209/2011. In the said matter, the defendant-Corporation had filed a written statement on 27.10.2015 and issues have been framed on 01.05.2017. The examination-in-chief of petitioner No.2 had been done on 31.7.2018. Several dates were fixed for cross-examination but till date the respondents had not cross-examined petitioner No.2 due to which the matter is getting delayed.

¶11

According to the petitioner, during pendency of the aforesaid case, a show cause notice/demand notice has been issued by the Corporation for non-contribution of the employer's share for the period 01.10.2008 to 31.7.2010. Again on 15.10.2018 a show cause notice has been issued by respondent No.3 to the petitioner-Firm for not contributing its share amounting to Rs.5,83,440/-. Thereafter, an ex parte order was passed on 01.01.2019 determining the amount of Rs.5,57,700/- under Section 45A of the Act.

¶12

According to the petitioner, an application dated 4.2.2019 for recall of the ex parte order has been moved by the petitioner-Firm for recalling the said order, which is still pending consideration, and in the meantime a recovery has been sent pursuant to ex parte order against the petitioner.

¶13

As the respondent- Corporation was pressing recovery certificate, petitioner-Firm had moved an application for stay on 18.12.2020 before

¶14

¶15

respondent No.5 for stalling the recovery proceedings till the proceedings under Section 75 of the Act are concluded by respondent No.5.

¶16

Sri Parekh, learned counsel for the petitioners submitted that the respondent-Corporation cannot proceed to determine employer's contribution by an ex parte order on the basis of inspection report, as the petitioner-Firm had denied the number of employees working with them. He further contended that till the decision is arrived at by the State Insurance Employees Corporation Court, no recovery can be made. Reliance has been placed upon decision of Apex Court in the case of E.S.I.C. vs. C.C.Santhakumar (2007) 1 SCC 584 ; M/s Srinivasa Rice Mill vs. Employees State Insurance Corporation (2007) 1 SCC 705 and decision of Madras High Court in Writ Petition No.13531 to 13533 of 2010 (M/s India Pistons Ltd. vs. The Deputy Director, The Employees' State Insurance Corporation) decided on 23.12.2010.

¶17

Sri Pranjal Mehrotra, learned counsel appearing for the Corporation raised a preliminary objection that the appeal filed by the petitioner-Firm under Section 45AA of the Act was decided on 28.01.2011, whereby quantum of contribution was reduced. Further there is no provision for any appeal against the said order and the claim of petitioners that he has challenged the order dated 28.01.2011 in proceedings under Section 75 of the Act cannot be accepted as Section 75 envisages a situation where the claim is decided and order passed under Section 75 is appellable under Section 82 of the Act. He however, could not dispute the fact that the adjudication proceedings, which had commenced in the year 2011 is pending consideration before respondent No.5.

¶18

I have heard learned counsel for the parties and perused the material on record.

¶19

It is not in dispute that the proceedings under the Act started pursuant to the inspection of the year 2007 wherein notice was issued to the petitioner-Firm. It was only in the year 2010 when the show cause notice-cum-determination order was passed by respondent No.4 that petitioner-Firm had replied and appeared before the authorities. It is also not in dispute that quantum of the amount determined under Section 45A of the Act was reduced in appeal under Section 45AA of the Act. The

¶20

¶21

petitioner had approached the Employees' State Insurance Court under Section 75 of the Act for adjudication of his claim and has also challenged the order passed by Appellate Authority under Section 45AA of the Act. It is further not in dispute that Section 45AA of the Act was incorporated in the Act in the year 2010 and the employer has been provided with the opportunity to challenge the determination order passed under Section 45A under Section 45AA of the Act.

¶22

The contention of learned counsel for the petitioners that he has not only challenged the order passed under Section 45AA of the Act on 28.01.2011 but also has challenged to the legality and claim of the respondent-Corporation in bringing the petitioner-Firm within the ambit of the Act has force as the respondent No.5 on 01.5.2017 has framed 11 issues wherein issue No.3 is in regard to the applicability of the Act upon the petitioner-Firm. Once it is established that the Act is applicable upon the petitioner-Firm, the petitioners shall be liable for the entire determination made right from the year 2007 onward but in case it is held by respondent No.5 that the Act is not applicable then no recovery can be made from the petitioner Firm.

¶23

It is not only that the appellate order is under challenge in proceedings under Section 75 but subsequent recovery proceedings and the recovery certificates issued on the strength of show cause notice and determination order passed for subsequent years are also under challenge before respondent o.5, which deserves to be adjudicated by respondent No.5. The present petition cannot be thrown out solely on the ground that the petitioners had already availed the remedy of appeal under Section 45AA of the Act and thus no adjudication can be made under Section 75 of the appellate order. This Court while declining to grant any relief as prayed by the petitioners for stalling the recovery proceedings or quashing the determination order passed under Section 45A on 01.01.2019 however directs respondent No.5 to take into consideration the application filed by the petitioner on 18.12.2020 for staying the recovery proceedings pursuant to the subsequent determination made by the Corporation for the employer's contribution.

¶24

As the matter is hovering consideration before respondent No.5 for last 10 years and examination-in-chief of the petitioner had already

¶25

¶26

concluded in the year 2018 and the petitioner has not been crossexamined by the Corporation for last three years, the respondent No.3 is directed to expeditiously decide the stay application of the petitioner-Firm strictly in accordance with law within a period of one month from the date of production of a copy of this order downloaded from the website of this Court without being influenced by the observation made above.

¶27

Writ petition stands disposed of.

¶28

Order Date :- 2.8.2021 Kushal

M/S Jaiswal Auto Sales and Another v. State of U.P. and 4 Others

Case brief

What is this about?

What did the court decide?

M/S Jaiswal Auto Sales and Another v. State of U.P. and 4 Others

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Dev Narayan Singh Vs State of U.P. and 4 Others

Ramakant and 8 Others Vs Deputy Collector Sub-Divisional Magistrate and 6 Others

Tulsi Aajivika Sahayata Samooh Narayanpur Basdila and Another Vs State of U.P. and 4 Others

Satish Vs State of U.P. and Another

Manju Vs State of U.P. and 9 Others

Sanjay Kumar Vs State of U P and 2 Others