Disposed

M/S Harish Electricals and Machenicals Contractors v. the Regional Director Employees and 2 Others

Allahabad HC5 Jul 2024WRIC/19956/2024

Case brief

AI extract

What is this about?

Petitioner challenged ESI recovery certificates without contesting the Section 45-A contribution determination. The court held the 45-A order is appellable under Section 45-AA and disposed of the petition with liberty to file an appeal with delay-condonation prayer within three weeks.

What did the court decide?

Liberty to petitioner to challenge Section 45-A order dated 12.6.2017 in appeal with delay-condonation prayer within three weeks; appellate authority to decide expeditiously within three months.

M/S Harish Electricals and Machenicals Contractors… — Service and Employment | Allahabad HC (2024)

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Neutral Citation No. - 2024:AHC:134563

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Court No. - 33

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Case :- WRIT - C No. - 19956 of 2024

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Petitioner :- M/S Harish Electricals And Machenicals Contractors Respondent :- The Regional Director Employees And 2 Others Counsel for Petitioner :- Rakesh Kumar Garg,Yash Garg Counsel for Respondent :- Pranjal Mehrotra

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Hon'ble Chandra Kumar Rai,J.

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Heard Sri Yash Garg, learned counsel for the petitioner and Sri Pranjal Mehrotra, learned counsel for the respondents.

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The instant writ petition has been filed for the following reliefs:-

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" i) Issue a writ, order or direction in the nature of Certiorari quashing the impugned recovery certificates dated 16.12.2022 (Annexure no.1 & 2 to this writ petition) passed by the respondent no.2 for the period September 2012 to March 2015 and from February 2020 to October 2021 respectively and further to quash the prohibitory order dated 02.02.2024 issued by the respondent no.3 (Annexure no.4 to this writ petition).

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ii) Issue a writ, order or direction in the nature of Mandamus directing the respondents not to recover the amount of Employees' State Insurance Contribution for the period September 2012 to March 2015 and from February 2020 to October 2021 in pursuance of the impugned recovery certificates dated 16.12.2022.

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iii) Issue a writ, order or direction in the nature of Mandamus directing the respondent no.2 to decide the representation dated 21.01.2023 filed by the petitioner firm in accordance with law within a stipulated period which this Hon'ble Court may deem fit and proper.

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iv) Issue a suitable writ, order or direction in the nature of Mandamus directing the respondent no.2 to consider the case of the petitioner as fresh on merit after providing reasonable opportunity of the hearing to the petitioner."

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Counsel for the petitioner submitted that recovery certificate has been issued against the petitioner in illegal and arbitrary manner. He further submitted that order passed under Section 45-A of The Employees' State Insurance Act, 1948 (hereinafter referred to as the "Act") has not been served upon the petitioner, as such, no proceeding can be initiated at the instance of the petitioner against the order passed under Section 45-A of the Act. It is further submitted that without making any inspection of the petitioner's company, liability of E.S.I. contribution has been imposed without any reasonable justification. He also submitted that determination of

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the contribution and interest made by the respondent-corporation is illegal. He also submitted that impugned recovery certificate issued by respondent no.2 is liable to be quashed.

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On the other hand, learned counsel for the respondents submitted that there was appearance on behalf of the petitioner in the proceeding under Section 45-A of the Act. He also submitted that even the Vakalatnama was filed in the proceeding under Section 45-A of the Act, as such, it cannot be said that petitioner is not aware of the proceeding under Section 45-A of the Act. He also submitted that there is no provision to serve the assessment order on the petitioner. He further submitted that order under Section 45-A of the Act was passed in the year 2017 and the petitioner has not challenged the order in appropriate proceeding under Section 45-AA of the Act, as such, the writ petition cannot be entertained by which the recovery certificate has been challenged without challenging the order passed under Section 45-A of the Act.

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In reply, learned counsel for the petitioner has placed reliance on the order of this Court dated 1.10.2021 passed in Writ C No.16304 of 2021 (Mahima Enterprises vs. The Regional Director, Employees State Insurance Corporation and Others), in order to demonstrate that the delay in filing the appeal may be considered liberally by the authority under Section 45-AA of the Act, if the court is of the view that an appeal is to be filed against the order under Section 45-A of the Act.

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I have considered the arguments advanced by learned counsel for the parties and perused the records.

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There is no dispute about the fact that recovery certificate has been issued against the petitioner in pursuance of the order passed under Section 45-A of the Act.

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In order to appreciate the controversy involved in the matter, perusal of Sections 45-A & 45-AA of the Act would be necessary, which are quoted hereunder:-

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[45A. Determination of contributions in certain cases.--(1) Where in respect of a factory or establishment no returns, particulars, registers or records are submitted, furnished or maintained in accordance with the provisions of section 44 or any [Social Security Officer] or other official of the Corporation referred to in sub-section (2) of section 45 is [prevented in any manner] by the principal or immediate employer or any other person, in exercising his functions or discharging his duties under section 45, the Corporation may, on the basis of information available to it, by order, determine the amount of contributions payable in respect of the employees of that factory or establishment:

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[Provided that no such order shall be passed by the Corporation unless the principal or immediate employer or the person in charge of

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the factory or establishment has been given a reasonable opportunity of being heard.] [Provided further that no such order shall be passed by the Corporation in respect of the period beyond five years from the date on which the contribution shall become payable.]

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(2) An order made by the Corporation under sub-section (1) shall be sufficient proof of the claim of the Corporation under section 75 or for recovery of the amount determined by such order as an arrear of land revenue under section 45B [or the recovery under section 45C to section 45-I].

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[45AA. Appellate authority.-- [If an employer is not satisfied with the order referred to in section 45A, he may prefer an appeal to an appellate authority as may be provided by regulation, within sixty days of the date of such order after depositing twenty-five per cent. of the contribution so ordered or the contribution as per his own calculation, whichever is higher, with the Corporation:

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Provided that if the employer finally succeeds in the appeal, the Corporation shall refund such deposit to the employer together with such interest as may be specified in the regulation.]

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The perusal of the provisions demonstrate that the order passed under Section 45-A of the Act is appellable under Section 45-AA of the Act.

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In view of the provisions contained under Section 45-A of the Act, the instant petition cannot be entertained, challenging the recovery certificate, without challenging the order passed under Section 45-A of the Act before the appellate authority.

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Considering the facts and circumstances of the case, the instant writ petition is finally disposed of with the liberty to the petitioner to challenge the order under Section 45-A of the Act dated 12.6.2017 in appeal along with the prayer for condonation of delay, within a period of three weeks from today along with certified copy of this order. The appellate authority shall consider the delay condonation matter in the light of the order passed by this Court dated 1.10.2021 in Writ C No.16304 of 2021 (Mahima Enterprises (supra) and decide the proceeding, in accordance with the provisions of the Act, expeditiously, preferably within a period of 3 months from the date of filing of appeal along with delay condonation application, after affording opportunity of hearing to the parties, in accordance with law.

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Order Date :- 22.8.2024 C.Prakash

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Digitally signed by :- CHANDRA PRAKASH High Court of Judicature at Allahabad

M/S Harish Electricals and Machenicals Contractors v. the Regional Director Employees and 2 Others

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M/S Harish Electricals and Machenicals Contractors v. the Regional Director Employees and 2 Others

Case brief

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