M/S Aryan Guard Services Thru. Its Proprietor Sanjay Kumar Mishra vs Deputy Director Employees State Insurance Corporation Sub Regional Office Lko. and Another — Allahabad HC (2026) — LawSathi Research

M/S Aryan Guard Services Thru. Its Proprietor Sanjay Kumar Mishra vs Deputy Director Employees State Insurance Corporation Sub Regional Office Lko. and Another — Allahabad HC (2026) — LawSathi Research

What the court decided

AI extract

Outcome

Interim relief only: (i) de-freezing of the petitioner's freezed account within three days; (ii) stay of operation of the impugned recovery order dated 16.03.2026 subject to deposit of 50% of the amount indicated therein, within two weeks from the date of freezing, before the Court, to be kept in a nationalized bank in a higher interest bearing account, subject to final outcome. Counter affidavit within three weeks; matter connected with Writ-C No.2884 of 2026 and listed in the week commencing 04.05.2026. Main issues left open.

Issue for consideration

Whether the recovery order dated 16.03.2026 could validly be issued under Section 45-C of the Employees State Insurance Act, 1948 without any proceedings/order under Section 45-A of the Act. +1 more

Court's answer

Operation of the impugned recovery order dated 16.03.2026 was stayed, subject to deposit of 50% of the amount indicated in that recovery order, within two weeks from the date of freezing of the account, before the Court; the deposit is to be kept in any nationalized bank in a higher interest bearing account, subject to the final outcome of the petition.

Ratio / Principle

As an interim measure, the petitioner's account, which had been freezed, was directed to be de-freezed within a period of three days.

Key takeaways

Having considered the rival submissions, the Court found that the matter requires consideration; counter affidavit was directed within three weeks (petitioner's response within a week thereafter), the matter was connected with Writ-C No.2884 of 2026 and listed in the week commencing 04.05.2026. The validity of the recovery order was not decided at this interlocutory stage.¶19

Detailed headnote1 paragraphs

ALLAHABAD HIGH COURT (LUCKNOW BENCH), Jaspreet Singh, J. — Writ - C No. 3124 of 2026, decided 02.04.2026 — M/s Aryan Guard Services (thru. its Proprietor Sanjay Kumar Mishra) v. Deputy Director, Employees State Insurance Corporation, Sub Regional Office, Lucknow and another. Challenge (at notice stage) to a recovery order dated 16.03.2026 issued under Sections 45-C to 45-I of the Employees State Insurance Act, 1948. Grounds: (i) recovery under Section 45-C without any order/proceedings under Section 45-A of the Act; (ii) no opportunity of hearing and no satisfaction as to the two conditions required in law to exercise powers under Section 45-C. Petitioner relied on a coordinate Bench decision of this Court (2023:AHC-LKO:56307); respondents relied on Carborandum Universal Ltd v. ESI Corporation, Civil Appeal No.14858 of 2025 (decided 18.12.2025). Court found the matter requires consideration; counter affidavit within three weeks; matter connected with Writ-C No.2884 of 2026, listed in the week commencing 04.05.2026. Interim orders: petitioner's freezed account to be de-freezed within three days; operation of the recovery order stayed subject to deposit of 50% of the amount indicated therein, within two weeks from the date of freezing, before the Court, to be kept in a nationalized bank in a higher interest bearing account, subject to final outcome. Main issues left open.

HIGH COURT OF JUDICATURE AT ALLAHABAD LUCKNOW

WRIT - C No. - 3124 of 2026

M/S Aryan Guard Services Thru. Its Proprietor Sanjay Kumar Mishra

.....Petitioner(s)

Versus

Deputy Director Employees State Insurance Corporation Sub Regional Office Lko. And Another

Another .....Respondent(s) Counsel for Petitioner(s) : D.P. Dutt Tiwari, Chandra Mohan Counsel for Respondent(s) : Ran Vijay Singh

Court No. - 8

HON'BLE JASPREET SINGH, J.

Heard learned counsel for the petitioner and Shri Gaurav Joshi holding brief of Shri Ran Vijay Singh, learned counsel for the respondents.

Under challenge is the recovery order dated 16.03.2026 issued under Sections 45-C to 45-I of the Employees State Insurance Act, 1948 (for short, 'Act of 1948).

Submission of learned counsel for the petitioner is that without proceedings to pass any order in terms of Section 45-A of the Act of 1948, the recovery has been issued under Section 45-C of the Act of 1948.

It has further been urged that even by issuing notice, neither the opportunity of hearing was granted coupled with the fact that there was no satisfaction regarding the existence of the two conditions required in law to exercise the powers under Section 45-C of the Act of 1948. In absence thereof, the initiation of proceedings and the recovery is de hors the principles of the Act of 1948.

In support of his submissions, he has relied upon a decision of a coordinate Bench of this Court in M/s Aryan Group of Guard Services, Lucknow v. U.O.I thru Secy. Ministry of Labour and Deptt. of Employment, New Delhi and 2 Ors; 2023: AHC-LKO:56307 .

WRIC No. 3124 of 2026

2

Learned counsel for the respondents, on the other hand, submits that in the given circumstances, there was no requirement for the respondent no.1 to have issued any order under Section 45-A of the Act of 1948 since on the basis of material which was uploaded by the petitioner himself and thereafter not making the contributions, gave right to the respondents to invoke the provisions of Section 45-C of the Act of 1948.

In support of his submissions, he has relied upon the decision of the Apex Court in Carborandum Universal Ltd v. ESI Corporation in Civil Appeal No.14858 of 2025 decided on 18.12.2025.

Having considered the aforesaid, this Court finds that the matter requires consideration.

Let counter affidavit be filed within three weeks with an advance copy to the counsel for the petitioner, who if may so choose, may file his response within a week thereafter.

Connect with Writ-C No.2884 of 2026 and list in the week commencing 04.05.2026.

As an interim measure, it is provided that the account of the petitioner, which has been freezed, shall be de-freezed within a period of three days from today. It is further provided that the operation of the impugned recovery order dated 16.03.2026 shall remain stayed subject to deposit of 50% amount, as indicated in the impugned recovery order dated 16.03.2026, within a period of two weeks from the date of freezing its account before this Court. The aforesaid deposit of 50% shall be kept in any nationalized bank in higher interest bearing account, which shall be subject to final outcome of this petition.

(Jaspreet Singh,J.)

April 2, 2026

Rakesh/-

Digitally signed by :- RAKESH PRAJAPAT High Court of Judicature at Allahabad, Lucknow Bench