Allowed

The Mercantile Co-Operative Credit Society Limited v. Teh Deputy Director

Karnataka HC9 Nov 2022WP/114245/2015

Case brief

AI extract

What is this about?

The High Court allowed a writ petition filed by a co-operative credit society challenging a notice to pay ESI contributions. The court held that since the society is engaged in banking, it falls outside the scope of the ESI Act under the 2011 notification, and quashed the impugned communication.

What did the court decide?

The impugned communication dated 3/6/2015 issued by the 1st respondent directing the petitioner to pay ESI contributions was quashed.

The Mercantile Co-Operative Credit Society… — Pension and Retirement Benefits | Karnataka HC (2022)

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WP No. 114245 of 2015

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

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DATED THIS THE 9^TH DAY OF NOVEMBER, 2022

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BEFORE

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THE HON'BLE MR JUSTICE HEMANT CHANDANGOUDAR WRIT PETITION NO. 114245 OF 2015 (L-ESI)

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BETWEEN:

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THE MERCANTILE CO-OPERATIVE CREDIT SOCIETY LIMITED BELAGAVI 1ST FLOOR, DATTA KRUPA COMPLEX, TAXI STAND, KADOLKAR GALLI, BELAGAVI, REP BY ITS CHAIRMAN SRI.SANJAY EKNATH MORE AGE:55 YEARS

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…PETITIONER

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(BY SRI. MRUTYUNJAY TATA BANGI.,ADVOCATE)

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AND:

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K M SOMASHEKAR

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Digitally signed by K M SOMASHEKAR Location: High court of Karnataka, Dharwad Bench, Dharwad

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TEH DEPUTY DIRECTOR EMPLOYEES STATRE INSURANCE CORPORATION SUB REGIONAL OFFICE, NO.4 DOLOR HEIGHTS 3RD AND 4TH FLOOR, DOLORES COLONY, GOKUL ROAD, HUBBALLI

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SOCIAL SECURITY OFFICER O/O THE DEPUTY DIRECTOR EMPLOYEES STATE INSURANCE CORPORATION SUB REGIONAL OFFICE, NO.4 DOLOR HEIGHTS 3RD AND 4TH FLOOR, DOLORES COLONY, GOKUL ROAD, HUBBALLI

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STATE OF KARNATAKA REP BY SECRETARY TO THE GOVERNMENT LABOUR DEPARTMENT, VIKAS SOUDHA, BENGALURU

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WP No. 114245 of 2015

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THE ASSISTANT REGISTRAR CO-OPERATIVE SOCIETY BELAGAVI

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…RESPONDENTS

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(BY SRI.M.C.VANTI, ADV. FOR SRI.V.M.SHEELAVANTH, ADV., FOR R1 AND R2; SRI.V.S.KALASURMATH., HCGP FOR R3 AND R4)

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THIS WP IS FILED PRAYING TO: I. QUASH THE LETTER ISSUED BY 1st RESPONDENT BEARING NO.C-11 DATED:03.06.2015, COPY AS PER ANNEXURE-D, AS ARBITRARY, UN-REASONABLE AND ULTRA-VIRES THE ESI ACT. II. CONSEQUENTIALLY, DECLARE THAT THE PROVISIONS OF THE EMPLOYEES STATE INSURANCE ACT, WOULD NOT BE APPLICALBE TO PETITIONER SOCIETY SO AS TO COVER THE EMPLOYEES UNDER THE PROVISIONS OF THE ESI ACT AS THE PETITIONER IS REGISTERED UNDER THE PROVISIONS OF THE KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959 AND THE APPROPRIATE GOVERNMENT UNDER THE PROVISIONS OF THE ESI ACT HAS NOT EXTENDED THE PROVISION OF THE ESI ACT TO THE INSTITUTIONS COVERED UNDER THE KARNATAKA CO-OPERATIVE SOCIETIES ACT, AS PER THE GAZETTE NOTIFICATION DATED:16.03.2011, COPY AS PER ANNEXURE-C.

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THIS PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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This writ petition is filed challenging the communication dated 3/6/2015 issued by the 1^st respondent, directing the petitioner to pay contribution to the Employees State

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WP No. 114245 of 2015

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Insurance Corporation and quantifying the arrears payable at Rs.9,48,627/-.

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The Government of Karnataka in exercise of power conferred under sub Section (5) of Section 1 of the Employees State Insurance Act, 1948 (For short the ‘Act’) issued a notification dated 16/3/2011, enumerating the establishments, which are covered under the provisions of the Act. The Co-operative Societies Registered under the Karnataka Co-operative Societies Act, 1959, which are engaged in banking business are not covered under the notification. Hence, the provisions of the Act are not applicable to the petitioner-Co-operative society, which is engaged in baking business. Therefore, the communication issued by the respondent No.1 is one without authority of law. Accordingly, I pass the following:

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ORDER

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i) The writ petition is allowed.

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ii) The impugned communication dated 3/6/2015 issued by the 1^st respondent vide Annexure-D is hereby quashed.

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WP No. 114245 of 2015

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iii) Registry to transfer the amount deposited vide interim order dated 27/1/2016 by the petitioner through RTGS to the bank account of petitioner’s society subject to petitioner furnishing proper identification.

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Sd/JUDGE

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VB List No.: 1 Sl No.: 75

The Mercantile Co-Operative Credit Society Limited v. Teh Deputy Director

Case brief

What is this about?

What did the court decide?

The Mercantile Co-Operative Credit Society Limited v. Teh Deputy Director

Case brief

What is this about?

What did the court decide?

What the court decided

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