Quashed

M/S.Guidance English Medium School v. Asst.Director Revenue,Employees State Insurance Cor.,Bbsr

Orissa HC4 Dec 2023WP(C)/3314/2018

Case brief

AI extract

What is this about?

The High Court of Orissa quashed contribution determination orders passed against an English medium school under the Employees' State Insurance Act, 1948. The court found a violation of natural justice as the authority failed to afford a proper opportunity to produce specific records before finalizing the assessment.

What did the court decide?

Impugned orders quashed; matter remitted for rehearing and redetermination after affording proper opportunity of hearing and record production.

M/S.Guidance English Medium School Vs… — Pension and Retirement Benefits | Orissa HC (2023)

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IN THE HIGH COURT OF ORISSA, CUTTACK

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W.P.(C) No.3314 of 2018

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M/s. Guidance English Medium School ....... Petitioner

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-Versus-

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Assistant Director (Revenue) Employees State Insurance Corporation, Bhubaneswar & another ....... Opp. Parties

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For Petitioner : Mr. S. Mishra,
Advocate
For Opp. Parties : Mr. A.P. Ray,
Advocate
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CORAM: JUSTICE SANJAY KUMAR MISHRA
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Date of Hearing & Judgment: 04.12.2023
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S.K. Mishra, J . The Writ Petition has been preferred by the

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Petitioner, which is an English Medium School, challenging the orders passed by the Assistant Director (Revenue-II) under Section 45-A of the Employees’ State Insurance Act, 1948, shortly hereinafter, ‘the Act, 1948, determining the alleged contribution payable for the period from 25.08.2011 to 07/2014 and 08/2014 to 11/2016, vide separate orders, both

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dated 22.09.2017/06.10.2017 and the consequential Notice dated 13.02.2018 of the Recovery Officer as at Annexure-7 (wrongly typed as Annexure-6 in the prayer portion of the Writ Petition).

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2. The ground to challenge the impugned orders so also the consequential Notice as detailed above, is not giving opportunity to the Petitioner to produce the records, as required by the concerned Authority, as has been detailed in the Writ Petition.

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3. In response to the said allegations made by the Petitioner, a detailed Counter Affidavit has been filed by the Corporation. Apart from raising the maintainability issue so also indicating therein various legal provisions under the Act, 1948, the facts, as has been detailed in the impugned orders, have also been detailed in the Counter Affidavit. The stand of the Corporation is that after giving sufficient opportunity and chance of personal hearing, the impugned orders have been passed. If the Petitioner was aggrieved by the said orders, it should have preferred an Appeal in terms of Section 45-AA of the Act, 1948 or could have approached the E.I. Court under Section-75 of the said Act, 1948.

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4. Heard Mr. S. Mishra, learned Counsel for the Petitioner so also Mr. A.P. Ray, learned Counsel for the Opposite Parties/Corporation.

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5. Mr. Mishra, learned Counsel for the Petitioner draws attention of this Court to the impugned orders, both dated 22.09.2017/06.10.2017, as at Anenxure-4 series, passed under Section 45-A of the Act, 1948 and submits, during personal hearing on 01.09.2017, the authorized representative of the Petitioner-School furnished the original Balance Sheet for the financial years 2011-12, 2012-13, 2013-14 and 2014-15 and intimated the concerned Authority that the Balance Sheet for the year 2015-2016 was available with the Chartered Accountant. Hence, it could not be brought to be produced during the personal hearing. So far as salary records from 07/2014, it was not readily available due to absence of the Accountant and the attendance register was also not readily available at the Institution. Though the period of determination was from 25.08.2011 to 07/2014 and the Balance Sheet for the financial year 2015-16 was not required to be produced by the Petitioner-School, without affording opportunity to produce the records, the Authority concerned

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illegally determined the alleged contribution for the period from 09/2012 to 07/2014 taking into consideration the figures available in the Balance Sheet towards hire charges of vehicle paid by the School, expenses borne for repair and maintenance of the School, building work in progress (WIP) and alleged difference of salary for the period in between 2012-2015.

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6. Mr. Mishra further submits, though the said heads of

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expenditures have been ascertained from the Balance Sheet

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so also profit and loss account after those documents were produced before the Authority, before determining so, the Authority concerned did not disclose the same before authorized representative, who was representing the School, giving her scope to produce the relevant voucher/bills to ascertain as to what was the labour component involved under the said heads of expenditures and whether any contribution is payable under the heads of expenditure in terms of various provisions of the Act, 1948. He further draws attention of this Court to the observation of the Authority concerned in the impugned orders and submits, the said orders reflect that after going through the Balance Sheets

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along with the profit and loss accounts, the authorized representative of the Petitioner-School was directed to furnish the details of ledger, cash book bill/vouchers against some heads of expenditures and she allegedly failed to furnish any of the said records. Contrary to the same, the Counter filed by the Corporation well demonstrates that the deponent has admitted therein that personal hearing was concluded on 01.09.2017. Hence, the allegation of giving opportunity to produce/furnish all records as detailed in the said order is incorrect. Though there are alternative remedies under Section 45-AA so also Section 75 of the Act, 1948, due to not affording opportunity of hearing, violation of principles of natural justice so also the gross-violation of the procedure to be followed before passing the determination order under Section 45-A of the Act, the Petitioner has rightly approached this Court in form of the present Writ Petition. This Court while issuing notice to the Corporation consciously did so.

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The Corporation has failed to demonstrate in its Counter as to providing opportunity of hearing so also opportunity to produce the records by the authorized representative of the

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Petitioner-School, as detailed above, before the Authority concerned.

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7. Mr. Ray, learned Counsel for the Corporation, drawing attention of this Court to the impugned orders as at Annexure-4 series submits, in fact photocopies of the Balance Sheet and profit & loss account for various financial years were produced before the Authority concerned on 29.08.2017 and not on 01.09.2017. That apart, Mr. Ray further submits, on 29.08.2017 itself, the Authority concerned directed the authorized representative of the Petitioner-School to furnish original salary sheet, attendance register for the notice period, statement of wages towards calculation of contribution actual due, original Balance Sheet along with profit and loss account for the notice period. So far as the financial year 2015-16, Mr. Ray submits, that is a typographical error crept in the impugned order, though period for determination was from 25.08.2011 to 07/2014 so far as the first order is concerned.

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So far as the second order is concerned, the same is for the period from 08/2014 to 11/2016. Since both the proceedings were taken up together on the very same day, the said

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typographical error has crept in the first order, impugned in this Writ Petition.

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8. Mr. Ray further submits, since the authorized representative of the School did not produce those records as detailed above, the Assistant Director (Revenue-II) was justified to determine the contribution amount based on various heads of expenditures, as was ascertained from the Balance Sheet, profit and loss account of the concerned years, which were produced by the authorized representative before the Authority concerned. There is no infirmity or illegality in

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the said orders, impugned in the Writ Petition, as sufficient opportunity was accorded to the Petitioner-School to have its say and personal hearing was also given to its authorized representative.

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9. From the pleadings of the parties so also submissions made by the learned Counsel for the Parties and from the contents of the impugned orders passed under Section 45-A of the Act, 1948, it is ascertained that the Petitioner-School

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was never directed to produce the cash book, bill/vouchers against some heads of expenditures, as has been incorrectly mentioned in the impugned order. For ready reference the

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relevant paragraphs from one of the orders impugned in the

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Writ Petition are extracted below:

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“ Mrs. Girija Kabi Satpathy, authorized representative, attended the personal hearing on 29.08.2017 and furnished copies of salary sheets for 08/2011-06/2014, copies of balance sheets along with profit and loss account for the financial year 2011-12, 2012-13, 2013-14, 2014-15. She told that, the unit has deposited Rs.138964/- for the period 25.08.2011-06/2014 and the dues for 07/2014-11/2016 should be deposited as per salary sheets. She assured to produce original salary records for 07/2014 onwards on 01.09.2017 and requested to provide one more date. She was directed to furnish original salary sheets, attendance register, for the notice period, statement of wages towards calculation of contribution actual due, original balance sheets along with profit and loss account for the notice period. Acceding to her request, next date of personal hearing was fixed on 01.09.2017 .

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She attended the personal hearing on 01.09.2017 and furnished original balance sheets for the financial year 2011-12, 2012-13, 2013-14, 2014-15. She told that, (i) the balance sheet for the F/y 2015-16 was available at the Charted Account and hence, the same could not be brought at personal hearing (ii) the salary records from 07/2014 onwards was not readily available due

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to absence of accountant, (iii) the attendance register was also not readily available at the institution.

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On going through the balance sheets along with profit and loss accounts , she was directed to furnish, the details of ledger, cash books, bill/vouchers against some heads of expenditures, but she failed to furnish any of the records .”

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(Emphasis supplied)

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10. That apart, as it seems from the impugned orders,

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most of the heads of expenditures based on which, the alleged contribution has been determined for the relevant periods are “ hire charges of vehicle” “repair & maintenance” “building WIP” and “difference of salary ”. The last date of hearing was on 01.09.2017 and as has been admitted in the Counter Affidavit, the hearing was concluded by the Authority concerned on the said date and thereafter the orders impugned were passed on 22.09.2017/06.10.2017, despite bringing to the notice of the Authority concerned as the reasons for non-furnishing the remaining documents in terms of order dated 29.08.2017. That apart, the authorized representative of the Petitioner-School was not given an opportunity to produce the details of ledger, cash book,

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bill/vouchers against some heads of expenditures as detailed above. Hence, this Court is of the view that the impugned orders of determination made by the Authority concerned, as at Annexure-4 series, are bad and deserves interference for violation of principles of natural justice so also not following due procedure in terms of the various provision of the Act, 1948.

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11. Accordingly, both the said orders as at Annexure-4

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series are quashed. Matter is remitted back to the Assistant

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Director (Revenue-II), Employees’ State Insurance Corporation, to rehear the matter and re-determine the contribution after giving opportunity of hearing to the Petitioner-School and opportunity to produce the records as has been detailed in the impugned orders.

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12. Since this is a matter of the year 2017, to avoid delay, the Petitioner is directed to appear before the Assistant Director (Revenue-II) Employees’ State Insurance Corporation on 18^th December, 2023, at 11.00 A.M. along with certified copy of this order. It is further directed that on 18.12.2023, the Authority concerned will do well to fix a date and pass a detailed order as to the documents required to be produced by

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the Petitioner-School and then proceed with the matter in accordance with law and conclude the said proceeding within a period of three months from the date fixed for production of documents.

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13. Needless to mention here that if the Assistant Director (Revenue-II) is not available, the Corporation may assign the matter to any other competent Officer to do the needful and rehear the matter on appearance of the Petitioner-School, in

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terms of the observation made above.

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14. It is made clear that despite granting liberty to the Petitioner, if it fails to appear on the date fixed so also consequently fails to produce the records, it is open for the Corporation to pass appropriate order in accordance with law.

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15. With the aforesaid observation, the Writ Petition stands disposed of. However, no order as to cost.

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…….….……………………

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S.K. MISHRA, J.

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High Court of Orissa, Cuttack

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The 4^th December, 2023 /Prasant

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Signature Not Verified

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Digitally Signed Signed by: PRASANT KUMAR PRADHAN Designation: Secretary Reason: Authentication Location: High Court of Orissa, Cuttack. Date: 06-Dec-2023 14:18:23

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M/S.Guidance English Medium School v. Asst.Director Revenue,Employees State Insurance Cor.,Bbsr

Case brief

What is this about?

What did the court decide?

M/S.Guidance English Medium School v. Asst.Director Revenue,Employees State Insurance Cor.,Bbsr

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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