M/S Oriental Security Service, Bhubaneswar Vs Recovery Officer, Employees State Insurance Corporation, Bhuabaneswar — Orissa HC (2026) — LawSathi Research

M/S Oriental Security Service, Bhubaneswar Vs Recovery Officer, Employees State Insurance Corporation, Bhuabaneswar — Orissa HC (2026) — LawSathi Research

What the court decided

AI extract

Outcome

Directions issued in favour of the petitioner: to approach the Regional Director for an instalment facility under Chapter-XXI of ESIC Revenue Manual read with 1/21 of DoP 2005; attachment over the petitioner's bank account to be lifted upon deposit of the fixed instalments; garnishee proceeding not to be given effect to; authority free to fix the payment schedule and to weigh the effect of coercive action on wages of the large workforce.

Issue for consideration

Whether the garnishee order dated 18.02.2026 and attachment notice dated 12.02.2026 passed by the opposite party no.1 (Recovery Officer, ESIC) against the petitioner should be given effect to, or whether the petitioner should instead pay the ESI dues through an instalment facility.

Court's answer

The Court directed that the petitioner shall approach the authority Regional Director for grant of instalment facility under Chapter-XXI of ESIC Revenue Manual read with 1/21 of DoP 2005, RD.

Ratio / Principle

After the authorities fix suitable instalments and the petitioner deposits them from its bank account, the attachment shall be lifted and the garnishee proceeding shall not be given effect to.

Key takeaways

Apart from following the ESIC revenue manual, the authorities shall have the liberty to fix the payment schedule in accordance with the instalments fixed and other necessary conditions, in the interest of justice and for furtherance of collection of the legitimate ESI dues.ratio¶27
In fixing the schedule the authority shall also consider that coercive action against an employer employing a very large number of employees would affect the payment of wages the employees are receiving.ratio¶29

Detailed headnote1 paragraphs

Orissa High Court (Cuttack), W.P.(C) No. 6541 of 2026, order dated 16.03.2026 by Mruganka Sekhar Sahoo, J. M/s Oriental Security Service, a partnership firm providing manpower services employing about two thousand persons, challenged the garnishee order dated 18.02.2026 and attachment notice dated 12.02.2026 passed by the Recovery Officer, Employees' State Insurance Corporation, Panchdeep Bhawan, Bhubaneswar. An instruction dated 13.03.2026 from the Director (Legal), ESIC Regional Office, Odisha, confirmed that as per Chapter XXI of ESIC Revenue Manual read with 1/21 of DoP 2005 the RD can grant an instalment facility, the employer being required to furnish a Bank Guarantee for monthly instalments. Relying on this and counsel's submissions, the Court directed the petitioner to approach the Regional Director for the instalment facility; directed that upon fixing suitable instalments and their deposit from the petitioner's bank account the attachment shall be lifted and the garnishee proceeding shall not be given effect to; left the authorities liberty to fix the payment schedule and other necessary conditions alongside the ESIC revenue manual for collection of legitimate ESI dues; and required the authority to consider that coercive action against an employer of very large workforce would affect payment of wages. Record of appreciation made for the learned Standing Counsel.

IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 6541 of 2026

M/S Oriental Security Service, Bhubaneswar

…. Petitioner

Mr. Ajit Kumar Roy, Advocate

-versus-

Recovery Officer, Employees State Insurance Corporation, Bhubabaneswar and another

…. Opposite Parties

Mr. Amarendra Prasad Ray,

Advocate

CORAM:

JUSTICE MRUGANKA SEKHAR SAHOO

ORDER

16.03.2026

Order No.

(Hybrid Mode)

02 The matter being in the list is mentioned by the learned counsel for the parties to be heard.

1. The petitioner-partnership firm providing manpower services to various organizations employs about two thousand persons as stated.

The petitioner is before this Court challenging the garnishee order dated 18.02.2026 and attachment notice dated 12.02.2026 passed by the opposite party no.1-Recovery Officer, Employees’ State Insurance Corporation, Panchdeep Bhawan, Bhubaneswar.

2. Along with the memo of date he produces letter dated 13.03.2026 issued from the Regional office,

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Odisha, Employees State Insurance Corporation (Ministry of Labour & Employment, Govt. of India) from the Director (Legal). The instruction states thus :

Sub: Instruction in W.P.(C) No. 6541 of 2026 (M/s. Oriental Security v. Recovery Officer, ESIC and another).

Sir, Please refer to your letter dated 05.03.2026 on the subject cited above, in this regard it is informed your that as per Chapter XXI of ESIC Revenue Manual read with 1/21 of DoP 2005, RD can grant instalment facility and for this the employer should be required to furnish Bank Guarantee for the payment of monthly instalment.

This is for information and necessary action at your end.”

3. In view of the submissions made by the learned counsel for the petitioner as well as learned Standing Counsel for the opposite party-authorities, it is directed that the petitioner shall approach the authority Regional Director for grant of instalment facility under Chapter-XXI of ESIC Revenue Manual read with 1/21 of DoP 2005, RD.

4. The authorities after fixing suitable instalment that would be directed, shall allow petitioner to deposit the same. For depositing the instalment from the bank account of the petitioner, attachment shall be lifted. The garnishee proceeding shall not be given effect to.

5. It is further directed that apart from following the ESIC revenue manual, the authorities shall have the liberty to fix the payment schedule in accordance with the instalments fixed and other necessary conditions, in the interest of justice as well as for furtherance of the

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collection of the legitimate ESI dues. The authority shall also consider the fact that coercive action against an employer that employs very large number of employees would affect the payment of wages that the employees are receiving.

6. This Court puts on record its appreciation for the efforts of the learned Standing Counsel in disposal of the matter.

(Mruganka Sekhar Sahoo) Judge

dutta

Signature Not Verified

Digitally Signed Signed by: AJIT KUMAR DUTTA Reason: Authentication Location: ohc Date: 23-Mar-2026 20:49:19

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