Dismissed

M/s.Guardian Security Services v. Employees State Insurance Corporation

Telangana HC4 Apr 2022WP/8216/2022

Case brief

AI extract

What is this about?

This writ petition challenged recovery proceedings and demand notices issued by the ESI Corporation for arrears dating back to 2013. The petitioner argued limitation and lack of a Section 45-A determination order. The court rejected these contentions, dismissing the petition qu sirus qe the[the[]because the Petitioner failed to dispute [he]he claima or the principal employer's liability, making th

What did the court decide?

The writ petition is dismissed. No order as to costs. Miscellaneous petitions pending are closed.

M/s.Guardian Security Services Vs Employees State… — Property and Title | Telangana HC (2022)

¶1

HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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(Special Original J urisd iction)

¶3

IVONDAY, THE FOURTH DAY OF APRIL TWO THOUSAND AND TWENTY TWO

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PRESENT

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THE HONOURABLE DR. JUSTICE G.RADHA RANI

¶6

WRIT PETITION NO: 8216 AF 2022

¶7

Betwee n

¶8

It4/s.Guardian Security Services, Rep, by its Proprietor, Sri G tt/anga Reddy, Aged about.60 yrs, Occ :Business, R/o.H.No.1-7-139/36, S.R.K. Nagar, Golkonda X Roads, It4usheerabad, Hyd-500020.

¶9

,..PETITIONER

¶10

AND

¶11

'1 . Employees State lnsurance Corporation, Represented by its Deputy Director, Office situated at.5-9-23, Adarsh Nagar, Hill Fort Road, Hyderabad 500063.

¶12

The Recovery Officer, Employees State lnSUrance Corporation, Office situated at. 5-9-23, Adarsh Nagar, Hill Fort Road, Hyderabad 500063.

¶13

The State Bank of lndia, Represented by its Chief Branch Manager, Situated at. 1-2-368, RTC X Rd, Jawahar Nagar, Chikkadpally, New Nallakunta, Hyderabad, Telangana 500020.

¶14

...RESPONDENTS

¶15

Petition^pnder Article 226 of the Constitution of lndia^praying thatⁱⁿ the circumstances stated in the affidavit filed therewith, the^{High Court maybe} pleased to issue a Writ, Order or direction, more particularly, one in the nature of Writ of lvlandamus declaring the impugned^proceedings vide No.52Q/25958'1018, d1.24.08.2021 issued by the Respondent No.2 and Notices of demand vide Ref. No.52000259580001018/CP/426629, dt.01.06.2021, notice vide^Ref. bearing No.52000259580001018/CP/427712, dt.11.08.2021 and^{Noticevide Ref.} bearing No.5200025958000101B, dated 15.09.2021 issued by the Respondent No.2 against the petitioner as arbitrary, illegal, improper, unjust, and contrary^to law and is violation of Article 14, 19 (1)^(g) and 21 of the Constitution of^{lndia and} consequently, set aside the impugned^proceedings vide^{No.52Q/25958-1018,} dl.24.OB.2021 issued by the Respondent No.2^{and Notices of demand videRef} No.52000259580001018iCP/426629, dt.01.06.2021,^{notice vide Ref. bearing} No.52O0O2595BOO01O1B/CP/427712, dt.11.08.2021^{and Noticevide Ref. bearing} No.52000259580001018. dated 15.09.2021, Notice vide^proceedings No.52Q/25958-1018, dated 29.01 .2022^{issuedby the RespondentNo.2.}

¶16

t.A.^NO: 1 oF2⁰²² 151^CPC Prayrng^{that in the ctrcumstancesstated} Petition^underSection he High^{Courtmaybe pleased to} in the^{affidavitf iled in supPo} rt of^the Petition '^t dings^videN o.52Q1259 58-1018, impug^nedProcee f demand^videRef and^{Notices o} suspend^{the oPerationof} ndent^No.2 Ref ued^{bYthe ResPo} notice^vide d1.24.08.2021^iss dt.01^06.2021, 0010'1^B tcP1426629' N o.52000259580 27712,^{dr.11 0B'2021 and Noticevide Ref} 259580 001018/cP/4 be^{a rlng} No.52000 bearlng^{o.52000 259580001018,dated 15.09.2021 issued bY the ResPondent} No.2 Pe^{ndlng disposal of the above writ petition}

¶17

OF^Z022 t.A^.NO

¶18

cPc^praving'h?l 11^tI:, :J',H$'1ili".,::i1: Petltion^{under Section 151} he^{petition, tlg} Iisl."o:'i,rnllJr,,, Branch. ,n,n"'uit'i,"*^{;l:!::^'.YoKX."t} I o The SBI^Banx' Y .lirect the^{ResPonoet tt.} Xli"".rnrO.. not^{to transfer anYf u} "i.^{,i",i ,n"""t:l'YX::;;:T::.11Xt:"':::l} 3 to the^{ResPondent t"tot} xl'oT[;";;,;rng^{No 62o1 22e2aa} of above^case'

¶19

IA NO:^30F2022 o that^{in the circurnslancesstated} Petition^{under Section 151 CPCpraytn} Yn" ii,nn^{court maY be.Pleased to} ^':;'^{t;"bank accountvide A/c} ft*:.;(j','!ffi^{li l:H'is " ir;} Tt';"ii""#^{P"noins disPosalof} above^{writPetition'}

¶20

t.A. NO^{:4OF20 22}

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cpc^{praying th?l} ll^{tI:,T'.i['l'""iil',::1i:} Petition^{Under Section151} 'l m :l'g* l,::*^{ff"' Ji;l;'} "^{"' "'} d,t:.s^{:'l:J: fi L[,t' ",".t" g1 x ; j rr" *i} ;:i-";;i^{paPJ's Pertaininsto writ}

¶22

Counsel^{for the Petitioner : SRI'C'VIKRAM CHANDRA}

¶23

Counsel^{for the Respondent Nos'1 & 2 : SRI'B'G'RAVINDERREDDY}

¶24

Counsel^{for the Respondent No'3 : --'}

¶25

The Court^{made the followingORDER}

¶26

HON'BLE Dr..ltlSl'lCli^{G. RADHA RA-I}

¶27

\ RI t I'E l-ll lO\ \o'8210 Of]!22

¶28

oRDliR:

¶29

l'his writ^{petition is fllecllor the following reliel:}

¶30

''..to issuc a Writ Order or direction nlore particularly^oneln thc naturc of^{Writ of \larrdantusdeclaring the impugned} procecclirtgs vide No.52Q/25958-l0ltl^{dt 24 08 2021issuedby} itr. Ilcs[onrient^{No.]and s'oticcsoldcmandvidc} Rct'. N;. 51000259580001018'c'l',426(rl9-^d1.01062021' noticc ','tdc Rel'.^{bearing No 520002595800010l 8/} CPl177712. dl.l^{1 ,08.201I antl Noticevide Rel' bcaring} No.510(10259580001018.^{dLrted15.09 102 Iissued blthe} I{cspondcnt No.2^{againstthe petitioncr' as arbilrarl''- illcgal'} inrprog.,cr. urtjust^{and contrarJ' to law and is violation of Arriclc} t+. tq t I )^{(g) and 2Io1' the ConslitttliorrolIndiaand} consecluentll ict^{asidcthc irrlpugncd procccdings.r'idc No'} the 5lQrl5958-'l01ti^{dt.2'1.08.2021issuccl b1'} Res-pondent No.2^{andN-oticcs ofdqnrand vide} neL r.,\o.5l()0()15958000I0I8'CP/426619'^{dt'0I 06102I'} noticc lidc^{Rcl'.hc-atirrgNo 52000259580001018/} CPt427712^{dt.11.08.202 1 and Noticevide l{ef' bearing} No.5200025958000-1018^{clated 15 09 1021' t'\oticevide} pl'occcdirigs No.52Q/25958-1018^{dated 2901 2012issued by} the I{espondent No.2^{and pass..."}

¶31

Heard the^{leamed counselfor the petitioner and the leamed}

¶32

Standing Counsel^{tbr the respondents l and ?}

¶33

Le arned^{counsel fbr the petitionersubrnittcdthat the} petitioner \'as a^{Proprietarycollcerllcovered under the provisions of} t)re [:rrplo.vees^{StatelrtsuranceAct, 1948 (1br short 'the Act')} r'n$a$ec1 lt1 providing sectlrit)'^{seri'ices to variotlsorganizatlolls} 1'hey also render^{their sen'ices to the AgricultLrralMarket}

¶34

DT,G RR,J tt l'.\rt.Dl6 ol )0)2

¶35

Committees (Committees). As per the tenns and conditions of l-he agreement between the petitioner and the committees with regard to payment of ESI/EPF and wages, it was specified that the petitioner should pay rhe wages to the Security Glrards including EpF and ESI and tlie conrrnittees should reirnbLlrse the same to the petitioner (z_r 13.61% and 4.7SYo,, respecti'ely. Thc percenra_ee nlentioned in the said agreement was the Principal Employer contribution in EpF and ESI fbr the securitl, guards. It means the Committec was the Principal Ernplol,er and the petitioner was a Contractor.

¶36

The petitioner was providing services to various Committees on yearly contract. Every year, the Committees would call for tenders to all the Agricultural Market Cornmittees under its control and only the successful bidder would provide security services for the said financial year. For the year 2021 . the 2,,,r respondent issued two demand notices under Section 45_C(3)(x) of. the Act for realizing arrears for the period lrom Jul1,,, 20 l3 to February, 20[9 amounting to Rs.7l ,67,Zlll- and interest thereon lrorr July, 20 l3 to 31.03.202 I amounrinq ro Rs.26.22.7741_. Subsequently, an order rvas passed by thc 2,,d respondent under Section a5-G (3)(x) of the Acr r,icle proceedings dated 24.0g.102 I fbr

¶37

¶38

DT.GRR.J ttP.\it.8)I6r{)0))

¶39

realizing the arrears fbr the period fi'orn Septembel', 20II to :5.01.2021.

¶40

The petitioner sLrbrritted that the ernployees supplied by him were ternporary contract employees and the requirernent of the Committees also would change from time to time, hence, claiming dues along with interest for the period where the petitioner had not supplied services was untenable in law and r.vas in violation of the fundamental rights guaranteed by the Constitution of India. No order ',r,as passecl r-rndcr Section^45A ol'the^{Act befo|einitiatingrecoverY} proceedinus b.r' thc 2'"r resporrdcnt r-rndcr Section 45-G^(3Xx) of rlre Act. The respondents No.l and 2 also approached the Principai Iirnpioyer ol the petitioner and "r,as insisting thern to make the payments ro E,SI Corporation rather than making payments to the petitioner. The clainrs made by the respondents No.l and 2 were also barred under Section 77(1A) of the ESI Act, as the Statute had prescribed a tirre lirlit ol'five years as lirnitation for recovering the contribution. The claims of the respondent No.l and^{2 were initiated} from the year 201I and they were barred by^{limitationand relied} upon a^judgrnent of the I{igh Court^{of Patna in M/s. Electronic Net,}

¶41

-l

¶42

DT.GRR,J lYP,\o.8216 of2022

¶43

through its Partner Sanjer Kumar r'. The L,nion of India through

¶44

Regional Director and othcrsr.

¶45

The learned counsci lbr the petitioner further sirbr.nittecl that belore approaching the couft. the petitionel had also approached the ESI CoLrrt. Llyderabad, but he was aclvised that without considering the order passed undel Section 45-A of thc Act, no application rvould be cor.rsidered. The petitioner made an application under Right to Ir.rtbrrnation Act to furnish the ordel passed under Section 45-A of the Act, but there was no response florn the respondents No.1 and 2. The respondents No.l and 2 approached the 3'd respondent and was pressurizing them to transf'er the funds to a tune ol Rs.10,00,000/- fl'onr the petitioner's cLrrrerlt accorint bearing No.620 I 2292443. but the said current accor.rnt rvas a salalv accollltt and if the said amounts w'ere attached. the petitioner would su ff'er irreparable loss and hardship * I.rich coLrlcl not be contpensatecl br anr rneans and pral,ed to ailor,,, the rvt'it petition

¶46

The learned Standing Counsel tbr the responclents No.l and 2 submitted that the petitioner had filed the rerurns ol contributions month-wise in respect ol his ernployees lr.orr July. 20i3 to February,2019, but not paid the contributions in full as I Civ il Writ .lurisclicrion Casc N().6882 ot 20I4. datcd; Il. I0.10 I I

¶47

¶48

Dr.C RR,J tt P .\o.li) l6 of 2(122

¶49

declared b1' hirrr.^'['hc respondent Corporation had issued notice in Form C-18^(Actual) dated i7.09.20 l9 to cleal the dues within l5 days. The Authorized O[trcer had issued notice in Form C-19, dated 19.05.2021 for Rs.7l .36,3401- to the Recovery Olficer to recover the or-rtstanding dues. On receipt o f notice, the petitioner sr-rbrnitted^a representation dated 01.07.2021 stating that the I'eason for late filing ol contributions was that he was not^getting bills settled fomr the Principal Employer on time due to which there^was delay in^filing and irr payment of contributions. The recovery officer issued notice of demand to det-aulter and as the petitioner failed to comply^{with the} said notice, issued warrant of attachment of irnmovable^{property and} the same rvas executed on 24.09.202 l. As the petitioner had^not complied.the sanle evcn aflel attachntertt ol'itnmovable^property,the rccovery of tlcer issuecl 45-G order datcd 24.08.202 I to the Chairrnan, Aglicultural Market Cornrnittee. Kothapet, Gaddiannararn^and Bor.venpally requesting thent to transler the alnoullt in^their possession and likely to become due to the petitioner towards seruices rendered by the defaulting unit.^{The recovery officer also} issued notices to the Cotnmissiouer,^{Weaver Serwice Centre,} Nampally, Hyderabad and^{Chainnan, TSSTEP, YouthService} Department, Governnrent^{of Telangana to transfer the amounts due or}

¶50

¶51

Dr.GIih, tt l' \o.821 6 of 2D)

¶52

likely to become due to the petitioner. The petitioner coulci not challenge the recovery action without challenging the claim of contribution, r.vhich is C-18 (Actual). He fur.ther contended that earlier the peririoner filed W.p. No.23693 ol 2021 and sought permission to withdraw the said writ petition to pursue remedies in accordance with law, but without availing the effective remedy under Section 75 of the Act, approached this Court on the same proceedings and the petition was liable to be dismissed on the said ground and prayed to dismiss the rvrit petition.

¶53

Perused the record.^'l'he contentir-rns of'the learned cor.rnscl for the petitioner were on the gror,rnd of limitation a,cl o. the srounci of issuing notices ro him under Section 45-C (3) (x) ol the Act, wlthout passrng any ordcrs under Section 45A of the ESI Act..fhe contention of the learned Standing Counsel lor the respondents No.l and 2, on the other hand, was that Section 45A ol the Acr had no application as notice was issued in Form C- l g (Actual) of the Act basing on the returns of contributions submittecl by the petitioner month-wise and that the petitioner could not challenge the recovery action without challenging the claim of contribution i.e. Fornr C_lg (Actual) and further contended that the second writ petition on the sarne ground was not rlaintainable.

¶54

¶55

D r.G R R,J tl'P.\o.8216 oJ 2022

¶56

With regard to the Inaintainability of the^{second writ} petition, the petitioner submitted that the earlier^{writ petitionwas} withdrawn as it was advised to the^petitioner that an^altemative rernedy was available under^{tl.re provisionsol the Act to deal with the} disputed facts on questions and iaw.^{The petitionerapproachedthe} -l'ribunal. but the Tribunai refirsed to accept and number the case on the ground that an order of^{assessntenturrder Section 4-5A of the Act} had not been lurnished. lhe^{respondentsfailed to furnisli such order} ol assessment under Section^45A ol^{the Act. The petitionerInade} several ef'forts to trace such order ol^{assesslrent,but to his utter} surprise came to know that no^{such order of assessment under} Section 45A of the Act had^{been passed by the respondentshence,} the petitioner rvas constrained^{to flle this wlit petition.Moreover,the} respondents had issued subsequent^{notice to the petitionerseeking} recovery of disputed alrount and in^{vierv of the subsequent} developnrent, a fl'esh cause^{of action had arisento the petitioner and} relied upon the^judgment of^{the Hon'ble ApexCourl in Vinod v'} Collector and Chairman^{and Others2. 'fhe Hon'ble Apex Courlin} the aboYe case obset'r'ed^{that in the facts olthe said case, the earlier} petition rvas w'ithdrau'n^{on accountol'the pendencyof tlie appealand} for the said reason only,^{the HighCourt had not disrnissed the} r Civil Appcal No.3352 of 2015 dated28'01.2018

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¶58

Dr.G RR,J l?P .'o.lt2l6 uJ 1022

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petition, but only disposed it of, and the prayer challenging rhe subsequent order passed in the appeal \,as not brought to the notice of the High Court as sucl'r, held that tl.re writ peririon was maintainab le.

¶60

In the present case. the earlier writ petition i.e. WP No.23693 o1' 2021 rvas dismissed as u,ithclra\,n on 18.09.102 1. However, considcring the subrrrissions of the learned cor-:nsel fbr. the petitioner that they had r.vitltdrarvn the earlicr r.vrit petition to avail the alternative remedy, but no such order ofassessment was ntade bv the respondent under Sectior.r^.l-5-A ol the Act and as thc TribLrnal failed to entertain tlte ntattet' rvitltor-rt any order o1'assessment r.rr-xler Sectjon 45-A ol the Act. u,as coltstrainecl to tlic this r,r,rir pctition. considerecl it as rnair.rtainable.

¶61

I l. Section 45-A ol the Act prescribes the procedure regarding determination of contributions in certain cases and it rc-acls as under:

¶62

"J5-{. Dcterrnination of contributions in certain

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c:l ses.: -

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(lI Who'c in respecl of a 1actor..,,- or.cstablishntent r'ro returns^ particulirrs. registers or r.ecords arc submitted. lirrnished or maintaincd in accordance rvith the provisions of section 44 or anr Social 0securiry Otficer or orher ol'ficjal oI rhc Corporation relcrred to in sub-scction (2) ol' scction^.15 is preventccl irr arrr manner bl the

¶65

Dt.GR R,J H P.\i.8216 oJ 1022

¶66

principal or immediate cmployer or anlr other person. in exercisir.lg his tunctions or discharging his duties under section 45, the Corporation may, on the basis of inlormation available to it, by order, determine the amount of contribuions payable in respect of the employecs of that factory or cstablishment:

¶67

I)rovided that no such ordcr.shall be passed by the Corporation unless the principal or imrnediate cmployer or the person in charge of the Iactory or establishrnent has been gir en a rcasonable opportun it1' o1'being hcarci

¶68

Provided lurthcr that no such order shall be passed by ihe Corporation in lespect ol the pcriod beyond five years from the date on u,hich thc contribution shall beconte payable.

¶69

(2) .,\n order ntade b) the Cor.poration under subsection ( I ) shall be sul'licient proof, ol the claim of the Corptlration undcr scction 75 or lor rccovcry of tlre amount determined by such order as an arrear o1'land revenuc under section "1,5U or the recoverl undcr sections^.15C ro 45-1.

¶70

l2:^'Ihe contention of rhe learned counsel for the petitioner

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was that as provided in the proviso under Section 45-A olthe Acr no rcasonable opportunity of being heard was given to the petitioner and no such order should be passed by the Corporation tbr the period beyond five years front the date on which the contribution shoulcl become pa.v-abie and the respondents had r.rot tbllorveci borh the saicl stipulations

¶72

llLrt, the contenl.ion o1-the Ieat'nccl Standing CoLrnsel fbr the respondents No" I and 2 rvas that Scctior.i 45-A oi the Act r.vas

¶73

¶74

Dr.GRR..l tt'P .'o.8216 of 2A22

¶75

applicable to cases where no returns, particulars, regislers or records were submitted, but in the present case. the petitioner had filed the retums of contributions, but not paid the contributions in r-uri as declared by him as such, Section 45-A of the Act had no applicability. In the judgrnent relied on by the learned counsel fbr the petitioner i, M/s. Erectronic Net ( l supra) of the patna Hieh Court, it was held that:

¶76

"29.'l-he conh.ibution pavablc lo the C.orporation as defined unclcl sub-scction 1.1) of Scction 2 o1'the. l'lSI Act is thc sum of monev pal.airle by thc pdncipal enrplovcr in rcspcct ol' an r-nt;rlolee. which includes the almount pairable by oI. o,i b.lloll. of the employee also. T'he principal cnrployer is required under Section 40-ol the ESI Act ro pa1, in respect of every cmplo1,r.e. q,hether directlt enrployed by him or by or tltrough an inrnrctliare employer. both the employer's contribution and the employee's contribution. Where thc principal employer pays the contribution in respect ol'an enrplol,ec employed b1, him or tlrrough irnnrediare employer. he is entitled to recover the anrount so paid fi'om thc immediate enrployer in view. of rhcprovisions prescribed under Section 4l ol the F_Sl Act. Sub-scction (l) of Scction 44 of the ESI Act requircs every principal employer and immediate ernpioyer to subrrrit to thc Corporation or to such officcr of' thc Corporation as it mav clirect such rcturns in such lorm trnti .untirinin. :uch particuiars rclating to persons entplovcd by'hint or to any lactorv or establishmcnt in rcspect ol o.hi.h hc is the principal or imrnetliate entplol,cr as nra1. be specified in regularions niadc in rhis behali Thus. it is ricll sertled posirion in Iaw. that rhc contribution has to be tlrst r.enritred to rhc Corporation by the principai entployer. u,hich he is entitled to recover front the inrmediate entployer,

¶77

ln the present case. the adnitted case of the respondents is that tl.re Social Securitv Olficer

¶78

Dt.G RR,J tt P .\it.3216 of lt)22

¶79

visited the establishnrent of the pelitioner on l5/18&29.i0.1013 and inspectcd the rccords of salarv statements ol empiovees lvith effect fionr December. 201 0 to March. 201 2 ploduced befole hinr lrr the petitioncr and hc lound I{s. I . I 8.14.5 | 2,'- as pa) ablc corrtribution. As the petitionc-r paid advancc contribution of Its.2 I .00.900/-. the balancc contribution amount. rvhich came to Rs,97. 13.612l-, was denranded through notice irr Form-C- 18 (Actual) on 11.12.2013 and since the petitioner failed to deposit the contribution as dernanded by the Authorized Officer within I 5 days grante d to it, the Authorized Officer had no option but to issue Fornr-C-19 to the Rccovery Oflicer on 13.01.2014 $,hereas the case of the petitioncr is that thc Authorized Officer could not have asked lbr

¶80

payment ol the balance contribution through demand notice. Its case is that irrmediately alier recciving notice. thc pr'litioncr rcspondcd vide its rcpll'datt'd 0(r.01.201.1 Irighlighting the Iact that it is thc se rr icc pror idcr','corltractor o,- Bt:l-1'RON, hencc. irr thc intL'rest ol .justice bcli.rrc dcciding the anrount tr[' contribution thc principal emplol'er IIELI-RON ma1' be madc part1, and the case be dccicicd under Sr'ction-15-.\ ol the ISI Act. its it is nol liable to pa) thc c()ntribution arnoLrnl. It also leitcratcd that^(he noticc issued in Irorm- C'-18 1,\ctual.1^{ispalentl)' illegaland againstthe} provisions ol' lau and also rvithout anl basis. Ilencc, in thc intercst ol'justice. the asscssnrent of contribution be made only after nolicing the principal employer IIELl'RON.

¶81

i L At thjs stagc. it lvould bc relcvant to noticc ccrtain ol'the case in Bharat IIeavl' I:lectricals I-td Vs.^'lhe Enrplolecs State Insurancc Corporation (Supra). ln that casc. thc appcllant Bharat Hear'1' l-llectricals Limitcd had rcceivcd a notice or.) 03.09.1992 under Section^-15-A ol the ESI^{Act on} tlie prenrise that it had not dr'positcd^{thc ESI} to contribution lor tlic period^{I 9.07,198} I 30.09.1991.1n response to lhe noticc^{issuedby the} rcspondcnts. a pra)cr^rvas nladc bl^{the appcllant} helorc the Corporation to inrplead^{thecolltractors} as par'lics in the^{proceedinqsuntleLSection'15-Aof} rhe I:SI Act as..inttttediatc cnlplolets".^{Thc said} praYcl \as rc'icclcd. \'lren the^{lllattcl'\ii-s} challengcd belirrc thc lligh^{Cotrrr.it hcld thatin}

¶82

Dr.G R R,J tll' \o 82lh ol )(122

¶83

accordancc \,ith the provisions oi'section 4.1 of the FISI Act thc Corl;oration is lr ithin its porvo.s to dcternrir.rc tltr' colttril)ution paya[rlc, in icsl]cct ol' contract entplo\ccs against thc pr.incipal cntplo!er rvithout Iooking lirl thc intmcr.liarc cntplor er. I he apireliant challengcd the order passcd b1 rhc lligh Court in appeal bcibt.e the. Suprcutc CoLlrt.^'i'hc Suprenre Clourt n,hile allor.ving tht rppcal and renritting the ntatrcr to rhc Corporatjon. hclcl that thc dctcrntination of'the exact lrabilitr on the part of thc contractors is nccessary keeping in vierv the fact that the), or some ol thenr mal not bc under the control ol thc principal cntploycr har ing r.e_lrard to the lact tltat thc contract has corle to an end. It Iurther hcld that thc principal enrplorcr has a statutorv right to recover the cjues tl.orl the corltractors/imlned iate emplo1,et.s. It held that in a proceeding under Section 45-A ol the ESI r\ct. not onlv the'applicabilitt.ol the ESI Acr but also the quantul'lt thereof rvhich mai,. bc helc.l to bc pal ablc mav lrc tltc srrlr,ect n)attel.of detcrrnination.

¶84

ln ESI Corporarion Vs. C.C.Sanrhakumar (Supra). the Supreme Court obscrvecl:

¶85

"Section 45-A provides lor determination ofcontributions in certain cases. When the records are nol produced by the establishmerrt before thc Corporation and r,r'lren tlterc is no cooperatiorr. the Colporation has got thc po\'er to tnake assessment and clclerrrrine thc amnunt under Scction^,l-5 -,,\ and reco\ cr tl.tc said amount as arrears itf ]and relcrrrrc undcr Section l5-B ol"thc Act'. lhis is rn rhc nltrrre ol'n hesl .jrrdgnrcrrt ils:essntcnl as is knorvn in ta\ing statutcs. \,hcn fhe Corporation passcs an order undcr Scction 45-A. thc said order is final as lar as the Corporation is concerned. Untler Section 45-A(l), the Corporation. by an order, can determine the amount of contributiorrs pavable in rcspccl of thc emplorees $here thc employr,r prevents thc Corpot.ati()n from exercising its lunctions or discharging its duties under Section 45. on the basis oi the material available to it. afier giving reasonable opportunity. But. where the records are produced. the assessntent has to

¶86

¶87

Dr.GRR.l lt'P .\o.321 6 ttf 2 02:

¶88

be rracic Lrndcr Scction 75(2)(a) ol''the Act'. Sccrion^{-15-,</sup> (l) prorirics thal thc oldcr under Scction J5-:(l) sirall hc usecl as sultlcicnt prool' ol' thc ciirinr ol tlie Colporation urrder Seciion 7-s or' lbr rcc()'r.rv ol'thc 0rroLurt dcternrincd by such ordcr as arrcars ol' Iantl rcverrue under St'ction "15-B. In othcr rvorcls-^rvlrcrt there is a lailure in ploduction rrf rccords and^rvhen tlrere is nr: coopL'r;rtiot). tllc Corporalion^can detcmrine the amount and recovcr the same as itn'ears of land revenue undcr Section ,15B. I-lut. on thc other hand, iI'the records are produced and il there is cooperation,^the asscssutent has 10 be made and it can^be used as a sufficient prool of'the claim o1' the Corporation under Section 75 belore the E.S.l. Court."}

¶89

(emphasis mine)

¶90

Ilaving seen the plovisions ol'the IISI Act.ⁱⁿ the opinion ot' this Court. the stand of^the respondent Corporation is not .iustilied.^'I'he petitioner had disputed its liability as the principal employer. It had requested that thc^principal enrploler BELTRON bc added as a^partl' and^a notice be also issued to it and onll'altcr hearing^all concerned, the liabilitl, ol'contribution should^be tleternrined. As the petitioncr hirs clisputcd^its liability as principal cmplover. the dispute ought^to havc becn dccidcd unclel^{Sr-'ction 15-A} ol^{the tlSI} .,\ct alte'r inrplcading ill--l..l ll.ON as paltl in^Lhe saitl plocccding in thc light ol'thc ratio laitl dosn br thc Suprenre Court in lShrrat llcrrl [:lectricals l-Lcl Vs.^-l hc limplol e cs Slalc Ittsurance Corporation^(Supra) or in the alterrtalive^thc dispute ought to have beeu decidcd undcr^Section 75 o1' the ESI Act anci assessnreut could have^been rnade thercafter b.v the lll Court^irr thc^{lightol the} ratio laid down by the Suprenle^{Court in ESI} Corporation Vs. C.C. Santhakurrlar^(Supra).

¶91

I 4. But, in the^{presentcase, the petitioner had not disputedits}

¶92

liability or had not^{contendedthat the principal employer i'e' the} Agricultulal Market Clornrnittees^{had not paid the contributionto be}

¶93

I-l

¶94

Dr.cRfi,,l ttl'\o.lD)6of )02|!

¶95

made to the ISI. ;\s rishtl\ conteltded b"- tlie lear.ne<1 Sirnding Counsci lbr thc rcspon(lcuts No.I anri l. the petitioner.. rt had anv gricvancc asainsr thc ciairn ol contriirutions. ita(l to clialiengc lhc C- l8 (AclLrals). BLrt, t iriror-tr cirallenginu rhc santc, ltc corilri itol challenge the. rccor.en' action r.r'hicl-r u ns in thc nature ol e\ecution_ Hence. I do not lind an\i uter'ts in tlte contention of thc learned counsel 1br the petitioner to set aside the intputned procecdines as illesal.

¶96