Jharkhand High Court
M/S. Bihar Foundry & Castings Limited vs Employees State Insurance Corporation on 28 February, 2019
Equivalent citations: AIRONLINE 2019 JHA 800, (2019) 161 FACLR 335 (2019) 2 CURLR 972, (2019) 2 CURLR 972
Author: Sujit Narayan Prasad
Bench: Sujit Narayan Prasad
IN THE HIGH COURT OF JHARKHAND AT RANCHI
W.P.(C) No.593 of 2019
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M/s. Bihar Foundry & Castings Limited, having its registered Office at Shanti Niwas, Near Albert Ekka Chowk, Main Road, P.S. Kotwali, P.O. and District Ranchi through its Managing Director Hari Krishna Budhia ......... Petitioner Versus
1. Employees State Insurance Corporation, Panchdeep Bhawan, Namkum, P.O. and P.S. Namkum, District Ranchi
2. The Recovery Officer, Employees' State Insurance Corporation, Panchdeep Bhawan, Namkum, P.O. and P.S. Namkum, District Ranchi
3. The Regional Director, Employees' State Insurance Corporation, Panchdeep Bhawan, Namkum, P.O. and P.S. Namkum, District Ranchi
4. The Branch Manager, IDBI Bank, Main Road, P.S. Lower Bazar, P.O. and District Ranchi
5. The Branch Manager, United Bank of India, Firayalal Building, Firayalal Chowk, Main Road, P.S. Kotwali, P.O. and District Ranchi
6. The Branch Manager, Canara Bank, S.N.L. Ganguly Road, P.S. Kotwali, P.O. and District Ranchi
7. The Branch Manager, Bank of India, Club Side Branch, Main Road, P.S. Chutia, P.O. and District Ranchi
8. The Branch Manager, India Overseas Bank, Radheshayam Building, Main Road, P.S. Kotwali, P.O. and District Ranchi .......... Respondents
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CORAM : HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD
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For the Petitioner : Mr. Nipun Bakshi, Advocate
For the Resp. ESIC : Mr. Ashutosh Anand, Advocate
For the Resp.No.7 : Mrs. Nehala Sharmin, Advocate
For the Resp. No.4 : Mr. Rohan Kashyap, Advocate
03/28.02.2019 This writ petition is under Article 226 of the Constitution of
India, wherein the order passed under the provision of Section 45- G(3)(x) of the Employees' State Insurance Act, 1948 has been questioned on the ground that the petitioner has not been provided adequate and sufficient opportunity to put forth his defence, since according to the petitioner, the notice in terms of provision of Section 45-G(3)(x) of the Employees' State Insurance Act, 1948 has been issued on 29.01.2019 which has been received by the petitioner on 30.01.2019, on the same very date, the order has been passed under the provision of Section 45-G(3)(x) of the Employees' State Insurance Act, 1948, as such, without providing an opportunity to look into the quantum, debt recovery proceeding has been initiated by seizing the bank account of the establishment as also the personal account of the Director of the establishment.
2. It is the case of the petitioner that the amount as stipulated under annexure-4 i.e. order passed under Section 45-G(3) of the Act, 1948 has been realized, even though, this writ petition was pending.
3. Learned counsel appearing for the respondent-E.S.I.C. has submitted that a proceeding under Section 45-A of the Act, 1948 vide order dated 31.07.2018 has been initiated against one Saibal Kunar who happens to be labour supplier in the petitioner establishment, wherein the final order was passed against which, he has preferred a writ petition being W.P.(C) No.5654 of 2018 which was dismissed on the ground of not providing an opportunity to prefer an appeal under Section 45-A of the Act, 1948. The competent authority of the Corporation after looking to the finality of the order passed under Section 45-A of the Act, 1948 has invoked the jurisdiction conferred under Section 45-G(3) for recovery of the aforesaid amount as has been determined under the provision of Section 45-A of the Act, 1948 against the Director namely Saibal Kunar and pursuant thereto, a notice has been issued under the provision of Section 45-G(3) on 28.01.2019 and again on 29.01.2019 and when it has not been received, the jurisdiction conferred under Section 45-G(3)(x) of the Act, 1948 has been invoked, therefore, there is no jurisdictional error in issuing the order under Section 45-G(3)(x) of the Act, 1948.
It is not in dispute that Saibal Kunar, Contractor is not supplying the labour to the petitioner establishment and as such being the principal employer, he has got liability to make payment under the said provision and taking into consideration the position of law as stipulated under the provision of Section 45-G(3), the order under Section 45-G(3)(x) of the Act, 1948 has been passed and hence which suffers from no infirmity.
4. Mr. Nehala Sharmin, associate counsel of Mr. A. Allam, learned senior counsel appearing for the Respondent-Bank has submitted that the bank account which has been freezed by virtue of the direction passed by E.S.I.C. authority, has been released.
5. Having heard learned counsel for the petitioner and after appreciating their rival submissions more particularly the submission of learned counsel for the petitioner as also the E.S.I.C., it is evident from the material available on record that a proceeding under Section 45-A of the Act, 1948 has been initiated for determining the claim regarding amount to be deposited for the interest of the workers, since the workers were discharging their services under a Contractor namely Saibal Kunar who happens to be labour supplier to the petitioner establishment. The determination has been made against the said Saibal Kunar fixing the liability against which the said Saibal Kunar has approached this Court by filing the writ petition being W.P.(C) No.5654 of 2018 which ultimately has been dismissed on the ground of availability of alternative remedy.
6. It is the settled position of law, so far as E.S.I., Act is concerned, a determination of quantum of insurance is to be made under the provision of Section 45-A of the Act, 1948 and after the amount having been determined and attained its finality, the same is to be recovered the mode of recovery has been provided under the said provision which contains sub-section (1) of section 45-G(3) which is applicable for the principal employer and if the employer fails to make payment even after determination of the claim under the provision of Section 45-A, the said determination of amount would be recovered by way of garnishee proceeding by invoking either of the applicable provision as contained under Section 45 of the Act, 1948.
7. The respondent authority by invoking the jurisdiction conferred under Section 45-G(3) has issued notice upon the petitioner establishment for recovery of the said amount, the said notice was issued as has been reflected under annexure-2 dated 29.01.2019, however, the same was disputed by the petitioner by submitting that the said notice was issued on 29.01.2019 which has been received by him on 30.01.2019 at 11:00 a.m. and therefore, adequate opportunity has not been provided to the petitioner, be that as it may, the question here is that procedure as stipulated under Section 45(G)(3) which speaks that a copy of the notice shall be forwarded to the principal or immediate employer at his last address known to the Director General or, as the case may be, the officer or authorized and in the case of a joint account to all the joint-holders at their last addresses known to the Director General or the officer so authorized.
8. Learned counsel for the petitioner has given much emphasis that although notice has been issued under the provision of Section 45- G(3)(iii) which speaks as follows:-
"(iii) A copy of the notice shall be forwarded to the principal or immediate employer at his last address known to the Director General or, as the case may be, the officer or authorized and in the case of a joint account to all the joint-holders at their last addresses known to the Director General or the officer so authorized."
9. It is evident from the provision as contained under Section 45- G(3), that a notice is required to be issued by the Director General to the Principal or the immediate employer, purpose of issuing notice is that the principal employer may be apprised with the dues as has been determined by the competent authority under E.S.I., Act and as such, said provision has been made for specific purpose of apprising immediate principal employer but amount has been gathered by the Court, notice under Section 45-G(3) either one, two or three was 28.01.2019. The said difference has been disputed by the petitioner since according to him as has been referred in reply to the notice that the aforesaid notices have been issued on 29.01.2019 which was received to the petitioner on 30.01.2019.
10. Thus, it is evident either 28.01.2019 or 29.01.2019 or 30.01.2019, the order under Section 45-G(3)(x) has been passed on 30.01.2019, the date of issuance of notice is in dispute which has said to be issued on 28.01.2019 rather the notice has been issued on 29.01.2019 and received on 30.01.2019 at 11:30 a.m. as would be evident from the reply of the petitioner as contained in annexure-3 which suggests that the petitioner has not been provided an adequate and sufficient time to comply with the aforesaid direction.
11. It is further evident from the provision of Section 45-G(vi), whereby and whereunder, it has been provided where a person to whom a notice under this sub-section is sent objects to it by a statement on oath that the sum demanded or any part thereof is not due to the principal or immediate employer and it is only thereafter the action under the provision of Section 45-G(3)(x) of the Act, 1948 is required to be taken.
12. This Court after going across the legality and propriety of the order, thinks it proper to refer the provision of Section 45-G(3)(i), (ii)
(iii), (vi) and (x) of Employees' State Insurance Act, 1948, as quoted below is of the view that the petitioner has not been provided with sufficient opportunity:-
"(3)(i) The Director General or any other officer authorized by the Corporation in this behalf may, at any time or from time to time, by notice in writing require any person from whom money is due or may become due to the factory or establishment or, as the case may be, the principal or immediate employer or any person who holds or may subsequently hold money for or on account of the factory or establishment or, as the case may, the principal or immediate employer, to pay the Director General either forthwith upon the money becoming due or being held or at or within the time specified in the notice (not being before the money becomes due or is held) so much of the money as is sufficient to pay the amount due from the factory or establishment or, as the case may be, the principal or immediate employer in respect of arrears or the whole of the money when it is equal to or less than that amount.
(ii) A notice under this sub-section may be issued to any person who holds or may subsequently hold any money for or on account of the principal or immediate employer jointly with any other person and for the purposes of this sub-section, the shares of the joint-holders in such account shall be presumed, until the contrary is proved, to be equal.
(iii) A copy of the notice shall be forwarded to the principal or immediate employer at his last address known to the Director General or, as the case may be, the officer so authorized and in the case of a joint account to all the joint-holders at their last addresses known to the Director General or the officer so authorized."
(vi) where a person to whom a notice under this sub-section is sent objects to it by a statement on oath that the sum demanded or any part thereof is not due to the principal or immediate employer or that he does not hold any money for or on account of the principal or immediate employer, then, nothing contained in this sub-section shall be deemed to require such person to pay any such sum or part thereof, as the case may be, but if it is discovered that such statement was false in any material particular, such person shall be personally liable to the Director General or the officer so authorized to the extent of his own liability to the principal or immediate employer's liability for nay sum due under this Act, whichever is less.
(x) If the person to whom a notice under this sub-section is sent fails to make payment in pursuance thereof to the Director General or the officer so authorized, he shall be deemed to be a principal or immediate employer in default in respect of the amount specified in the notice and further proceedings may be taken against him for the realization of the amount as if it were an arrear due from him in the manner provided in sections 45-C to 45-F and the notice shall have the same effect as an attachment of a debt by the Recovery Officer in exercise of his powers under section 45-C."
13. It is evident from the material available on record that the notice has been issued on 29.01.2019 and served upon the petitioner on 30.01.2019, therefore, the object of the provision of Section 45-G(3)(vi) has not been served, since, it cannot be done in such a short time and without waiting for the same, final order has been passed under Section 45-G(3)(x) of the Act, 1948, therefore, vital right of the petitioner to make objection as per the provision of Section 45-G(3)(vi) has been taken away.
14. This Court keeping the fact into consideration, the amount as has been stipulated under Section 45-G(3)(x) as referred in the order dated 30.01.2019 has been realized but thinks it proper to quash the order dated 30.01.2019 and accordingly quash it with direction to the petitioner to appear before the Recovery Officer within a period of two weeks' from the date of receipt of copy of the order.
15. The Recovery Officer after receipt of the order passed by this Court shall fix a date and communicate the same to the petitioner from the date fixed. The petitioner shall appear along with the relevant records, upon which, fresh order shall be passed by the said authority within a period of two weeks'.
16. It is made clear that the decision with respect of amount already deposited will depend upon the final outcome taken by the authority as referred hereinabove.
17. Accordingly, this writ petition stands disposed of.
18. Needless to say that the petitioner will cooperate with the proceeding, in case of non-cooperation, the concerned authority will be at liberty to proceed further in accordance with law.
(Sujit Narayan Prasad, J.) Rohit/-