Andhra Pradesh High Court - Amravati
Annapurna Auto Agencies vs The State Of Ap on 19 September, 2022
THE HON'BLE SRI JUSTICE SUBBA REDDY SATTI
WRIT PETITION No.8570 of 2019
ORDER:
The present Writ Petition came to be filed under Article 226 of the Constitution of India seeking the following relief:-
"to issue a writ, order or direction more particularly one in the nature of a writ of mandamus declaring the Notice of Demand vide Ref.No.2000090790000705/CP/ 285773 dt. 23-11-2018 issued by the 3rd respondent by directing the petitioner to pay the ESI contribution from the month of July 2013 to August 2014 along with interest though the establishment was closed down from the month of June 2013 as highly illegal, arbitrary and contrary to law and consequently set aside the notice dt. 23-11-2018 and pass such other order or orders ....".
2. The case of the petitioner as averred in the affidavit is that petitioner is running business of Hero Honda Vehicle Sales under the name of 'Annapurna Auto Agencies'. Petitioner is conducting the business duly complying with all the statutory requirements under various statutes including payment of VAT and other taxes. The further case of the petitioner is that it has also complied with the statutory 2 requirements as per the provisions of the Employees State Insurance Act, 1948 with the Employer Code as 62000090790000705 and paid the monthly contribution every month by filing returns through online and ESI contribution was paid up to June 2013. Thereafter i.e. from the month of July, 2013 ESI contribution was not paid as the establishment was closed and the information about closure of the establishment was submitted to the respondent authorities through online. While things stood thus, respondent No.3 issued notice vide Ref.No. 62000090790000705/CP/285773 dated 23.11.2018 demanding the petitioner to pay an amount of Rs.2,16,739/- towards ESI contribution from July, 2013 to August, 2014 with interest up to 23.10.2018 stating that certificate No.6200009079000/000001, dated 24.10.2018 was forwarded by the authorized officer, E.S.I. Corporation, Regional Office, for recovery of an amount of Rs.2,16,739/- and directed the petitioner to pay the said sum within fifteen days, failing which recovery shall be made in accordance with the provisions of the Employees State Insurance Act, 1948 3 (for short 'E.S.I. Act'). Challenging the demand notice the present writ petition is filed.
3. Respondent Nos.2 and 3 filed counter and inter alia contended that petitioner's establishment is covered under Section 2(12) of the ESI Act w.e.f. 01.09.2022 as there are more than ten coverable employees with the petitioner. ESI Corporation issued Form C-11 dated 05.11.2022 to the petitioner informing about coverage of petitioner's factory and allotted the unique code No.62000090790000705. Petitioner paid contributions for the period from October, 2012 to June, 2013 and August, 2014 to July, 2019. Petitioner did not pay contributions from July, 2013 to July, 2014. Therefore, as per Section 40 read with Section 39 of the ESI Act and the Regulations 29, 31 and 33 of the ESI (General) Regulations, 1950, show cause notice, dated 03.11.2014 for Rs.1,50,150/- was issued duly affording opportunity of personal hearing on 20.11.2014. On receipt of the above said notice, authorized representative of the petitioner attended for personal hearing and failed to produce relevant records for the disputed period. Except stating that the unit has been closed no evidence was 4 produced. Inspite of sufficient opportunity given to the petitioner, no evidence is produced in support of the allegation and hence, it was found that petitioner has to pay ESI contributions from July 2013 to July 2014. Therefore respondent Corporation passed order under Section 45-A of the ESI Act, directing the petitioner to pay an amount of Rs.1,38,796/- towards ESI contribution for the period from July, 2013 excluding an amount of Rs.11,354/- which was paid on 04.12.2015 for the month of August, 2014. The operative portion of the order reads thus:
"if the petitioner not satisfied with the order, he may prefer an appeal to the competent authority within 60 days from the date of the order by depositing 25% of the contributions or the contribution as per the petitioner's calculation whichever is higher."
4. It is further averred in the counter that the above order was served to the petitioner through registered post and despite receiving the same, petitioner did not choose to file appeal in terms of Section 75 of the ESI Act. After completion of the statutory period, Corporation issued form C-19 dated 5 24.10.2018 to the Recovery Officer to recover the due amounts as per law. Since, no appeal is filed, Recovery Officer issued CP-2, dated 23.11.2018 for an amount of Rs.2,16,739/-. The petitioner, without filing appeal before the competent authority within stipulated time approached this Court by suppressing the facts. Hence, prays to dismiss the writ petition.
5. Heard Sri K. Prudhvi Raj, learned counsel for the petitioner, learned Government Pleader for Labour, for respondent No.1 and Sri K. Sangam Naidu, learned standing counsel for respondent Nos.2 and 3.
6. Learned counsel for the petitioner submits that petitioner paid ESI contribution till the month of June, 2013 and thereafter he stopped paying the contribution as establishment was closed down. He submits that the fact that establishment was closed from July, 2013 was intimated to respondent corporation through online. He submits that demand notice discloses that the authorized officer has forwarded the certificate dated 24.10.2018 for recovery of the amount mentioned in the said certificate. He submits that 6 petitioner has no knowledge about the issuance of said certificate till receipt of the impugned proceedings, dated 23.11.2018. Learned counsel submits that petitioner was not given any notice or opportunity before determining the contribution to be paid for issuing the said certificate.
7. Learned counsel for the petitioner further submits that authorized authority has to determine the contribution of the employer as per Section 45 A of the ESI Act, on the basis of the information available and no such order shall be passed unless the employer has been given reasonable opportunity of being heard. He further submits that petitioner was not given any opportunity before issuing certificate. Hence, prays to the grant the relief.
8. Learned Government Pleader for Labour submits that petitioner has to avail alternative remedy of appeal under Section 75 of the ESI Act, before the ESI Court and this writ petition is not maintainable.
9. Learned standing counsel for respondent Nos.2 and 3 submits that petitioner invoked writ jurisdiction instead of 7 availing remedies under the ESI Act. He submits that after adjudication before E.S.I. Court, the aggrieved party can prefer appeal against such order under Section 82 of the ESI Act. The petitioner without availing the remedy under ESI Act filed this writ petition and hence, the same is liable to be dismissed.
10. Learned standing counsel placed reliance on the judgment rendered in W.P.No.7762 of 2004 between A.P. Genco vs. The Regional Director, ESI, Hyderabad, wherein it was held that the Specialized Tribunal is constituted for adjudication of disputes arising under the ESI Act and thereafter aggrieved party has appeal provision under the ESI Act, as such writ petition is not maintainable.
11. Petitioner is challenging demand notice issued by respondent No.3 subsequent to the order, dated 02.07.2018 passed under Section 45-A of the ESI Act. In this regard the contention of learned counsel for the respondents is that against order passed under Section 45-A of the ESI Act, as per Section 75 of the ESI Act, petitioner has got efficacious remedy of preferring appeal, before ESI Tribunal, within time 8 stipulated. But, petitioner did not challenge the same. Thus, order, dated 02.07.2018 became final.
12. It is appropriate to extract Section 75 of the ESI Act, which reads thus:
"75. Matters to be decided by Employees' Insurance Court. --
(1) If any question or dispute arises as to--
(a) whether any person is an employee within the meaning of this Act or whether he is liable to pay the employee's contribution, or
(b) the rate of wages or average daily wages of an employee for the purposes of this Act, or
(c) the rate of contribution payable by a principal employer in respect of any employee, or
(d) the person who is or was the principal employer in respect of any employee, or
(e) the right of any person to any benefit and as to the amount and duration thereof, or 192 [(ee) any direction issued by the Corporation under section 55A on a review of any payment of dependants' benefit, or] 193 [***]
(g) any other matter which is in dispute between a principal employer and the Corporation, or between a principal employer and an immediate employer or between a person 9 and the Corporation or between an employee and a principal or immediate employer, in respect of any contribution or benefit or other dues payable or recoverable under this Act, 194 [or any other matter required to be or which may be decided by the Employees' Insurance Court under this Act], such question or dispute 195 [subject to the provisions of sub-
section (2A)] shall be decided by the Employees' Insurance Court in accordance with the provisions of this Act. (2) 195 [Subject to the provisions of sub-section (2A), the following claims] shall be decided by the Employees' Insurance Court, namely:--
(a) claim for the recovery of contributions from the principal employer;
(b) claim by a principal employer to recover contributions from any immediate employer; 196 [***]
(d) claim against a principal employer under section 68;
(e) claim under section 70 for the recovery of the value or amount of the benefits received by a person when he is not lawfully entitled thereto; and
(f) any claim for the recovery of any benefit admissible under this Act.
197 [(2A) If in any proceedings before the Employees' Insurance Court a disablement question arises and the decision of a medical board or a medical appeal tribunal has not been obtained on the same and the decision of such question is necessary for the determination of the claim or question before the Employees' Insurance Court, that Court 10 shall direct the Corporation to have the question decided by this Act and shall thereafter proceed with the determination of the claim or question before it in accordance with the decision of the medical board or the medical appeal tribunal, as the case may be, except where an appeal has been filed before the Employees' Insurance Court under sub-section (2) of section 54A in which case the Employees' Insurance Court may itself determine all the issues arising before it.] 198 [(2B) No matter which is in dispute between a principal employer and the Corporation in respect of any contribution or any other dues shall be raised by the principal employer in the Employees' Insurance Court unless he has deposited with the Court fifty per cent. of the amount due from him as claimed by the Corporation: Provided that the Court may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this sub-section.] (3) No Civil Court shall have jurisdiction to decide or deal with any question or dispute as aforesaid or to adjudicate on any liability which by or under this Act is to be decided by 199 [a medical board, or by a medical appeal tribunal or by the Employees' Insurance Court]."
13. Thus, for any person aggrieved by the order passed under Sec 45-A of the ESI Act, remedy of appeal is provided under the ESI Act to the E.I.Court.
11
14. Further, after adjudication of the matter before the E.I. Court, the aggrieved party can prefer appeal as per Section 82 of the ESI Act. Section 82 of the ESI Act, reads thus:
82. Appeal (1) Save as expressly provided in this section, no appeal shall lie from an order of an Employees' Insurance Court.
(2) An appeal shall lie to the High Court from an order of an Employees' Insurance Court if it involves a substantial question of law.
(3) The period of limitation for an appeal under this section shall be sixty days.
(4) The provisions of sections 5 and 12 of the 1[Limitation Act, 1963 (36 of 1963)] shall apply to appeals under this section.
15. A perusal of Sections 75 and 82 of the ESI Act indicates that there is effective alternative statutory remedy available to the petitioner. When an order was passed under Section 45-A of the ESI Act, petitioner ought to have filed an appeal under Section 75 of the ESI Act, if it is aggrieved by the same. Against the order of E.I. Court further appeal is provided under Section 82 of the ESI Act, to the High Court. 12
16. In the present case, as can be seen from the record, order passed under Section 45-A by Assistant Director is not challenged by the petitioner. The impugned notice is only consequential to order passed under Section 45-A of the ESI Act. Unless and until, the order passed by the authority under Sec 45-A of the Act is set aside or modified, challenging the consequential demand notice would not arise.
17. In view of the facts and circumstances of the case, since this writ petition is filed challenging the demand notice, which is issued as consequential to the order passed under Section 45-A of the ESI Act, which became final, this Court finds no merits in the writ petition and the writ petition is liable to be dismissed.
18. Accordingly, writ petition is dismissed. However, no costs.
As a sequel, pending miscellaneous petitions, if any, shall stand closed.
__________________________ SUBBA REDDY SATTI, J Date : 19.09.2022 ikn 13 THE HON'BLE SRI JUSTICE SUBBA REDDY SATTI WRIT PETITION No.8570 of 2019 Date : 19.09.2022 ikn