Gujarat High Court
Employees State Insurance Corporation vs Chansma Taluka Sarvoday Mazdoor Kamdar ... on 24 February, 2026
NEUTRAL CITATION
C/FA/4099/2024 JUDGMENT DATED: 24/02/2026
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/FIRST APPEAL NO. 4099 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MRS. JUSTICE M. K. THAKKER
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Approved for Reporting Yes No
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EMPLOYEES STATE INSURANCE CORPORATION
Versus
CHANSMA TALUKA SARVODAY MAZDOOR KAMDAR SAHAKARI
MANDALI LIMITED
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Appearance:
MR.KRUTARTH K PANDYA(7092) for the Appellant(s) No. 1
MR YOGI K GADHIA(5913) for the Defendant(s) No. 1
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CORAM:HONOURABLE MRS. JUSTICE M. K. THAKKER
Date : 24/02/2026
JUDGMENT
1. This appeal is filed under section 82 of the Employee State Insurance Act, 1948 read with section 96 of the Code of Civil Procedure, 1908 challenging the judgment and order dated 01.04.2023 passed by learned ESI Court, Ahmedabad in ESI Application No. 54 of 2017 whereby the learned court has partly allowed the application filed by the present opponent and set aside the order passed under section 45-A as well as remanding back the matter tot he appellate authority to Page 1 of 11 Uploaded by MRS. ARCHANA SAJEEVKUMAR PILLAI(HC01899) on Tue Mar 03 2026 Downloaded on : Sat Mar 14 05:40:38 IST 2026 NEUTRAL CITATION C/FA/4099/2024 JUDGMENT DATED: 24/02/2026 undefined re-decide the matter.
2. The present appellant is the original defendant and the respondent is the original applicant (hereinafter referred to on their original status for the sake of convenience).
3. The facts involving the present case is as under:
3.1. The applicant is a co-operative society engaging in the business of supplying man power to ONGC. The applicant applied with ESI Code which was allotted on 17.11.2014 vide C.11 from that day the applicant has complied with the provisions of ESI and regularly paid the dues of the eligible employees. The social security officer of the ESI Corporation visited the applicant establishment on 07.12.2016, 08.12.2016 and 09.12.2016. Thereafter, served notice vide C.18 dated 21.02.2017 demanding amount of Rs.1,60,12,664/- on the ground that date of coverage of the applicant is pre-
poned from 01.11.2014 to 01.04.2011. Thereafter, the opportunity of hearing was given to the applicant to produce documentary evidence and considering these various documentary evidence denying the claim made by the corporation however, the opponent corporation passed order on 30.06.2017 holding the applicant liable Page 2 of 11 Uploaded by MRS. ARCHANA SAJEEVKUMAR PILLAI(HC01899) on Tue Mar 03 2026 Downloaded on : Sat Mar 14 05:40:38 IST 2026 NEUTRAL CITATION C/FA/4099/2024 JUDGMENT DATED: 24/02/2026 undefined for payment of contribution of Rs.29,25,544/-. Thereafter, on 10.04.2017 personal hearing was fixed and subsequently on 28.04.2017 order under section 45- A came to be passed determining the total amount of ESI Contribution of Rs.1,46,14,370/- both the orders passed under section 45-A dated 28.04.2017 as well as 30.06.2017 were challenged before the learned ESI court under section75 of ESI Act. The learned court, after hearing to the parties, has allowed the application filed by the employer and matter was remanded back to the authority under section 45-A to re-decide the same which is subject matter of challenge before this Court. 3.2. The learned Court, while adjudicating the matter, has framed the following issues and answered the accordingly:
1 Whether the application is within the limitation? 2 Whether the application is maintainable at law? 3 Whether the applicant proves that, the order passed under section- 45 A dated 28/04/2017, is of natural illegal, against the principle justice, unjust and without application of mind?
4 Whether the applicant is entitled to get relief as prayed for? Answers:-
1 In the affirmative.
2 In the affirmative.Page 3 of 11 Uploaded by MRS. ARCHANA SAJEEVKUMAR PILLAI(HC01899) on Tue Mar 03 2026 Downloaded on : Sat Mar 14 05:40:38 IST 2026
NEUTRAL CITATION C/FA/4099/2024 JUDGMENT DATED: 24/02/2026 undefined 3 In the affirmative.
4 partly affirmative.
4. Heard learned advocate Mr.Krutarth Pandya for the appellant and learned advocate Mr.Yogi Gadhiya for the respondent.
4.1. It is submitted by learned advocate Mr.Krutarth Pandya that pursuant to the GR dated 20.07.2009 whereby, the E.S.I Act is made applicable to the establishments belonging or under the control of Central Government wherein 20 or more persons are employed for wages on any day of the preceding twelve months from the date of notification, in all the area where the provisions of ESI Act have already been brought into force under section 1(3) of the Act. It is submitted that the unit known as ONGC has been covered under section 1(5) of ESI Act with effect from 11.10.2011. It is submitted that the social security officer of the corporation had visited the unit on 11.10.2011 for survey in pursuance to the government notification and obtained the details of casual employee/ employees labourers engaged/ deployed/ through labour contractors as on 11.10.2011. Thereafter the letter of Page 4 of 11 Uploaded by MRS. ARCHANA SAJEEVKUMAR PILLAI(HC01899) on Tue Mar 03 2026 Downloaded on : Sat Mar 14 05:40:38 IST 2026 NEUTRAL CITATION C/FA/4099/2024 JUDGMENT DATED: 24/02/2026 undefined coverage came to be issued as C.18 assessing the contribution on ad-hoc basis. It is submitted that though the learned E.I Court is having wide powers to decide the dispute under section 75 of the Act, the learned Court, after setting aside the order passed under section 45-A has sent it back to the Authority which is erroneous. Learned advocate Mr.Krutarth Pandya has relied on the decision rendered by this Court in the case of Employees State Insurance Corporation Vs Escort Security And Personnel Services in SCA No.16717 of 2017 and submitted that in identical situation, learned Court has set aside the order passed by the ESI Court sending the matter back to the Authority under section 45-A and directed the ESI Court to hear the application and decide the same. In the background, learned advocate Mr.Pandya has prayed to pass similar order and allow this first appeal. 4.2. Per contra, learned advocate Mr.Yogi Gadhiya submits that learned ESI Court, after hearing all the issues, has set aside the order passed under section 45-A however, the employer has not challenged the same. In view of the same, it is submitted by learned advocate Page 5 of 11 Uploaded by MRS. ARCHANA SAJEEVKUMAR PILLAI(HC01899) on Tue Mar 03 2026 Downloaded on : Sat Mar 14 05:40:38 IST 2026 NEUTRAL CITATION C/FA/4099/2024 JUDGMENT DATED: 24/02/2026 undefined Mr.Yogi Gadhiya that appropriate order be passed.
5. On perusing the appeal, it transpires that substantial questions of law are raised in the present appeal, which are reproduced hereinbelow:
(a) In light of the facts of present case WHETHER learned Employees state Insurance Court has power under section 75 of Employees State Insurance Act, 1948 to decide all the questions involved for which the matter is remanded to the ESI Corporation?
(b) Whether, when the regular employees have been exempted from the applicability of ESI Act, the contractual employees or daily wagers be said to be covered within the relevant provisions of ESI Act?
(c) WHETHER the unit of the Opponent No.1 is covered under Section 2(12) of Employee state insurance act, 1948.
(d) WHETHER court below have committed substantial error of law in not appreciating that the employer has committed breach of Section 44 of the ESI Act, 1948?
6. Having considered the submissions made by the learned advocates for the respective parties and on referring the reasons assigned by the learned ESI court, it emerges that, while adjudicating the dispute under section 75, learned Court has held that the applicability of the Act was for the period from November, 2011 to March, 2016, which is found to be erroneous. It is also held by the learned Court that only in new contract there is a Page 6 of 11 Uploaded by MRS. ARCHANA SAJEEVKUMAR PILLAI(HC01899) on Tue Mar 03 2026 Downloaded on : Sat Mar 14 05:40:38 IST 2026 NEUTRAL CITATION C/FA/4099/2024 JUDGMENT DATED: 24/02/2026 undefined clause of ESI was not considered by the Authority while assessing the contribution under section 45-A. It is also held by the learned Court that the order passed under section 45-A is without application of mind as there are no findings recorded with the applicability of ESI to ONGC was prior to the implementation of fair wage policy. After determining the issues in favour of the appellant, and setting aside the order passed under section 45-A, the learned Court has, instead of granting the relief, remanded back the matter to appellate Authority to re-decide the same.
7. At this stage, reference of the decision rendered by this Court in the case of Employees State Insurance Corporation (supra) is required to be referred wherein, this Court has held as under:
"7. Having considered submissions of learned advocate of both the sides and considered the provisions of Section 75 of the ESI Act which reads as under:
75. Matters to be decided by Employees' Insurance Court.
(1) If any question or dispute arise 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 any employee, or Page 7 of 11 Uploaded by MRS. ARCHANA SAJEEVKUMAR PILLAI(HC01899) on Tue Mar 03 2026 Downloaded on : Sat Mar 14 05:40:38 IST 2026 NEUTRAL CITATION C/FA/4099/2024 JUDGMENT DATED: 24/02/2026 undefined
(c) the rate of contribution payable by a principal employer in respect of employee, or
(d) the person which 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 [(ee) any direction issued by the Corporation under section 55A on a review of any payment of dependants' benefit or]
(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 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, [or any other matter required to be or which may be decided by the Employees' Insurance Court under this Act], such question or dispute [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) [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;
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(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 Page 8 of 11 Uploaded by MRS. ARCHANA SAJEEVKUMAR PILLAI(HC01899) on Tue Mar 03 2026 Downloaded on : Sat Mar 14 05:40:38 IST 2026 NEUTRAL CITATION C/FA/4099/2024 JUDGMENT DATED: 24/02/2026 undefined lawfully entitled thereto; and
(f) any claim for the recovery of any benefit admissible under this Act.
[(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 shall direct the Corporation to have the questions decided by this Act and shall thereafter proceed with the determination oof 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.] [(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 [a medical board, or by a medical appeal tribunal or by the Employees' Insurance Court].
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NEUTRAL CITATION C/FA/4099/2024 JUDGMENT DATED: 24/02/2026 undefined
8. In view of above provision, more particularly clause (a), (c) and (g) of sub-section (1) of Section 75 of the ESI Act, ESI Court has power to decide all the questions involved in the matter on merits and therefore, there was no need to remand the matter back to the petitioner-corporation for adjudication as ESI Court is empowered to decide dispute between the parties. Therefore, the impugned orders dated 02.08.2010 and 21.01.2011 passed by the ESI Court in EI Application No.2 of 2012 and EI Application No.3 of 2012 respectively are hereby quashed and set aside."
8. In view of the above discussions and the ratio laid down by this Court in the decision referred hereinabove, this Court is of the opinion that the learned Court, has the power under section 75 of the ESI Act to decide all the questions involved in the matter on merits. Therefore, instead of remanding the matter back to the Corporation, the learned Court could have decided the issues by exercising its powers. In that background, the impugned judgment qua remanding the matter back to the learned Authority to decide the issue under section 45-A is erroneous, and therefore, learned Court is directed to decide the issues in respect of the relief prayed for by the appellant herein. Learned court shall decide the issues independently without being prejudiced by the observations, if any, made by this Page 10 of 11 Uploaded by MRS. ARCHANA SAJEEVKUMAR PILLAI(HC01899) on Tue Mar 03 2026 Downloaded on : Sat Mar 14 05:40:38 IST 2026 NEUTRAL CITATION C/FA/4099/2024 JUDGMENT DATED: 24/02/2026 undefined Court, after granting reasonable opportunity to both the parties.
(M. K. THAKKER,J) ARCHANA S. PILLAI Page 11 of 11 Uploaded by MRS. ARCHANA SAJEEVKUMAR PILLAI(HC01899) on Tue Mar 03 2026 Downloaded on : Sat Mar 14 05:40:38 IST 2026