Allahabad High Court
M/S Aryan Group Of Guard ... vs U.O.I. Thru. Secy. Ministry Of Labour ... on 23 August, 2023
Author: Alok Mathur
Bench: Alok Mathur
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH ?Neutral Citation No. - 2023:AHC-LKO:56307 Court No. - 17 Case :- WRIT - C No. - 6418 of 2023 Petitioner :- M/S Aryan Group Of Guard Services,Lucknow Thru. Proprietor Sanjay Kumar Mishra Respondent :- U.O.I. Thru. Secy. Ministry Of Labour And Deptt. Of Employment,New Delhi And 2 Others Counsel for Petitioner :- D.P. Dutt Tiwari,Chandra Mohan Counsel for Respondent :- A.S.G.I.,Shishir Pradhan Hon'ble Alok Mathur,J.
1. Heard Sri D.P. Dutt Tiwari, learned counsel for the petitioner as well as Sri Shishir Pradhan for respondent No.s 2 and 3.
2. The counter affidavit filed on behalf of respondent Nos. 2 and 3 is taken on record.
3. By means of the present writ petition the petitioner has sought quashing of the recovery order dated 17.1.2020 issued by opposite party No.2 under Section 45-C to 45-I of the Employees State Insurance Act, 1948 (hereinafter referred to as the Act of 1948).
4. The petitioner has challenged aforesaid recovery order on the ground that the same has been passed without carrying out any proceeding or passing any order under Section 45 A of the Act of 1948 and without passing any order of assessment as statutory required by sub-section (1) of Section 45A of ESI Act straight away directing the Recovery Officer Employees' State Insurance Corporation, Sub Regional Officer, Sarojani Nagar, Lucknow (opposite party No.3) from recovering an amount of Rs.67,33,238/- is illegal and arbitrary.
5. Sri Shishir Pradhan, on the other hand, has submitted that in the present case letter was issued on 1.1.2020 to the petitioner asking him to show cause as to why he has not deposited statutory insurance contribution amount for the workers engaged by the petitioner for which the contribution details were submitted and were available on ESIC portal. It is stated that the petitioner himself had declared contribution amount payable and numbers of workers engaged by him for the period November, 2018, December, 2018, January, 2019, February, 2019, March, 2019, April, 2019, May, 2019, June, 2019 and July, 2019 in online C-6 compliance register of ESIC and, therefore, as the amount was known, no order or determination under Section 45A with regard to the establishment and straightway recovery proceedings were initiated. He has annexed a copy of the return filed by the petitioner.
6. The petitioner has also challenged the order dated 17.1.2020 passed by Deputy Director thereby seeking to recover the amount of contribution under Section 45 C to 45 I of the Act of 1948. In the said order it is stated that the provisions of ESI Act are applicable upon the petitioner and the petitioner was required to pay Rs.61,82,611/- as contribution in respect of its employees for the period from November, 2018 to July, 2019 plus interest at the rate of 12 per cent per annum for each day and, hence, the total amount recoverable was Rs.67,33,238/-.
7. The only issue which requires to be determined by this Court is as to whether the recovery as sought to be made by the respondents by means of the impugned order could have been passed without resorting to the provisions of Section 45 A of the Act of 1948? In this regard, according to the scheme contained in the Act of 1948. Under Section 44 Employers have to furnish returns and maintain registers, in certain cases. ? (1) Every principal and immediate employer shall submit to the Corporation or to such officer of the Corporation as it may direct such returns in such form and containing such particulars relating to persons employed by him or to any factory or establishment in respect of which he is the principal or immediate employer as may be specified in regulations made in this behalf.
(2) Where in respect of any factory or establishment the Corporation has reason to believe that a return should have been submitted under sub-section (1) but has not been so submitted, the Corporation may require any person in charge of the factory or establishment to furnish such particulars as it may consider necessary for the purpose of enabling the Corporation to decide whether the factory or establishment is a factory or establishment to which this Act applies.
(3) Every principal and immediate employer shall maintain such registers or records in respect of his factory or establishment as may be required by regulations made in this behalf.
8. Once the returns as provided for under Section 44 are filed the same are required to be examined by the respondent-corporation under Section 45 of the said Act where it is provided that Social Security Officers appointed by the Corporation may for the purposes of inquiring into the correctness of any of the particulars stated in any return referred to in section 44 or for the purpose of ascertaining whether any of the provisions of this Act has been complied with ?
(a) require any principal or immediate employer to furnish to him such information as he may consider necessary for the purposes of this Act ; or (b) at any reasonable time enter any office, establishment, factory or other premises occupied by such principal or immediate employer and require any person found in charge thereof to produce to such Social Security Officer] or other official and allow him to examine such accounts, books and other documents relating to the employment of persons and payment of wages or to furnish to him such information as he may consider necessary ; or (c) examine, with respect to any matter relevant to the purposes aforesaid, the principal or immediate employer, his agent or servant, or any person found in such factory, establishment, office or other premises, or any person whom the said Social Security Officer or other official has reasonable cause to believe to be or to have been an employee;(d) make copies of, or take extracts from, any register, account book or other document maintained in such factory, establishment, office or other premises ;
(e) exercise such other powers as may be prescribed.3) [A Social Security Officer] shall exercise such functions and perform such duties as may be authorized by the Corporation or as may be specified in the regulations. [(4) Any officer of the Corporation authorized in this behalf by it may, carry out re-inspection or test inspection of the records and returns submitted under section 44 for the purpose of verifying the correctness and quality of the inspection carried out by a Social Security Officer.]
9. Section 45 A deals with determination of contributions in certain cases. ? (1) Where in respect of a factory or establishment no returns, particulars, registers or records are submitted, furnished or maintained in accordance with the provisions of section 44 or any [Social Security Officer] or other official of the Corporation referred to in sub-section (2) of section 45 is 5[prevented in any manner] by the principal or immediate employer or any other person, in exercising his functions or discharging his duties under section 45, the Corporation may, on the basis of information available to it, by order, determine the amount of contributions payable in respect of the employees of that factory or establishment.]
10. In case the employer is aggrieved of such determination Section 45AA provides for an appeal against such a determination. Section 45 C provides for issuance of recovery certificate by the Recovery Officer, which provides that (1) Where any amount is in arrears under this Act, the authorized officer may issue, to the Recovery Officer, a certificate under his signature specifying the amount of arrears and the Recovery Officer, on receipt of such certificate, shall proceed to recover the amount specified therein from the factory or establishment or, as the case may be,
11. It is further provided under Section 45 E that when the authorized officer issues a certificate to a Recovery Officer under section 45-C, it shall not be open to the factory or establishment or the principal or immediate employer to dispute before the Recovery Officer the correctness of the amount, and no objection to the certificate on any other ground shall also be entertained by the Recovery Officer.
12. From the aforesaid, provisions it is clear that a mechanism for determination of the amount due upon upon the employees as its contribution under the Act of 1948 has been clearly provided. The employer is mandated to file its return under Section 44 of the Act. The said return is to be scrutinized by Social Security Officer under Section 45 of the Act and treating the return filed under Section 44 or the report submitted by Social Security Officer under Section 45 is treated as determining the outstanding by the employer under Section 45 A of the Act. Sub clause 2 of the Section 45 A clearly provides that such determination would amount to an order made by the Corporation under Section 45 A (1) and shall be sufficient proof of the claim of the Corporation under Section 75 or for recovery of the amount determined by such order as an arrears of land revenue under Section 45 B or the recovery under Section 45 C to Section 45 I.
13. From the aforesaid it is clear that under 45 A it is provided that determination for certain amount will have to be made in all cases where contribution of the employer is contested.
14. In absence of any order passed under Section 45A no recovery can be proceeded against. This also seems to be the only interpretation in as much as the employer is restrained from challenging the amount stated in the recovery notice and the order issued by the Recovery Officer while determination made under Section 45 A is appeal-able under Section 45 AA and it is only either the order under Section 45 A is finalized and in case no appeal is filed or after the appeal is filed and subsequently the order of appellate authority under Section 45 AA the amount has been finally determined and the respondents can, therefore, proceeded to recover the amount under Section 45 C.
15. In view of the above, this Court is of the considered opinion that even if the employer has not filed any return still the respondents are duty bound to make determination under Section 45 A of the Act of 1948. In the present case, it is not disputed that there is no determination under Section 45A and the respondents have directly proceeded to pass recovery notice under Section 45 E which accordingly is illegal and arbitrary and contrary to the provisions of the Act. This aspect of the matter has already been considered by the Gauhati High Court in the case of Hem Kumar Gogoi Vs. Employee''s State Insurance Corporation and others reported in (2016) 09 Gau CK 0004, the relevant portion of which is quoted as under:-
"20. Unless there is an order determining the amount of contribution payable in respect of employees of the factory or establishment under Section 45 A (1), Section 45 A(2), Section 45 B and 45 C, will not come into the play. In absence of any final order passed under Section 45 A (1), as demonstrated by the materials on record, the impugned order dated 10.06.2010 has to be construed as being without jurisdiction in the eye of law. "
16. In light of the above, no determination under Section 45 A has been made by the respondents and accordingly the recovery proceedings initiated against the petitioner are illegal and arbitrary and contrary to the provisions of law. The order impugned dated 17.1.2020 issued by opposite party No.2 under Section 45-C to 45-I of the Employees State Insurance Act, 1948 is quashed and all the proceedings in pursuance of the said order are also set aside.
17. Liberty is granted to the respondents to pass fresh orders as per Section 45 A and accordingly proceed further in the matter in accordance with law.
18. The writ petition thus stand allowed.
Order Date :- 23.8.2023 (Alok Mathur, J.) RKM.