Ms.Toshali Sands Puri-Konark Marine ... vs The Regional Director Employees State ... on 17 August, 2016

[Cites 21, Cited by 0]

Orissa High Court

Ms.Toshali Sands Puri-Konark Marine ... vs The Regional Director Employees State ... on 17 August, 2016

Bench: Biswajit Mohanty

ORISSA HIGH COURT: CUTTACK

W.P. (C) No.8845 of 2013

In the matter of an application under Articles 226 and 227 of the
Constitution of India and an application under the Employees' State
Insurance Act, 1948 and the Rules framed thereunder.

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M/s.Toshali Sands, Puri-Konark
Marine Drive, Puri-represented
through its Director ...... Petitioner

-versus-

The Regional Director, Employees'
State Insurance Corporation,
Bhubaneswar and others ...... Opp. parties

For Petitioner : M/s. Nitish Kumar Mishra, D.K.Pani,
A.K.Roy, A.Mishra, P.Dash and
S.Pradhan.

For Opposite parties : Mr. Bibhudhendra Dash

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Date of Judgment:17.08.2016
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P R E S E N T:

THE HONOURABLE SHRI JUSTICE BISWAJIT MOHANTY

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Biswajit Mohanty, J. The present writ application has been filed by the

petitioner with the following prayers:
2

"It is therefore, most fervently prayed that this Hon'ble Court may
be graciously pleased to issue notice of RULE NISI to the opp. parties
directing to file show cause as to why this writ petition shall not be allowed
and to make the said Rule absolute and to allow the writ petition in case,
the opp. parties fail to show cause or shows insufficient cause, by
quashing Annexure-3 as illegal and without jurisdiction;

And to pass any other or further appropriate orders as may be
deemed fit and proper in the facts and circumstances of the case;

And for such act of kindness, the petitioner as in duty bound shall
ever pray."

2. Mr. Mishra, learned counsel for the petitioner submitted that the

the petititioner is a company registerd under the Companies Act and is

running an ethnic village resort situated on Konark Marine Drive at

Puri which is engaged in hotel and hospitality industry. It is a division

of M/s. T.K. International Limited having its Corporate Office at

Gurgaon. According to him, the petitioner has been regularly making

all statutory payments in respect of its employees by depositing

contributions under the Employees' State Insurance Act, 1948 (for

short, "the Act") as would be evident from Annexure-1 series. According

to Mr. Mishra, learned counsel for the petitioner, despite regular

payments, the demand notice dated 2.4.2007 was served on the

petitioner on 15.4.2007 demanding payment of arrear contribution for

the period March, 2004 to June 2005. When the petitioner informed

the opp. parties about the deposit of the above mentioned contributions

paid vide Annexure-1 series, no further action was taken by the opp.

parties. However, vide letter dated 8.10.2012 (Annexure-2), the opp.

party No.2 requested the opp. party No.3 to initiate recovery proceeding

against the petitioner to recover Rs.90,375/-+ Rs.86,239/- (interest) =

Rs.1,74,004/- along with further interest till the date of recovery, as
3

the petitioner failed to pay the contribution for a certain period. This

requestes of opp. party No.2 to opp. party No.3 vide Annexure-2 was

also informed to the petitioner. Immediately thereafter, vide Annexure-3

dated 19.10.2012, the opp. parties issued notice to the petitioner in

initiating Certificate Proceeding No.18785/2012 for a highly inflated

amount. Even though the petitioner had made several communications

regading deposit of all contributions on time for the notice period, the

opp. parties 2 and 3 without applying their mind to the repeated

request of the petitioner for supplying a detailed break up of the alleged

outstanding dues remained silent and failed to account for the

amounts already deposited by the petitioner towards contribution for

the notice period. He further submitted that at no point of time the opp.

parties have initiated the proceedings under Section 45-A of "the Act".

Mr. Mishra also submitted that all throughout the petitioner has been

attending the proceedings before opp. party No.3 but neither the basis

of demand raised against the petitioner nor the details of the break up

has been supllied to the petitioner despite the same being asked for by

the petitioner on several occasions. In this context, he relied on the

representation dated 11.02.2013 vide Annexure-4. In such

background, Mr. Mishra, learned counsel for the petitioner argued that

the arrears are required to be determined in accordance with Section

45A of "the Act" after giving reasonable opportunity of hearing to the

petitioner. Only after such determination, in case of non-payment, a

certificate proceeding can be initiated under Section 45C of "the Act"

and not otherwise. According to him in the present case no proceeding
4

under Section 45A of "the Act" was ever initiated prior to issuance of

Annexure-3. For all the reasons he contended that Annexure-3 is bad

in law. In this context, Mr. Mishra relied on a decision of Patna High

Court reported in Hazari Sah v. State of Bihar and others, 2009

LLR 1193 and the decision of Supreme Court in ESI Corporation v.

C.C.Satha Kumar, reported in (2007) 1 SCC (L& S) 413. It is the

further case of Mr. Mishra, learned counsel for the petitioner that as

per the 2nd proviso to sub section (1) of Section 45-A, no direction to

make payment can be made by the ESI authorities after a lapse of five

years from the date from which the arrears were due. In this context,

he pointed out that the demand related to the period from March, 2004

to June 2005. The period of five years as indicated under 2nd proviso to

sub-section (1) of Section 45A expired during 2009-10. Therefore,

initiation of certificate proceeding in 2012 vide Annexure-3 being time

barred is wholly void and has been issued without jurisdiction. On this

ground also, Annexure-3 is liable to be quashed. Mr. Mishra, learnead

counsel for the petitioner also pointed out that since the petitioner all

along has been depositing the contributions in time and since the

proceeding has been initiated by the opp. parties without any order

under Section 45-A, the only remedy available for the opp. parties is to

invoke Section 75 of the Act. In such background also, he submitted

that the order under Anneuxre-3 is liable to be set aside.

3. In his reply, Mr. B.Dash, relying on the counter affidavit filed by

the opp. parties submitted that the present case involves disputed

questions of facts as it involves controversy relating to payment/non-
5

payment of contribution and the same cannot be decided in the present

proceeding. Dispute of the present nature can only be adjudicated by

the Employees' Insurance Court as per Section 75 of "the Act" following

the procedure laid down under Orissa Employees' Insurance Court

Rules, 1951 by receiving written statement, framing issues, recording

evidence and pronouncing final order upon each of the issues

separately. Mr. Dash further submitted that any party aggrieved by the

order of the Employees' Insurance Court can appeal to this Court

under sub-section (2) of Section 82 of "the Act", if it involves a

substantial question of law. He also submitted that the petitioner-unit

has been covered under the Act with effect from 1.4.1997 and

accordingly the petitioner is under a statutory duty to comply the

provisions of the Act which make it obligations on the part of the

petitioner-employer to pay contributions. The certificate proceeding

pursuant to certificate case No.18785 of 2012 has been initiated by

opp. party No.3 to recover the certificate dues. He submitted that in the

present case on the basis of inspection of records carried out on

27.7.2005

, in which process the petitioner participated, it was found that the petitioner has not paid full contribution for the period March, 2004 to June, 2005. Mr. Dash drew the attention of this Court to a table indicated in the counter with regard to all the contributions that was required to be made by the petitioner for the above period and the contribution that has been paid by the petitioner and the balance amount that is required to be paid, which is Rs.90,375/-. As the petitioner did not pay the above noted amount, the opp. party No.2 6 issued a letter to the petitioner on 8.11.2005 with a request to pay the aforesaid contribution. Thereafter, the opp. party No.2 issued letter dated 2.4.2007 (Annexure-A) with a request to pay the aforesaid contribution of Rs.90,375/-. In response to the letter under Annexure-A, vide letter dated 25.4.2007 (Annexure-B), the petitioner requested the Additional Director (Revenue-II) of Employees' State Insurance Corporation for grant of two months time to remit the amount as financial condition of the petitioner was not good. When the petitioner did not pay the amount, the opp. party No.2 being the Authorised Officer issued a certificate on 8.10.2012 under Annexure-2 to opp. party No.3 to recover the aforesaid contribution required to be paid under Section 40 of the "the Act" with interest under Section 45-C to 45-I of "the Act". On receipt of the said certificate opp. party No.3 registered certificate case No.18785/2012 and issued notice on 19.10.2012 (Annexure-3) to the petitioner to recover the certificate dues. Thus, the certificate proceeding initiated by opp. party No.3 to recover the certificate dues is strictly as per the provisions of "the Act". Mr. Dash, learned counsel for the opp. parties made it clear that Section 45-A of "the Act" has no application to the present case as in the instant case the petitioner had produced all the records during the inspection on 27.7.2005 and cooperated with the inspection and on the basis of the records, the petitioner was found liable to pay the arrear contribution under Section 40 read with Section 39 of the "the Act" to the tune of Rs.90,375/-. Thus in the present case, no determination has been made under Section 45-A of "the Act". The demand is to pay 7 the arrear contributions under Section 40 of the "the Act" as would be clear from Annexure-2. Accordingly, Mr. Dash submitted that the petitioner is not entitled to the relief sought for.

4. In this case, no rejoinder has been filed. However, Mr. Mishra, learned counsel for the petitioner while reiterating the earlier submissions, argued that the writ application is maintainable inasmuch as there has been violation of principles of natural justice as envisaged in 1st proviso to sub-section (1) of Section 45A of "the Act" in passing the impugned order. He also submitted that since the impugned order is ab initio void and has been issued without jurisdiction, the present writ application is maintainable.

5. Heard Mr. Mishra, learned counsel for the petitioner and Mr. Bibhudhendra Dash, learned counsel for the opp. parties.

6. Perused the records.

The undisputed facts of the present case are as follows:

The petitioner unit has been covered under the Act with effect from 1.4.1997. On 4.5.2005, under Annexure-1 series the petitioner deposited both the Employer's and Employees' contribution amount of Rs.51,522/- for the period October, 2004 to March, 2005. Further on 21.6.2005, petitioner deposited Rs.8420/- with the E.S.I. Corporation covering both the employees' contribution and employer's contribution for the month of April, 2005. On 27.7.2005, the Inspector of E.S.I. Corporation carried on inspection of records of the petitioner unit for the period March, 2004 to June, 2005, which were produced by the petitioner-employer. There in the inspection it was found that the 8 petitioner had not paid full contribution for the period March, 2004 to June, 2005. Sometime thereafter, on 16.8.2005, the petitioner deposited Rs.3535/- towards both employees' and employer's contribution relating to contract labour employees. On 8.11.2005, opp.

party No.2 issued a letter to the petitioner with a request to pay Rs.90,375/-. Thereafter, on 2.4.2007 vide Annexure-A again the petitioner was requested to pay Rs.90,375/. Pursuant to such letter under Annexure-A, on 25.4.2007 (Annexure-B), the petitioner prayed two months' time to pay the same citing financial problem. In otherwords, the petitioner never disputed the demand made on 8.11.2005 and reiteration of the same demand on 2.4.2007 vide Annexure-A. Rather the petitioner prayed for more time to make payment. When no payment was made, vide Annexure-2 dated 8.10.2012, the opp. party No.2 issued a certificate to opp. party No.3 to recover Rs.90,375/- along with interest. The letter under Annexure-2 makes it clear that the contribution that was required to be paid was to be paid under Section 40 of "the Act". It is also important to note here that in the present case no prayer has been made to quash Annexure-2. Accordingly, on 19.10.2012 vide Annexure-3, the opp. party No.3 wrote to the petitioner for making payment of Rs.1,74,006/-, which included the interest. Thereafter, it seems under Annexure-4 that the petitioner submitted a representation to opp. party No.1 on 11.2.2013 for providing detail break up of all the outstanding amount as they did not have any details in their record. Accordingly, the petitioner requested to provide one copy of the details so that they 9 would be able to take further action. Thereafter, on 15.4.2013, the present writ application was filed with the prayer to quash Annexure-3.

7. In such factual backdrop, before proceeding further in the matter, it would be profitable to quote and analyse Sections 38,39,40,43,44, 45-A,45-B, 45-C and 75 of "the Act".

"38. All employees to be insured. Subject to the provisions of this Act, all employees in factories, or establishments to which this Act applies shall be insured in the manner provided by this Act.

39. Contributions.- (1)- The Contribution payable under this Act in respect of an employee shall comprise contribution payable by the employer (hereinafter referred to as the employer's contribution) and contribution payable by the employee (hereinafter referred to as the employee's contribution) and shall be paid to the Corporation.

(2) The contribution shall be paid at such rates as may be prescribed by the Central Government:

Provided that the rates so prescribed shall not be more than the rates which were in force immediately before the commencement of the Employees' State Insurance (Amendment) Act, 1989.

(3) The wage period in relation to an employee shall be the unit in respect of which all contributions shall be payable under this Act.

(4) The contributions payable in respect of each [wage period] shall ordinarily fall due on the last day of the [wage period), and where an employee is employed for part of the [wage period], or is employed under two or more employers during the same [wage period], the contributions shall fall due on such days as may be specified in the regulations.

[(5) (a) If any contribution payable under this Act is not paid by the principal employer on the date on which such contribution has become due, he shall be liable to pay simple interest at the rate of twelve per cent per annum or at such higher rate as may be specified in the regulations till the date of its actual payment:

Provided that higher interest specified in the regulations shall not exceed the landing rate of interest charged by any scheduld bank.

(b) Any interest recoverable under clause (a) may be recovered as an arrear of land revenue or under section 45C to section 45-I.

40. Principal employer to pay contribution in the first instance.

(1) The principal employer shall pay in respect of every employee, whether directly employed by him or by or through an immediate employer, both the employer's contribution and the employee's contribution.

(2) Notwithstanding anything contained in any other enactment but subject to the provision of this Act and the regulations, if any, made thereunder, the principal employer shall, in the case of an employee directly employed by him (not being an exempted employee), be entitled to recover from the employee the employee's contribution by deduction from his wages and not otherwise:

Provided that no such deduction shall be made from any wages other than such as relate to the period or part of the period in respect of which the contribution is payable, or in excess of the sum representing the employee's contribution for the period.

(3) Notwithstanding any contract to the contrary, neither the principal employer nor the immediate employer shall be entitled to deduct the employer's contribution from any wages payable to an employee or otherwise to recover it from him.

(4) Any sum deducted by the principal employer from wages under this Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted.

(5) The principal employer shall bear the expenses of remitting the contributions to the Corporation."

"43. Method of payment of contribution.-Subject to the provisions of this Act, the Corporation may make regulations for any matter relating or incidental to the payment and collection of contributions payable under this Act and without prejudice to the generality of the foregoing power such regulations may provide for-

(a) the manner and time of payment of contributions;

(b) the payment of contributions by means of adhesive or other stamps affixed to or impressed upon books, cards or otherwise and regulating the manner, times and conditions, in, at and under which, such stamps are to be affixed or impressed;

[bb] the date of which evidence of contributions have been paid is to be received by the Corporation;]

(c) the entry in or upon books or cards of particulars of contributions paid and benefits distributed in the case of the insured persons to whom such books or cards relate; and

(d) the issue, sale, custody, production, inspection and delivery of books or cards and the replacement of books or cards which have been lost, destroyed or defaced.

44. Employers 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 11 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.]"

"45A. 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 [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:

[Provided that no such order shall be passed by the Corporation unless the principal or immediate employer or the person in charge of the factory or establishment has been given a reasonable opportunity of heing heard:] [Provided further that no such order shall be passed by the Corpoation in respect of the period beyond five years from the date on which the contribution shall become payable.] (2) An order made by the Corporation under sub-section (1) 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 arrear of land revenue under section 45B [or the recovery under sections 45C to 45-I]."

"[45B.Recovery of contributions.- Any contribution payable under this Act may be recovered as an arrear of land revenue.] [45C.Issue of certificate to the Recovery Officer.-(1) Where any amount is in arrears under this Act, the authorised 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, the principal or immediate employer by one or more of the modes mentioned below:

(a) attachment and sale of the movable or immovable property of the factory or establishment or, as the case may be, the principal, or immediate employer;

(b) arrest of the employer and his detention in prison;

(c) appointing a receiver for the management of the movable or immovable properties of the factory or establishment or, as the case may be, the employer:

Provided that the attachment and sale of any property under this section shall first be effected against the properties of the factory or establishment and where such attachment and sale is insufficient for recovering the whole of the amount of arrears specified in the certificate, the Recovery Officer may take such proceedings against the properety of the employer for recovery of the whole or any part of such arrears.

(2) The authorised officer may issue a certificate under sub-section (1) notwithstanding that proceedings for recovery of the arrears by any other mode have been taken.]"

"75. Matters to be decided by the 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 1 [(ee) any direction issued by the Corporation under section 55-A on a review of any payment of dependants' benefits, or] 2 [ * * *]

(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, 3 [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 contribution from the principal employer ;

(b) claim by a principal employer to recover contributions from any immediate employer;

3 [ * * *]

(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.

[(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 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.] [(2-B) 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]."

8. An analysis of the above provision shows that as per Section 38 of "the Act", all the employees in the factories or establishment covered by "the Act" should be insured in the manner as provided under "the Act". As per Section 40 of "the Act", the principal employer is under an obligation to pay in respect of every employee whether directly employed by him or by or through an immediate employer, both the employee's contribution and employer's contribution and the principal 14 employer can recover the employee's contribution from his wages in case the said employee is directly employed by him, who does not come under the category of exempted employee. The principal employer has to bear the expenses for remitting the contribution to the ESI Corporation. As per Section 39 of the Act, the contribution covers both the employer's contribution and employee's contribution as indicated above. Clause-(a) of sub-section (5) of Section 39 of "the Act" makes it clear that if any contribution payble under "the Act" is not paid by the principal employer on the date on which such contributuion has become due, the principal employer would be liable to pay simple interest @ 12% p.a. or at such higher rate as specified in the regulations till the date of actual payment. Clause-(b) of sub-section (5) of Section 39 makes it clear that any interest recoverable under Clause-

(a) as indicated above may be recovered as an arrear of land revenue or under Section 45C to 45-I of "the Act". Thus, a factory or an establishment which has been covered by this Act has to pay contribution to ESI Corporation at prescribed rates as per the provisions of Sections 39 and 40 of "the Act". Section 43 of "the Act"

provides for method of payment of contribution. Section 44 of "the Act"

makes it clear that every principal or an immediate employer are bound to furnish returns to the ESI Corporation containing the particulars relating to persons employed by him as may be specified in regulations made in this behalf. It also requires every principal or an immediate employer to maintain such register and records in respsect of factory or establishment as may be required by the regulations made in this 15 behalf. Thus, as per Seciton 40 read with Section 39 of "the Act", ordinarily the employers are required to pay contributions. However, Section 45-A of "the Act" covers special cases relating to a course of action to be taken by the corporation where a factory or establishment fails to furnish returns or fails to maintain and furnish the registers OR where a Social Security Officer or any other official of the corporation is prevented in any maner by the principal or immediate employer in discharing his duties under "the Act". Only in these two cases, the ESI authority can determine the amount of contribution payable in respect of the employees of that factory or establishment. This has also been made clear in ESI Corporation v. C.C.Satha Kumar reported in (2007) 1 SCC (L& S) 413. In such cases, first proviso to sub-section (1) of Section 45-A requires that the principal or immediate employer or person in charge of factory or establishment has to be given a reasonable opportunity of being heard and the 2nd proviso to sub- section (1) of Section 45-A makes it clear that no order determining the contribution can be made for recovering contribution five years after from the date on which such contribution became payable. As per sub- section (2) of Section 2 of Section 45-A, an order made by the ESI Corporation under sub-section (1) shall be sufficient proof of the claim of the corporation under Section 75 of the Act. Thus, Section 45-A takes care of special circumstances for determining the contribution as otherwise contributions are ordinarily determined and paid by employers in accordance with provisions of Sections 39 and 40 of "the Act". So far as Section 75 of "the Act" is concerned, it would be enough 16 to say that it deals with as to what matters are to be decided by an Employees' Insurance Court. Such specific maters have been indicated in Clauses (a), (b), (c), (d), (e) and (ee) of sub-section (1) of Section 75 of "the Act". Clause-(g) of sub-section (1) of Section 75 of "the Act" deals with any other matter/dispute between the principal employer and corporation in respect of any contribution/dues payable or recoverable under "the Act". Such a dispute can also be decided by the Employees Insurance Court under this Act. Further sub-section 2 (B) of Section 75 makes it clear that any dispute between a principal employer and ESI Corpoation in respect of any contribution or other dues can be raised by principal employer in the ESI Court after he deposits with the court 50% of the amount due from him as claimed by the corporation. All these make it clear that in case of any dispute relating to any contribution or dues, Employees' Insurance Court has the jurisdiction to decide the same.

9. Now, coming to the facts of the present case, it is crystal clear that here the facts of the case do not attract the provison of Section 45-A of the Act. Here, the factual backdrop does not point out to a case where the petitioner had submitted no returns or has maintained no registers or records as required to be maintained in accordance with provison of Section 44 of "the Act" or has prevented the officers in discharging their duties. Rather, on the date of enquiry/inspection, i.e., 27.7.2005, the petitioner has produced the required records. Furher, it is not disputed that the petitioner is covered under "the Act" since 1.4.1997. Thus the provision of Section 45A is clearly not applicable to 17 the present case. In such background, the contention of the petitioner that in issuing Annexure-3, mandatory requirements of Section 45-A have been violated, has no legs to stand.

Once provision of Section 45 of the Act is not applicable, the argument of the petitioner on the basis of 1st proviso to sub-section (1) of Section 45A of "the Act" that as the order under Annexure-3 has been passed without giving reasonable opportunity of hearing to the petitioner, the same is bad in law, has no legs to stand. Even otherwise, in the present case, during inspection not only the petitioner participated by producing all the records but also after the letter under Annexure-A was issued raising the demand of Rs.90,375/-, the petitioner prayed for two months time under Annexure-B to make payment without raising any plea of violation of principles of natural justice. On this account also, it can be said that there has been no violation of principles of natural justice in passing the order under Annexure-3. Further, since Section 45A has no application to the present case, the argument of the petitioner relying on 2nd proviso to sub-section (1) of Section 45A of "the Act" finding fault with Annexure-3 dated 19.10.2012 being issued beyond five years from the date when the contribution fell due during 2004-05 also has no legs to stand. In such background, the contention of Mr. Mishra relating to Annexure-3 being void abintio and being issued without jurisdiction also has no legs to stand. The present case has nothing to do with Section 45A of "the Act". The case of Hazari Sah (supra), which mainly deals with Section 45A of "the Act" is also clearly factually distinguishable. There, 18 on the basis of survey report on 20.11.1979, the unit became liable for coverage. Here, the inspection dated 27.7.2005 did not result in covering the petitioner unit for the first time under "the Act" as it has been already covered since 1.4.1997 and has been paying contributions. Here, the enquiry only found out that no full payment of contribution has been made for a certain period and accordingly demand was made for arrears with interest. Thus, the facts of the present case are totally different as it deals with recovery of contribution, which fell due as per Section 40 read with Section 39 of "the Act". Here, the facts clearly reveal that while making payment of contributions as required under Secitons 39 and 40 of "the Act", the petitioner has defaulted in making some payments for which demand was raised on 8.11.2005 and reiterated on 2.4.2007 under Annexure-A. The letter under Annexure-2 clearly refers to contribution being made under Section 40 of "the Act". Thus in the facts and circumstances, this Court has no hesitation in accepting the contention of Mr. Dash that the petitioner is labouring under a wrong notion about the applicability of Section 45-A of the Act to the facts and circumstances of the case.

So far as the contention of the petitioner that unless an determination is made under Section 45-A, no certifiacate or recovery proceeding can be initiated cannot be accepted inasmuch as the proviosns of recovery as contained in Section 45-B, 45-C apply both to recovery of contribution and its arrears which are required to be paid under Sections 39 and 40 of "the Act" so also to recovery of determinations made under Section 45A of "the Act". There is no 19 prohibition with regard to application of Sections 45B to 45C for recovery of contributions which are required to be paid under Sections 39 and 40 of "the Act". Therefore, no fault can be found on the part of the opp. parties in initiating certificate proceeding as required under Section 45-C of "the Act" to recover the arrear amount as has been done under Annexure-3.

10. Similarly, the submission of Mr. Mishra, learned counsel for the petitioner that since the demand was raised by the opp. parties without any order under Section 45-A, the opp. parties can only enforce such demand by invoking Section 75 of "the Act" has no legs to stand as a combined reading of Clause-(g) of Sub-section (1) of Section 75, sub-section (2B) of Section 75 coupled with the decision of Hon'ble Supreme Court in Employees' State Insurance Corporation v. M/s. F.Fibre Bangalore (P) Ltd. reported in AIR 1997 Supreme Court 2441 makes it clear that the dispute of present nature has to be raised by the petitioner before the Employees' Insurance Court and it is not for the corporation to approach the Employees' Insurance Court. There, the Hon'ble Supreme Court has made it clear that when the employer denies liability or the quantum of contribution to be deposited by the employer, it is for him to approach the Insurance Court and seek adjudication. It is not for the Corporation in each case whenever there is such dispute to go to Insurance Court and have the dispute adjudicated. The same thing has been reiterated in ESI Corporation v. C.C.Satha Kumar reported in (2007) 1 SCC (L& S) 413 though the 20 central issue in that case revolved around applicability of Section 77 (1- A) (b) of "the Act".

11. Since all the contentions of Mr. Mishra, learned counsel for the petitioner be it relating to violation of principles of natural justice in issuing impugned order under Annexure-3, be it relating to order under Annexure-3 being issued without jurisdiction fail and since the present matter involves disputed questions of facts relating to payment and quantum of contribution, this Court is not inclined to interfere with the order under Annexure-3. However, if the petitioner so likes, it can approach the Employees' Insurance Court for redressal of it's grievances. It is made clear that in the event the petitioner approaches Employees' Insurance Court, the same shall be decided by that Court in accordance with law.

With the above indicated findings and observations, the writ application is disposed of and interim order granted earlier stands vacated.

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Biswajit Mohanty, J.

Orissa High Court, Cuttack The 17th August, 2016/bns

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