Karnataka High Court
Employees' State Insurance ... vs Catholic Club And Anr. on 13 July, 1999
Equivalent citations: 2000(2)KARLJ290, (2000)ILLJ1136KANT
Author: M.P. Chinnappa
Bench: M.P. Chinnappa
JUDGMENT M.P. Chinnappa, J.
1. The first respondent herein filed an application under Section 75 of the Employees' State Insurance Act before the E.S.I. Court at Bangalore in E.S.I. Application No. 1 of 1998 questioning the order passed by the appellant herein directing him to pay the contribution of Rs. 59,600/- At the request of the first respondent, stay order was also granted by the Court on January 13, 1998. Subsequently, the appellant appeared and filed objections to the main petition. At that time, the respondent herein filed an application under Section 151 of the CPC for extension of stay. On the basis of that application, the E.S.I. Court extended the stay till the next date of hearing by order dated March 6, 1998. Being aggrieved by that order, the appellant-Corporation has preferred this appeal.
2. Though notice was served on respondents 1 and 2, they have remained unrepresented.
3. Heard the learned Counsel for the appellant. The learned Counsel has drawn my attention to Section 75(2-B) of the Employees' State Insurance Act, 1948 which reads thus:
"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."
4. In this case, the Court has not given any reason as to why it has waived the deposit of 50% of the amount claimed by the Corporation as contemplated under Section 75(2-B). On the other hand, for mere asking, the stay order has been granted.
5. The learned Counsel for the appellant submitted that the stay order has been extended from time to time as a result of which 50% of the amount as contemplated under Section 75(2-B) of the Act is not deposited. From a reading of the Section, it is clear that the Section has made it mandatory that in order to raise the dispute, 50% of the amount shall be deposited. It is not in dispute that no reason is assigned to bring the case under proviso. In this case, without assigning any reason, the E.S.I. Court has granted an absolute blanket stay of the recovery proceedings initiated by the appellant. From the perusal of the order, it is clear that the Insurance Court granted the interim order and extended the ex parte order of stay which had expired on February 24, 1998 without even noting the appellant's Counsel's request for time to file objections and also overlooked the submissions made by the Counsel that as per the decision of this High Court in MFA No. 1631 of 1993, dated March 20, 1995, that it is mandatory provision, which ought to be complied with before granting an interim order. It is a settled law that only in exceptional cases, the Court is given power to waive or reduce the amount for the reasons to be recorded by it. Failure to deposit the amount by the applicant in order to raise the dispute or making out any ground in the application to waive the mandatory requirement of law and the Court having failed to give any valid reason in allowing the application, the order is liable to be set aside.
6. Accordingly, this appeal is allowed. The impugned order is set aside. Further, the Court is directed to consider the application in accordance with law in the light of the observations made above. It is also open to the appellant to raise the objections before the Court below in regard to the maintainability of the application as the mandatory requirement of law is not complied with. If such an objection is raised, the Court shall consider the same and pass necessary orders in accordance with law.