Madras High Court
M/S.Annai Velankanni College vs The Director General on 25 November, 2025
Author: R.Vijayakumar
Bench: R.Vijayakumar
W.P(MD).Nos.21595 & 21596 of 2025
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
ORDER RESERVED ON :28.08.2025
ORDER PRONOUNCED ON : 25.11.2025
CORAM:
THE HONOURABLE MR.JUSTICE R.VIJAYAKUMAR
W.P.(MD).Nos.21595 & 21596 of 2025
and WMP(MD).Nos.16688, 16689,
16713 and 16715 of 2025
M/s.Annai Velankanni College
Represented by its Correspondent
Fr.A.Jesu Marian
ESI Code: No.66-00-040338-000-1303
Tholayavattam
Vilavancode Taluk
Kanyakumari District 629 157 ....Petitioner in both petitions
Vs
1.The Director General
Employees' State Insurance Corporation, Headquarters
Panchdeep Bhawan
Comrade Indrajeet Gupta (CIG) Marg
New Delhi 110 002
2.The Additional Commissioner & Regional Director
Tamil Nadu Region
Employees' State Insurance Corporation
Panchadeep Bhawan
143, Sterling Road, Nungambakkam
Chennai 600 034.
3.The Additional Commissioner
ESI Corporation, Sub Regional Office
Salai Street, Vannarpettai
Tirunelveli 627 003
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W.P(MD).Nos.21595 & 21596 of 2025
4.The Deputy Director (Authority passed Section 45A Orders)
ESI Corporation, Sub Regional Office
Salai Street, Vannarpettai
Tirunelveli 627 003
5.The Deputy Director (Revenue -Authority issued C19 and CPS 2 Notices)
ESI Corporation, Sub Regional Office
Salai Street, Vannarpettai
Tirunelveli 627 003
6.The Recovery Officer
ESI Corporation, Sub Regional Office
Salai Street, Vannarpettai
Tirunelveli 627 003 ….Respondents in both petitions
Prayer in WP(MD).No.21595 of 2025 : This Petition filed under Article 226
of the Constitution of India, to issue a Writ of Certiorari, by way of calling for
the records in the proceedings in the issue of Order No.
66-00-040338-000-1303/45-A/SRO/TLI/419/13/84/25 dated 24.04.2025
under Section 45A of Employees' State Insurance Act, 1948 (as amended)
issued by the 4th respondent determining contribution of Rs.2,02,415/- for the
period from 11/12 to 05/13, quash the said proceedings, as being in violation
of 2nd proviso under Section 45 A (1) Employees' State Insurance Act, 1948
( as amended) as regards Five Years limitation period for adhoc assessment of
contributions, besides the violation of requirements for demanding
contribution by application in Employees' Insurance Court by the respondents
from the petitioners under Section 75(2)(a) read with the proviso under
Clause(b) of Section 77 (1A) of the Employees' State Insurance Act, 1948, as
without jurisdiction, illegal, in violation of Rule of Law, arbitrary.
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W.P(MD).Nos.21595 & 21596 of 2025
Prayer in WP(MD).No.21596 of 2025: This Petition filed under Article 226
of the Constitution of India, to issue a Writ of Certiorari, by way of calling for
the records in the proceedings in the issue of Order No.
66-00-040338-000-1303/45-A/SRO/TLI/901-22-83/25 dated 24.04.2025
under Section 45A of Employees' State Insurance Act, 1948 (as amended)
issued by the 4th respondent determining contribution of Rs.61,23,161/- for
the period from 06/13 to 12/22, quash the said proceedings, as being in
violation of 2nd proviso under Section 45 A (1) Employees' State Insurance
Act, 1948 ( as amended) as regards Five Years limitation period for adhoc
assessment of contributions, besides the violation of requirements for
demanding contribution by way of filing application in Employees' Insurance
Court by the respondents against the petitioners under Section 75(2)(a) read
with the proviso under Clause(b) of Section 77 (1A) of the Employees' State
Insurance Act, 1948, as without jurisdiction, illegal, in violation of Rule of
Law, arbitrary.
(in both petitions)
For Petitioner : Mr.A.Irudayam
For Respondents : Mr.N.Dilipkumar
COMMON ORDER
These writ petitions have been filed by an Unaided Educational Institution challenging two separate orders passed by the authority under Section 45-A of the Employees' State Insurance Act, 1948. 3/17 https://www.mhc.tn.gov.in/judis ( Uploaded on: 25/11/2025 02:51:12 pm ) W.P(MD).Nos.21595 & 21596 of 2025 (A).Factual Background:
2.WP(MD).No.21595 of 2025 challenges the determination of contribution for the period covering November 2012 to May 2013.
WP(MD).No.21596 of 2025 challenges the determination of contribution for the period covering between June 2013 to December 2022.
3.Under the Employees' State Insurance Act, 1948 (hereinafter called as ESI Act).The employer is entitled to file an appeal before the appellate authority under Section 45-AA of ESI Act or can challenge the same under Section 75 of ESI Act. Without exhausting these two alternative remedies, the present writ petitions have been filed.
(B).Submissions of the learned counsel appearing on either side:
4.According to the learned counsel for the writ petitioners, the provisions under Section 45-A of ESI Act relating to determination of contribution can be invoked only when the establishment has not submitted its returns, particulars, registers or records which are maintained in accordance with the provisions of Section 44 of ESI Act. That apart, if the official of the Corporation is prevented by the principal or immediate employer in exercising his functions or discharging his duties under Section 45, the determination of contribution under Section 45-A of the ESI Act can be invoked on the basis of information available with the Corporation. If 4/17 https://www.mhc.tn.gov.in/judis ( Uploaded on: 25/11/2025 02:51:12 pm ) W.P(MD).Nos.21595 & 21596 of 2025 none of the above said conditions are satisfied, the authorities cannot invoke Section 45-A of the Act and determine the contribution, especially in a case where the employer has submitted or furnished all the particulars that are called for by the ESI authority.
5.According to the learned counsel for the petitioner, when all the particulars called for by the authority were submitted promptly by the employer, the only option to the ESI Corporation is to approach the Labour Court/ ESI Court under Section 75(2)(a) of ESI Act claiming for recovery of contribution from the employer.
6.The learned counsel had further submitted that in the present case, there is no allegation whatsoever that the employer/management has not furnished the returns/records/registers that were called for by the Corporation. There is no allegation whatsoever that any of the officials from the Corporation were prevented from exercising their function or discharging their duties. In the light of these factual background, the authority has no discretion whatsoever to exercise its power under Section 45-A of the ESI Act for determination of the contribution on the basis of the information available with them. When the entire information relating to the employees is available before the Corporation, the only option open to them is to approach the ESI Court for recovery of contribution. The ESI authority cannot take their law into their hands and pass an order under Section 45-A of ESI Act for 5/17 https://www.mhc.tn.gov.in/judis ( Uploaded on: 25/11/2025 02:51:12 pm ) W.P(MD).Nos.21595 & 21596 of 2025 determination of contribution. Any such order would be clearly without jurisdiction and in violation of the statutory provisions. According to him, the writ petitions are maintainable challenging an order under Section 45-A of the Act, in view of the fact that these two impugned orders have been passed without jurisdiction.
7.The learned counsel for the petitioner had relied upon Paragraph Nos.28 and 31 of the Division Bench judgment of Madras High Court reported in 2006 (2) CTC 1 (Cosmopolitan Club, Chennai, Rep.by its Hon.Secretary Vs. The Deputy Director, Regional Office (Tamil Nadu) and contended that when there is a non-cooperation on the part of the employer, the Corporation would get jurisdiction to invoke Section 45-A of ESI Act. But in all cases where records are produced, the assessment has to be made only Section 75(2)(a) of the Act. He further relied upon the decision of the High Court of Judicature at Patna in Civil Writ Jurisdiction Case No.6882 of 2014 ( M/s.Electronic Net through its Partner-Sajev Kumar Vs. The Union of India and others) specifically Paragraph Nos. 26 and 27 in support of his contention. He also relied upon the decision of the High Court of Judicature at Allahabad in Special Appeal No.472 of 1998 ( M/s.Allahabad Canning Company Vs. The Regional Director, ESIC & others) especially Paragraph No.15 in support of his contention. Therefore, according to him, 6/17 https://www.mhc.tn.gov.in/judis ( Uploaded on: 25/11/2025 02:51:12 pm ) W.P(MD).Nos.21595 & 21596 of 2025 when the management had submitted all the records, particulars and registers maintained by them, the authorities have no jurisdiction whatsoever to invoke Section 45-A of ESI Act. Therefore, the orders impugned in the writ petitions are liable to be set aside.
8.Per contra, the learned Standing Counsel appearing for the respondent Corporation submits that once the employer is brought within the purview of ESI Act, he has to voluntarily deposit the contribution amount on the due date as specified under the Act. In case, if the contribution has not been made or lesser contribution has been made, the authority would have every jurisdiction to invoke Section 45-A of the Act. He further submitted that the contribution under the Act is mandatory for an institution that is covered under the Act. There is no need whatsoever for the Corporation to determine the contribution amount. When there is failure to pay the contribution, right to invoke Section 45-A of ESI Act arises.
9.The learned Standing Counsel for the respondent Corporation had further submitted that the petitioner after having received notice, had participated in the enquiry without challenging the notice. Therefore, he is estopped from contending that the authorities cannot invoke the jurisdiction under Section 45-A of the Act. He had relied upon Paragraph No.15 of both the impugned orders and contended that the records produced by the Management are incomplete/inchoate and therefore, the authorities had 7/17 https://www.mhc.tn.gov.in/judis ( Uploaded on: 25/11/2025 02:51:12 pm ) W.P(MD).Nos.21595 & 21596 of 2025 exercised their jurisdiction under Section 45-A of the Act.
10.The learned Standing Counsel for the respondents had relied upon Paragraph No.16 of the judgment of the Hon'ble Supreme Court reported in (2007) 1 SCC 584 ( ESI Corporation Vs. C.C.Santhakumar) and submitted that where an order is passed under Section 45-A of the Act, it is the duty of the employer and not the Corporation to approach the ESI Court. He also relied upon Paragraph No.17 of the said judgment and contended that Section 45-A of the Act was introduced by way of an amendment in the year 1966 only to simplify the process and cut-short the delay in recovering the contribution amount. According to him, it gives an option to the Corporation to determine the contribution without resorting to ESI Court. He had further submitted that Section 45 and 75 of ESI Act operate in different spheres. The learned counsel had also relied upon Paragraph Nos. 6 and 8 in support of his contention.
11.In view of the factual background that the management had produced only incomplete records, the jurisdiction of the authority to invoke Section 45-A of the Act cannot be questioned. According to him, the writ petitions are not maintainable for not invoking the alternative remedy of appeal under Section 45-AA or Section 75 of the ESI Act. Hence, he prayed for dismissal of the writ petitions.
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12.I have considered the submissions made on either side and perused the material records.
(C).Analysis:
13.Paragraph Nos.15 and 16 of the impugned order dated 24.04.2025 which is the subject matter of WP(MD).No.21595 of 2025 is extracted as follows:
“15.On checking the records submitted, schedule sheet was not available in P & L submitted for the period FY 2012-2013 and FY 2013-2014. Submitted Profit and Loss/ Income Expenditure statements were incomplete, where the exact wage element count not be derived. Hence, salary component could not be assessed. Further, employer was already offered with ample opportunities of personal hearings. Hence, contribution is determined on ADHOC basis for 11/2012 to 05/2013. From the ADHOC based wages total wage element is derived as Rs.63,52,500/-, wages amounting equivalent to Rs.32,38,426/- is considered as ESI exempted/ESI not covered contribution based on wages register and contribution exempted @ 6.5% Rs.2,10,498/- as per salary statement submitted during personal hearing dated 27.06.2023. For rest of the amount Rs.31,14,074/- contribution @ 6.5% is claimed.
16.Accordingly, I determine the contributions @ 6.5% on the assumed average wages of Rs.8,250/- per month per employee as per ADHOC basis is used as per ESIC Hqrs. Memorandum number 1-II/13/1/2010-Rev.1, dated:16.08.2010 for 110 employees for the period from November 2012 to May 2013 and the amount of 9/17 https://www.mhc.tn.gov.in/judis ( Uploaded on: 25/11/2025 02:51:12 pm ) W.P(MD).Nos.21595 & 21596 of 2025 contributions so determined works out to Rs.2,02,415/- which is fair, reasonable and according to law.”
14.The relevant portion of Paragraph Nos.4 and 15 of the order dated 24.04.2025 which is impugned in WP(MD).No.21596 of 2025 is extracted as follows:
“4.Employer did not attend personal hearing on 29.03.2023. Letters dated 27.03.2023 received for waiver under Section 91A of ESI Act and adjournment of personal hearing. Hence, one more opportunity of personal hearing as offered on 02.05.2023 vide letter dated 19.04.2023. Fr.A.Jesu Marian, correspondent appeared for the hearing on 02.05.2023 and submitted one letter dated 02.05.2023. The correspondent further requested adjournment of personal hearing for production of records such as Salary Register etc., in respect of the period under consideration. Hence, the hearing is adjourned to 30.05.2023 at around 10.30 a.m. Fr.A.Jesu Marian, correspondent appeared for the hearing on 30.05.2023 and personal hearing is adjourned to 27.06.2023. Fr.A.Jesu Marian, correspondent appearing for the hearing on 27.06.2023 and submitted original salary register, salary summary statement duly signed by the correspondent and soft copy of salary register in PDF form. To reconcile the wages paid with Balance Sheet, P&L, Income and Expenditure Statements, one final opportunity of personal hearing was offered on 25.03.2025 vide letter dated 05.03.2025. Fr.A.Jesu Marian, correspondent appeared for the hearing on 25.03.2025 and submitted copies of Profit and Loss 10/17 https://www.mhc.tn.gov.in/judis ( Uploaded on: 25/11/2025 02:51:12 pm ) W.P(MD).Nos.21595 & 21596 of 2025 Statement, balance sheet for the period FY 2012-2013 to FY 2022-2023 (except FY 2015-2016). The Income and Expenditure Statement for FY 2015-2016 was not produced by employer despite these many opportunities. The produced Income and Expenditure Statements for the period from 04/2012 to 03/2015 does not contain any schedules of the expenses made, salary paid details not available in the produced records.
15.On verification of the records submitted by employer during personal hearing opportunities, it was found that the copies of produced profit and loss statements were incomplete as schedule sheet details covering the salary paid expense, other expenses etc., was not available in P&L submitted for the period FY 2013-2014/FY 2014-2015. Hence, salary component could not be assessed for the said period based on the records produced and ADHOC basis is used to derive contribution as per ESIC Hqrs. Memorandum Number T-II/13/1/2010-Rev.1 dated 16.08.2010. Further, P &L was not submitted for FY 2015-2016, hence ADHOC basis is used to derive contribution as per ESIC Hqrs. Memorandum number T-II/13/1/2010-Rev.1 dated 16.08.2010. Further, employer was already offered with ample opportunities of personal hearings.”
15.The Paragraphs extracted from both the impugned orders would clearly reveal that the petitioner Management has submitted only incomplete records covered under both the orders. Therefore, the authorities were constrained to determine the contribution on Adhoc basis invoking their 11/17 https://www.mhc.tn.gov.in/judis ( Uploaded on: 25/11/2025 02:51:12 pm ) W.P(MD).Nos.21595 & 21596 of 2025 power under Section 45-A of the Act. Therefore, on facts, this Court is of the considered opinion that the authorities have rightly exercised their jurisdiction under Section 45-A of ESI Act.
16.The Hon'ble Supreme Court had an occasion to consider this issue in a judgment reported in (2007) 1 SCC 584 (ESI Corporation Vs. C.C.Santhakumar). Paragraph Nos.6, 15, 16 and 28 which are relevant for disposal of the present writ petitions are extracted as follows:
“6. Section 45-A provides that in a case where a factory or establishment fails to furnish the returns or maintain or furnish the registers etc., the Corporation can determine the amount of contributions payable in respect of the employees of that factory or establishment. Such an order can be passed only after giving reasonable opportunity of hearing to the employer or the person in- charge of the factory or establishment. The order passed by the Corporation shall be sufficient proof of the claim of the Corporation under Section 75 or for recovery of the amount determined by such an order as an arrear of land revenue under Section 45-B or under Section 45- to 45-I.
15.Section 45A provides for determination of contributions in certain cases. When the records are not produced by the establishment before the Corporation and when there is no cooperation, the Corporation has got the power to make assessment and determine the amount under Section 45A and recover the said amount as arrears of land revenue under Section 45B of the Act.
This is in the nature of a best judgment assessment as is known in 12/17 https://www.mhc.tn.gov.in/judis ( Uploaded on: 25/11/2025 02:51:12 pm ) W.P(MD).Nos.21595 & 21596 of 2025 taxing statutes. When the Corporation passes an order under Section 45A, the said order is final as far as the Corporation is concerned. Under Section 45A(1), the Corporation, by an order, can determine the amount of contributions payable in respect of the employees where the employer prevents the Corporation from exercising its functions or discharging its duties under Section 45, on the basis of the material available to it, after giving reasonable opportunity. But, where the records are produced, the assessment has to be made under Section 75(2)(a) of the Act. Section 45A (2) provides that the order under Section 45A(1) shall be used as sufficient proof of the claim of the Corporation under Section 75 or for recovery of the amount determined by such order as arrears of land revenue under Section 45B. In other words, when there is a failure in production of records and when there is no cooperation, the Corporation can determine the amount and recover the same as arrears of land revenue under Section 45B. But, on the other hand, if the records are produced and if there is cooperation, the assessment has to be made and it can be used as a sufficient proof of the claim of the Corporation under Section 75 before the E.S.I. Court......
16. Where an order is passed under Section 45A, it is the duty of the employer and not the Corporation to approach the E.S.I. Court........
28.What Section 75(2) empowers is not only the recovery of the amounts due to the Corporation from the employer by recourse to the E.S.I. Court, but also the settlement of the dispute of a claim by the corporation against the employer. While this is so, there is no 13/17 https://www.mhc.tn.gov.in/judis ( Uploaded on: 25/11/2025 02:51:12 pm ) W.P(MD).Nos.21595 & 21596 of 2025 impediment for the Corporation also to apply to the E.S.I. Court to determine a dispute against an employer where it is satisfied that such a dispute exists. If there is no dispute in the determination either under Section 45A(1) or under Section 68, the Corporation can straightaway go for recovery of the arrears.
17.A perusal of Section 75(1) of the ESI Act reveals that either the employer or the ESI Corporation can approach the ESI Court if any question or dispute falls within (a) to (g) of the said Section. Any other dispute which is referred under Section 75(1)(g) of the Act should only be construed to be ejusdem generis to Section 75(1)(a) to (ee). When the disputes does not fall within 75(1)(a) to (ee), the Corporation need not approach the ESI Court. They can very well invoke their jurisdiction under Section 45-A to determine the contribution. A perusal of Section 75(1) to (ee) reflects only when the parameters touching upon contribution is disputed or there is any dispute with regard to the coverage of an employee or the employer himself, the issue has to be adjudicated upon by the ESI Court.
18.On the other hand, when there is no dispute with regard to the coverage of the employer or employee and the rate of wages, in such circumstances, for mere determination of contribution, the Corporation need not approach the ESI Court. They can determine the contribution on their own by invoking the jurisdiction under Section 45-A of the Act. When larger 14/17 https://www.mhc.tn.gov.in/judis ( Uploaded on: 25/11/2025 02:51:12 pm ) W.P(MD).Nos.21595 & 21596 of 2025 issues touching upon the coverage are not involved, a quicker process was introduced by incorporation of Section 45-A wherein the Corporation is conferred with a power of adjudicating contribution by themselves. They can also enforce the orders passed under Section 45-A of the Act by invoking Section 45-B to 45-G. Therefore, the parameter as contemplated under Section 75(1) or Section 75(2) of the Act is not made out. The ESI Corporation cannot be forced to invoke those provisions when the quicker process is available to them under Section 45-A of the Act.
19.In the present case, on facts, this Court has already found that the petitioner employer has only furnished incomplete records before the authorities. That apart, even assuming that all the records are produced, when the dispute does not fall under Section 75, the authorities can very well invoke their power under Section 45-A of the Act relating to determination of contribution.
20.The Hon'ble Supreme Court in Paragraph No.28 of the judgment reported in (2007) 1 SCC 584 as extracted above has categorically pointed out that there is no impediment for the Corporation also to apply to the E.S.I. Court to determine a dispute against an employer where it is satisfied that such a dispute exists. Therefore, when the Corporation is not satisfied with regard to the existence of any dispute covered under Section 75 of the Act, they can very well invoke the jurisdiction under Section 45-A of the Act and 15/17 https://www.mhc.tn.gov.in/judis ( Uploaded on: 25/11/2025 02:51:12 pm ) W.P(MD).Nos.21595 & 21596 of 2025 proceeded to determine the contribution.
(D).Conclusion:
21.In view of the above said deliberations, both on facts and on law, the present writ petitions are not maintainable and the same are liable to be dismissed. The petitioner is at liberty to invoke the appeal remedy available under the Act. Accordingly, both the writ petitions stand dismissed. No costs. Consequently, connected miscellaneous petitions are closed.
25.11.2025.
Internet : Yes/No
Index : Yes/No
NCC : Yes/No
msa
To
The Section Officer
V.R.Section
Madurai Bench of Madras High Court
Madurai
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W.P(MD).Nos.21595 & 21596 of 2025
R.VIJAYAKUMAR, J.
msa
Pre-delivery order made in
W.P.(MD).Nos.21595 & 21596
of 2025 and WMP(MD).Nos.
16688, 16689, 16713 and 16715
of 2025
25.11.2025
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