Calcutta High Court (Appellete Side)
Averill Infrastructure Private ... vs Employees State Insurance Corporation ... on 10 April, 2024
Author: Arindam Mukherjee
Bench: Arindam Mukherjee
10.04.2024
Sl. No. 08.
D/L.
Mithun
Ct.No.23. In the High Court at Calcutta
Constitutional Writ Jurisdiction
Appellate Side
WPA 10058 of 2024
Averill Infrastructure Private Limited & Anr.
Vs.
Employees State Insurance Corporation & Ors.
Mr. Shyamal Sarkar, Sr. Adv.,
Mr. Kumar Gupta,
Mr. Binay Kumar Jain,
Mr. Abhishek Jain
..for the petitioners.
Mr. Tilak Mitra
...for the respondent/ESI Corporation.
Mr. Daysshankar Mishra, Mr. Sushil Kumar Mishra, Mrs. Sarda Sha ...for the Union of India.
The petitioner has challenged two letters respectively issued on 20th March, 2023 and 22nd March, 2024 be marked as Annexure 'P-4' at Page 69 and Annexure 'P-5' at Page 72 issued by the Employees' State Insurance Corporation (in short 'ESI'). By the letter dated 20th March, 2023, the sub- code issued by the ESI to the petitioner was deactivated and the petitioner was directed to deposit the money in the old code of M/s. Weaverly Jute Mills Private Limited (in short 'Weaverly'). The ESI Corporation vide letter dated 22nd March, 2024 the 2 petitioner No.1 was hauled up for non-payment of Rs.5,40,919/- for the period August-2020 and September-2020. The petitioners say that the petitioner No.1 was incorporated in August, 2022. Prior to the incorporation the petitioner No.1 had no business of any nature. Under an agreement dated 19th September, 2022, the petitioner acquired and purchased from Weaverly certain assets free and clear from any encumbrance, along with receivables accruing thereupon on the date of execution of the said agreement. The said agreement in Clause-8 thereof which appears at Page 47 of the writ petition as clearly defined the state of the employees of Weaverly on having accepted the offer of employment/engagement from the writ petitioner No.1. Relying upon the said agreement it is submitted by the petitioners that the petitioner no. 1 is not a transferee in respect of the factory or establishment of Weaverly and is , as such, not jointly or severally liable to pay the amount due in respect of any contribution or any amount payable under the ESI Act in respect of the periods up to the date of such transfer. The provision of Section 93A of ESI Act is, therefore, is not applicable in respect of the petitioner no.1. The respondent authorities have illegally and unlawfully 3 held that the petitioner no.1 is responsible in view of the provisions of Section 93A of the ESI Act without the issue being actually adjudicated. The petitioners' further grievance is that the respondent authorities have proceeding against the petitioner no.1 under the provision of Section 85B of the ESI Act though there was no employer-employee relationship with the erstwhile employees of Weaverly prior to the incorporation of the petitioner No.1 and up to the date of the agreement dated 19th September, 2022. In absence of such relationship, the petitioner No.1 cannot also be held liable for any default said to have been committed by Weaverly for the period prior to 19th September, 2022. The notice alleging default for the period of August, 2020 and September, 2020 is, therefore, bad in law and is required to be set aside. Similarly, the deactivation of the sub-code allotted to the petitioner No.1 as also holding the petitioner responsible for an alleged default of Rs.3,07,52,955/- with interest is also bad in law and required to be set aside and/or quashed. The main issues, therefore, which fall for consideration are :-
1. Whether the petitioner is covered under the provision of Section 93A of the ESI Act; 4
2. Whether the petitioners can be held liable for alleged arrears prior to 19th September, 2022 under the provision of Section 85B of the ESI Act.
These issues can only be decided at the final hearing after affording the respondents an opportunity to file their respective affidavits. However, at the interim stage keeping in view the object of the ESI Act an interim direction is also necessary to protect the interest of the workmen/employees till the issues are finally decided. Otherwise, amidst the crossfire between the petitioner and the ESI authorities, the interest of the workmen/employees will be in jeopardy. Unless an interim measure is directed there is also every likelihood that the petition when becomes ripe for hearing may become infructuous for any subsequent steps that may be taken by the respondent authorities relying upon the provision of Section 93A and Section 85B of the ESI Act. There is also a likelihood of multiplicity of judicial proceeding, the end result of which will lead to the suffering of the workmen / employees for whose benefit the act has been promulgated. The interim measure is also necessary as the petitioner has been able to prima facie demonstrate a doubt as to the applicability of 5 provision of Section 93A and Section 85B of the ESI Act in respect of the petitioner No.1.
In the aforesaid facts and circumstances, keeping in mind the balance of convenience and inconvenience of the workmen/employees in particular, the following directions are given:
1. The ESI Authorities shall immediately activate the sub-Code No.40410974250010999 allotted to the petitioner No.1;
2. The petitioner No.1 shall deposit the current dues payable in terms of the provision of ESI Act in the said sub-Code with effect from 1st April, 2024;
3. The petitioner No.1 shall deposit a sum of Rs.3,00,000/- per month without prejudice to its rights and contentions that it is not liable for the arrears and/or past dues that is prior to 19th September, 2022 in the code allotted to Weaverly Jute Mills Private Limited being Code No.40000049670000102.
These payments are to be continued until disposal of this writ petition or until further orders, whichever may be earlier. Subject to payment of the amounts as directed in this order, the respondent authorities shall be restrained from taking any further 6 step and/or coercive action as against the petitioner No.1, particularly in respect of alleged arrears prior to 19th September, 2022 until disposal of this writ or until further order whichever may be earlier. Any payment already made by the petitioner with regard to alleged arrears without prejudice to their rights and contentions shall be appropriately dealt with at the final hearing of the writ petition after taking note of the amounts to be deposited as directed by this order.
The maintainability of the writ petition as raised by the respondents which does not bar the passing of an interim order is left open to be decided at the time of final hearing.
Let affidavit-in-opposition be filed by 3rd May, 2024. Reply thereto, if any, by 24th May, 2024.
The parties will be at liberty to mention after completion of affidavits or on expiry of the time to file affidavits if the same are not filed within the time period as provided.
(Arindam Mukherjee, J.)