Delhi District Court
M/S Taurus Station Canteen vs Employee State Insurance Corporation on 6 March, 2026
IN THE COURT OF SENIOR CIVIL JUDGE-CUM-RENT
CONTROLLER, SOUTH-EAST DISTRICT, SAKET
COURTS, NEW DELHI
Presided By : Sh. Fahad Uddin
ESIC 8/2021
In the matter of :-
M/s Taurus Station Canteen
through Executive Director,
25, Mall Road, Delhi Cantt.,
New Delhi ........Petitioner
versus
Employees State Insurance Corporation
Through Deputy Director,
C-149, Okhla Phase-I, New Delhi-20 .........Respondent
APPLICATION UNDER SECTION 75 OF ESI ACT, 1948
DATE OF INSTITUTION: 16.12.2021
DATE OF RESERVED FOR JUDGMENT: 13.01.2026
DATE OF JUDGMENT: 06.03.2026
JUDGMENT
1. Vide this judgment/order, I shall dispose of the present application filed by the applicant / petitioner ( M/s Taurus Station Canteen) through its executive director against the respondent / Employees State Insurance Corporation through its Deputy Director under Section 75 of ESI Act, 1948. The brief facts necessary to decide the present case may be described as under:-.
Petitioner's case as per the petition.
2. It is the case of the petitioner / applicant ( M/s Taurus Station Canteen) that the petitioner is a unit run canteen under the Digitally ESIC 8/2021 signed by FAHAD FAHAD UDDIN Page 1 of 32 UDDIN Date:
2026.03.14 16:22:12 +0530 aegis of HQ Delhi area and the profit earned from the said canteen is used for welfare of troops and their family members. In the year 2014, the respondent / ESIC filed a complaint case under Section 85 (g) of ESI Act before Ld. CMM, SE, Saket Delhi wherein it was alleged that the official of the petitioner failed to produce the records of five years before the respondent's official and the respondent filed a false and frivolous complaint against the petitioner. The records of the canteen were inspected by a team of two social security officers of ESIC from 07.09.2016 to 09.09.2016. As per inspection team's calculation, an amount of Rs.37,80,220/- was required to be paid by M/s Taurus Station Canteen up-to 31.03.2014 and post 01.04.2014 to 31.08.2016 the calculation on similar way was done and an amount of Rs.32,51,637/- was required to be paid by the petitioner. Thus, the total amount to be paid by petitioner to ESIC was Rs.70,31,857/- from 01.04.2011 to 31.08.2016. Thus, total payment amounting to Rs.1,04,96,507/- (Rupees One Crore Four Lakhs Ninety Six Thousand Five Hundred Seven only) was made by Taurus Station Canteen to ESIC. Details of which are as under:
(a) Rs.57,11,161/- (Rupees Fifty Seven lakh Eleven Thousand one hundred Sixty one only) towards contribution of employees for the period from April 2011 to March 2014 and payment was made between 16.05.2017 to 21.11.2017.
(b) Rs.46,44,477/- (Rupees Fourty Six Lakh forty four thousand four hundred seventy seven only) towards contribution of employees for the period from April 2014 to March 2017 and payment was made between 29.11.2017 to 27.02.2018.
(c) Rs.1,40,869/- (Rupees one lakh fourty thousand Eight hundred sixty nine only) towards contribution for repair and Digitally signed by FAHAD FAHAD UDDIN ESIC 8/2021 UDDIN Date:
2026.03.14 16:22:24 Page 2 of 32 +0530 maintenance and truck hire charges for the period from April 2011 to March, 2016 and payment was made between 24.12.2018 to 15.01.2019.
3. It is the case of the petitioner that on 28.03.2018 the respondent / ESIC issued detailed calculation sheet mentioning damages amount in the said calculation sheet and no hearing was afforded to the petitioner before calculating the said damage amount. After receiving the said letter, the petitioner vide letter dated 20.04.2018 raised the said issue of damages to the tune of approx. Rs.63,72,580/- with the respondent / ESIC. Again on 27.11.2018 the petitioner sought time for interaction with the respondent's official so that the matter may be resolved. The petitioner's official visited on several occasion to the respondent office for the said purpose but to no avail. The petitioner official vide letter dated 10.09.2021 forwarded the documents regarding ESIC contribution from April 2011 to March 2017 and requested the respondent officials to resolve the said case at the earliest but to no avail. Thus respondent / ESIC has completely violated the principles of natural justice and failed to observe the statutory provisions and the respondent did not provide any hearing before imposing the amount of damages upon the petitioner. The respondent / ESIC further failed to appreciate that the profit earned by the petitioner is used for welfare of troops and their family members unlike the other institutions or factory running for profit motive for themselves. Hence, in the facts and circumstances of the case, no damages ought to have been levied as Section 85 (B) of ESI Act provides for an enabling provision and does not make it mandatory to levy damages in every case. There was no mens-rea or actus-reus on the part of the petitioner to contravene a statutory provision as the higher officials of the ESIC 8/2021 Digitally Page 3 of 32 signed by FAHAD FAHAD UDDIN UDDIN Date:
2026.03.14 16:22:36 +0530 petitioner who were looking after the affairs of the petitioner were serving army officers. The present petition has been filed within the prescribed period of limitation and hence it has been prayed by the petitioner that the calculation sheet dated
28.03.2018 issued by the respondent / ESIC levying damages upon the petitioner be quashed and set aside. Prayed accordingly.
Respondent's case as per the written statement.
4. Written statement was filed in the present case by the respondent / ESIC wherein it has been submitted by the respondent / ESIC that the petitioner /applicant has not come before this Court with clean hands and has suppressed material facts from this court. The present petition has not been filed by the authorized person of the petitioner as no authorization letter has been filed and as such the present petition is liable to be dismissed on this ground alone. The petitioner has himself admitted in the petition that he has paid the contribution amount after the due date and thus decree / judgment may be passed on the admission itself in favour of the respondent and against the petitioner. When the employer fails to pay the contribution as per the ESI Act, 1948 within the stipulated period, the employer is liable to pay the damages and also the interest as per regulation 31 and as such the present petition is not maintainable and liable to be dismissed. As per section 75 (2B) of the ESI Act 1948, no petition/application can be entertained regarding the dispute between the principal employer and corporation unless the employer may deposit 50% of the amount due from him as claimed by the corporation and thus the present petition cannot be entertained by this Court. Interest under the ESI Act cannot be challenged in any court of law as per the judgment passed by the ESIC 8/2021 Digitally signed by Page 4 of 32 FAHAD FAHAD UDDIN UDDIN Date:
2026.03.14 16:22:46 +0530 Hon'ble Supreme Court in "M/s Goetze (India) Ltd. Vs. Employees State Insurance" and the damages asked by the respondent / ESIC is the interest amount which was levied on the petitioner due to partial late payments. It has been further submitted by the respondent that the present petition has been filed by the petitioner on the ground that on 28.03.2018 the respondent issued a detailed calculation sheet mentioning the damages amount in the said calculation sheet and no hearing was afforded to the petitioner before the said damages were levied upon the petitioner. Thus, the issue raised in the petition is not a ground for not making contribution / payment of the said damages mentioned in the calculation sheet. The calculation sheet was regarding the details of balance payments payable as per the request made by the employer vide letter dated 17.03.2018. There was no D-18 notice issued to the employer and accordingly the question of offering a personal hearing does not arise. There is no proper cause of action raised by the petitioner in the petition and hence the same is liable to be dismissed. That a case was filed under Section 85 (g) of ESI Act, 1948 as the employer / petitioner did not produce any record even after many opportunities / chances given by the ESIC for inspection of reports. The petitioner is trying to conceal the material facts with regard to present petition and the case filed by the respondent under Section 85 (g) ESIC Act. The petitioner has concealed the material facts and accordingly if the petitioner/applicant is found guilty of concealment of material facts or making an attempt to pollute the stream of justice, the court not only has the right but a duty to summarily deny relief to such person to prevent abuse of the process of law and reject the petition on this ground alone.
Digitally signed by FAHAD FAHAD UDDIN ESIC 8/2021 UDDIN Date:
2026.03.14 16:22:55 Page 5 of 32 +0530
5. The respondent stated that a C-19 notice dated 01.11.2017 was received by the AR of the petitioner for the recovery of Rs.33,28,973/- plus further interest of Rs.835.92/- per day w.e.f. 01.11.2017. Accordingly, CP-2 dated 08.11.2017 for contribution of Rs.25,42,603/- plus interest of Rs.7,86,370/- plus notice fee cost Rs.50/- and the total amount comes to Rs.33,29,023/- plus future interest @ Rs.835.92/- w.e.f. 01.11.2017 till date of payment was issued vide RRC No.4032 and Rs.3,04,569/- is pending as balance amount of interest and further interest for the period from 01.11.2017 to 22.12.2017.
The details of which are given as under:
Sl. No. Notice Notice Amount
1 C-19 Period 04/2011 to 03/2014 Dated 27/01/2017 Rs.57,02,411/-
2 C-19 Period 04/2014 to 01/2016 Dated 03/11/2017 Rs.33,60,707/-
3 C-19 Period 02/2016 to 03/2016 Dated 09/11/2017 Rs.2,60,707 (Rs. 3,61,645/- as
per C-6, increased due to
daily interest/-
4 C-18 [Adhoc Basis (Annexure-B) (colly) Period Rs.9,781/-
02/16 to 03/2016 Dated 08/11/2017
5 C-18 (Adhoc) 04/11 to 03/2014 Dated 08/11.2017 Rs.24,170/-
6 45-A Period 04/2014 to 01/2016 Dated 07/11/2017 Rs.1,06,918/-
7 45-A Period 04/2016 to 01/2017 Dated 07/01/2018 Rs.10,54,697/-
Thus, the total realized payment against the recovery branch as on date is Rs.92,71,161/- and the outstanding balance amount is Rs.4,42,534/- against the petitioner and the total amount received against the notices issued to the petitioner till date is (Rs.67,11,161/- received for 17.06.2017 to 21.12.2017 and Rs.36,47,381/- received for 09.08.2018 to 25.01.2019). The respondent denied that the petitioner had visited the office of the respondent on any given date to resolve the issue as alleged in the petition. The payments made by the petitioner were in parts/partial payment which made it difficult for the respondent to finalize the pending dues of the petitioner and the respondent finalized the payment as early as possible. The respondent stated Digitally signed by FAHAD FAHAD UDDIN ESIC 8/2021 UDDIN Date:
2026.03.14 Page 6 of 32 16:23:05 +0530 that it offered physical / personal hearing wherever and whenever it was required and the respondent has not violated the principle of natural justice since D-18 notice was not issued to the petitioner so the question of personal hearing does not arise at all. The respondent denied the fact that it failed to appreciate the case of the respondent as well as the fact that the profit earned by the petitioner is used for welfare of troops and their family members as the said fact has no relevance toward the liabilities of the respondent / ESIC. According to Section 31 (a) ESI Act, 1948, it is very clear that if the contributions are not paid within the period specified in Regulation 31 then they shall be liable to pay simple interest @ 12% per annum in respect of each day of default or delay in payment and it is a matter of fact that damages are payable by the petitioner because of delayed deposition of contribution as per ESI Act, 1948. There was no question of any compromise to waive the interest which is not statutorily permissible. The liability to pay interest is statutory and there is no power of waiver with the respondent and the question of any compromise or settlement does not arise at all as per settled position of law. Hence, respondent prayed for dismissal of petition filed by the petitioner under Section 75 ESI Act, 1948 on the various grounds as mentioned in the WS.
6. It may be noted that no replication / rejoinder to the WS of the respondent / ESIC was filed by the petitioner in the present case. After completion of pleadings between the parties, arguments were addressed by the counsels for parties on the application under Section 75 (2B) ESI Act filed by the petitioner in the present case and vide order dated 16.08.2022 passed by the court, the said application of the petitioner under Section 75 (2B) Digitally signed by ESIC 8/2021 Page 7 of 32 FAHAD FAHAD UDDIN UDDIN Date:
2026.03.14 16:23:18 +0530 ESI Act was allowed with the direction to the petitioner to deposit 20% of the total claimed amount with the respondent within eight weeks and on 20.10.2022, counsel for petitioner had filed receipt for deposition of 20% of the total claimed amount in terms of order dated 16.08.2022 passed by this Court with the respondent / ESIC.
Issues:-
7. Thereafter, out of the pleadings of the parties, the following issues/additional issues were framed by the court for adjudication in the present case vide order dated 16.08.2022 and 04.02.2025:-
i) Whether the demand notice dated 28.03.2018 under Section 85 of ESI Act by the respondent is liable to be quashed ? OPP.
ii) Relief.
Additional issue framed vide order dated 04.02.2025:
i) Whether the present petition has been instituted on behalf of the petitioner by an authorized person and the petition has been signed and verified by a competent person ? If not effect thereof. OPP Petitioner Evidence.
8. In order to prove its case against the respondent, the petitioner got examined two witnesses ie. PW-1 Col. Sanjay Malik, Staff Officer at Taurus Station Canteen, Delhi area who tendered his evidence by way of affidavit which is Ex.PW1/A on court record bearing his signature at point A & B and the said Digitally signed by ESIC 8/2021 Page 8 of 32 FAHAD FAHAD UDDIN UDDIN Date:
2026.03.14 16:23:55 +0530 witness relied upon the following documents in support of the case of the petitioner:-
(i) Copy of letter dated 20.04.2018 marked as Mark-PW1/1.
(ii) Copy of letter dated 27.11.2018 marked as Mark-PW1/2.
(iii) Copy of letter dated 22.12.2018 marked as Mark-PW1/3.
(iv) Copy of letter dated 15.01.2019 marked as Mark-PW1/4.
(v) Copy of letter dated 10.09.2021 marked as Mark-PW1/5.
The witness stated that all the above documents are letters , original of which were sent to the respondent and only office copies were retained which have been produced before this Court. The said witness was duly cross examined by counsel for respondent on 27.10.2023 and after conclusion of his cross- examination, PW1 was discharged in the present case. Another witness examined on behalf of petitioner is PW2 Col. Anil Rana, Staff Officer, Taurus Station Canteen, Delhi area who tendered his evidence by way of affidavit which is Ex.PW2/A on court record and said witness relied upon copy of SOP of Taurus Station Canteen which is Ex.PW2/1 on court record. Said witness was also cross examined in the present case by counsel for respondent on 14.07.2025 and after conclusion of his cross- examination, PW2 was discharged in the present case and on separate statement of counsel for petitioner, petitioner evidence was closed in the present case vide order dated 14.07.2025 passed by the court.
Respondent's Evidence:
9. To disprove the case of the petitioner, respondent also got examined two witnesses in the present case i.e. RW1 and RW2.
ESIC 8/2021 Digitally
signed by
FAHAD
Page 9 of 32
FAHAD UDDIN
UDDIN Date:
2026.03.14
16:23:31
+0530
RW1 Shri R. N. Mehto, SSO in ESIC who tendered his evidence by way of affidavit which is Ex.RW1/AA on court record and said witness relied upon the following documents in support of case of the respondent:-
(i) Copy of letter dated 17.03.2018 sent to respondent is Ex.RW1/Doc A (OSR)
(ii) Copy of C-19 notice dated 01.11.2017 is Ex.RW1/Doc B (OSR)
(iii) Copy of CP-2 dated 08.11.2017 is Ex. RW1/Doc C (OSR).
(iv) Copy of C-19 notice dated 27.01.2017 is Ex.RW1/ Doc D (OSR)
(v) Copy of C-19 notice dated 03.11.2017 is Ex.RW1/ Doc E (OSR)
(vi) Copy of 45-A dated 07.11.2017 is Ex.RW1/Doc F (OSR)
(vii) Copy of C-18 Adhoc notice dated 08.11.2017 for the period from February, 2016 to March, 2016 is Ex. RW1/Doc G (OSR)
(viii) Copy of C-18 Adhoc dated 08.11.2017 for the period from April 2011 to March, 2014 is Ex. RW1/Doc H (OSR)
(ix) Copy of C-19 notice dated 09.11.2017 is Ex.RW1/Doc I (OSR)
(x) Copy of 45-A dated 17.01.2018 is Ex.RW1/Doc J (OSR).
(xi) Copy of document relating to total realized payment and outstanding balance amount is Ex.RW1/Doc K.
(xii) Copy of Authorization letter of RW1 dated 15.07.2024 is Ex.RW1/Doc 1.
Digitally signed by ESIC 8/2021 FAHAD FAHAD UDDIN Page 10 of 32 UDDIN Date:
2026.03.14 16:24:08 +0530 RW1 R N Mehto was duly cross examined by counsel for petitioner on 25.09.2024 and after conclusion of his cross-examination, the witness was discharged in the present case.
10. Another witness examined on behalf of respondent is RW2 Shri Anil Shukla, SSO in ESIC who tendered his evidence by way of affidavit which is Ex.RW2/AA. In his examination in chief, RW2 also relied upon the documents which are already Ex.RW1/Doc A to Ex.RW1/Doc K in the testimony of RW1 as described in the preceding paragraph and are not mentioned herein again for the sake of brevity. RW2 also relied upon copy of authorization letter dated 22.07.2024 in his favour which is Ex.RW2/Doc 1. RW2 was also cross-examined by the counsel for petitioner on 25.09.2024 and after conclusion of cross- examination of RW2, he was discharged in the present case. No other witness has been examined on behalf respondent in the present case and on separate statement of counsel for respondent, respondent evidence was closed in the present case on 04.02.2025 and 04.09.2025.
Final Arguments:
11. Thereafter, final arguments were addressed in the present case by the Counsel for the petitioner as well as the Counsel for the respondent on 27.11.2025 and 13.01.2026. During the final arguments, Counsel for the petitioner stated that on the basis of testimony of PW-1 and PW-2 and the documents relied upon by them in the present case, the petitioner is entitled to the relief in his favour as prayed for in the petition. On the other hand, Ld. Counsel for the respondent /ESIC stated that the petitioner has failed to prove its case against the respondent and the case of the ESIC 8/2021 Digitally signed by FAHAD Page 11 of 32 FAHAD UDDIN UDDIN Date:
2026.03.14 16:24:16 +0530 petitioner is liable to be dismissed on the grounds as raised by the respondent in the WS.
12. Submissions heard. Record Perused and the documents filed by the parties in the present case are also gone through.
Findings:
13. After going through the case of both the parties as well as the documents relied upon by them , the issue wise findings of this court are as under:-
Additional Issue no. 1 framed vide order dated 04.02.2025 passed by the Court.
(1) Whether the present petition has been instituted on behalf of the petitioner by an authorized person and the petition has been signed and verified by a competent person? If not, effect thereof OPP.
14. For the sake of convenience, additional issue no.1 framed by the court vide order dated 04.02.2025 is being taken up firstly for determination by this court. The onus to prove this issue is upon the petitioner. It may be noted that in the WS filed by the respondent/ESIC a preliminary objection has been raised in preliminary objection no. 2 that the present petition has not been filed by the authorized person as no authorization letter has been filed and as such the present petition is liable to be dismissed on this ground alone. To prove this additional issue, petitioner has got examined PW-2 Col. Anil Rana Staff Officer, Taurus Station Canteen, Delhi area who tendered his evidence by way of affidavit which is Ex. PW-2/A on court record. In his affidavit, PW-2 Col. Anil Rana stated that he is working as a staff officer of the management and he is conversant with the facts and circumstances of the present case derived from the records and ESIC 8/2021 Digitally Page 12 of 32 signed by FAHAD FAHAD UDDIN UDDIN Date:
2026.03.14 16:24:26 +0530 further stated that the petitioner M/s Taurus Station Canteen is a unit run canteen under aegis of HQ Delhi area and the functioning of the petitioner is governed as per SOP placed on record i.e. Ex. PW-2/1. As per the SOP, the Executive director (Col. HQ Delhi area) will exercise strict control on all matters relating to canteen and as per SOP SO Canteen will be responsible for monitoring court cases and represent the petitioner's management in these cases in consultation with legal counsel. Hence the executive director and SO Canteen both by virtue of their offices/appointments are empowered to represent, file or defend cases on behalf of the petitioner before a court of law. At this stage a perusal of the said document Ex. PW-2/1 i.e. Copy of SOP of Taurus Station Canteen shows that the rules framed in the said SOP deals with the organization, management and functioning of canteen as well as other matters mentioned therein. In para no.9 with regard to Executive Director, it is mentioned that the Executive Director will exercise strict control on all matters relating to canteen and he will (a) be responsible for overall supervision and effective functioning of canteen ,(b) ensure that the SOP is strictly followed in letter and spirit, (c)take adequate steps to monitor the functioning of canteen, (d) ensure that points if any from the consumers in the form of suggestion register are addressed to and (e) ensure that guidelines from higher HQs are implemented. Further in para no.11 the SO canteen will be responsible for monitoring court cases and represent Taurus Station canteen management in these cases in consultation with legal counsel.
15. It may be noted that cross examination of PW-2 was conducted in question and answer form in the present case. In his Digitally signed by ESIC 8/2021 Page 13 of 32 FAHAD FAHAD UDDIN UDDIN Date:
2026.03.14 16:24:36 +0530 cross examination PW-2 Col. Anil Rana SO stated that he did not know the name of the concerned officer of the petitioner who at the first instance had instituted the present petition and what was the concerned officer's designation, however, he ought to be the Executive Director. He further stated that there is no document other than the SOP placed on record authorizing the Executive Director Col. Shailender Sharma to institute the present petition. He further stated that he took over the appointment of SO canteen w.e.f 06.12.2023 and as per SOP of the Canteen, he is entitled to represent HQ Delhi area and Executive Director for all legal cases related to Canteen in consultation with the designated lawyer and attention of the witness was also drawn at para no.9 of the SOP of M/s Taurus Station Canteen Ex. PW-2/1 and after seeing the document he stated that it is correct that the said paragraph deals with the powers and duties of Executive Director towards the Canteen and he further stated that para no.9 clearly says that Executive Director will exercise strict control on all matters related to Canteen which makes it clear that legal matters are included in the same. He further stated that para no.9 sub para
(a) to (e) categorically spell out the rules, responsibilities and powers of Executive Director which does not spell out legal cases or disputes or representations and it clearly defines the powers of Executive Director to exercise strict control on all matters. He further stated that he did not know as to who is the author of said SOP Ex. PW-2/1 and the SOP is written by group of staff officers under the overall supervision of the management and it is approved by the higher management with HQ. He further stated that he did not know if the approval of the higher management with HQ with respect to SOP Ex. PW-2/1 has been placed on record and he further stated that the committee derived Digitally signed by ESIC 8/2021 FAHAD FAHAD UDDIN Page 14 of 32 UDDIN Date:
2026.03.14 16:24:46 +0530 the powers for formulation of SOP Ex. PW-2/1 from HQ. Delhi area. And the said document has not been placed on record by him. He further stated that he did not know if the SOP Ex. PW- 2/1 is a gazetted/published document. During his cross examination the witness was also confronted with Administrative instructions on departmental canteen in Govt. Offices and Industrial Establishments published on 11.12.2008 which is Ex. PW-2/DX1 and the witness stated that he did not know if the petitioner is governed by Administrative instructions on departmental canteen in Govt. offices and Industrial establishments. The witness further stated that the petitioner is an autonomous legal entity with respect to matters related to Canteen. He further stated that he did not know if he has placed on record any document pertaining to registration of the petitioner as a legal entity and he further stated that CSD canteens have been entitled as a welfare measure to the soldiers and their families by the government. The attention of the witness was also drawn to Canteen's Store department manual for Unit Run Canteen updated upto 12 th Januray 2018 which is Ex. PW-2/DX2 and after seeing the document the witness stated that he did not know that the operation of Unit Run Canteen and its legal structure is governed by the said manual. No other material fact was deposed to by PW-2 during his cross examination in the present case and he was discharged accordingly. It may be noted that no witness has been examined by the respondent/ESIC with regard to this additional issue and the respondent's evidence with regard to this additional issue was closed vide order dated 04.09.2025 passed by the Court.
16. Thus after going through the testimony of PW-2 Col. Anil Digitally signed by ESIC 8/2021 FAHAD FAHAD UDDIN UDDIN Date:
Page 15 of 322026.03.14 16:24:55 +0530 Rana SO and the SOP placed on record by him which is Ex. PW- 2/1 on court record, this court is of the view that the said SOP specifically deals with the petitioner canteen HQ Delhi area and are applicable to the case of the petitioner. As per the said SOP the Executive Director is the part of organization of management of the petitioner (Delhi area) and is responsible for overall supervision and effective functioning of the Canteen as well as other matters mentioned in para no. 9 of the said SOP. The present petition has been filed by Col. Shailender Sharma before this court being the Executive Director and authorized signatory of the Canteen and by a competent person as per the SOP. Further no witness has been got examined by the respondent/ESIC to prove the contrary before this court and the documents referred to by the respondent during cross examination of PW-2 Col. Anil Rana i.e.Ex. PW-2/DX1 and Ex. PW-2/DX2 do not seem to be specifically applicable to the petitioner as they are general manuals/administrative instructions for unit run canteen by Ministry of Defence and departmental canteens in govt. offices and industrial establishments having a different purpose and not specifically applicable to the case of petitioner herein and hence due to these reasons based on SOP of petitioner, this court is of the view that the present petition has been instituted on behalf of the petitioner by an authorized person i.e. Executive Director of the petitioner and it has been signed and verified by a competent person. Thus this issue is answered in favour of the petitioner and against the respondent accordingly.
Issue framed vide order dated 16.08.2022 passed by the Court:-
Whether the demand notice dated 28.03.2018 under section Digitally signed by FAHAD FAHAD UDDIN ESIC 8/2021 UDDIN Date:
2026.03.14 16:25:06 Page 16 of 32 +0530 85 of ESI Act by the respondent is liable to be quashed? OPP
17. The onus to prove this issue is also upon the petitioner. To prove this issue, the petitioner has got examined PW1 Col. Sanjay Malik who has tendered his evidence by way of affidavit which is Ex. PW1/A on court record. In his evidence by way of affidavit PW1 Col. Sanjay Malik stated that he is working as staff officer of the petitioner and he is well aware with the facts and circumstances of the present case as derived from the records. He stated that the petitioner is a unit run canteen under aegis of HQ Delhi area and the profit earned from the said canteen is used for the welfare of troops and their family members. In the year 2014, the respondent / ESIC filed a complaint case under Section 85 (g) of ESI Act before Ld. CMM, SE, Saket, Delhi alleging that the official of petitioner failed to produce the record of five year before the respondent official and the respondent filed a false and frivolous complaint against the petitioner. The records of canteen were inspected by a team of two social security officers of ESIC from 07.09.2016 to 09.09.2016 and as per inspection team calculation, an amount of Rs.37,80,220/- was required to be paid by Taurus Station Canteen upto 31.03.2014 and post 01.04.2014 till 31.08.2016, the calculation on similar way was done and an amount of Rs.32,51,637/- was required to be paid and thus the total amount to be paid to ESIC was Rs.70,31,857/- from 01.04.2011 to 31.08.2016. The total payment amounting to Rs.1,04,96,507/- (Rupees One Crore Four lakh Ninty Six thousand five hundred seven only) was made by Taurus Station Canteen to ESIC and the details of the same are as under :
(i) Rs.57,11,161/- (Rupees Fifty Seven Lakh Eleven Thousand One Hundred Sixty one only) towards contribution of Digitally signed by FAHAD FAHAD UDDIN ESIC 8/2021 UDDIN Date: Page 17 of 32 2026.03.14 16:25:15 +0530 employees for the period from April 2011 to March, 2014 and payment was made between 16.05.2017 to 21.11.2017.
(ii) Rs.46,44,477/- (Rupees Fourty Six Lakh Fourty Four Thousand four hundred seventy seven only) towards contribution of employees for the period from April 2014 to March, 2017 and payment was made between 29.11.2017 to 27.02.2018.
(iii) Rs.1,40,869/- (Rupees One Lakh Fourty Thousand Eight Hundred sixty nine only) towards contribution of repair and maintenance and truck hire charges for the period from April 2011 to March, 2016 and payment was made between 24.12.2018 to 15.01.2019.
18. PW1 further stated that on 28.03.2018 the respondent issued detail calculation sheet mentioning damages amount in the said calculation sheet and no hearing was afforded to the petitioner before calculating the said damages amount. After receiving the said letter, the petitioner vide letter dated 20.04.2018 raised the said issue of damages to the tune of approximately Rs.63,72,580/- with the respondent and again on 27.11.2018 the petitioner sought time for interaction with the respondent official so that the matter may be resolved. Meanwhile, the petitioner official also visited to the respondent office on several occasions but to no avail. The petitioner's official vide letter dated 10.09.2021 forwarded the documents regarding ESIC contributions from April 2011 to March, 2017 and requested the respondent official to resolve the said case at the earliest but to no avail. Thus, in the present case, respondent has completely violated the principle of natural justice and failed to observe the statutory provision and the respondent did not provide any hearing before imposing damage amount upon the Digitally signed by FAHAD ESIC 8/2021 FAHAD UDDIN UDDIN Date:
2026.03.14 Page 18 of 32 16:25:37 +0530 petitioner and the respondent failed to appreciate that the profit earned by the petitioner is used for welfare of the troops and their family members unlike other institutions or factory running for profit motive for themselves. In the facts and circumstances of the present case no damage ought to have been levied by the respondent as Section 85 (B) of ESI Act is an enabling provision and does not make it mandatory to levy damages in every case. There was no mens-rea or actus-reus on the part of the petitioner to contravene a statutory provision as the higher official who are looking after the affairs of petitioner are serving army officers. Hence, PW1 stated that calculation sheet dated 28.03.2018 issued by the respondent levying the damages upon the petitioner be quashed / set aside as prayed for in the petition.
19. To prove its case against the respondent, PW1 also relied upon documentary evidence which is Mark-PW1/1 to Mark PW1/5 on court record. Letter dated 20.04.2018 written by Executive Director of the petitioner to ESIC is Mark PW1/1. In the said letter, it was submitted by the petitioner that the final amount due to ESIC including the principal amount and interest was Rs.1,03,55,638/- (Rupees One Crore Three Lakh Fifty Five Thousand and Six hundred Thirty Eight only) and a total payment of Rs.94,09,126/- was already paid to the ESIC and the petitioner expressed a shock on raising due amount of Rs.63,72,508/- against the petitioner and as per petitioner no explanation was given as to how the amount inflated six times in letter dated 28.03.2018 of the respondent. Therefore, the petitioner requested the respondent to provide a detailed bill with complete break up and under what provision it has calculated the over and above amount of the principal to be more than 100%.
Copy of letter dated 27.11.2018 written by the petitioner to ESIC 8/2021 Page 19 of 32 respondent / ESIC is Mark PW1/2 wherein the petitioner sought time with the respondent for interaction in connection with resolving the issues with regard to final bill issued vide letter dated 28.03.2018 at the earliest by making payment of balance dues and also requested for suitable dates for interaction at the earliest in this regard. Copy of letter dated 22.12.2018 written by the petitioner to ESIC, wherein in furtherance of earlier letters issued by the petitioner to the respondent and meeting of SO Canteen with the official of respondent on 19.12.2018, the petitioner enclosed a cheque dated 24.12.2018 for Rs.9781/- towards payment of the bill and requested to acknowledge the receipt of payment and the same is Mark PW1/3 on court record. Further, copy of letter dated 15.01.2019 written by the petitioner to the respondent ESIC and paying an amount of Rs.1,06,918/- by way of cheque in respect of heads-repair and maintenance and other charges for the period from April 2014 to January, 2016 is Mark PW1/4. Further, letter dated 10.09.2021 written by the petitioner to the Deputy Director of respondent thereby furnishing the details of ESIC contributions (from April 2011 to March, 2017) made by the petitioner and photocopy of related documents for consideration by the Deputy Director ESIC is Mark PW1/5. As per the explanation given by PW1, the original of said letters were sent to the respondent and only office copies were retained which were produced before the court.
20. In his cross-examination, PW1 stated that he has not filed any authority letter to depose before this court and as per records documents were produced before the SSO during the visit of the officials of SSO. He denied the suggestion that all the relevant documents were not produced by the petitioner for inspection by Digitally signed by FAHAD ESIC 8/2021 FAHAD UDDIN UDDIN Date:
2026.03.14 Page 20 of 32 16:25:53 +0530 the concerned official of ESIC. He stated that he did not know if any criminal complaint under Section 85 (g) of ESI Act before Ld. CMM was filed by the official of respondent against the petitioner after inspection of records. He admitted as correct that the petitioner had produced all the relevant records before Ld. CMM in the said complaint. He stated that the petitioner had paid contribution for the period upto 31.03.2014 and thereafter for the period up-to August 2016. He stated that he did not remember if the contributions were paid within the statutory period of 21 days from the date of contribution becoming due. He stated that he cannot say right now if demand notices dated 07.11.2017, 08.11.2017, 01.11.2017 were received at petitioner's office or not. He further stated that he can confirm after checking his records. He further stated that the representative from petitioner office had visited the office of respondent for personal hearing after receiving notice for damages from the respondent.
He denied the suggestion that amount claimed interest and damages are statutory amount and cannot be challenged. No other material fact was deposed to by PW1 Col. Sanjay Malik with regard to case of petitioner and he was discharged accordingly.
21. On the other hand, to disprove the case of the petitioner, the respondent got examined two witnesses i.e. RW1 and RW2. RW1 is Shri R. N. Mehto SSO with the respondent, who tendered his evidence by way of affidavit which is Ex.RW1/AA on court record. In his evidence by way of affidavit, RW1 stated that he is designated as social security officer in the ESIC and he is conversant with the facts and circumstances of the present case. He stated that petitioner is an establishment covered under the Digitally signed by ESIC 8/2021 Page 21 of 32 FAHAD FAHAD UDDIN UDDIN Date:
2026.03.14 16:26:02 +0530 ESI Act,1948 and required to pay contribution in accordance with Section 39 and 40 of the said Act r/w Regulations 29 & 31 of the Employees State (General) Regulations Framed under the Act. When the employer fails to pay the contribution as per the ESI Act, 1948 within the stipulated period the employer is liable to pay the damages and also the interest as per Regulation 31. As per Section 75 (2B) of ESI Act 1948, no petition can be entertained regarding the dispute between the principal employer and corporation unless the employer deposits 50% of the amount due from him as claimed by the corporation and thus the present petition cannot be entertained by this Court. The calculation sheet concerning the details of balance payment was made available to the petitioner as requested by the petitioner vide letter dated 17.03.2018 and as there was no D-18 notice issued to the petitioner, therefore, the question of personal hearing does not arise in the present case. That case had been filed by the respondent under Section 85 (g) of the ESI Act, 1948 against the petitioner as the petitioner did not produce any record even after many opportunities given by the respondent for inspection of reports. The petitioner is trying to conceal the material facts with regard to present case and the case filed by the respondent under Section 85 (g) of ESI Act, 1948. C-19 dated 01.11.2017 was received by the authorized officer of the petitioner for recovery of Rs.33,28,973 plus further interest of Rs.835.92/- per day w.e.f. 01.11.2017. Further CP-2 dated 08.11.2017 for contribution of Rs.25,42,603 plus interest Rs.7,86,370 plus notice fee cost of Rs.50/- which equals to total amount of Rs.33,29,023/- plus future interest @ Rs.835.92 w.e.f. 01.11.2017 till date of payment was issued vide RRC No. 4032 and Rs.3,04,569/- is pending as balance amount of interest and further interest for the period Digitally signed by FAHAD FAHAD UDDIN ESIC 8/2021 UDDIN Date:
2026.03.14 16:26:17 Page 22 of 32 +0530 from 01.11.2017 to 22.12.2017. The details of notices issued by the respondent claiming the amount are as under:-
Sl. No. Notice Notice Amount
1 C-19 Period 04/2011 to 03/2014 Dated 27/01/2017 Rs.57,02,411/-
2 C-19 Period 04/2014 to 01/2016 Dated 03/11/2017 Rs.33,28,973/-
3 C-19 Period 02/2016 to 03/2016 Dated 09/11/2017 Rs.2,60,707 (Rs. 3,61,645/- as
per C-6, increased due to
daily interest/-
4 C-18 [Adhoc Basis) Period 02/16 to 03/2016 Dated Rs.9,781/-
08/11/2017
5 C-18 (Adhoc) 04/11 to 03/2014 Dated 08/11.2017 Rs.24,170/-
6 45-A Period 04/2014 to 01/2016 Dated 07/11/2017 Rs.1,06,918/-
7 45-A Period 04/2016 to 03/2017 Dated 17/01/2018 Rs.10,54,697/-
22. RW1 stated that the total realized payment against the recovery branch as on date 07.01.2019 was of Rs.92,71,161/- and outstanding balance amount is Rs.4,42,534/- with respect to petitioner and total amount received against notice issued till date is :
(i) Rs.67,11,161/- received for 17.06.2017 to 21.12.2017
(ii) Rs.36,47,381/- received for 09.08.2018 to 25.01.2019.
RW1 further stated that respondent had not received any letter or information nor any visit from the petitioner for any interaction dated 27.11.2018 specifying the interaction to sort time for resolving the issues. None of the visits of the petitioner to the respondent office was official. Respondent did not fail to appreciate that the profit earned by the petitioner are used for the welfare of troops and their family members as it had no relevance with the ESI liabilities. According to Section 31 (a) of ESI Act,1948, it is very clear that if the contribution are not paid within the period specified in Regulation 31, then they shall be liable to pay interest @ 12% per annum in respect of each day of default or delaying payment and it is a matter of fact that the damages are payable by the petitioner because of the delayed Digitally signed by FAHAD FAHAD UDDIN ESIC 8/2021 UDDIN Date:
2026.03.14 Page 23 of 32 16:26:27 +0530 deposition of contribution as per the ESI Act, 1948.
23. RW1 has also relied upon documentary evidence in support of case of respondent/ ESIC which are Ex.RW1/Doc A to RW1/Doc K as well as RW1/Doc 1. Copy of letter dated 17.03.2018 written by the petitioner to respondent/ESIC whereby the petitioner had requested to the respondent to forward the final bill at the earliest or latest by 23.03.2018 for making timely payment is Ex. RW-1/Doc A(OSR). Copy of C-19 notice dated 01.11.2017 whereby the respondent had raised a claim of Rs.
33,28,973/- against the petitioner for the period 04/2014 to 01/2016 in respect of contributions plus further interest @ 12% per annum calculated on the amount @ of Rs.835.92/- per day from 01.11.2017 to the date of recovery is Exhibit RW-1/Doc B. Further copy of CP-2 notice dated 08.11.2017 issued by the respondent to the petitioner thereby directing to pay the petitioner the amount of Rs 33,28,973 within 15 days of receipt of said notice, failing which recovery was to be made in accordance with the provisions of sec 45(c) to 45 (I) of the ESI Act against the petitioner is Ex.RW-1/Doc C. Copy of C-19 notice dated 27.01.2017 wherein the respondent had raised a claim of Rs 57,02,411/- against the petitioner towards contribution for the period 04.2011 to 03.2014 alongwith interest mentioned therein is Ex. RW-1/Doc D. Further copy of C-19 notice dated 03.11.2017 regarding contribution amount of Rs 33,28,973/- alongwith interest mentioned therein due against the petitioner for the period 04/2014 to 01/2016 is Ex. RW-1/Doc E. Copy of 45A order dated 07.11.2017 for the period 04/2014 to 01/2016 for Rs 1,06,918/- passed against the petitioner is Ex. RW-1/Doc F. Copy of C-18 adhoc dated 08.11.2017 for the period from Feb Digitally signed by FAHAD ESIC 8/2021 FAHAD UDDIN UDDIN Date: Page 24 of 32 2026.03.14 16:26:37 +0530 2016 to March 2016 towards repair and maintenance and truck charges for Rs 9,781/- is Ex. RW-1/Doc G. Copy of C-18 Adhoc dated 08.11.2017 for the period from 04/2011 to 03/2014 towards repair and maintenance for Rs 24,170/- is Ex RW-1/Doc H. Copy of C-19 notice dated 09.11.2017 for demand of Rs 2,60,707/- alongwith interest as mentioned therein for the period from Feb 2016 to March 2016 is Ex. RW-1/Doc I. Copy of 45 A order dated 17.01.2018 for Rs 10,54,697/- for the period 04/2016 to 03/2017 against the petitioner is Ex. RW-1/Doc J. Copy of document relating to total realized payment and outstanding balance amount against the petitioner is Ex. RW-1/Doc K as per which the total realized payment from the petitioner is stated to be 92,71,161/- and the balance outstanding amount against the petitioner has been shown to be Rs 4,42,534/-.
24. In his cross examination, RW-1, R.N Mehto stated that he is posted in the present office since January, 2014 and he had inspected the petitioner's institution, however, he did not recollect the year. He had admitted as correct that Taurus Station Canteen has paid Rs.1,04,96,507/- towards the contribution and interest amount and he had inspected the petitioner and he is aware about the nature of working of institution. He further stated that he had no idea whether the show cause notice was issued before levying the damage amount as that is automatic process done by the concerned branch. In response to a question, he stated that no hearing u/s 85 (B) before levying the damages was given to the petitioner and he had admitted as correct that letter dated 20.04.2018 was received by the dispatched branch of ESIC on 23.04.2018. He was asked a specific question whether any opportunity of hearing was given to the petitioner after 23.04.2018 regarding levying of damages or not and in response Digitally ESIC 8/2021 Page 25 of 32 signed by FAHAD FAHAD UDDIN UDDIN Date:
2026.03.14 16:26:48 +0530 to said question witness stated that he cannot say nor can point out any such document from the court record. No other material fact was deposed by RW1 Sh. R. N. Mehto in his cross- examination.
25. Another witness examined on behalf of respondent is RW2 Sh. Anil Shukla who is social security officer with ESIC and he tendered his evidence by way of affidavit which is Ex.RW2/AA bearing his signature at point A & B. In his evidence by way of affidavit, RW2 reiterated and reaffirmed all the facts stated by RW1 in his evidence by way of affidavit and his testimony is similar to RW1, hence said facts are not repeated herein for the sake of brevity and to avoid repetition. Further, RW2 relied upon all documents already discussed above in the testimony of RW1 which are Ex.RW1/Doc A to RW1/Doc K and same are not repeated herein to avoid repetition of the matter. In addition, RW2 also relied upon copy of Authorization Letter dated 22.07.2024 in his favour which is Ex.RW2/Doc. 1.
26. However, in his cross-examination RW2 Sh. Anil Shukla stated that he is posted in the present office since April 2016 and he had inspected the petitioner's institution and he did not recollect the year. He admitted as correct that the petitioner has paid Rs.1,04,96,507/- towards the contribution and interest amount and he had inspected the petitioner and he is aware about the nature of the working of institution. In response to a question, he stated that he had no idea whether the show cause notice was issued before levying the damage amount as that is the automatic process done by concerned branch. He was specifically asked whether any hearing u/s 85 (B) before levying the damages was given to petitioner or not to which he stated that ESIC 8/2021 Digitally signed by FAHAD Page 26 of 32 FAHAD UDDIN UDDIN Date:
2026.03.14 16:27:00 +0530 cannot say about the same. He admitted as correct that letter dated 20.04.2018 was received by Dispatched Branch of ESIC on 23.04.2018. He was specifically asked whether any opportunity of hearing was given to the petitioner after 23.04.2018 regarding levying of damages or not to which he replied that he cannot say nor can point out any such document from the court record. No other material fact was deposed to by RW2 in his cross-
examination.
27. At this stage, Section 85 (B) of ESI Act, 1948 may be reproduced as under for reference :
"85B Power to recover damages- (1) Where an employer fails to pay the amount due in respect of any contribution or any other amount payable under this Act, the Corporation may recover [from the employer by way of penalty such damages not exceeding the amount of arrears as may be specified in the regulations].
Provided that before recovering such damages, the employer shall be given a reasonable opportunity of being heard:
[Provided further that the Corporation may reduce or waive the damages recoverable under this Section in relation to an establishment which is a sick industrial company in respect of which a scheme for rehabilitation has been sanctioned by the Board for Industrial and Financial Reconstruction established under Section 4 of the Sick Industrial Companies (Special Provisions Act, 1985 (1 of 1986), subject to such terms and conditions as may be specified in regulations).
(2) Any damages recoverable under sub-section (1) may be recovered as an arrear of land revenue or under section 45C to Section 45-I. "
28. The intention behind insertion of Section 85 B is to deter the employer who makes any default or delay in depositing the contribution amount. Therefore, when there is a default or delay in making the said contribution amount, the Corporation may recover damages from the employer by way of penalty after ESIC 8/2021 Digitally signed by Page 27 of 32 FAHAD FAHAD UDDIN UDDIN Date:
2026.03.14 16:27:53 +0530 giving an opportunity to employer of being heard. The exercise of power u/s 85 B of the Act is quasi-judicial in nature and it is incumbent upon the corporation to not only consider the explanation of the employer if duly rendered but also to pass a speaking order, if damages are imposed. However, it is axiomatic that the volume and the content of speaking order must inevitably depend upon the nature of the particular case. The reasons expected to be recorded in a speaking order are directly related to the exhaustiveness or otherwise of the contentions raised or the explanations given in reply to the show cause notice. Obviously, where the objections raised are themselves vague and devoid of necessary particulars and explanation is ex- facie unsatisfactory, then even a finding that the plea is plainly untenable may be sufficient compliance of the requirement of a reasoned order. Section 85 B is discretionary in nature and not mandatory and the wordings of regulations 31-C Employees State Insurance (General Regulations), 1950 cannot override the parent legislation to make the levy of damages imperative. Mens-Rea or Actus-Reus is a necessary ingredient for imposing penalty u/s 85 B. Once Section 85 B is held as discretionary in nature, the principles of natural justice have to be scrupulously followed and the order should be reasoned and speaking. Even in cases attracting penalty, waiver of the same is contemplated under Regulation 31 (C) of the ESI (General) Regulation, 1950 to sick units. A penalty has to be levied only in the manner prescribed. It is also not a case where the authority is left with no discretion. The legislation does not provide that adjudication for the purpose of levy of penalty proceeding would be a mere formality or imposition of penalty as also computation of quantum thereof became a foregone conclusion. Application of Digitally signed by FAHAD FAHAD UDDIN ESIC 8/2021 UDDIN Date:
2026.03.14 16:28:05 +0530 Page 28 of 32 mind to the reasons, situations and circumstances that led to delayed payment are to be considered before passing the order invoking the power. Had it been not so, what is the purpose and object of giving show cause notice prior to passing of the order. Virtually, offering of opportunity by issuing show cause notice in terms of its proviso, is intended to enable the authority concern to have such reasons, situations and circumstances and then to make an evaluation in accordance with law and in compliance with the principles of natural justice. It would also make it clear that defaultee employer is also having the obligation to furnish them for consideration of the authority concerned. If such reasons or situations are discernible from any record or in any manner while discharging the statutory obligation in accordance with the principles applicable to impose penalty, it has to apply its mind on such reasons or situations to decide, firstly whether damages is to be levied and if decided to levy at what rate, it should be levied in view of such reasons or situations. Held that justifiability of imposition of damages by way of penalty is justiciable on various grounds including non application of mind. Exercise of any such power should not be a mere arithmetical computation and rigid application of law by which damages could be recovered and therefore, there must be an application of mind and there must be an examination of merits of individual case.
29. Being a provision which confers a power to impose penalty, Section85 B of the Employees State Insurance Act must be taken to confer a discretion on Regional Director in the matter of determining the quantum. But that discretion calls for objective exercise within the limit pointed out in that Section and such exercise must be apparent in the order. It is necessary to Digitally ESIC 8/2021 Page 29 of 32 signed by FAHAD FAHAD UDDIN UDDIN Date:
2026.03.14 16:28:16 +0530 find guilty conduct on part of a party to justify the imposition of damages and quantum of guilt and gravity of misconduct should naturally determine the gravity of punishment. Therefore, while one would not expect the order of the Regional Director to state with precision how exactly the damages have been assessed, it must be possible to see from the order the presence of punitive circumstances justifying the imposition of damages and the gravity of the punitive element. That would be necessary to appreciate whether the damages imposed could be said to be reasonable. If the damages is imposed as merely related to the delay without reference to the punitive element that may not be justifiable.
30. Thus, if the case of the petitioner is seen in the light of the aforesaid legal principles, this court is of the view that the calculation sheet dated 28.03.2018 forwarded by the respondent to the petitioner regarding final payment of outstanding bills and levy of damages to the tune of Rs.37,80,220/- in the said calculation sheet, fails to meet the test of reasonableness as no reasons have been given by the respondent / ESIC regarding levy of such a huge amount as damages upon the petitioner. It seems that no show cause notice and hearing before imposition of such damages has been given by the respondent to the petitioner and the said fact is apparent from the testimony of RW1 and RW2 wherein they have specifically stated that they had no idea whether the show cause notice was issued before levying the damage amount upon the petitioner and they specifically stated that no hearing u/s 85 B was given to the petitioner before levying the damages. They further stated that they cannot point out any such document from the court record if opportunity of hearing was given to petitioner after 23.04.2018 regarding ESIC 8/2021 Page 30 of 32 Digitally signed by FAHAD FAHAD UDDIN UDDIN Date:
2026.03.14 16:28:26 +0530 levying of damages or not. Further, both the witnesses have admitted that letter dated 20.04.2018 which is Mark PW1/1 on court record was received by the dispatched branch of ESIC on 23.04.2018 but despite this it seems that no prior or subsequent hearing has been given by the respondent to the petitioner regarding amount of damages imposed upon the petitioner as mentioned in the calculation sheet dated 28.03.2018 which is under challenge before this Court. Further, as per case of the respondent / ESIC, only a sum of Rs.92,71,161/- was received by the respondent towards the contribution amount from the petitioner as on date which is mentioned in the document Ex.RW1/Doc. K. However, in the cross examination, both witnesses RW1 & RW2 have admitted before the Court that the petitioner had paid Rs.1,04,96,507/- towards the contribution and interest amount. Further, it may be noted that the petitioner in compliance of order dated 16.08.2022 passed by the Court has further deposited 20% of the total claimed amount with respondent which comes to Rs.12,67,726/-. Thus, it seems that in the calculation sheet dated 28.03.2018 the respondent / ESIC has not properly adjusted the received amount from the petitioner and for this reason, the calculation sheet dated 28.03.2018 of the respondent seems to be exaggerated one and does not show the proper adjustment of the amount received from the petitioner and due to the said reasons the said calculation sheet cannot survive under the law and in the facts and circumstances of the present case as well as due to violation of principles of natural justice and not giving proper hearing to the petitioner before levying the damages upon the petitioner to the tune of Rs.37,80,220/- as mentioned in the said calculation sheet. The said amount seems to be unreasonable without giving proper reasons and without Digitally signed by ESIC 8/2021 FAHAD FAHAD UDDIN Page 31 of 32 UDDIN Date:
2026.03.14 16:28:55 +0530 considering the fact that the petitioner is a unit run canteen under aegis of HQ Delhi area and is run for welfare of troops and their family members. Thus, due to the said reasons, this court deems fit to allow the application of the petitioner under Section 75 of the ESI Act, 1948 and the calculation sheet dated 28.03.2018 issued by the respondent thereby levying the damages upon the petitioner without any hearing is quashed / set aside and the Deputy Director of the respondent /ESIC is directed to give a proper hearing to the petitioner before ascertaining the amount of damages to be recovered from the petitioner in the facts and circumstances of present case as well as to properly adjust already paid amount of Rs.1,04,96,507- plus deposit of 20% amount in compliance of order dated 16.08.2022 passed by this Court which comes to Rs.12,67,726/- shall also be adjusted by the respondent/ESIC towards the total liability of the petitioner/final bill as per law and applicable rules. Ordered accordingly.
With these directions and observations, the application of the petitioner under Section 75 of ESI Act, 1948 is allowed / disposed of.
No further action is required.
File be consigned to record room after due compliance.
Copy of Judgment / order be sent to Deputy Director, ESIC for intimation and necessary action.
Announced in the Open Court on 06.03.2026 Digitally signed by FAHAD FAHAD UDDIN UDDIN Date:
2026.03.14 16:29:03 +0530 (FAHAD UDDIN) Senior Civil Judge-cum-Rent Controller South East, Saket Courts, New Delhi.ESIC 8/2021 Page 32 of 32