Delhi District Court
Mahesh Kumar Chauhan vs . Employees State Insurance ... on 31 March, 2018
Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation
IN THE COURT OF MS TYAGITA SINGH
SENIOR CIVIL JUDGECUMRENT CONTROLLER (SOUTH)
SAKET COURTS, NEW DELHI
CS SCJ. 82907/16
CNR No. DLST030000502009
IN THE MATTER OF:
SH. MAHESH KUMAR CHAUHAN
R/O 32, NAGLI RAZAPUR,
NIZAMUDDIN EAST,
NEW DELHI .......PLAINTIFF/PETITIONER
VERSUS
EMPLOYEES STATE INSURANCE CORPORATION
DDA FLATS CUM OFFICE COMPLEX
RAJINDDRA PLACE, NEW DELHI
THROUGH ITS REGIONAL DIRECTOR
....DEFENDANT/RESPONDENT
DATE OF INSTITUTION :03.03.2009 DATE OF RESERVING ORDER :26.03.2018 DATE OF DECISION :31.03.2018 DECISION :ALLOWED Advocates appearing in the case:
Sh. Narender Kumar, Ld. Counsel for petitioner. Sh. A.K. Verma, Ld. Counsel for respondent.
CS SCJ No. 82907/16 Page 1 of 17Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation J U D G M E N T
1. Vide this judgment, I shall decide petition U/s 76 and 77 of Employees State Insurance Corporation Act (hereinafter referred to as 'ESIC Act'), filed by petitioner against respondent.
2. Brief facts of the case of petitioner as mentioned in the petition dated 02.03.2009 are as follows:
2.1. Petitioner has stated that he was awarded contract by Punjab National Bank for running staff canteen for its employees, on 30.05.1994 and he employed labourers/ workers and other staff for running the canteen, in the name of firm M/s. Kumar Caterers and petitioner was proprietor of the said firm.
2.2. That the said firm was duly covered under Employees State Insurance Corporation Act, and it was registered with respondent/ ESIC since 15.09.1996 under Code No. 1124171. Petitioner has stated that he regularly contributed to the scheme and duly submitted the statutory returns from time to time and complied with all the statutory provisions of ESIC Act.CS SCJ No. 82907/16 Page 2 of 17
Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation 2.3. That the contract used to be extended by Punjab National Bank on yearly basis and petitioner used to regularly deposit the ESIC contributions and also used to submit the returns to the respondent as per rules.
2.4. That the contract finally expired on 31.10.1997 and thereafter, it was never renewed, due to which petitioner had to close the work of running the staff canteen and firm Kumar Caterers was also dissolved and due intimation of closure of the firm was given to the respondent and thereafter, no business by the name of M/s. Kumar Caterers was carried on by the petitioner. That thereafter, petitioner started authorized Service Centre of M/s. Bajaj Auto Ltd. in the name and style of "M/s. Friends Service Station" at Vasundhra, Ghaziabad, after execution of Dealership Agreement dated 11.01.1998 and the said firm is not registered with ESIC at Ghaziabad (U.P.).
2.5. That during the existence of firm M/s. Kumar Caterers, petitioner had regularly paid the subscription of ESIC and had never committed any default and no dues of any kind were outstanding against firm at the time when it was closed in year 1997 under due intimation to the respondent.
CS SCJ No. 82907/16 Page 3 of 17Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation 2.6. That after expiry of so many years, petitioner received a notice dated 05.01.2009 from office of Recovery Officer, ESIC, Rajendra Bhawan, Rajendra Place, New Delhi, in which it is claimed that the petitioner has failed to pay the arrears. The petitioner has further mentioned that he attended the office of the respondent on 16.01.2009 but the concerned officer was not on duty, therefore, he sent a letter dated 16.01.2009 through his counsel and another letter dated 22.01.2009 through courier and sought the details of the arrears due, and requested for stay of the recovery proceedings but the officers of respondent failed to supply any information /details of the arrears due and rather they threatened to recover the alleged dues through coercive methods.
2.7. The petitioner has challenged the demand raised by the respondent on the ground that it is bad in law and against the actual facts of his case. He has further stated that M/s. Kumar Caterers was closed in 1997 and due intimation regarding its closure was given to ESIC and no payment was raised, by the respondent for many years and suddenly in year 2009, demand of arrears was raised, which is without any basis and without giving any opportunity of hearing to the petitioner.
CS SCJ No. 82907/16 Page 4 of 17Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation 2.8. On the basis of above stated facts and circumstances, petitioner has prayed that the letter dated 21.01.2008 bearing no. 1138419 regarding demand of Rs. 47,547/ towards alleged arrears of contribution of ESI be set aside/ quashed and the matter be remanded back to ESIC for fresh hearing. The petitioner has further prayed that respondent had restrained from recovering the outstanding amount of Rs. 47,547/ from petitioner through coercive methods.
3. Summons were duly served upon the respondent and respondent filed on record written statement. Brief facts of the written statement of respondent are as follows:
3.1. In reply on merits, the respondent has stated that petitioner himself submitted Form No.01 dated 29.04.1997 under his own signatures declaring that he has 20 employees as on 17.08.1996, and applied for registration under ESIC Act, and he was covered under Code No. 1138419. It was specifically denied that petitioner is covered under ESIC Code No. 112471 since 15.09.1996.
3.2. It was specifically denied that any intimation of closure of the unit was given by the petitioner to the respondent under ESIC CS SCJ No. 82907/16 Page 5 of 17 Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation Code No. 1138419. It was submitted that in absence of compliance by the petitioner under ESIC Code No. 1138419, ad hoc contribution was claimed by the respondent vide C18 dated 13.07.2005 for the period 17.08.1996 to 31.05.2005 granting opportunity of personal hearing on 19.08.2005, but neither the petitioner attended himself nor through any representative, due to which speaking order was passed on 19.09.2005 followed by C19 dated 09.03.2007.
3.3. It is further submitted that C18 was also issued for a period of 01.06.2005 to 30.09.2006 on 09.03.2007 granting opportunity of personal hearing to the petitioner on 09.04.2007, but nobody appeared on behalf of petitioner on 09.04.2007, due to which speaking order dated 29.11.2007 was passed followed by C19, dated 21.01.2008. It was specifically denied by the respondent that petitioner was regularly paying contribution and submitting returns. The respondent stated that Recovery Officer has initiated action for recovery of the arrears as per provisions of ESIC Act and many opportunities of hearing were granted to the petitioner before passing the order but petitioner did not avail the opportunity of hearing and did not file any due representation in the office.CS SCJ No. 82907/16 Page 6 of 17
Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation 3.4. On the basis of above stated facts and circumstances, it was denied that the demand notice for the arrears is illegal, ultravires and unconstitutional. It was specifically mentioned that the petitioner used two ESIC Codes i.e. No. 1138419 and 1124171 for the reasons best known to him, and it is a fault on the part of petitioner. That no intimation about closure of firm was ever given to the respondent by the petitioner. It was further mentioned in the reply that the only representation received on record is regarding the request for stay of the recovery of arrears, dated 22.01.2009. It was further mentioned in the reply that copies of the challans submitted by the petitioner reveals that the petitioner was using some wrong ESIC Code for deposit of the amount and it is fault of the petitioner himself.
3.5. Vide order dated 03.03.2009, the respondent was restrained from recovering the demand of Rs. 47,547/ subject to deposit of Rs. 15,000/ within one month.
ISSUES
4. On the basis of pleadings of the parties, following issues were framed on 19.03.2012 by Ld. Predecessor:
CS SCJ No. 82907/16 Page 7 of 17Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation
1. Whether the petitioner duly intimated respondent about the closure of the firm M/s Kumar Caterers? OPP
2. Whether the petitioner was not given sufficient opportunity of being heard before the order dated 29.11.2007 and the demand letter dated 21.01.2008 was issued by the respondent? OPP
3. Whether the letter dated 21.01.2008 containing the demand of Rs. 47,547/ is liable to be set aside? OPP
4. Relief.
5. Thereafter, case was kept for Petitioner's Evidence.
EVIDENCE ON RECORD
6. The petitioner has examined himself as PW1 and tendered his affidavit of evidence as Ex. PW1/1. He has reiterated the same facts in his affidavit, as mentioned in the plaint. PW1 exhibited following documents on record:
Serial Documents Exhibits
No.
1. Letter of PNB to M/s. Kumar Caterers dated Ex. PW1/3
26.09.1995 (OSR)
2. Letter dated 27.02.1996 Ex. PW1/4
(OSR)
3. Challan of ESIC Ex. PW1/5
(OSR)
CS SCJ No. 82907/16 Page 8 of 17
Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation
4. Letter dated 12.11.1997 by PNB to Ms. Kumar Ex. PW1/6 Caterers (OSR)
5. Service Dealership at Sahibabad Ex. PW1/7 (OSR)
6. Copy of photograph Ex. PW1/8 (OSR)
7. Letter by M/s. Kumar Caterers to Commissioner of Ex. PW1/9 ESIC dated 01.12.1997 (OSR) 8. U.P.C. Ex. PW1/10 (OSR)
9. Show Cause Notice of Recovery dated 05.01.2009 Ex. PW1/11 (OSR)
10. Reply of show cause notice, dated 16.01.2009 Ex. PW1/12 (OSR)
11. Receipt of Courier Ex. PW1/13 (OSR) 12. Fax Receipt Ex. PW1/14 (OSR)
13. Similar petition which was withdrawn on 20.02.2009 Ex. PW1/15 (OSR)
14. Copy of application for stay of recovery proceedings Mark A
15. Copy of application for RTI Mark B
16. Copy of Form C-19 dated 21.01.2008 Mark C
17. Copy of Agreement dated 30.05.1994 Mark D He was duly crossexamined by Ld. Defence counsel and discharged.
7. After closure of plaintiff's evidence, case was fixed for respondent's evidence.
CS SCJ No. 82907/16 Page 9 of 17Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation
8. Respondent examined Sh. Alexander Bhajan, Social Security Officer as RW1. RW1 tendered his affidavit of evidence as Ex. RW1/A, in which the facts mentioned in written statement were reiterated. Following documents were exhibited by RW1:
Serial Documents Exhibits
No.
1 Copy of Covering Letter, Allotment Letter dated Ex. RW1/1
28.05.1997, Survey Report dated 29.04.1997 and 01 (colly.) (OSR)
Form dated 29.04.1997 filled by petitioner 2 Copy of C-18 Form dated 13.07.2005 with AD, Ex. RW1/2 Assessment Order dated 19.09.2005 with AD, C-19 dated (colly.) 09.03.2007 with AD, C-18 dated 09.03.2007, order dated 29.11.2007 3 C-19 Form dated 21.01.2008 Ex. RW1/3 RW1 was duly crossexamined by Ld. Counsel for plaintiff and discharged.
ISSUE WISE DECISION:
Issue no.1. Whether the petitioner duly intimated respondent about the closure of the firm M/s Kumar Caterers? OPP CS SCJ No. 82907/16 Page 10 of 17 Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation
9. To prove this issue, petitioner also exhibited on record copy of handwritten letter in Hindi dated 01.12.1997 addressed to the Commissioner, ESIC as Ex. PW1/9, in which it is written that the unit registered under code no. 112038419 was closed on 31.10.1997. Copy of UPC vide which the said letter was sent to the Commissioner has been exhibited as Ex. PW1/10. He also exhibited copy of Letter dated 12.11.1997 written by Manager of Punjab National Bank, Sansad Marg, to M/s. Kumar Caterers as Ex. PW1/6, in which it is mentioned that the contract of M/s. Kumar Caterers with Punjab National Bank had expired on 31.10.1997.
10. It is clear from above stated documents that the contract of M/s. Kumar Caterers with Punjab National Bank had expired on 31.10.1997 and intimation was duly sent by the petitioner to respondent vide letter dated 01.12.1997, which is Ex. PW1/9, by way of UPC Ex. PW1/10. As per Indian Evidence Act, sending of any letter by UPC or RC at proper address of the respondent is deemed to be due service, hence reasonable presumption is raised in favour of the petitioner that the letter Ex. PW1/9 was duly served upon the respondent vide UPC EX. PW1/10. Therefore, issue no.1 is decided in favour of the petitioner and against the respondent. Petitioner had duly intimated respondent about CS SCJ No. 82907/16 Page 11 of 17 Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation closure of firm M/s. Kumar Caterers.
Issue no.2. Whether the petitioner was not given sufficient opportunity of being heard before the order dated 29.11.2007 and the demand letter dated 21.01.2008 was issued by the respondent? OPP
11. The onus to prove this issue was upon the petitioner. Petitioner has exhibited copy of reply dated 16.01.2009 to the show cause notice dated 05.01.2009 as Ex. PW1/11, in which it is clearly mentioned that petitioner had appeared in the office of respondent ESIC but he was not heard and requisite documents were not provided to him for giving proper reply. The copy of legal notice dated 16.01.2009 has also been exhibited as Ex. PW1/12 and the courier receipt and fax receipt of the legal notice has been exhibited as Ex. PW1/13 and Ex. PW1/14. Therefore, it is clear from these documents that petitioner had duly given reply to the show cause notice dated 05.01.2009, in which it was mentioned that petitioner had appeared in the office but he was not given proper hearing. Thereafter, no response was by given by the respondent ESIC to the reply Ex. PW1/11 and no fresh opportunity of hearing was given by the respondent to the petitioner.
CS SCJ No. 82907/16 Page 12 of 17Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation
12. In this regard, it is pertinent to mention herein that during pendency of the suit, at the instance of Ld. Predecessor Court, opportunity of hearing was again given to the petitioner and certain documents were filed on record by the respondent in respect of the opportunity of hearing given to the petitioner on 28.07.2014. However, the said documents have not been exhibited and not proved on record by the respondent and the petitioner had no occasion to crossexamine the concerned officer upon the issue whether reasonable opportunity of hearing was given to him or not on 28.07.2014 during pendency of suit. It was duty of respondent to prove that reasonable opportunity of hearing was given to petitioner on 28.07.2014 which respondent has failed to prove.
13. There are certain copies of receipts/ vouchers on record which have not been exhibited either by the petitioner or by the respondent but perusal of those vouchers reflects that certain payments had been made by M/s. Kumar Caterers to respondent ESIC under two different codes i.e. Code No. 1124171 and Code No. 1138419. It is pertinent to mention herein that the earlier Code No. 1124171 was issued by the respondent to the Punjab National Bank Canteen and at the request of Manager of Punjab National Bank, M/s. Kumar Caterers used to deposit the CS SCJ No. 82907/16 Page 13 of 17 Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation contributions under said ESIC No. 1124171 till the time a new Code No. 1138419 was alloted afresh to him.
14. It is also pertinent to mention herein that after the contract of M/s. Kumar Caterers with Punjab National Bank had expired, Punjab National Bank had hired other subsequent contractors, who also used to deposit the contributions to ESIC under the same code i.e. 1138419. This fact is clear from copy of letter dated 26.08.2014 sent by Assistant Director, Sub Registrar Office, Rohini to Deputy Director, Regional Office, ESIC dated 26.08.2014.
15. Therefore, keeping in view all these facts and circumstances, petitioner should have been given proper opportunity of hearing before passing the order dated 29.11.2007 and before issuing Demand Letter dated 21.01.2008 and set off should have been given in respect of deposit of contributions already made by the petitioner against both the ESI Codes at the behest of the Punjab National Bank, who had given contract to the petitioner. There was no fault of petitioner in depositing the contributions in two different codes.
CS SCJ No. 82907/16 Page 14 of 17Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation
16. It is pertinent to mention here that the documents exhibited by respondent as Ex. RW1/1 (colly.) i.e. copy of Covering Letter, allotment Letter and Survey Report and Form No.1 are not under challenge. Thus, coverage of M/s. Kumar Caterers as a unit under ESIC is not under challenge. However, the petitioner has raised the issue that he had given due intimation of closure of the firm and expiry of contract with PNB, and the impugned demand vide letter Ex. RW1/3 was raised by respondent after closure of the firm and after expiry of the contract and he was not given reasonable opportunity of hearing before raising the demand.
17. Thus, it is clear from above discussion that due and sufficient opportunity of hearing was not given to the petitioner before passing of the impugned order dated 29.11.2017 and demand letter dated 21.01.2008 Ex. RW1/3. Issue no.2 is also decided in favour of petitioner and against respondent.
Issue no.3. Whether the letter dated 21.01.2008 containing the demand of Rs. 47,547/ is liable to be set aside? OPP
18. The onus to prove this issue was upon the petitioner. From the above stated findings on issue no.1 and 2, it is clear that petitioner had given due intimation of closure of the firm and CS SCJ No. 82907/16 Page 15 of 17 Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation expiry of contract with Punjab National Bank but respondent had not given him sufficient opportunity of hearing before passing the impugned order. Therefore, it is clear that impugned order has been passed without following due process of law and without following principles of natural justice. Hence, the letter dated 21.01.2008 Ex. RW1/3 is liable to be set aside. Issue no.3 is also decided in favour of petitioner and against the respondent.
Issue no.4 Relief.
19. In view of findings upon above stated issues, the petition is allowed and impugned letter dated 21.01.2008 Ex. RW1/3 is set aside and respondent is restrained from recovering the amount of Rs. 47,547/ as mentioned in the said letter. The respondent is directed to give fresh hearing to the petitioner as per rules and as per principles of natural justice before raising any fresh demand. Due consideration be also given to the amount of contributions already deposited by the petitioner under both the ESIC codes no. 1138419 and 1124171. Petition stands disposed off in above stated terms.
20. The amount, if any, deposited in Court by the petitioner as per order dated 03.03.2009 be refunded to him as per rules upon CS SCJ No. 82907/16 Page 16 of 17 Mahesh Kumar Chauhan Vs. Employees State Insurance Corporation filing proof of deposit.
21. File be consigned to record room.
(Announced in the open (Tyagita Singh)
Court on 31.03.2018) SCJcumRC (South), Saket Courts,
New Delhi
CS SCJ No. 82907/16 Page 17 of 17