The Calcutta Stock Exchange ... vs Employees State Insurance ...
2022 Latest Caselaw 2988 Cal/2

OD-01
                                         ORDER SHEET
                                         WPO/2807/2022
                               IN THE HIGH COURT AT CALCUTTA
                              CONSTITUTIONAL WRIT JURISDICTION
                                        ORIGINAL SIDE


                       THE CALCUTTA STOCK EXCHANGE LIMITED
                                        -VS-
                  EMPLOYEES STATE INSURANCE CORPORATION AND ORS.



BEFORE:
HON'BLE JUSTICE RAJA BASU CHOWDHURY
DATE: 12TH DECEMBER 2022.


                                                                                  APPEARANCE:
                    Mr. S. Mazumder, Adv.; Mr. U.K. Mondal, Adv.; Ms. M. Roy, Adv., for petitioner.
                                      Mr. T. Chatterjee, Adv.; Ms. N. Mondal, Adv., for respondents.

THE COURT: The present application has been filed, inter alia, challenging the orders

dated April 21, 2022 and September 16, 2022, passed under section 45A and under section 45AA

respectively of the Employees' State Insurance Act, 1948 (hereinafter referred to as "the said Act").

Mr. Mazumder, learned Advocate representing the writ petitioner, submits that the

original order under section 45A of the said Act was passed without giving appropriate opportunity of

hearing to the writ petitioner. By referring to the aforesaid order, it is submitted that the respondent no.2

had determined a sum of Rs.1,86,648/- towards the ESI contributions payable by the petitioner for the

period from March 2017 to November 2019.

Being aggrieved, the petitioner preferred an appeal under section 45AA of the said Act

upon depositing a sum of Rs.46,662/-, constituting 25% of the contributions determined in proceedings

under section 45A of the said Act.

Mr. Mazumder, by drawing attention of this Court to the order dated September 16, 2022,

passed under section 45AA of the said Act, submits that the appellate authority, despite setting aside the

parent order under section 45A of the said Act, had re-determined the contributions payable by the

petitioner and assessed the same at Rs.25,15,891/- for the period February 2017 to November 2019. By

referring to section 45AA of the said Act, it is submitted that the right to prefer an appeal arising out of

an order passed under section 45A of the said Act, has only been conferred on the employer. Such right

has, however, not been conferred on the ESI Corporation. He says that if the Corporation is aggrieved

by the aforesaid determination, the Corporation has to proceed before the Employees' Insurance Court,

under section 75 of the said Act. In this context, he placed reliance on a judgment delivered by the

Hon'ble Supreme Court of India in the case ESI Corporation -vs- C.C. Santhakumar, reported in

(2007) 1 SCC 584.

It is submitted that the appellate authority under section 45AA of the said Act, while treating

itself as the original authority, had not only re-appreciated evidence but had collected evidence which is

not permissible. No notice to show cause was issued on the petitioner indicating that the quantum of the

contributions payable by the petitioner would be enhanced. He says that the appellate authority, under

section 45AA of the said Act, has no power to enhance the determination already made under section

45A of the said Act.

Per contra, Mr. Chatterjee, learned Advocate representing the ESI Corporation, submits

that the petitioner had notice of the proceedings. A notice to show cause was also issued on the

petitioner prior to passing of the order under section 45A of the said Act. Before the appellate authority,

all documents have been verified and it was only thereafter that an order has been passed. If the

petitioner is so aggrieved by the order passed by the appellate authority, the petitioner has an alternative

remedy, and can well approach the Employees' Insurance Court to have its claim adjudicated, under

section 75 of the said Act. He says that the instant application deserves to be dismissed with costs.

I have heard the Advocates appearing for the respective parties and have considered the

materials on record. I find at the first instance that the respondent no.2 had determined the contributions

payable by the petitioner vide his order dated April 21, 2022, for the period from March 2017 to

November 2019. While preferring an appeal from the said order, under section 45AA of the said Act,

the petitioner had deposited a sum of Rs.46,662/-, constituting 25% of the contributions ordered to be

paid by the respondent no.2. A perusal of section 45AA of the said Act would, inter alia, make it clear

that the right to prefer an appeal is, however, restricted to the employer. The proviso to the said section,

inter alia, provides that if the employer succeeds in the appeal, the Corporation shall refund the deposit

to the employer together with such interest as may be specified in the rules. The said section does not

provide for any scope and authority for enhancing the quantum of contributions, as originally

determined under section 45A of the said Act.

In the case at hand, I find that the appellate authority, while disagreeing with the order

passed by the authorised officer under section 45A of the said Act, had not only set aside the same but

had also re-determined the contributions payable by the petitioner, by re-examining the records and had

enhanced the quantum of contributions payable by the petitioner. No notice to show cause as to why

contributions so determined shall not be enhanced, had been issued.

In my view, prima facie, the appellate authority, under section 45AA of the said Act, has

usurped the jurisdiction of the Insurance Court, constituted under section 75 of the said Act. In this

context, it would be relevant to refer to the judgment of the ESI Corporation(supra), where the

Hon'ble Supreme Court, in paragraphs 26 to 28 of the Judgment, while considering the scope and

jurisdiction of sections 45A and 45B of the said Act, has been, inter alia, pleased to observe as follows:

"26. On a plain reading of Sections 45-A and 45-B in Chapter IV and Sections 45 and

77 in Chapter VI of the Act, as indicated above, there cannot be any doubt that

the area and the scope and ambit of Sections 45-A and 75 are quite different.

27. If the period of limitation, prescribed under proviso (b) of Section 77(1-A) is read

into the provisions of Section 45-A, it would defeat the very purpose of enacting

Sections 45-A and 45-B. The prescription of limitation under Section 77(1-A)(b)

of the Act has not been made applicable to the adjudication proceedings under

Section 45-A by the legislature, since such a restriction would restrict the right of

the Corporation to determine the claims under Section 45-A and the right of

recovery under Section 45-B and, further, it would give benefit to an

unscrupulous employer. the period of five years, fixed under Regulation 32(2) of

the Regulations, is with regard to maintenance of registers of workmen and the

same cannot take away the right of the Corporation to adjudicate, determine and

fix the liability of the employer under Section 45-A of the Act, in respect of the

claim other than those found in the register of workmen, maintained and filed in

terms of the Regulations.

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 ESI Court, but also the

settlement of the dispute of a claim by the corporation against the employer.

While this is so, there is no impediment for the Corporation also to apply to the

ESI 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 45-A(1) or under Section 68, the Corporation can straightaway go for

recovery of the arrears."

Admittedly, the ESI Corporation has not applied before the Employees' Insurance Court,

for re-determination of the contributions payable by the petitioner.

Since the petitioner has raised the jurisdictional issues, I am of the opinion that the alternative

remedy would not stand in the way of this Court entertaining the writ application. I am of the view that

the writ application should be heard.

Mr. Mazumder, learned Advocate representing the writ petitioner, to show bona fide has

volunteered to deposit a sum of Rs.15 lakhs for the same to be retained to the credit of the writ

application. According to him, the aforesaid deposit along with the deposit already made by his client,

would constitute more than 60% of the determination made by the appellate authority, under section

45AA of the said Act.

Since I have already held that the writ application should be heard, there shall be an

interim order restraining the respondents from taking any further steps in connection with the orders

dated April 21, 2022 and September 16, 2022, passed under section 45A and section 45AA of the said

Act respectively, till December 21, 2022. The petitioner is directed to deposit the aforesaid sum of

Rs.15 lakhs with the Registrar, Original Side, High Court, Calcutta, on or before December 21, 2022. If

such deposit is made, the learned Registrar, Original Side, High Court, Calcutta, shall invest the same in

an interest bearing fixed deposit account, maintained with any nationalized bank of his/her choice and

shall keep the same renewed from time to time until further orders of this Court. If the deposit as

aforesaid is made, the interim order passed herein shall continue till the disposal of this application or

until further orders, whichever is earlier.

The respondents shall be at liberty to file affidavit-in-opposition within four weeks; reply

thereto, if any, may be filed within two weeks thereafter.

List the matter in the Monthly List of February, 2023 under the heading "For Hearing".

(RAJA BASU CHOWDHURY, J)

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