Chattisgarh High Court
The Regional Director Employees State ... vs Ms Hotel Octopus on 2 January, 2025
Author: Parth Prateem Sahu
Bench: Parth Prateem Sahu
1
2025:CGHC:262
NAFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
MA No. 21 of 2018
The Regional Director Employees State Insurance Corporation 107,
Jagannath Chowk, Ramnagar Road, Kota, Raipur, Chhattisgarh.
--- Appellant
versus
M/s. Hotel Octopus Main Road, Telibandha, Raipur, Chhattisgarh, Through
Charanjit Singh. Add- Aishwarya Residency, Telibandha, Raipur,
Chhattisgarh.
---- Respondent
For Appellant : Mr. Pranav Saxena, Advocate
For Respondent : None present even when the case is taken
up for hearing in second round.
Hon'ble Shri Justice Parth Prateem Sahu
Order On Board
02/01/2025
1. By this appeal, the appellant has challenged the legality and
sustainability of the impugned judgment dated 07.12.2017, passed by
the Judge, Employee State Insurance Act -cum- Labour Court No.1,
Raipur (C.G.) in case No.40/ESI Act/2013, whereby learned Labour
Judge has set-aside the order of assessment dated 22.01.2013 of the
Employees' State Insurance Act, 1948 (In short 'the Act, 1948').
2. This appeal was admitted on the following substantial questions of
"(i) Whether the Court below has failed to appreciate the
fact that by admission of the respondent, the provisions of
ESI Act was applicable?
(ii) Whether the Court below should have taken
cognizance of the matter without deposit of 50% of the
claim as per Section 75 (2B) of the ESI Act, 1948?"
3. Facts necessary for disposal of this appeal are that respondent
submitted an application under under Section 75 read with Section 77
of the Act, 1948 pleading therein that respondent is a hotel/restaurant,
which is registered under C.G. Shops and Establishment Act, 1958.
Respondent was issued notice for depositing contribution and fixed the
date of hearing 20.09.2012. Respondent submitted reply to the
application and requested for time for giving opportunity of hearing.
Two show cause notices were issued to respondent on 15.03.2013
and 02.04.2013, in both the notices assessment is with respect to 12
employees and have made total assessment of Rs.88,015/-.
Application was filed for setting-aside the order of assessment dated
22.01.2013 on the ground that no opportunity of hearing was granted.
Application was replied by appellant therein pleading that respondent
was served with a notice for depositing the contribution, however, the
letters were not complied with and the amount as mentioned therein
was not deposited. On 17.07.2012, letter was written to non-applicant
providing him an opportunity of hearing fixing the date of hearing on
02.08.2012 and 03.08.2012 and on the date fixed for hearing the non-
applicant/respondent did not appear, consequently the letter was again
issued on 31.08.2012 granting time till 20.09.2012 for producing
documents. The letter was replied through the advocate, however, no
supporting documents were submitted in the office of Employees State
Insurance Corporation. Non-applicant did not appear on the date fixed
for hearing and accordingly, the order of assessment was passed on
22.01.2013. The order of assessment was put to challenge before the
Employees State Insurance Court (in short "ESI Court") in the
proceedings under Section 75 read with Section 77 of the Act, 1948
before ESI Court. The ESI Court allowed the application by impugned
order.
4. Learned counsel for appellant would submit that he is pressing upon
substantial question of law No.2 as framed by this Court of non
depositing of 50% of the amount in terms of Section 75 (2B) of the Act,
1948 and hence, the impugned judgment is vitiated and not
sustainable. He submits that pre-deposit of 50% amount is mandatory
and therefore, unless and until 50% of amount as mandated under
Section 75 (2B) is not deposited, no appeal would lie and therefore,
the ESI Court erred in considering the appeal on merits in absence of
the deposit in terms of Section 75 (2B). He also contended that even if
the ESI Court is having the jurisdiction to waive the amount of pre-
deposit as mandated under Section 75 (2B) of the Act, 1948 then also
there should be a prayer in this regard by the employer and further
there should be reasoned and speaking order on the said prayer
waiving the pre-deposit of amount of 50% and fixing the case for
further hearing. No such proceedings or order is there on the proviso
to Section 75 (2B) of the Act, 1948.
5. This appeal is listed for final hearing since 11.11.2024 and on the said
date, there was no representation on behalf of respondent and the
case was passed over. Thereafter the case was again listed in the
week commencing 25.11.2024 as not reach final hearing and again it
could not be heard in absence of respondent. This case thereafter was
again listed in the not reach final hearing list in the week commencing
09.12.2024 in the said week also there was no representation on
behalf of respondent.
6. Perusal of the order-sheets would show that after admission of this
case on the substantial questions of law on 31.10.2018, notice was
issued. The notice was served upon respondent and Mr. Anjinesh
Shukla, Advocate appeared on behalf of respondent on 06.03.2019.
Vakalatnama is also filed on behalf of respondent by Mr. Anjinesh
Shukla, Advocate on 28.01.2019.
7. From the aforementioned facts of the case, it is apparent that after
admission of appeal, notice was issued, respondent has engaged an
Advocate who has also filed Vakalatnama, however, there is no
representation by the Advocate on behalf of respondent since last
many dates of hearing.
8. To appreciate the submission of learned counsel for appellant, I find it
appropriate to extract the relevant provisions of Section 75 (2B) of the
Act, 1948, which is as under :-
"75. Matters to be decided by Employees' Insurance
Court.
(1) x x x x x x
(2) x x x x x x
(2A) x x x x x x
(2B) No matter which is in dispute between a principal
employer and the Corporation in respect of any
contribution or any other dues shall be raised by the
principal employer in the Employees' Insurance Court
unless he has deposited with the Court fifty per cent. of
the amount due from him as claimed by the Corporation:
Provided that the Court may, for reasons to be
recorded in writing, waive or reduce the amount to be
deposited under this sub-section."
9. Provision under Section 75 is forming part of Chapter VI of the Act,
1948, which deals with adjudication of dispute and claims. Section 74
under Chapter -VI deals with constitution of Employees' Insurance
Court and Section 75 deals with the matter to be decided by the
Employees' Insurance Court, which also includes the rate of
contribution payable by a principal employer in respect of any
employee. Section 75 (2) deals with subject to the provisions of sub -
section (2A), following claim shall be decided by the Employees'
Insurance Court which include claim for recovery of contribution from
the principal employer along with the other claims against the
employer.
10. Admittedly the challenge before the State Employees Insurance Court
filed under Section 75 read with Section 77 is against the assessment
order 22.01.2013, which is available on record as Ex.D-8C. In the said
order dated 22.01.2013 there is assessment of Rs.88,015/- and
direction to respondent to deposit the said amount so assessed within
specified time framed of 60 days.
11. From the letter under challenge in an application under Section 75
read with Section 77 of the Act, 1948 is with respect to a dispute of
contribution dues raised by principal employer before the Employees'
Insurance Court and therefore, the provisions under Section 75 (2B) of
the Act, 1948 in clear terms mandates that no dispute between a
principal employer and the Corporation in respect of any contribution
or any other dues shall be raised by the principal employer unless he
has deposited with the Court fifty percent of the amount so claimed by
the corporation. Along with an application under Section 75 read with
Section 77 of the Act, 1948, there is no application seeking exemption
from mandatory deposit of 50% as mandated under Section 75 (2B) of
the Act, 1948.
12. According to the provision as referred above under Section 75 (2B) of
the Act, 1948 before entering into the merits of the claim/dispute as
raised by principal employer, the ESI Court has to satisfy with the
requirements as provided under the Act, 1948 and it is the duty cast
upon it to look into whether the applicant has complied with all the
provisions as provided under the Act, 1948 before entertaining the
application on merits.
13. True it is under the proviso of Section 75 (2B) of the Act, 1948, there is
discretion upon the Court to reduce the amount of 50% as mandated
under Section 75 (2B) or to waive the entire amount of 50%, however,
there should be an order in this regard in writing specifying the
reasons showing the application of mind of the Court for waiving or
reducing the amount, if any, prayed for. From perusal of the order-
sheets of the ESI Court would show that no such proceedings have
been drawn of waiving the amount of mandatory deposit as provided
under Section 75 (2B) of the Act, 1948.
14. In absence of recording such proceeding with respect to the proviso to
Section 75 (2B) of the Act, 1948 granting waiver to deposit or reducing
the amount by reasoned and speaking order there was no occasion for
the ESI Court to deal with the application on merits but to dismiss the
same for want of necessary compliance under Section 75 (2B) of the
Act, 1948.
15. In the aforementioned facts of the case as also the provisions under
Section 75 (2B) of the Act, 1948, this Court is of the considered
opinion that in absence of any application seeking exemption and
specific order of the ESI Court in this regard, the appeal could not
have heard on merit, therefore, the learned ESI Court had committed
illegality in entering into the claim of respondent on merit in application
filed under Section 75 read with Section 77 of the Act, 1948, hence,
the impugned order dated 07.12.2017 passed by the ESI Court is not
sustainable and accordingly it is set-aside.
16. As the State Employee Insurance Court has not applied its mind to the
proviso under Section 75 (2B) of the Act, 1948, considering the
interest of both the parties I find it appropriate to remit back the case to
the ESI Court to first take decision on the proviso to Section 75 (2B) of
the Act, 1948, if any, by passing speaking and reasoned order and
only thereafter, if required, to pass an order afresh examining the
merits of the case.
Sd/-
(Parth Prateem Sahu)
Judge
Balram
