Rajeev Oberoi vs Employees State Insurance ...
2017 Latest Caselaw 2556 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                         FAO No. 231/2017

%                                                      22nd May, 2017

RAJEEV OBEROI                                            ..... Appellant
                          Through:       Mr. Shivam Garg, Advocate.
                          versus

EMPLOYEES STATE INSURANCE CORPORATION & ANR.
                                    ..... Respondents

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not?

VALMIKI J. MEHTA, J (ORAL)

1. This first appeal under Section 82 of the Employees‟ State

Insurance Act, 1948 (hereinafter referred to as the „ESI Act‟) is filed

by the petitioner before the ESI court, challenging the impugned

judgment dated 15.3.2017 which has dismissed the petition filed by the

present appellant under Sections 75 and 76 of the ESI Act impugning

the assessment order dated 19.1.2012 assessing demand of Rs.

1,68,025/- upon the appellant/petitioner. I may note that in fact the

„order‟ is not the order dated 19.1.2012 inasmuch as the document

dated 19.1.2012 is the show-cause notice and the assessment order

which has thereafter been issued against the appellant/petitioner is

dated 26.4.2012. The issue is with respect to non-payment of

contribution and non filing of returns from October 2009 to March

2011 by the appellant/petitioner under the ESI Act. The case of the

appellant/petitioner was that the appellant/petitioner did not receive the

show-cause notice dated 19.1.2012, and therefore, it was contended

that the assessment proceedings against the appellant/petitioner are

bound to fail.

2. The court below has examined the issue threadbare with

respect to non-filing of returns and non-deposit of contribution by the

appellant/petitioner for the period from October 2009 to March 2011.

The ESI court below has referred to the fact that admittedly the dues

for the period in question were not deposited within time but were only

deposited on 9.3.2012 i.e after the issuance of the show-cause notice

dated 19.1.2012. The ESI court below has also observed that the

assessment order was actually passed against the appellant/petitioner

much later after the show-cause notice dated 19.1.2012 i.e on

26.4.2012. The assessment order is passed on account of admitted

non-filing of returns and not depositing of the requisite contribution by

the appellant/petitioner for the period from October 2009 to March

2011. I may reiterate that it is not disputed that the appellant/petitioner,

for the period from October 2009 to March 2011, did not deposit the

contribution in time and deposited the requisite contribution only on

9.3.2012 i.e after issuing of the show-cause notice dated 19.1.2012.

The ESIC court below notes that when the show-cause notice dated

19.1.2012 was issued there was even no return of contribution for

March 2011 on the record. The relevant observations of the ESI court

below for dismissing the petition filed by the appellant/petitioner reads

as under:-

"The receipt of notice dated 19.1.2012 was denied by PW1. The said receipt is exhibited as ExRW1/2. It is acknowledgment of receipt of notice by petitioner which was sent by the respondent. Though PW1 denied the receipt of the same but counsel during the course of arguments admitted the receipt of said notice.

Perusal of receipt would reveal that the date of personal hearing was granted to petitioner for 20.02.2012. The petitioner for the reason best known to him did not appear before the respondent to explain his case. There is no written communication to the respondent by the petitioner even after the factum of said notice came to his knowledge. During the course of arguments, it was argued on behalf of petitioner that petitioner could not have appeared on 20.02.2012 due to any personal difficulty and he should have been granted at least two or more days for personal appearance.

Admittedly, the petitioner did not visit the office of respondent nor communicated with the respondent for grant of such opportunity in writing. This opportunity of being heard was never availed by the petitioner for the reasons best known to him. Neither the reason for non- appearance is stated in the petition nor the same has come in the evidence of the petitioner.

On account of non-appearance of petitioner, respondent was constrained to pass an assessment order dated 26.04.2012 on the basis of calculation of contribution done on 19.01.2012.

The petitioner deposited the contribution after the date of personal hearing and even the return of contribution was submitted late. The factum of late deposit of return of contribution is admitted by petitioner in his cross examination. Admittedly, on the date of issuance of show cause notice dated 19.01.2012, no return of contribution for March, 2011 was on record. The claim of having been granted more opportunities than one for personal hearing is not supported with either any precedent or through the provision laid down under the ESI Act.

Counsel for respondent has relied upon judgments reported as 1975 (1) LLJ; 29 1982 (21) DLT 14 and 2001 LLR 477 in support of his arguments. As per which in order to avoid section 45A being used, an employer will have to show that he has filed the return as required by

section 44 of the ESI Act. And if no return is filed, it immediately attracts section 45A of the ESI Act.

The assessment order dated 26.04.2012 has attained finality after quasi- judicial proceedings under section 45-A of the ESI Act, as no closure returns within time filed for period ending March, 2012. Further judgment reported as 207 (2014) DLT 519 of which para 7 would be relevant wherein it has been held that "ESI fully justified under section 45-A to arrive at a conclusion on its own because respondent cannot take advantage of its own wrong by failing to file necessary employment records.Self-serving statements given in replies with respect to number of employees or their salaries could be rightly disbelieved by appellant. Therefore, there is no liability in order passed under section 45-A determining contribution of respondent @ Rs.2,05,643/- for period in question.Adverse consequence must flow to respondent in view of failing to file record.

The petitioner in my considered view has failed to prove that the assessment order dated 19.01.2012 is illegal or arbitrary. The petitioner has not been able to explain his non-appearance on 20.2.2012. Once the receipt of show cause notice dated 19.01.2012 is admitted by counsel for petitioner during the arguments then the question of not being aware of date of personal hearing does not arise. Even otherwise the petitioner has never communicated with the respondent for grant of such opportunity. Order passed on 26.04.2012 is as per the provision laid down under the ESI Act and thus legal. This issue is accordingly decided against the petitioner." (emphasis added)

3. A reading of the aforesaid paras of the impugned

judgment show that during the course of arguments, the

appellant/petitioner did not take up a case of non-service of notice

dated 19.1.2012 but in fact pleaded that the appellant/petitioner could

not appear on 20.2.2012, the date of hearing fixed by show-cause

notice dated 19.1.2012, due to personal difficulty. Therefore, the

appellant/petitioner was served the notice dated 19.1.2012 for

appearance on 20.2.2012 but yet the appellant/petitioner failed to

appear before the authorities. The show-cause notice dated 19.1.2012

was proved by respondent as Ex.RW1/2 as duly served on the

appellant/petitioner. In fact realizing his non-deposit of the

contribution, the appellant/petitioner got the same done on 9.3.2012.

Since there was admittedly a default in compliance of the provisions of

the ESI Act and there was non-filing of returns and non-deposit of

contribution, and that it is only after 20.2.2012 that the assessment

order was passed against the appellant/petitioner on 26.4.2012,

accordingly, I cannot agree with the arguments urged on behalf of the

appellant/petitioner that the appellant/petitioner was not noticed by the

authorities under the ESI Act before passing of the assessment order

dated 26.4.2012 or that on merits the assessment order could not have

been passed against the appellant/petitioner.

4. Learned counsel for the appellant/petitioner sought to

draw attention of this Court to a notice dated 19.1.2012 at page 48 of

the paper book of this appeal to argue that by this notice 15 days time

was given to the appellant/petitioner, and therefore a hearing could not

be fixed before the expiry of 15 days. It is however seen that there are

two notices dated 19.1.2012, one notice dated 19.1.2012, and which is

at page 48 of the paper book, is for prosecution of the

appellant/petitioner under the provisions of the ESI Act which provides

for criminal prosecution, whereas the second notice which is the

subject show-cause notice dated 19.1.2012 is a separate notice for

assessment fixing a date of hearing on 20.2.2012. Appellant/petitioner

is therefore unfortunately causing to mix-up two separate notices for

two separate purposes. This argument of the appellant/petitioner is

therefore rejected. In any case the date of 20.2.2012 is well after the

expiry of 15 days period mentioned in the other notice dated 19.1.2012

and therefore there was sufficient time for the appellant/petitioner to

reply within 15 days of service of notice dated 19.1.2012 and thereafter

to appear on 20.2.2012.

5. In view of the above, I do not find any merit in the appeal.

6. Dismissed.

MAY 22, 2017                                 VALMIKI J. MEHTA, J
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