Delhi High Court
Shukal Gupta vs Employees State Insurance Corporation on 15 November, 2025
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 13th November, 2025
Judgment pronounced on: 15th November, 2025
+ FAO 503/2019 & CM APPLs. 54666/2019, 54668/2019, 49128/2022
& 49129/2022
SHUKAL GUPTA .....Appellant
Through: Mr. S. Singhal, Advocate
Versus
EMPLOYEES STATE INSURANCE CORPORATION
.....Respondent
Through: Mr. T. Singhdev, Ms. Yamini Singh,
Mr. Tanishq Srivastava, Mr. Sourabh
Kumar and Mr. Vedant Sood,
Advocates
CORAM:
HON'BLE MS. JUSTICE CHANDRASEKHARAN SUDHA
JUDGMENT
CHANDRASEKHARAN SUDHA, J.
1. The present appeal under Section 82(2) of the Employees' State
Insurance Act, 1948 (the ESI Act) has been preferred by the original
appellant, late Sh. Shukal Gupta, the proprietor of M/s Vandana Carpets, a
proprietorship concern engaged in the manufacture of machine-made, hand-
tufted and hand-knotted carpets, registered with the Employees' State
Insurance Corporation (the ESIC) under Code No. 11-20555.
2. The dispute arises out of ESIC's assessment of contributions on
alleged omitted wages for the period from April 1993 to March 1998, in
respect of the establishment of the appellant, which culminated in the
passing of orders under Sections 45A and 45AA of the ESI Act. Annexure B
show-cause notice was first issued on 17.02.1999, proposing assessment of
contribution. This was followed by an order under Section 45A of the ESI
Act on 16.02.2000, where after the appellant furnished representations and
produced statutory records seeking formal verification. Between 2000 to
2008, the ESIC issued recovery notices on multiple occasions, at times
contemplating warrant proceedings, while the appellant continued to seek
reconsideration and made deposits. During this period, the ESIC kept the
matter in abeyance on various occasions pending re-verification. Inspections
and verification exercises were undertaken on 27-28 October 1998,
during 2003 - 2004, and once again on 23.09.2013, followed by further
correspondence.
3. Ultimately, the ESIC passed an assessment/recovery order dated
24.03.2014, finalising the contribution demand for the period in question.
The appellant preferred an appeal under Section 45AA of the ESI Act,
which came to be disposed of on 08.10.2014, determining the payable
contribution at ₹4,01,516/-, besides applicable interest. Aggrieved, the
appellant instituted proceedings under Section 75 of the Act before the ESI
Court, which, by judgment dated 31.07.2019, dismissed the petition. The
present appeal, FAO 503/2019, was thereafter filed under Section 82(2) of
the Act, giving rise to the proceedings presently before this Court.
4. While the appeal was pending before this Court, the original appellant
expired on 11.05.2020. Applications were then filed by the widow and sons
of the deceased seeking their substitution as legal representatives under
Order XXII Rule 3 of the Civil Procedure Code, 1908 (CPC), along with an
application under Section 5 of the Limitation Act, 1963 (the Act) seeking
condonation of delay of 871 days in filing the substitution application.
5. The respondent-ESIC has contested the substitution as well as the
condonation sought, primarily on the ground that the delay is inordinate,
unexplained, contradictory, and unsupported by material particulars.
6. In this backdrop, it becomes necessary to clarify that the present
judgment is confined only to the determination of the applications for
condonation of delay and substitution of legal representatives. Consideration
of the merits of the appeal, and of the challenge to the ESIC assessment and
orders, shall arise only if the applicants succeed in crossing the threshold of
substitution.
7. The learned counsel for the applicant submitted that the original
appellant, passed away on 11.05.2020, during the pendency of the present
appeal, and that he is survived by his widow and two sons. Presently, the
wife/the applicant herein is now in charge of the affairs of the Concern. The
applicant learnt of the appeal only in October 2022, when a consultant
associated with the establishment's ESIC matters informed them that an
appeal relating to the demand on M/s Vandana Carpets was pending. Upon
receiving this information, the applicant contacted the counsel of the
deceased appellant.
7.1 It is stated that only thereafter did the applicant come to know
that the statutory period for filing an application under Order XXII
Rule 3 CPC had expired. On legal advice, she has filed the present
substitution application along with an application under Section 5 of
the Act seeking condonation of 871 days' delay (while the condonation
application refers to 819 days). It is submitted that the delay arose
solely due to the applicant's bona fide ignorance of the proceedings.
7.2 The learned counsel for the Applicant would further emphasise
that the appellant had passed away in the midst of the COVID-19
pandemic, and that considerable disruption was caused during that
period. It was urged that the pandemic further contributed to the
applicants' inability to communicate with the counsel or ascertain the
status of the litigation.
7.3 The learned counsel augmented his contention by stating that
the appeal is filed by M/s Vandana Carpets, a proprietorship concern,
and not against the individual proprietors in their personal capacity. He
states that the business concern continues to exist, and therefore,
substitution of the legal representatives is necessary to enable the
appeal to survive. According to counsel, if substitution is refused, not
only would the appeal abate, but the establishment would be left
remediless against the ESIC demand.
7.4 It is therefore submitted that the delay is neither intentional nor
due to any neglect, and that the reasons given constitute "sufficient
cause" under Section 5 of the Act. Counsel accordingly prays that the
delay be condoned and the applicant be brought on record as legal
representative so that the appeal may proceed on merits.
8. On the other hand, the learned counsel for the respondent opposes the
applications, submitting that the delay of 871/819 days is inordinate and
wholly unexplained, and that the applicant has failed to furnish any credible
or satisfactory justification for approaching the Court after more than two
years. It is argued that such prolonged silence by the legal heirs cannot be
condoned.
8.1 The counsel draws attention to Article 120 of the Act, which
provides a 90-day limit for bringing the legal representatives on record.
It is submitted that, in view of the appellant's demise on 11.05.2020,
the present applications--filed after an inordinate --are ex facie barred.
8.2 During oral submissions, the learned counsel for the respondent
highlighted that the applicant's explanation was internally inconsistent.
The substitution application cites 871 days of delay, while the
condonation application cites 819 days, indicating a lack of precision
and casting doubt on the bona fides of their explanation.
8.3 The learned counsel would further contend that the applicant's
assertion that they became aware of the appeal through an unnamed
consultant in October 2022 is vague, unsupported and inherently
implausible. No details of the said consultant--name, role or
circumstances of the disclosure--have been furnished. It was argued
that such an explanation is unverifiable and does not inspire
confidence.
9. The learned counsel for the respondent stated that it is difficult to
believe that the widow and sons of the deceased appellant remained unaware
for more than two years, and did not contact the counsel at any point. Even
taking into account the difficulties posed by COVID-19, it was submitted
that at most one year could be excluded, and the remaining period remains
wholly unexplained. The applicant's claim of ignorance of the proceedings
for over two years is untenable. It is urged that condoning such an
extraordinary delay would unsettle long-standing statutory proceedings and
prejudice the respondent; hence both applications deserve dismissal.
10. Heard the rival contentions advanced by the parties and examined the
applications, the replies thereto, and the material placed on record.
11. The principal issue that falls for consideration at this stage pertains
solely to the request for substitution of the legal representatives of the
deceased appellant and the prayer for condonation of the substantial delay in
moving such request. The merits of the appeal do not arise for consideration
unless the applicants first succeed in satisfying the Court that the delay
deserves to be condoned.
12. The records indicate that the appellant, passed away on 11.05.2020
during the pendency of this appeal. No application was filed within the time
prescribed for bringing his legal representatives on record, nor was any
explanation furnished during that period. It was only in October 2022, more
than two years after his demise that the applicantapproached the Court with
an application under Order XXII Rule 3 CPC, accompanied by a request for
condonation of delay, stated as 871 days in one application and 819 days in
another.
13. The justification offered for this delay is that the applicants were
unaware of the pendency of the appeal and came to know of it only in
October 2022 when a consultant allegedly informed them of the same.
However, the identity of the said consultant, the circumstances in which the
information was conveyed, or any material to substantiate this assertion have
not been disclosed. The applicants have also not indicated when they
contacted the counsel representing the deceased appellant or what steps were
taken thereafter. In the absence of these essential particulars, the explanation
remains general and uncorroborated, and does not satisfactorily account for
a delay of this magnitude.
14. Even if some allowance is made for the disruption caused by the
COVID-19 pandemic, the passage of more than two years without any
inquiry or step taken by the immediate family members of the deceased
appellant remains unexplained.
15. It is well settled that while the expression "sufficient cause" under
Section 5 of the Act deserves a liberal construction, such liberality cannot be
extended to condone prolonged and unexplained inaction. The Apex Court
has repeatedly held that a mere assertion of ignorance, unsupported by
material particulars, does not meet the statutory threshold. The burden lies
upon the applicants to establish that they were prevented by circumstances
beyond their control from acting within time; vague and unverified
assertions cannot discharge that burden.
16. In this context, it is apposite to notice the recent pronouncement of the
Hon'ble Supreme Court in Om Prakash Gupta alias Lalloowa & Ors. v.
Satish Chandra / Rooprani, 2025 INSC 183, which reiterates that although
courts may adopt a justice-oriented and pragmatic approach in applications
concerning abatement and substitution, such leniency is not attracted where
the record discloses prolonged, unexplained inactivity. The Court clarified
that revival may be justified where death has been duly intimated under
Order XXII Rule 10-A CPC or where the plea of ignorance is supported by
circumstances on record; however, a generalised assertion unaccompanied
by particulars, corroboration, or any contemporaneous conduct is
insufficient to constitute "sufficient cause". In the present case, there is no
intimation of death on the file, no material verifying the alleged disclosure
by a consultant in October 2022, no evidence of any attempt to contact
counsel or the Court during the intervening period, and even inconsistencies
in the computation of delay. Applying the principles in Om Prakash
Gupta(Supra), the explanation offered falls markedly short of the legal
standard required for condonation.
17. In these circumstances, this Court is not persuaded that the reasons
offered constitute "sufficient cause" for condonation of the extraordinary
delay in bringing the legal representatives on record. The requirements of
Section 5 of the Act remain unfulfilled.
18. Consequently, the application seeking condonation of delay cannot be
allowed. The application for substitution under Order XXII Rule 3 CPC,
being dependent upon the success of the condonation application, must also
fail.
19. For the reasons stated hereinabove, the application seeking
condonation of delay in moving the substitution application is dismissed. As
a corollary, the application under Order XXII Rule 3 CPC for bringing the
legal representatives of the deceased appellant on record is also dismissed.
The appeal, having abated and there being no surviving appellant before the
Court, stands disposed of accordingly. No order as to costs.
CHANDRASEKHARAN SUDHA
(JUDGE)
NOVEMBER 15, 2025
p'ma/RN
