Regional Director / Recovery ... vs Nitinbhai Vallabhbhai ...
2022 Latest Caselaw 1210 Guj

     C/FA/297/2022                            ORDER DATED: 03/02/2022



          IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
                   R/FIRST APPEAL NO. 297 of 2022
                                With
             CIVIL APPLICATION (FOR STAY) NO. 1 of 2020
                                 In
                    R/FIRST APPEAL NO. 297 of 2022
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               REGIONAL DIRECTOR / RECOVERY OFFICER
                                Versus
                 NITINBHAI VALLABHBHAI PANCHASARA
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Appearance:
MR SHASHIKANT S GADE(1706) for the Appellant(s) No. 1,2
MR PANKAJ R DESAI(3120) for the Defendant(s) No. 1
MR. HEMAL SHAH(6960) for the Defendant(s) No. 1
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 CORAM:HONOURABLE MR. JUSTICE A.G.URAIZEE

                          Date : 03/02/2022
                           ORAL ORDER

1. In this appeal under Section 82 sub section 2 of the Employees State Insurance Act, 1948 (ESI Act for short) the appellants have assailed the judgment and order dated 04.07.2019 passed by Judge ESI Court, Rajkot in Application (ESI) No.9 of 2012 whereunder the application preferred by the respondent under Sections 75 and 78 of ESI Act came to be partly allowed.

2. I have heard Mr. Shashikant S. Gade, learned advocate for the appellant and Mr. Pankaj R. Desai, learned advocate for respondent No.1.

3. Mr. Gade, learned advocate for the appellants submits that many substantial question of law are involved in this appeal. According to his submission, the ESI Court has not properly appreciated the ESI Act. He further submits that the ESI Court failed to appreciate that the appellants are entitled to receive interest of ESI contribution under Section 39(5(a) and to receive damages of ESI contribution

C/FA/297/2022 ORDER DATED: 03/02/2022

under Section 85(B). Hence, two notice given to the respondent were legal and valid. He, therefore, submits that the present appeal in needs to be admitted for consideration of substantial question of law which are proposed in the memo of appeal.

4. On the other hand, Mr. Desai, learned advocate for the respondent submits that no substantial question of law is involved in the appeal. He submits that the labour Court has recorded finding that the appellants ought not to have been given 2nd notice during the pendency of earlier application preferred by the respondent to challenge the first notice. He, therefore, submits that the labour Court has not committed any error in recording findings that the ESIC cannot demand notice and penalty. It is his further submission that in view of the decision of the Supreme Court, the labour Court has held that ESIC cannot demand interest beyond two years. He, therefore, submits that the appeal may not be admitted. He has fairly made statement that the respondent shall not claim the excess of 20% amount which is deposited at the time of filing of an application as a condition for stay of the notice.

5. I have considered the rival submissions.

6. An appeal under Section 82 sub section 2 of ESI Act as maintainable in this Court only on substantial question of law. The labour Court has after threadbare consideration of the evidence and the legal position coupled with the decision of the Supreme Court in the case of State Insurance Corporation v. H.M.T. Ltd. and 11 others has recorded a finding that the ESIC cannot claim

C/FA/297/2022 ORDER DATED: 03/02/2022

interest in two years and during the pendency of an application preferred by the respondent to challenge first notice, and therefore, the subsequent two notices for interest and damages could not have been given more particularly when the respondent was ready to pay the amount.

7. In my considered view the finding recorded by the labour Court ought not suffer for any legal infirmity and no substantial question of law is involved in this appeal. Hence, the appeal is devoid of merit and deserves to be dismissed at threshold.

8. As noted in the foregoing, the respondent has deposited 20% of the demand notice as a condition for grant of stay at the time of filing of the application. According to the labour Court, the liability of the respondent to pay interest is less then 20% and hence the appellants are directed to refund excess amount to the respondent. However, Mr. Desai, learned advocate for the respondent has fairly stated that the respondent shall not claim the said excess amount.

9. For the foregoing reasons, the appeal fails and is hereby dismissed. The excess amount from the 20% amount deposited by the respondent shall be retained by the appellants towards the costs.

(A.G.URAIZEE, J)

Manoj