Madras High Court
The Joint Director vs P.Krishnamoorthy on 11 December, 2021
C.M.A.(MD)No.97 of 2018
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 11.12.2021
CORAM :
THE HONOURABLE MRS.JUSTICE S.ANANTHI
C.M.A.(MD)No.97 of 2018
1.The Joint Director,
The Employees State Insurance Corporation,
Sub Regional Office, 4th Main Road,
K.K.Nagar,
Madurai – 625 020.
2.The Recovery Officer,
The Employees State Insurance Corporation,
Sub Regional Office, 4th Main Road,
K.K.Nagar,
Madurai – 625 020. ...Appellants/Respondents
Vs.
P.Krishnamoorthy ...Respondent/Petitioner
PRAYER: Civil Miscellaneous Appeal filed under Section 82(2) of ESI Act,
1948, to set aside the decree and Judgment made in E.S.I.O.P.No.14 of 2009,
dated 05.07.2017 passed by the ESI Court (Labour Court), Madurai and
allow the Civil Miscellaneous Appeal.
For Appellants :Mr.I.Pinayagash for A1
Mr.K.C.Ramalingam for A2
For Respondent :Mr.G.Arunachalam
1/8
https://www.mhc.tn.gov.in/judis
C.M.A.(MD)No.97 of 2018
JUDGMENT
This Civil Miscellaneous Appeal has been filed to set aside the decree
and Judgment made in E.S.I.O.P.No.14 of 2009, dated 05.07.2017 passed by
the ESI Court (Labour Court), Madurai.
2.The respondent herein, as petitioner, has filed a petition under
Section 75(1)(a)(g) of the ESI Act, to declare the order and impugned notice
of the 2nd respondent is null and void and to declare that the notice of the
Recovery Officer, ESI Corporation, Madurai in No.57-
RRC/5368/SRO/MDU/08, dated 24.12.2008, for arrest of the applicant for
Civil Provision is null and void and have to be set aside and for granting an
order of permanent stay restraining the respondents their man claiming
through them from collecting a sum of Rs.41,176/- with interest sought to be
collected in the wake of the order referred in C1(a) to supra and to launch
any criminal prosecution on the basis of the order refer in No.57-
RRC/5368/SRO/MDU/08, dated 24.12.2008 and for cost.
3.It is mentioned in the petition that the petitioner was one of the
partner of erstwhile M/s.Lakshmi Match Works, Sivakasi, a closed concern
and the 2nd respondent issued the impugned notice against him. M/s.Lakhsmi
https://www.mhc.tn.gov.in/judis
C.M.A.(MD)No.97 of 2018
Match Works was closed in the year 1980 itself which consisted of three
partners. After closure of the concern, the entire machineries and articles
were sold and the partnership was also dissolved. The one of the main
partner, the mother of the petitioner was also expired. After 1980, the
concern never received any correspondence from the respondent corporation
and informed that all the dues of the Government including the ESI
corporation were completely settled. While so, the petitioner received the
impugned notice without passing 45A order from the respondent corporation
stating that for the non payment of arrears of ESI contribution of Rs.41,176/-
due with future interest. After receipt of the notice, the petitioner sent a letter
dated 02.01.2009 to the respondent requested to furnish particulars regarding
the claim. The 2nd respondent informed that the said claims are relating to the
year 4/78, 9/86, 10/83 to 1/85 and 3/81 to 11/83 without any other
particulars. After closure of the concern nearly 30 years, the question of non-
payment of contribution will not arise. Without giving any opportunity to the
petitioner and without passing any order u/s.45A of ESI Act to arrive a sum
of Rs.41,176/- with interest is completely against the provisions of law and
the order is nullity and void and barred by limitations and therefore, the
respondent prayed to set aside the recovery proceedings.
https://www.mhc.tn.gov.in/judis
C.M.A.(MD)No.97 of 2018
4. On the side of the respondents, the petitioner unit was covered under
the ESI Act with effect from 1972. Some claims raised by the respondents
are found to be still pending. Hence a notice in Form C-18, dated 06.11.1987
was issued proposing to charge a contribution of Rs.8262/-. Neither the
petitioner nor his representative appeared for the personal hearing, hence 45A
order was issued on 16.03.1989. Then notice for recovery in Form No.ESI-
CP2, dated 28.05.1996 was issued for Rs.16,057/-. Another C-18 notice
issued on 27.05.1987 for an amount of Rs.9244.30 for the period from 3/81
to 11/83 based on that 45A order dated 29.10.87, and then 29.01.1987 were
issued. The petitioner failed to remit the contribution for the period from
6/83 to 1/85, the petitioner is liable to pay contribution, as claimed by the
respondents. Multiple remedies have been claimed by the employer by
challenging the 45A orders through the single petition which is also legally
not permissible. The petitioner unit was closed with effect from 4/1987 as
per records and not from 1980. The contributions have been determined after
proper notices and after giving opportunities of hearing by following the
principles of natural justice. Hence, the petition is liable to be dismissed with
cost.
5.On the basis of the available rival evidence on record, the court
below has allowed the petition and thereby set aside the impugned order of
https://www.mhc.tn.gov.in/judis
C.M.A.(MD)No.97 of 2018
demand made by the respondents. Against the order passed by the court
below, the present civil miscellaneous appeal has been preferred at the
instance of the respondents, as appellants.
6.Heard Mr.I.Pinayagash, learned counsel for the first appellant and
Mr.K.C.Ramalingam, learned counsel for the second appellant and
Mr.G.Arunachalam, learned counsel for the respondent and perused the
materials available on record.
7.The learned counsel for the appellants contended that the C-18
notices are issued to the appellants after a long delay is erroneous and
arbitrary. Under Section 77(a) of the ESI Act, there is no time limit
prescribed to claim the arrears of contribution. The leaned judge has failed to
consider the issue as per the provisions of the Act and allowed the petition.
Hence, he prayed for dismissing the petition.
8.The learned counsel appearing for the respondent/petitioner has
contended that court below after considering all the available evidence on
record, allowed the petition and therefore, the order passed by the court
below is perfectly correct and the same does not require any interference.
https://www.mhc.tn.gov.in/judis
C.M.A.(MD)No.97 of 2018
9. According to the appellants, under Section 77 (a) of the ESI Act,
there is no time limit prescribed to claim the arrears of contribution. But the
first appellant claim contribution from the respondent from 01.04.1978,
30.09.1986 and he sent C18 notice on 29.01.1987 and further he issued the
show cause notice on 24.12.2008. After thirty years, the first appellant issued
the show cause notice and has not stated the sufficient causes for the
inordinate delay in sending the C18 notice on 29.01.1987. Even though there
is no limitation for taking action against the establishment, there should be a
reasonable time for recovering the amount.
10.As per judgment of Hon'ble Supreme Court of India in E.S.I.C. Vs.
C.C.Santha Kumar, reported in (2007 LAB I.C 597) wherein, in paragraph
Nos.34 and 35 held as follows:
34.A ''reasonable period'' would depend upon the
factual circumstances of the case concerned.
There cannot be any empirical formula to
determine that question. The Court/authority
considering the question whether the period is
reasonable or not has to take into account the
surrounding circumstances and relevant factors to
decide that question.
35.In State of Gujarat v. Patel Raghav Natha (1969
(2) SCC 187) it was observed that when even no
period of limitation was prescribed, the power is to
be exercised within a reasonable time and the limit
of the reasonable time must be determined by the
https://www.mhc.tn.gov.in/judis
C.M.A.(MD)No.97 of 2018
facts of the case and the nature of the order which
was sought to be varied......''.
11.It is seen from the records that already in the year 1987, the
respondent/Ms.Lakshmi Match Works was closed. Even though Act is
beneficiary for the works under the ESI Corporation enhanced to spend
beneficiary of the workers of the closed establishment, the ESI Corporation
has to take steps in reasonable time. Without any reasons for the delay, they
issued show cause notice on 24.12.2008, after an inordinate delay. Hence,
the court below, after considering all the contentions raised on either side,
has rightly passed its order. As per Supreme Court judgment, the delay is
huge, this Court finds no valid reason to interfere with the award passed by
the Court below.
12.In fine, this civil miscellaneous appeal is dismissed. The impugned
order passed in E.S.I.O.P.No.14 of 2009 by the ESI Court (Labour Court),
Madurai, is hereby confirmed. No costs.
11.12.2021
Index :Yes/No
Internet:Yes/No
vsd
https://www.mhc.tn.gov.in/judis
C.M.A.(MD)No.97 of 2018
S.ANANTHI, J.
vsd
Note:In view of the present lock down owing to COVID-19 pandemic, a web
copy of the order may be utilized for official purposes, but, ensuring that the
copy of the order that is presented is the correct copy, shall be the
responsibility of the Advocate/litigant concerned.
To
The ESI Court (Labour Court),
Madurai.
C.M.A.(MD)No.97 of 2018
11.12.2021
https://www.mhc.tn.gov.in/judis
