Madras High Court
Rajaguru Spinning Mills (P) ... vs Recovery Officer on 29 June, 2021
W.P.No.13290 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 29.06.2021
CORAM
THE HONOURABLE MR.JUSTICE S.VAIDYANATHAN
W.P.No.13290 of 2021
and WMP.No.14113 of 2021
Rajaguru Spinning Mills (P) Limited., (Unit III),
Rep.by its Director – B, Siva Kumar
S.F.No.411, Patharai,
Veppadai,
Pallipalayam,
Erode 638 008. ... Petitioner
-vs-
1. Recovery Officer
Office of the Recovery Officer,
Regional Office (SRO Salem)
Employees' State Insurance Corporation
ESI Corporation, 39/57
Three Roads, Salem 636 009.
2. Appellate Authority
Regional Office (SRO Salem)
Employees' State Insurance Corporation
39/57, Theerthamalai Vaniga Valagam,
Three Roads, Salem 636 009.
3. The Branch Manager,
Axis Bank,
Annamalai Complex, Sathy Main Road,
K.Kulam, Veerappan Chathiram,
Periasemur 638 004.
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W.P.No.13290 of 2021
4. The Branch Manager,
State Bank of India,
Commercial Branch,
78/79, CD Building
Park Road,
Erode – 638 003. ... Respondents
Writ Petition filed under Article 226 of Constitution of India praying for
the issuance of a Writ of Mandamus, directing the first respondent, 3rd and 4th
respondents to revoke the attachment of Petitioner's bank accounts till such
time the petitioner files petition under Section 75 of the ESI Act before the
Employees State Insurance Court, Salem challenging the order of the second
respondent dated 08.02.2021.
For Petitioner : Mr.S.Ravindran
Senior Counsel for
Mr.M.Arumugham
For Respondents : Mr.C.V.Ramachandramurthy
for R1& R2
ORDER
This writ petition has been filed, seeking a direction to the 1st
respondent, 3rd and 4th respondents to revoke the attachment of Petitioner's
bank accounts till such time the petitioner files petition under Section 75 of
the ESI Act before the Employees State Insurance Court, Salem challenging
the order of the second respondent dated 08.02.2021.
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W.P.No.13290 of 2021
2. Learned Senior Counsel appearing for the petitioner / Management
submitted that the Management has got sufficient time to approach the ESI
Court and the time limit prescribed therein is three years and therefore, no
coercive action shall be taken, as has been done in the present case on hand.
He further submitted that an Appeal under Section 45AA has been preferred
and the same has been rejected in February 2021 itself. When the time limit
for approaching the ESI Court is available, no coercive action shall be taken
in the light of the judgment in the case of Pyramid Siamira Threatre Ltd.,
Vs Regional Provident Fund Commissioner, Chennai and another reported
in (2009) 4 LLJ 893.
3. Mr.C.V.Ramachandramurthy, learned counsel appearing for the
respondents 1 & 2 submitted that the Management has deposited 25% of the
amount, while preferring an intra departmental appeal under Section 45AA
of the ESI Act, 1948 and that final order has been passed in February 2021.
Since the Management has approached this Court after initiation of action
against them, the writ petition itself not maintainable, as the Management,
without exhausting the remedy under Section 75 of the ESI Act, has
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W.P.No.13290 of 2021
approached this Court.
4. Heard both sides and perused the materials available on record.
5. It is not in dispute that the Bank attachment has been made pursuant
to the order dated 08.02.2021 passed under Section 45AA of the ESI Act,
1948 and that the Management had already deposited 25% of the amount
determined under Section 45A of the ESI Act 1948. The main contention of
the Management is that when they have got time to approach the Authority /
ESI Court, the action of the respondents is perverse in law. If the said
contention of the Management is accepted, it would amount that the ESI
Corporation shall have to be keep quiet for a period of three years and watch
the violator as to whether any appeal under Section 75 has been filed and
three years limitation is over or not. Therefore, the aforesaid contention is
summarily rejected. This Court, in the given circumstances of that case in
Pyramid Saimira Theatre Ltd., Vs Regional Provident Fund
Commissioner, Chennai and another (supra) held that the time limit
prescribed is only 120 days and hence, the EPFO will have to wait for a
period of 120 days before taking any coercive action. The same yardstick
cannot be applied in every case without looking into its reality or
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W.P.No.13290 of 2021
background of the case.
6. Even though the period of limitation prescribed is three years, it is
to be noted that some of the employers may take recourse to law with
immediate effect or some of them may disappear from the scene and in that
event, it is very difficult for the ESI Corporation to keep a watch over them
and ascertain whether any appeal has been preferred within three years or
not. The ESI Corporation is bound to take coercive action, which would
make the employer to file an appeal under Section 75 of the ESI Act. This
Court has already held that the Legislatures must think of reducing the period
of time limit prescribed under the ESI Act to prefer an appeal and reduce the
period from three years to one year, as the Court has no power either to
legislate or to make any amendment to the Act. After one year and within
three years, the ESI Court can entertain the dispute under Section 75
provided the entire amount is deposited and that beyond one year, the waiver
application cannot be entertained. On one such occasion, the Hon'ble Apex
Court in the case of Krishna District Co-operative Marketing Society
Limited vs. N.V.Purnachandra Rao, (1987) 4 SCC 99, had suggested for
amendment of the provisions of the Industrial Disputes Act and the relevant
paragraph is extracted hereunder:
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W.P.No.13290 of 2021
“11. We may incidentally observe that the Central Act itself
should be suitably amended making it possible to an individual workman
to seek redress in an appropriate forum regarding illegal termination of
service which may take the form of dismissal, discharge, retrenchment etc.
or modification of punishment imposed in a domestic enquiry. An
amendment of the Central Act introducing such provisions will make the
law simpler and also will reduce the delay in the adjudication of industrial
disputes. Many learned authors of books on industrial law have also been
urging for such an amendment. The State Act in the instant case has to
some extent met the above demand by enacting section 41 providing for a
machinery for settling disputes arising out of termination of service which
can be resorted to by an individual work- man. In this connection we have
one more suggestion to make. The nation remembers with gratitude the
services rendered by the former Labour Appellate Tribunal which was
manned by some of our eminent Judges by evolving great legal principles
in the field of labour law, in particular with regard to domestic enquiry,
bonus, gratuity, fair wages, industrial adjudication etc. The Industrial
Disputes (Appellate Tribunal) Act, 1950 which provided for an all-India
appellate body with powers to hear appeals against the orders and awards
of Industrial Tribunals and Labour Courts in India was repealed in haste. If
it had continued by now the labour jurisprudence would have developed
perhaps on much more satisfactory lines than what it is today. There is a
great need today to revive and to bring into existence an all- India Labour
Appellate Tribunal with powers to hear appeals against the decisions of all
Labour Courts, Industrial Tribunals and even of authorities constituted
under several labour laws enacted by the States so that a body of uniform
and sound principles of Labour law may be evolved for the benefit of both
industry and labour throughout India. Such an appellate authority can
become a very efficient body on account of specialisation. There is a
demand for the revival of such an appellate body even from some workers'
organisations. This suggestion is worth considering. All this we are saying
because we sincerely feel that the Central Act passed forty years ago needs
a second look and requires a comprehensive amendment."
7. Of course, the aforesaid decision has been rendered, while
considering the case under Industrial Dispute Act 1947 and the principle
with regard to amendment to various Labour Law Enactments has to be seen
in this present day context. In the present case on hand, though the Writ
Petition is not maintainable and that remedy is available under Section 75 to
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W.P.No.13290 of 2021
circumvent an order under Section 75, the present writ petition has been filed
without moving the ESI Court.
8. Considering the facts and circumstances of the case and in the
interest of the beneficiaries of the employees and their families, the Writ
Petition is disposed of with the following directions, in order to give an
opportunity for early adjudication:
i) The Management / Employer is permitted to move the ESI Court on
deposit of further sum of 10% over and above 25% already deposited, and on
such deposit, the ESI Court, instead of deciding the waiver application, can
straight away decide ESI OP at the earliest point of time. Till an order is
passed by the ESI Court in the stay petition (after deposit of 10% of the
amount over and above 25%), there shall be an order of interim stay of the
operation of the impugned order. Once the application is filed before the
ESI Court, 35% of the amount stated supra can be taken into account, while
deciding the stay application therein.
ii) The Management shall deposit the aforesaid amount within a period
of two weeks from the date of receipt of a copy of this order and in the event
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W.P.No.13290 of 2021
of the Management not depositing the amount in time, the concerned
Respondents are at liberty to proceed further as per the impugned order;
iii) ESI Corporation shall lift the attachment order so as to enable the
Management / Employer to operate the Bank Account. The attachment order
shall be lifted forthwith in order to enable the employer to pay the salary and
to comply with the orders of this Court in this writ petition.
9. It is made clear that this Writ Petition has been entertained as a
special case, owing to the present pandemic situation and this cannot be
taken as a precedent for other employers to approach this Court with the
similar request as the remedy is only under Section 75 of the ESI Act and
thereafter under Section 82 if any adverse orders are passed. No costs.
Consequently, connected Miscellaneous Petition is closed.
29.06.2021
dpq (½)
Index: Yes/No
Speaking order / Non speaking order
Note: Issue order copy and upload before 12:30pm on 30.06.2021
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W.P.No.13290 of 2021
To:
1. Recovery Officer
Office of the Recovery Officer,
Regional Office (SRO Salem)
Employees' State Insurance Corporation
ESI Corporation, 39/57
Three Roads, Salem 636 009.
2. Appellate Authority
Regional Office (SRO Salem)
Employees' State Insurance Corporation
39/57, Theerthamalai Vaniga Valagam,
Three Roads, Salem 636 009.
3. The Branch Manager,
Axis Bank,
Annamalai Complex, Sathy Main Road,
K.Kulam, Veerappan Chathiram,
Periasemur 638 004.
4. The Branch Manager,
State Bank of India,
Commercial Branch,
78/79, CD Building
Park Road,
Erode – 638 003.
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W.P.No.13290 of 2021
S. VAIDYANATHAN, J.
dpq
W.P.No.13290 of 2021
and WMP.No.14113 of 2021
(½)
29.06.2021
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