Madras High Court
Mani India Technologies (P) Ltd vs E.S.I.Corporation on 20 April, 2023
C.M.A(MD)No.776 of 2019
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 20.04.2023
CORAM
THE HON'BLE MR.JUSTICE R.VIJAYAKUMAR
C.M.A(MD)No.776 of 2019
Mani India Technologies (P) Ltd.,
6/1209-B, Balathilagam Towers,
3rd Street, 4th Cross Indira Nagar,
Kovilpatti,
Represented by its Director,
P.Pyanchella Vadivoo ... Appellant/Petitioner
Vs.
1.E.S.I.Corporation,
Sub Regional Office (Tirunelveli),
Salai Street, Vannarpettai – 627 003,
Represented by its Joint Director.
2.Recovery Officer,
E.S.I.Corporation,
Sub Regional Office (Tiruneveli),
Salai Street, Vannarpettai,
Tirunelveli. ... Respondents/Respondents
PRAYER: Civil Miscellaneous Appeal is filed under Section 82 (2) of
the Employee's State Insurance Act, to set aside the order, dated
20.05.2019 in I.A.No.05 of 2018 in unregistered E.S.I.O.P on the file of
the Labour Court, Tirunelveli.
For Appellant : Mr.M.Jerin Mathew
https://www.mhc.tn.gov.in/judis For Respondents : Mr.R.Ravindran
1/7
C.M.A(MD)No.776 of 2019
JUDGEMENT
The present appeal has been filed challenging an order passed by
the E.S.I Court refusing to waive 50% of the damages, which has to be
paid as a pre-condition for numbering the E.S.I petition.
2. According to the learned counsel appearing for the appellant,
they are running a software company and an inspection was conducted
on 08.05.2008. Originally, the authorities were of the view that the
establishment would be covered from 01.02.2007. But later, after
enquiry, they arrived at a finding that the establishment is covered from
02.08.2004 and arrived at a finding that the establishment has to pay a
contribution of Rs.35,00,000/-. The said Rs.35,00,000/- was paid in
installments by the employer.
3. The learned counsel appearing for the appellant had further
contended that they received a notice on 16.06.2017 from the E.S.I
corporation why damages should not be levied for delay payment for the
period between April 2004 – July 2008, April 2009 – December 2009
and June 2010 – March 2012. The employer had appeared for personal
hearing on 13.07.2014 and requested to waive off the damages. The said
https://www.mhc.tn.gov.in/judis
request of the employer was rejected and an order under Section 85-B of
C.M.A(MD)No.776 of 2019
Employee's State Insurance Act (hereinafter referred as E.S.I Act) was
passed directing the employer to pay a sum of Rs.15,02,320/- towards
damages. The said order was challenged by the employer by filing a
petition under Section 75 (1) (g) of the E.S.I Act before E.S.I Court,
Tirunelveli. In view of Section 75 (2)-B of E.S.I Act, the petition cannot
be numbered, unless 50% of the demand amount is deposited. However,
as per the proviso to the above said sub Section, the Court has got
powers to waive or reduce the said amount, if sufficient reasons are made
out. Therefore, the employer had filed I.A.No.5 of 2018 to completely
waive the pre-deposit. In the said application, the employer had
contended that they were receiving job work from U.S.A and since the
said job work had got gradually reduced, they have to reduce the
employee strength also. Considering the said mitigating circumstances
and due to the financial crisis of the employer, they had requested the
Court to waive the pre-deposit fully.
4. The respondent Corporation had filed a counter contending that
the reasons assigned in the petition are fake in nature and on the said
reasons, the statutory pre-deposit cannot be waived fully. The Court after
considering the submissions on either side, permitted the employer to
deposit 25% of the amount due. The said order is under challenge in the
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present appeal.
C.M.A(MD)No.776 of 2019
5. According to the learned counsel appearing for the appellant, as
per the proviso to Section 75 (2)-B E.S.I Act, the E.S.I Court has got
powers to waive the pre-deposit in entirety. In the present case,
considering the fact that the employer was doing job work for various
foreign companies and there was reduction of the business, the E.S.I
Court ought to have exercised its discretionary power and should have
waived the pre-deposit in entirety.
6. Per contra, the learned counsel appearing for the respondents
corporation had contended that considering the financial crises expressed
by the employer, the E.S.I Court has graciously reduced the pre-deposit
from 50% to 25%. This 25% of the amount would be around
Rs.3,00,000/-. The employer is a software company and receiving job
work from abroad and hence they cannot be considered to be in such a
financial crisis that they could not pay a sum of Rs.3,00,000/-. He further
contended that uniformly such a policy is followed by the E.S.I Court
and exemption cannot be granted to the employer for completely waiving
of the pre-deposit.
https://www.mhc.tn.gov.in/judis
C.M.A(MD)No.776 of 2019
7. I have carefully considered the submissions made on either side
and perused the records.
8. The employer had filed an application under Section 75 (2)-B of
E.S.I Act to completely waive off the 50% pre-deposit as contemplated
in the said Section. The E.S.I Court after considering the reasons
assigned by the employer, had reduced the pre-deposit from 50% to 25%
which would be around Rs.3,00,000/-. However, the present appeal has
been filed by the employer seeking to completely waive off the pre-
deposit on the ground that the company is under the financial crisis. It
could be seen from the records that the company is a software company
and still it is a running concern.
9. Considering the above said facts, this Court is of the view that
no further concession could be granted in favour of the
appellant/employer. As rightly pointed out by the learned counsel
appearing for the respondents, when a uniform policy is being followed
by the E.S.I Court in reducing the pre-deposit from 50% to 25%, unless
extraordinary circumstances are made out by the employer, the Court will
not be in a position to completely waive off the pre-deposit. Therefore,
this Court does not find any illegality or infirmity in the order passed by
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the E.S.I Court.
C.M.A(MD)No.776 of 2019
10. Hence, this Civil Miscellaneous Appeal stands dismissed. No
costs.
20.04.2023
NCC : Yes / No
Index : Yes / No
Internet : Yes / No
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To
1.The Labour Court,
Tirunelveli.
2.The Section Officer,
Vernacular Section,
Madurai Bench of Madras High Court,
Madurai.
https://www.mhc.tn.gov.in/judis
C.M.A(MD)No.776 of 2019
R.VIJAYAKUMAR ,J.
gbg
Judgment made in
C.M.A(MD)No.776 of 2019
20.04.2023
https://www.mhc.tn.gov.in/judis
