Madras High Court

A 1382 Virudhunagar District ... vs The Assistant Regional Director on 4 October, 2024

                                                                     C.M.A.(MD) No.349 of 2022

                          BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT

                                            Reserved on          26.09.2024
                                            Pronounced on        04.10.2024


                                                     CORAM

                                  THE HON'BLE MR.JUSTICE SUNDER MOHAN

                                           C.M.A.(MD) No.349 of 2022
                                                      and
                                           C.M.P.(MD) No.3174 of 2022

                    A 1382 Virudhunagar District Consumer's
                    Cooperative Wholesale Stores Ltd.,
                    87, Main Bazar,
                    Aruppukottai Road,
                    Virudhunagar.                                            ... Appellant

                                                          Vs.

                    The Assistant Regional Director,
                    Employees' State Insurance Corporation,
                    2, West Street, K.K.Nagar,
                    Madurai - 625 020.                                       ... Respondent

                    Prayer:- Civil Miscellaneous Appeal filed under Section 82 of the
                    Employees' State Insurance Act, 1948 to set aside the order of the
                    Employees' State Insurance Court (Labour Court), Madurai in
                    E.S.I.O.P.No.56 of 2010 dated 02.09.2021.


                                   For Appellant    : Mr.V.O.S.Kalaiselvam

                                   For Respondent   : Mr.C.Karthik

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                    Page No. 1 of 9
                                                                             C.M.A.(MD) No.349 of 2022




                                                      JUDGMENT

The instant appeal has been filed challenging the order of the

Employees' State Insurance Court (Labour Court), Madurai, dated

02.09.2021, passed in E.S.I.O.P.No.56 of 2010, which confirmed the

order dated 30.08.2010 passed by the respondent claiming a contribution

amount of Rs.62,929/- for the period from April 1990 to March 1999.

2. The facts leading to the filing of this appeal are as follows:

(a) The appellant is covered under the Employees' State Insurance Act, 1948 [hereinafter referred to as the 'ESI Act'].

(b) The respondent issued a Show Cause Notice in Form C-18 dated 13.07.1999, calling upon the appellant to pay a sum of Rs.62,929/- as contribution for the period from April 1990 to March 1999.

(c) The respondent subsequently passed an order under Section 45A of the ESI Act on 17.04.2001.

(d) The appellant filed a Writ Petition in W.P.No.13385 of 2001 challenging the order of the respondent, mainly on the ground that the respondent had not provided sufficient opportunity to the appellant to respond to the notice.

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(e) This Court, by an order dated 10.06.2010, set aside the order passed by the respondent and directed the respondent to pass a fresh order under Section 45A of the ESI Act after giving sufficient opportunity to the appellant.

(f) Thereafter, the respondent passed an order under Section 45A of the ESI Act on 30.08.2010, calling upon the appellant to pay the contribution of Rs.62,929/-.

(g) The appellant challenged the said order before the Employees' State Insurance Court (Labour Court), Madurai, in E.S.I.O.P.No.56 of 2010. The ESI Court dismissed the petition.

(h) Aggrieved by the same, the appellant has filed the instant appeal.

3. The learned counsel for the appellant submitted that the order

dated 30.08.2010 passed by the respondent is barred by limitation, as it

was passed beyond the period of five years from the date on which the

contribution became payable; that the respondent had not provided

sufficient opportunity and had not furnished the Inspection Report, which

is mandatory; and that they are not liable to pay contributions since the

employees were not permanent employees but daily wage labourers, and

therefore cannot be treated as employees of the appellant. The learned

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counsel for the appellant relied upon the Judgment of the Hon'ble

Supreme Court in The Managing Director, Hassan Co-operative Milk

Producer's Society Union Limited Vs. The Assistant Regional

Director Employees State Insurance Corporation, reported in (2010)

11 SCC 537.

4. The learned counsel for the respondent, per contra, submitted that

a copy of the Inspection Report was served on the appellant, as could be

seen by the endorsement made in Ex.R6, the copy of the Inspection

Report; that the appellant had not produced any documents to substantiate

that the employees were daily wage workers and not permanently

employed by the appellant; that in any case, both the points raised by the

appellant were factual in nature and cannot be interfered with in the

absence of any substantial questions of law involved; that the point raised

by the appellant regarding the period of limitation cannot be

countenanced, since it was at the instance of the appellant that this Court,

in the Writ Petition, directed the respondent to pass a fresh order after

giving notice to the appellant and that the order of this Court in the Writ

Petition was passed on 10.06.2010, and within two months, the order was

passed by the respondent.

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5. This Court has given its anxious consideration to the rival

submissions.

6. This Court finds that Ex.R6, which is the copy of the Inspection

Report, contains an endorsement, which reveals that it was served on the

appellant. The ESI Court also rendered a finding that all the material

documents were served on the appellant. In any case, it is not a question

of law for this Court to interfere with the order in an appeal under Section

82 of the ESI Act. Likewise, the factual finding rendered by the ESI Court

that the respondent had established that the contribution demanded was in

respect of persons employed by the appellant, cannot be interfered with in

the instant appeal. The ESI Court held that the appellant had not produced

any documents to substantiate that the contribution demanded by the

respondent was in respect of the loaders who were not employed by the

appellant. In such circumstances, the judgment of the Hon'ble Supreme

Court in The Managing Director, Hassan Co-operative Milk

Producers' Society Union Limited case (supra), relied upon by the

learned counsel for the appellant, could not be of any avail to the

appellant.

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7. The only substantial question of law raised by the appellant in the

instant appeal is whether the order passed by the respondent under Section

45A of the ESI Act, which was impugned before the ESI Court in

E.S.I.O.P.No.56 of 2010, is barred by limitation.

8. The admitted facts are that the contribution claimed was for the

period from April 1990 to March 1999. The first order under Section 45A

of the ESI Act was passed as early as in 2001. The appellant chose to file

a Writ Petition in W.P.No.13385 of 2001 before this Court instead of the

appeal provided under the Act. This Court, by an order dated 10.06.2010,

passed the order dated 10.06.2010 with the following observations:

“5. Of course, it is true that the petitioner has got an effective alternative remedy of approaching the ESI Court under the provisions of the Act. But the fact remains that this Writ Petition was admitted in the year 2001. In my considered opinion, at this length of time, if the petition is dismissed giving liberty to the petitioner to avail the alternative remedy, it may not be in the interest of justice. Apart from that, as pointed out by the learned Senior Counsel for the Petitioner, before passing the impugned order, no notice was given to the petitioner and no opportunity was also provided to him to defend the case. Thus, there is gross violation of the principles of natural justice. It is settled law that when an order has been passed in gross violation of the principles of natural justice, the availability of alternative remedy cannot be a ground to non suit the

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case of the Writ Petitioner. After all, disinclination to entertain a writ petition on the ground of availability of alternative remedy is only a self-imposed restriction by the Courts of law. There is no legal bar to entertain the writ petition in exceptional circumstances, such as, violation of principles of natural justice. Therefore, I am inclined only to reject the contentions of the learned Counsel for the Respondents.”

9. Thereafter, an inquiry was conducted by the respondent, and the

order dated 30.08.2010, which was impugned in E.S.I.O.P.No.56 of 2010,

was passed. It is pertinent to point out that the second proviso to Section

45A of the ESI Act, which stipulates that the order under Section 45A of

the Act shall not be passed beyond the period of five years from the date

on which the contribution becomes payable, came into force on

01.06.2010. However, the order dated 30.08.2010 was passed only

pursuant to the directions given by this Court in W.P.No.13385 of 2001.

Therefore, the order dated 30.08.2010 cannot be said to be barred by

limitation. The ESI Court has rightly dismissed the E.S.I.O.P. filed by the

appellant challenging the order dated 30.08.2010 passed under Section

45A of the ESI Act. The substantial question of law is answered