M/S. Satyasai Engineering ... vs Bm
2023 Latest Caselaw 7212 Ori

       IN THE HIGH COURT OF ORISSA AT CUTTACK
                         W.P.(C) No.28035 of 2022
                          (Through Hybrid mode)

     M/s. Satyasai Engineering College,           ....                      Petitioner
     Balasore

                                       -versus-

     BM, SBI, Mayurbhanj and others               ....              Opposite Parties


     Advocates appeared in this case:

     For petitioner              : Mr. S. Mishra, Advocate


     For opposite parties        : Ms. M. Tripathy, Advocate



              CORAM: JUSTICE ARINDAM SINHA
                                    ORDER

04.07.2023

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Date of hearing and judgment : 04.07.2023

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1. Mr. Mishra, learned advocate appears on behalf of petitioner.

He submits, in respect of demand of determined contribution, garnishee

order dated 26th May, 2022 was issued under section 45-G of

Employees' State Insurance Act, 1948, to his client's banker. At that

time the bank held three fixed deposits of his client, due to mature in

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future, on 8th June, 2023. The bank, purportedly in compliance with the

garnishee order, caused premature encashment of the deposits and paid

out aggregate Rs.50,19,934 to the Corporation. There was no reference

to his client being depositor. The premature encashment could not have

been done without authorization from his client. The deposits, not

matured for withdrawal as on 26th May, 2022, could not be said they

were money due from the bank to his client, to be paid pursuant to the

garnishee order, for the bank obtaining discharge. He submits further,

section 45-G does not mention fixed deposits to be prematurely

encashed and paid out to the recovery officer. The bank having acted in

the manner it did, prevented his client from challenging the garnish

order and hence prayer for repatriation of the amount along with

compensation.

2. Ms. Tripathy, learned advocate appears on behalf of the

bank. She draws attention to the garnishee order, from where relied

upon recitals are extracted and reproduced below.

"WHEREAS, I, Shri S. Pradhan (Recovery Officer), who is also the officer, authorized to section 45G of the ESI Act, 1948 as amended hereby, requires account with State Bank of India Gaddeulia Branch, Dist- Mayurbhanj-757482 to transfer forthwith an amount of Rs.50,17, 934 (Rupees Fifty Lakh Seventeen Thousand Nine Hundred Thirty Four)

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only which includes for interest upto 25.05.2022 on the contribution due thereon from and out of any account held by the defaulter / defaulting unit including Fixed/Termed deposit or any A/C by which ever name the same designated by the Bank by an a/c payee Demand Draft drawn in favour of Recovery Officer Corporation, Bhubaneswar, Separate orders with regard to interest till the date of payment any further cost, charges and expenses incurred in the recovery proceedings for realizing the arrear liable to be recovered under the ESI Act, 1948 read with Rule 5 of the Second Schedule of the Income Tax Act, 1961 shall be issued on the receipt of Demand Draft from the Bank.

xxx xxx xxx WHEREAS, attention of the Branch Manager is invited to Section 45G (3) (ix) & (x) of the ESI Act, 1948 as amended, according to which, the Bank and also the Manager are liable to be deemed as Principal Employer in default and the amount due from the defaulter / defaulting unit is liable to be recovered from the deemed defaulter and further, non-compliance with this requirement is likely to result in invocation of Section 45G(3)(ix)/(x) of the Act. "

(emphasis supplied) She lays emphasis on the first recital having mentioned as included,

fixed/term deposit as also the caution stated in the second quoted

recital, on the bank deemed to be the principal employer in default. She

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submits, upon being served with the garnishee order, her client acted in

accordance with law. She also relies on clauses (iv), (ix) and (x) under

sub-section (3) in section 45-G.

3. It is true that sub-section (2) in section 45-G does not

mention fixed deposit. It is not an amount exempt from attachment in

execution of decree of a civil Court under section 60 of the Code of

Civil Procedure, 1908. However, clause (iv) under sub-section 45-G (3)

provides that in complying with a garnishee order, it shall not be

necessary for, inter alia, any deposit receipt to be produced to the

person served (in this case the bank) for purpose of any entry,

endorsement or like being made before payment is made,

notwithstanding, any rule, practice or requirement to the contrary. This

mandate obviated the necessity of the bank from obtaining instructions

to encash prematurely the fixed deposits, for payment in compliance of

the garnishee order. Hence, there was no reference to petitioner in the

compliance made by the bank.

4. For reasons aforesaid, no interference is warranted

5. The writ petition is dismissed.

Signature Not Verified Digitally Signed Signed by: PRASANT KUMAR SAHOO (Arindam Sinha) Reason: AUTH Location: OHC Judge Date:Prasant 04-Jul-2023 18:38:14