The main legal point established in the judgment is the importance of exhausting the alternative statutory remedies provided under the Employees State Insurance Act, 1948 before seeking judicial intervention.

ORDER :

The present Writ Petition came to be filed under Article 226 of the Constitution of India seeking the following relief:-

“to issue a writ, order or direction more particularly one in the nature of a writ of mandamus declaring the Notice of Demand vide Ref.No.2000090790000705/CP/ 285773 dt. 23-11-2018 issued by the 3rd respondent by directing the petitioner to pay the ESI contribution from the month of July 2013 to August 2014 along with interest though the establishment was closed down from the month of June 2013 as highly illegal, arbitrary and contrary to law and consequently set aside the notice dt. 23-11-2018 and pass such other order or orders ….”.

2. The case of the petitioner as averred in the affidavit is that petitioner is running business of Hero Honda Vehicle Sales under the name of ‘Annapurna Auto Agencies’. Petitioner is conducting the business duly complying with all the statutory requirements under various statutes including payment of VAT and other taxes. The further case of the petitioner is that it has also complied with the statutory requirements as per the provisions of the Employees State Insurance Act, 1948 with the Employer Code as 62000090790000705 and paid the monthly contribution every month by filing returns through online and ESI contribution was paid up to June 2013. Thereafter i.e. from the month of July, 2013 ESI contribution was not paid as the establishment was closed and the information about closure of the establishment was submitted to the respondent authorities through online. While things stood thus, respondent No.3 issued notice vide Ref.No. 62000090790000705/CP/285773 dated 23.11.2018 demanding the petitioner to pay an amount of Rs.2,16,739/- towards ESI contribution from July, 2013 to August, 2014 with interest up to 23.10.2018 stating that certificate No.6200009079000/000001, dated 24.10.2018 was forwarded by the authorized officer, E.S.I. Corporation, Regional Office, for recovery of an amount of Rs.2,16,739/- and directed the petitioner to pay the said sum within fifteen days, failing which recovery shall be made in accordance with the provisions of the Employees State Insurance Act, 1948 (for short ‘E.S.I. Act’). Challenging the demand notice the present writ petition is filed.

3. Respondent Nos.2 and 3 filed counter and inter alia contended that petitioner’s establishment is covered under Section 2(12) of the ESI Act w.e.f. 01.09.2022 as there are more than ten coverable employees with the petitioner. ESI Corporation issued Form C-11 dated 05.11.2022 to the petitioner informing about coverage of petitioner’s factory and allotted the unique code No.62000090790000705. Petitioner paid contributions for the period from October, 2012 to June, 2013 and August, 2014 to July, 2019. Petitioner did not pay contributions from July, 2013 to July, 2014. Therefore, as per Section 40 read with Section 39 of the ESI Act and the Regulations 29, 31 and 33 of the ESI (General) Regulations, 1950, show cause notice, dated 03.11.2014 for Rs.1,50,150/- was issued duly affording opportunity of personal hearing on 20.11.2014. On receipt of the above said notice, authorized representative of the petitioner attended for personal hearing and failed to produce relevant records for the disputed period. Except stating that the unit has been closed no evidence was produced. Inspite of sufficient opportunity given to the petitioner, no evidence is produced in support of the allegation and hence, it was found that petitioner has to pay ESI contributions from July 2013 to July 2014. Therefore respondent Corporation passed order under Section 45-A of the ESI Act, directing the petitioner to pay an amount of Rs.1,38,796/- towards ESI contribution for the period from July, 2013 excluding an amount of Rs.11,354/- which was paid on 04.12.2015 for the month of August, 2014. The operative portion of the order reads thus:

“if the petitioner not satisfied with the order, he may prefer an appeal to the competent authority