An order under Section 45A of the ESI Act must consider all relevant evidence; if an authority passes an order without reviewing specific documentary proof regarding the non-engagement of labour, the court may set it aside and direct a fresh hearing to ensure procedural fairness.

ORDER :

K SREENIVASA REDDY, J.

This Writ Petition was filed seeking the following relief:

“…to issue an appropriate Writ, Order or direction more particularly one in the nature of Writ of Mandamus, declaring the action of 2^nd respondent in issuing the Proceedings vide No.AP/Ins.II/52000282330001001, dated 05.05.2016 of 2^nd respondent and also consequential Order vide No.AP/INS-II/52-00- 028233-000-1001/493, dated 15.07.2015 proceedings of 2^nd respondent, as illegal, unconstitutional, colourable exercise of power and contrary to the provisions of the Employees State Insurance Act, 1948 and the rules and regulations framed thereunder and also contrary to the Proceedings of No.E5/122(7)/2012-RM (NLR), dated 13.03.2012 and set-aside the same and pass such other order or orders …”

2. Contents of the affidavit filed by the Writ Petitioner, in brief, are that 2^nd respondent awarded a Tender vide Proceedings No.E5/122(7)/2012-RM (NLR), dated 13.03.2012 specifying her contract only for Two (02) years, and it was further mentioned that it can be extended for One (01) more year; that the said contract specified the number of workers as Four (04) Sweepers and One (01) Attender and also specified the amount at Rs.28,901/- per month. The said proceeding confirms the total employees limited to Five (05) only.

(b) The intention of Legislature is clear that 1^st respondent can invoke its powers to cover any Unit as stipulated under Section 1 (5) of the Employees’ State Insurance Act, 1948 (for brevity ‘the ESI Act, 1948’). The individual, who covered the Writ Petitioner, is none other than an Inspector, under Section 45 of the ESI Act, 1948, without any verification of the documents. The Writ Petitioner was covered on adhoc basis by issuing C-18 Notice, but not by verifying the records, which is an admission on the part of 1^st and 2^nd respondents.

(c) If the respondent Nos.1 and 2 intend to extend the purview and scope under Section 1 (5) of the ESI Act, 1948, the scheme has been extended to Shops, Hotels, Restaurants, Cinemas including Preview Theatres, Road Motor Transport Undertakings and Newspaper Establishments, and it should be 20 employees without the aid of power, and 10 or more employees with the aid of power. That distinction was made by the ESI Act, 1948 under Section 2 (12) of the ESI Act, 1948. But, 3^rd respondent, being a State or the instrumentality of the State, confirmed in the agreement vide Proceedings No.E5/122(7)/2012- RM (NLR), dated 13.03.2012 that only five (05) persons were deployed to the sanitation work of seeping, cleaning of garage yard and DMs Office at Nellore-II Depot, thus, 2^nd respondent high-handedly invoked the provisions of law without consulting the Writ Petitioner nor getting any explanation from her.

(d) After receiving Adhoc Notice under C-18, the Writ Petitioner issued a legal notice. Respondent No.2 further went on and issuing C-19 Notice without verification of records from 3^rd respondent, and further issued Section 45A of the ESI Act, 1948 Order dated 15.07.2015 directing to pay half of the amount and finally, issued a proceeding threatening the Writ Petitioner to invoke the provisions of law as contemplated under Section 45-C to 45-Ia of the ESI Act, 1948, which is nothing but, sort of excessive exercise of power by 2^nd respondent, and such action is contrary to 1^st respondent and its coverage procedure under the ESI Act, 1948.

(e) Respondent No.1 widely published in its webpage making applicable to non-seasonal factories employing 10 or more persons, under Section 2 (12) of the ESI Act, 1948. If that is so, even according to 1^st respondent, contrary to their stand, they applied the scheme against the Writ Petitioner. The contract of the Writ Petitioner is only for Two (02) years and expired along with the time prescribed in the said proceedings of 3^rd respondent. The mandatory obligation on the part of Writ Petitioner is that, she shall not engage more than Five (05) persons as stipulated under the Agreeme