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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
MADHAV J. JAMDAR, J.
SBI General Insurance Company Limited - Petitioner
Versus
Employees’ State Insurance Corporation & Anr. - Respondents
Writ Petition No. 3796 of 2024
Decided On : 18-09-2024
Natural Justice - Writ Petition - Employee State Insurance Act - Sections 45A, 45AA, 75, 77 - The court emphasized the necessity of adhering to natural justice principles, particularly the right to be heard and access to relevant documents before a quasi-judicial decision is made.
Fact of the Case:
The petitioner challenged an order under Section 45A of the ESI Act, claiming it was issued without following natural justice principles, as they were not provided copies of interim reports relied upon in the decision.
Finding of the Court:
The court found that the impugned order violated natural justice by not supplying the petitioner with interim reports and not allowing them to respond before the order was made, thus rendering the order invalid.
Issues: Whether the impugned order was valid given the alleged violation of natural justice principles and the right to a fair hearing.
Ratio Decidendi: The court held that a quasi-judicial authority must disclose all material relied upon in its decision-making process, and failure to do so constitutes a violation of natural justice.
Result: The impugned order was quashed and remitted for fresh disposal with directions to adhere to natural justice principles.
JUDGMENT :
Madhav J. Jamdar, J.
1. Heard Mr. Sudhir Talsania, learned Senior Counsel appearing for the Petitioner and Mr. Pathak, learned Counsel appearing for the Respondents.
2. At the outset, Mr. Sudhir Talsania, learned Senior Counsel appearing for the Petitioner seeks leave to amend the cause title. Leave to amend the cause title is granted. Amendment be carried out forthwith. Re-verification is dispensed with.
3. By the present Writ Petition filed under Article 226 of the Constitution of India, the challenge is to the legality and validity of the order dated 29th December 2023/1st January 2024 passed by the Assistant Director, Authorized Officer, Employees’ State Insurance Corporation passed under Section 45A of the Employee State Insurance Act, 1948 (“ESI Act”).
4. Mr. Sudhir Talsania, learned Senior Counsel appearing for the Petitioner raised the following submissions :
(b) The impugned order has been passed without following the principles of natural justice. Learned Senior Counsel points out paragraph No.6 and 10 of the impugned order where reference is made to the interim reports dated 2nd June 2021 and 30th November 2021 submitted by the Social Security Officer and contends that on the basis of these reports, inter alia the impugned order has been passed. He submitted that the Petitioner came to know about the said interim reports dated 2nd June 2021 and 30th November 2021 when the impugned order has been served on the Petitioner.
(c) Before passing of the impugned order, the Assistant Director who passed the order under Section 45A of the ESI Act has not supplied copies of the said interim reports to the Petitioner and Petitioner’s say has not been called on the said interim reports.
(d) In any case, as the copies of the said interim reports have not been supplied to the Petitioner and the same have been inter alia taken into consideration while passing the impugned order therefore, there is violation of the principles of natural justice.
(e) Although the contention is raised in the affidavit-in-reply filed on behalf of the Respondent that the Petitioner can avail remedy of Appeal under Section 45AA of the ESI Act or can approach the Employees Insurance Court under Sections 75 and 77 of the ESI Act, as the impugned order passed is in violation of the principles of natural justice, in view of the law laid down by the Supreme Court in Whirlpool Corporation vs. Registrar of Trade Marks, Mumbai & Ors., (1998) 8 SCC 1, the Writ Petition is maintainable.
He therefore submits that the impugned order be quashed and set aside and the matter be remitted to the Authority for deciding the same afresh, after giving the copies of the interim reports to the Petitioner and by giving adequate opportunity.
5. On the other hand, it is the contention of Mr. Shailesh Pathak, learned Counsel appearing for the Respondents that the said decision in Whirlpool Corporation (supra) will not apply to the present case. He relied on the decision of Supreme Court in the State of Maharashtra vs. Greatship (India) Limited, (2022) 105 GSTR 300 : (2022) SCC OnLine SC 1262. He pointed out paragraph Nos. 7 to 10 of the said decision. He submits that therefore, the Writ Petition be not entertained and the Petitioner be relegated to the statutory remedy under Sections 75 and 77 of the ESI Act.
6. Before considering the rival submissions, it is necessary to set out paragraph Nos.6 and 10 of the impugned order wherein reference is made to the interim reports dated 2nd June 2021 and 30th November 2021 submitted by the Social Security Officer, which read as under :
1. Requisite Bills and vouchers for marked entries in led
A quasi-judicial authority must disclose all relevant materials relied upon in its decision-making process to ensure compliance with natural justice.
Authority must not invoke Section 45A for best judgment assessment unless there is no submission of required documents; disputes should be resolved in ESI Court.
Disciplinary authority must supply enquiry report to employee before forming punishment opinion; failure breaches natural justice without needing prejudice proof; proceedings remanded for compliance.
Writ jurisdiction is discretionary and should not be exercised when an efficacious statutory remedy exists, especially for disputes involving complex factual determinations. Courts should defer to sp....
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