The State Government cannot grant retrospective exemption for more than one year under Sec. 87 and 91-A of the ESI Act.

AJOY NATH RAY, J.

( 1 ) AT the time of hearing of the application for extension of the interim order, which was granted from time to time only for limited periods, the writ application itself appeared to be ready for hearing and was taken up by consent of parties. It appears that ESI Contribution has not been paid by the writ petitioner company for an inordinately long period of 12 years from 1983 to 1995. The ESI Authorities also did not initiate any assessment recovery proceedings for the said large length of time.

( 2 ) IT is only for the first time in or about the month of March, 1999 that notices were issued by the ESI Authorities pointing out to the writ petitioner company the defaults in the making of contribution and the defaults in the making of return. Although Mr. Sengupta appearing for the Union of Workers once submitted that the aggregate of these notices is around Rupees 62 lakhs, yet the exact computation was not given to Court by the parties.

( 3 ) IMMEDIATELY on receipt of the notices, one T. Banerjee, General Manager of the first writ petitioner wrote to the ESI a one page letter. In that letter it was stated that because of frequent disruption in electricity there was dislocation of work and as such the Assistant Regional Director of the ESI could not be met or given any explanation. It was further stated in the letter that the writ petitioner has made an application before "your Goodselves" meaning the ESI itself, for exemption from operation of the ESI Act, 1948. This part of the letter is hopelessly misinformed because the exemption granting authority is the State of West Bengal and not ESI.

( 4 ) IT might as well be stated here once for all that if the State Government refuses to grant exemption to the writ petitioner No. 1, it will be liable for 12 years' ESI contribution and the sum is likely to be very large.

( 5 ) THE writ petitioner, however, made an application to the State Government for exemption under the hand of the Managing Director R. C. Banerjee by a letter dated August 4, 1999. The application was not made in the standard proforma. There were two annexures apparently to the letter of application: i) an express bipartite agreement between the company and the employees association and ii) statement of financial liability incurred annually for providing benefits to employees.

( 6 ) THE case before the Writ Court made on behalf of the writ petitioner was that the company extends all insurance benefits to its employees by way of a bipartite agreement; such benefit is accepted by the employer and the employees as more beneficial to the employees than to that an ESI contribution and coverage might produce.

( 7 ) THE Union appearing through Mr. Sengupta has supported the case of Mr. Pai's client in the writ Court. Since the employer and the employees are satisfied on both sides, the question of making ESI contribution should not prove to be an additional and useless burden to the employer - so ran the submission.

( 8 ) IN answer to the letter requesting for exemption the State Government wrote back a cryptic six line letter enclosing a proforma "a" in which the application for exemption is to be made. State Government's letter is dated August 27, 1999. The proforma was filled up and submitted to the State Government by the writ petitioner on or about October 4, 1999. The grounds for exemption from the ESI Scheme would be found against item 15 given at pages 29 and 30 of the affidavit-in-reply. The State Government has not yet given a decision in the matter of grant of exemption.

( 9 ) MR. Pai appearing for the writ petitioner submitted that all that his clients want for the present is a direction upon the State Government to dispose of the exemption application and for stay of recovery proceedings until such disposal.

( 10 ) MR. Sengupta has supported Mr. Pai's case throughout, submitting that if ESI contributions are now to be made by the employer, the employer will pass the burden over t

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