IMPORTANT POINT
The main legal point established in the judgment is the joint and several liability of the transferee and the transferrer under Section 93A of the Employees State Insurance Act.

JUDGMENT :

Goutam Bhaduri, J.

Heard.

1. The present appeal is against the Order dated 23.07.2016 passed by the Employees Insurance Court-cum-Labour Court No. 2), Raipur (C.G.) wherein, the recovery for contribution of Rs. 3,91,081+ Rs. 4,94,679/- and Rs. 1,54,58,216/- totaling to Rs. 1,63,43,976/- for the period of 16.08.1995 to 31.07.2001 was asked for. According to the appellant, it acquired a unit of Rajesh Strips which was declared sick and was under Board of Industrial and Financial Reconstruction (BIFR).

2. The appellant contended that by an order dated 17.09.2001 of BIFR, the erstwhile Rajesh Strips was declared sick under Section 3 (1) of the Sick Industrial Companies (Special Provisions Act, 1985) and IDBI was appointed as a operative agency for revival. The appellant contended that they had taken one unit on rent and that unit was being run by the Abhishek Steel Industries. It is stated that the appellant company started on 01.09.2004 and sought for new code to make its contribution under the Employee State Insurance Act, 1948. According to the appellant, they were not provided with any fresh code number and consequently they continued to make their contribution under the old code which was given to Rajesh Strips. The appellant contended that the ESI Corporation without giving any relief to the appellant has entirely transferred the liability of Rajesh Strips to it, though the financial liability was not ascertained as that of a secured creditor by ESI. It is stated under these circumstances that the demand made by ESI Corporation was bad in law.

3. The respondent contended that as per the notification of the Union Government dated 08.08.2015, the provisions of E.S.I Act was made applicable in the Urla Industrial Area from 16.08.1995, wherein the unit on which liability is imposed situates and the State Government has not granted any exemption from any incurred liability under the Employees State Insurance Act, 1948 to any industries. According to the respondent on 15.10.2004, one of the unit of Rajesh Strips Limited was acquired by the appellant. According to the respondent No. 2, ESI, Corporation, the officers had inspected the Rajesh Strips, the Erstwhile Unit from 16.08.1995 to 21.07.2001 and subsequently from 10.09.2001 to 13.09.2001 and on the basis of such inspection, demand notice under C-18 were issued for Rs. 1,54,58,216/- and Rs. 4,94,679/- and thereafter the appellant was asked to submit their stand. For such hearing, date was fixed on 06.04.2005, but no one appeared on behalf of the appellant. Consequently, on 23.11.2005, the orders were passed as per Section 45 (A) of the Act of 1948 and the liability has been fastened on the appellant company.

4. The learned Employees Insurance Court, went into detail of the facts and held that in respect of the amount so demanded the liability of the present appellant company would be joint and several with that of the erstwhile company Rajesh Strips and dismissed the application. Being aggrieved by such order, the present appeal has been filed.

5. Learned counsel for the appellant would submit that the necessary statutory notice under Section 45A of the Employees’ State Insurance Act, 1948 and one of the notice which is Ex.P/5 was not issued to the present appellant company who subsequently acquired one of the unit. He would submit that without giving the notice, fastening of liability would be against the rules of natural justice. He would further submit that liability prior to transfer of the unit cannot be fastened as the erstwhile unit was declared sick as the recovery pertains to 16.08.1995 to 31.07.2001 whereas, the present appellant company acquired the unit in the year 2004. He would further submit that undoubtedly since the unit was under the Sick Industrial Companies (Special Provisions) Act, 1985 and IDBI was appointed as an operating agency, without the stand of IDBI and unilaterally the recovery cannot be made. He further submits that the recovery was prior to