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2019 Supreme(Jhk) 1547

IN THE HIGH COURT OF JHARKHAND AT RANCHI
Mr. Sujit Narayan Prasad, J.
M/s. Bihar Foundry & Castings Limited - Appellant
Versus
Employees State Insurance Corporation - Respondent
W.P.(C) No. 593 of 2019
Decided On : 28-02-2019

Advocates Appeared:
Mr. Nipun Bakshi, Advocate, for the Appellant; Mr. Ashutosh Anand, Advocate, Mrs. Nehala Sharmin, Advocate, Mr. Rohan Kashyap, Advocate, for the Respondent

Headnote:

Employees State Insurance Act,1948 - Section 45 G(3)(x) - Constitution of India 1950 - Article 226 - Debt recovery - Jurisdiction conferred - Counsel appearing for respondent-E-S-I-C- has submitted that a proceeding under Section 45A of Act 1948 vide order has been initiated against one who happens to be labor supplier in petitioner establishment wherein final order was passed against which he has preferred a writ petition being W-P-(C) which was dismissed on ground of not providing an opportunity to prefer an appeal - It is not in dispute that Contractor is not supplying labor to petitioner establishment and as such being principal employer he has got liability to make payment under said provision and taking into consideration position of law as stipulated - Held It is evident from material available on record that notice has been issued and served upon petitioner on therefore object of provision of Section 45G(3)(vi) has not been served since it cannot be done in such a short time and without waiting for same final order has been passed under Section 45G(3)(x) of Act 1948 therefore vital right of petitioner to make objection as per provision of Section 45G(3)(vi) has been taken away - This Court keeping fact into consideration amount as has been stipulated under Section 45G(3)(x) as referred in order has been realized but thinks it proper to quash order and accordingly quash it with direction to petitioner to appear before Recovery officer within a period of two weeks from date of receipt of copy of order - Recovery officer after receipt of order passed by this Court shall fix a date and communicate same to petitioner from date fixed- petitioner shall appear along with relevant records upon which fresh order shall be passed by said authority within a period of two weeks - writ petition stands disposed of

Judgement Key Points

Key Points: - The writ petition challenges the order under Section 45G(3)(x) on the ground of inadequate opportunity to defend; the notice timing and receipt are contested (!) (!) - The court found that notices under Section 45G(3)(vi) were not given adequate time to object before finalizing the order under Section 45G(3)(x) and quashed the order dated 30.01.2019 for fresh proceedings (!) (!) (!) - It directed the petitioner to appear before the Recovery Officer within two weeks of receipt of the copy of the order to pass a fresh order, with records, within two weeks and stated the deposited amount’s fate would depend on the final outcome (!) (!) (!) - The order indicates that the Recovery Officer shall fix a date and communicate it to the petitioner for fresh proceedings (!) - It emphasizes that the principal employer may be liable to pay under Section 45G(3) and that garnishee or recovery proceedings may follow if not complied (!) (!) (!) - The judgment references the statutory scheme and sub-sections (i, ii, iii, vi, x) of Section 45G(3) and their proper application in the recovery process (!)

What is the objection raised regarding the adequacy of opportunity under Section 45G(3) of the Employees' State Insurance Act, 1948?

What is the court’s stance on the due process timing and notice requirements under Section 45G(3) and its sub-sections (iii, vi, x) in this case?

What relief or remedy did the High Court grant regarding the Recovery Officer’s proceedings and the need to issue a fresh order?


JUDGMENT

Sujit Narayan Prasad, J. - This writ petition is under Article 226 of the Constitution of India, wherein the order passed under the provision of Section 45 G(3)(x) of the Employees'' State Insurance Act, 1948 has been questioned on the ground that the petitioner has not been provided adequate and sufficient opportunity to put forth his defence, since according to the petitioner, the notice in terms of provision of Section 45G (3)(x) of the Employees'' State Insurance Act, 1948 has been issued on 29.01.2019 which has been received by the petitioner on 30.01.2019, on the same very date, the order has been passed under the provision of Section 45G(3)(x) of the Employees'' State Insurance Act, 1948, as such, without providing an opportunity to look into the quantum, debt recovery proceeding has been initiated by seizing the bank account of the establishment as also the personal account of the Director of the establishment.

2. It is the case of the petitioner that the amount as stipulated under annexure-4 i.e. order passed under Section 45G(3) of the Act, 1948 has been realized, even though, this writ petition was pending.

3. Learned counsel appearing for the respondent-E.S.I.C. has submitted that a proceeding under Section 45A of the Act, 1948 vide order dated 31.07.2018 has been initiated against one Saibal Kunar who happens to be labour supplier in the petitioner establishment, wherein the final order was passed against which, he has preferred a writ petition being W.P.(C) No. 5654 of 2018 which was dismissed on the ground of not providing an opportunity to prefer an appeal under Section 45A of the Act, 1948. The competent authority of the Corporation after looking to the finality of the order passed under Section 45A of the Act, 1948 has invoked the jurisdiction conferred under Section 45G(3) for recovery of the aforesaid amount as has been determined under the provision of Section 45A of the Act, 1948 against the Director namely Saibal Kunar and pursuant thereto, a notice has been issued under the provision of Section 45G(3) on 28.01.2019 and again on 29.01.2019 and when it has not been received, the jurisdiction conferred under Section 45G(3)(x) of the Act, 1948 has been invoked, therefore, there is no jurisdictional error in issuing the order under Section 45G(3)(x) of the Act, 1948.

It is not in dispute that Saibal Kunar, Contractor is not supplying the labour to the petitioner establishment and as such being the principal employer, he has got liability to make payment under the said provision and taking into consideration the position of law as stipulated under the provision of Section 45G(3), the order under Section 45G(3)(x) of the Act, 1948 has been passed and hence which suffers from no infirmity.

4. Mr. Nehala Sharmin, associate counsel of Mr. A. Allam, learned senior counsel appearing for the Respondent-Bank has submitted that the bank account which has been freezed by virtue of the direction passed by E.S.I.C. authority, has been released.

5. Having heard learned counsel for the petitioner and after appreciating their rival submissions more particularly the submission of learned counsel for the petitioner as also the E.S.I.C., it is evident from the material available on record that a proceeding under Section 45A of the Act, 1948 has been initiated for determining the claim regarding amount to be deposited for the interest of the workers, since the workers were discharging their services under a Contractor namely Saibal Kunar who happens to be labour supplier to the petitioner establishment. The determination has been made against the said Saibal Kunar fixing the liability against which the said Saibal Kunar has approached this Court by filing the writ petition being W.P.(C) No.5654 of 2018 which ultimately has been dismissed on the ground of availability of alternative remedy.

6. It is the settled position of law, so far as E.S.I., Act is concerned, a determination of quantum of insurance is to be made unde

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