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2010 Supreme(Mad) 5638
IN THE HIGH COURT OF MADRAS
S. Manikumar, J.
Alagappa Spinning Mills Pvt. Ltd. – Appellant
Versus
Employees State Insurance Corporation – Respondent
Writ Petition (MD) No's. 1232 and 4787 of 2007 and M.P. (MD) No's. 1 and 1 of 2007
Decided On : 25-08-2010
G.R. Swaminathan, in W.P.1232/07, for the Appellant; R. Ravindran in W.P.4787/07, for the Respondent
The main legal point established in the judgment is that statutory remedies provided under the Employees State Insurance Act, including the appeal process, should be exhausted before seeking judicial intervention.
Headnote:
Employees State Insurance Act - Challenge to Form-C Notice u/s 45A - 45A - Summary of the acts and sections referenced and discussed by the court: The court discussed the provisions of the Employees State Insurance Act, 1948, particularly Section 45A, which allows the authority to issue show-cause notices for determining the amount and contribution due from the employer. The court also referred to Section 35(5) and Sections 45C to 45I, which deal with the recovery of contributions and interest. The judgment highlighted the statutory remedies provided under Sections 75 and 77 for disputes related to employment and contributions.
Fact of the Case:
The petitioner challenged a Form-C Notice issued under Section 45A of the Employees State Insurance Act, 1948, calling for explanation and submission of statements regarding unpaid contributions. The petitioner claimed that the mill was closed in 2002 and all workers had resigned, while the respondent alleged non-compliance and huge arrears of contribution.
Finding of the Court:
The court found that the show-cause notices were issued in accordance with the provisions of the Employees State Insurance Act, and the petitioner failed to provide necessary details and comply with the requirements. The court also held that the writ petition against the show-cause notice was not maintainable and dismissed it.
Issues: The issues involved the challenge to the show-cause notices issued under Section 45A, the petitioner's claim of mill closure and worker resignation, and the maintainability of the writ petition against the show-cause notice.
Ratio Decidendi: The court emphasized that the statutory remedies provided under the Act should be availed before approaching the court, and cited precedents to support the dismissal of the writ petition against the show-cause notice.
Final Decision: The court dismissed the writ petition challenging the show-cause notice and the petition challenging the order passed under Section 45A of the Employees State Insurance Act, along with the connected miscellaneous petitions.
S. Manikumar, J.
In W.P. No. 4787 of 2007, Form-C Notice issued u/s 45A of the Employees State Insurance Act, 1948, by the Sub-Regional Office (Madurai), Employees' State Insurance Corporation, calling upon the Petitioner to offer its explanation and to submit a statement or to appear in person or through an authorized representative, as to why a final assessment should not be made towards Employees' contribution for the period 01.10.2006 to 31.03.2007, is challenged in this writ petition.
2. In the impugned notice it is alleged that the Petitioner had not paid the contribution, as per the provisions of law and not submitted returns of contribution, for the period between 01.10.2006 to 31.03.2007, and therefore, the Petitioner has been called upon to show-cause within 15 days from the date of notice, as to why assessment should not be made, as proposed in the said notice. In the said notice, it was further cautioned that if the Petitioner failed to offer any explanation or submitted a statement giving the actual due for the period in question, the department would proceed with the case on merits and appropriate orders would be passed u/s 45A of the Employees State Insurance Act, 1948, determining the amount and contribution due from the Petitioner under the provisions of the Employees State Insurance Act, 1948 and appropriate action would be taken to recover the same as arrears along with interest at the rate of 15% per annum u/s 35(5) of the ESI Act and u/s 45C to 45I of the Act. The said show-cause notice is under challenge in this writ petition.
3. According to the Petitioner, due to recession in the industry, the Mill was closed down and all the workers in the Mill resigned way back as early as 2002. Resignation was also recorded in the conciliation proceedings of the Labour Officer, dated 07.04.2004. However, in order to ensure the value of the Unit does not suffer, it was leased out to M/s. Om Muruga Company Limited. According to the Petitioner, the Petitioner Company is in existence only on record, whereas, all the employees have resigned in the year 2002 itself.
4. The Petitioner has further contended that though a copy of the Conciliation report, dated 07.04.2002, evidencing the above said fact was brought to the notice of the Respondent, the Respondent had mechanically issued orders levying contribution for the period between 01.04.2004 and 31.03.200, which was challenged in W.P. No. 1232 of 2007 and that this Court had granted an order of interim stay. It is the further contention of the writ Petitioner that notwithstanding the interim order granted in the above said writ petition, the Respondent has issued the impugned show-cause notice for the subsequent period between 01.04.2006 and 13.09.2006 and again for the period between October 2006 and March 2007. According to the Petitioner, the authority has failed to consider that contribution from the Petitioner under the Employees State Insurance Act, 1948, does not arise, as the Unit had been closed from March 2002 and all the workers have resigned. It is also contended that the authority had failed to take note of the interim stay granted in W.P. No. 1232 of 2007.
5. Per contra, Mr. R. Ravindran, learned Counsel appearing for the Respondent Corporation, made preliminary objections to the maintainability of the writ petition, on the ground that what is impugned is only a show-cause notice and that writ against a show-cause notice, is not maintainable.
6. In respect of his contention, learned Counsel for the Petitioner placed reliance on the decisions made in The Special Director and Another Vs. Mohd. Ghulam Ghouse and Another, (2004) 3 SCC 440, in N. Kailasam v. The Bar Council of India represented by its Chairman, New Delhi and Ors. reported in (2005 (2) MLJ 44, M/s. Malladi Drugs and Pharma Ltd v. Union of India reported in (AIR 2004 SC 4905), and Regional Di
