The main legal point established in the judgment is that when the order passed under Section 45-A of the ESI Act is not challenged and is allowed to become final, the consequential recovery proceedings under Section 45-G cannot be questioned.

JUDGMENT

(Prayer: Civil Miscellaneous Appeal is filed under under Section 82(2) of ESI Act, praying to set aside the order dated 25.10.2018 passed in E.I.O.P.No.117/2007 on the file of the Employees Insurance Court (Principal Labour Court, Chennai).

1.The Employees State Insurance Corporation has filed the above Civil Miscellaneous Appeal raising the following substantial questions of law:

a. Whether the petition under Section 75 of the ESI Act challenging the consequential recovery proceedings dated 09.08.2007 and 20.08.2007 are maintainable without challenging the order Dated 27.04.2004 passed under Section 45-A of the Act?

b. Whether the finding of the ESI Court that the Factory was closed on 31.03.1996 is correct merely on the letter dated 01.04.1996 sent by the first respondent?

c. Whether any notice under Section 45-C and 45-H of the Act is required to be issued before issuing an order under Section 45-G of the Act?

2. The brief facts leading to the above appeal are as follows. The first respondent was the Proprietrix of the factory run by her in the name and style of M/s.Raj Medias. The said factory was covered under the provisions of the Employees State Insurance Act, 1948. Though the first respondent had paid the contributions upto the month of March 1996, she did not make any contributions from 01.04.1996. Based upon the Inspection reports and other materials on record, and after due notice to the first respondent and after affording personal hearing, the petitioner/appellant Corporation passed an order dated 27.04.2004 under Section 45-A of the ESI Act determining the contribution payable by the first respondent at Rs.4,59,798/- for the period from 04/1996 to 03/1997 and 1994-1995 to 1995-1996. Since the first respondent did not make the payment as per the order dated 27.07.2004, recovery proceedings came to be initiated as against the first respondent under Section 45-G of the said Act, and a sum of Rs.70,000/- was recovered by attachment of the amounts lying to her credit with the garnishee, the second respondent herein. The first respondent therefore filed E.I.O.P.No.117 of 2007 on the file of the Principal Labour Court, being the Employees Insurance Court, Chennai, praying to pass orders, holding that she would not be liable to pay any contributions to the corporation, in respect of the relevant period, and also for setting aside the consequential recovery orders passed therein, and for the refund of sum of Rs.70,000/- recovered, through the second respondent herein.

3. The appellants contested the above said petition, on several grounds including the preliminary objection that the first respondent was not entitled to challenge the recovery proceedings without challenging the order dated 27.04.2004 passed under Section 45-A of the Act, by the Deputy Director, the competent authority notified under the said Act.

4. Before the ESI Court, the respondent examined one K.Rajan as P.W.1 and produced Ex.P.1 to Ex.P.8. The appellants examined two witnesses as R.W.1 and R.W.2 and produced Ex.R.1 to Ex.R.9.

5. The ESI Court, on an assessment of entire evidence on record allowed the petition under Section 75 of the ESI Act by setting aside the notice bearing No.TN/RECY/45(G)-51-52134, dated 09.08.2007 and 20.08.2007 issued by the 2nd respondent to the 3rd respondent and to Anna Thirumana Maligai, demanding payment an amount of Rs.10,76,487/- u/s.45-G of the ESI Act, 1948.

6. Aggrieved by the order of ESI Court, the appellant corporation has preferred the above appeal.

7. The learned counsel for the appellant vehemently contended that the order passed under 45-A of the ESI Act determining the liability of the first respondent was not challenged and hence challenge to the consequential recovery proceedings cannot be sustained.

8. The learned counsel for the first respondent on the other hand submitted that the recovery proceedings were issued without notice to the first respondent and th