Authority must not invoke Section 45A for best judgment assessment unless there is no submission of required documents; disputes should be resolved in ESI Court.

ORDER :

D.BHARATHA CHAKRAVARTHY, J.

The writ petition is filed seeking a Writ of Certiorari to call for the records of the first respondent in C-19 notice, dated 20.10.2023 and consequential order, under Section 45A of the Employees State Insurance Act, 1948 (in short “ESI Act”) dated 12.09.2022 and to quash the same.

2. Upon hearing Mr.G.Anandhagopalan, learned counsel appearing on behalf of the petitioner and perusing the material records of the case, the contention of the petitioner is that the petitioner was originally having ESI Code and was paid the contributions in accordance with law, until March 2018. Thereafter, the petitioner’s establishment was closed. After the petitioner’s establishment was closed, in the year 2022, when notices were issued to the petitioner claiming payment of contribution, the partner of the firm appeared before the authorities on behalf of the petitioner and submitted the necessary details evidencing the closure of the unit. Thereafter, without dropping the proceedings, the authorities seems to have passed an order under Section 45A of the ESI Act, determining the dues. However, after the enquiry, that was conducted, an order under of the ESI Act, was not served on the petitioner firm. Only when the bank account belonging to the wife of the partner of the petitioner firm was attached, they enquired and came to know about the impugned proceedings and as such, the petitioner has approached this Court.

3. The first contention of the petitioner is that, the petitioner is entitled to approach this Court, since the order under Section 45A of ESI Act, was not even served on the petitioner firm, so as to enable the petitioner to file an appeal or to approach the ESI Court, at the relevant point of time. Without even serving the order, the authorities cannot now take further action.

4. The second contention of the petitioner is that, in the recent judgement of the Honourable Supreme Court of India in M/s Carborandum Universal Ltd., v. ESI Corporation reported in [2025 INSC 1455], it is decided by the Honourable Supreme Court of India that the respondents, under the erstwhile Employees State Insurance Act, 1948, had powers to pass an order under Section 45A , which is in the nature of best judgment assessment only on the terms mentioned therein. When the employee had appeared and furnished all the documents, merely on the ground of inadequacy of evidence or on dispute of any facts, the power under cannot be invoked and the only course open to the respondents authorities is to approach the ESI Court under Section 75 (1) of the ESI Act to decide the said disputed question of fact or other disputes relating to the assessment and they cannot straight away pass an order under of the ESI Act, and make a demand or to make the attachment. Therefore, the impugned orders cannot be sustained and are liable to be quashed by this Court.

5. The writ petition is resisted by the respondents and the learned counsel appearing on behalf of the respondents, by placing reliance on the counter affidavit and other particulars, would submit that, it is true that when the order under Section 45A of the ESI Act was passed and it was sent by Registered Post, the same was returned with an endorsement as “addressee left”. It is for the petitioner firm to have informed the Corporation of their change of address. The petitioner ought to have exhausted the remedy of appeal as well as the