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IN THE HIGH COURT OF ALLAHABAD
D. K. Seth, J.
ALLAHABAD CANNING COMPANY - Appellant
Versus
REGIONAL DIRECTOR, E.S.I.C. - Respondents
C. M. P. 11553 Of 1987
Decided On : 04/15/1998
EMPLOYEES STATE INSURANCE ACT, 1948 - SECTION 45-A - ASSESSMENT ORDER - OPPORTUNITY OF BEING HEARD - LIMITATION - SECTION 77 (1-A) - PROVISO - CLAIM FOR RECOVERY - FIVE YEARS BAR - EMPLOYEES STATE INSURANCE (GENERAL) REGULATIONS, 1950 - REGULATION 102-A - MAINTENANCE OF RECORDS - INSPECTION REPORTS - CAUSE OF ACTION - SECTION 75 - DISPUTE - RAISING OF DISPUTE - LIMITATION - SECTION 77 - PROCEDURE AND LIMITATION - EXPLANATION TO SUB-SECTION 1-A - CAUSE OF ACTION - DEEMED TO HAVE ARISEN - ALTERNATIVE REMEDY - SECTION 75 - NOT AVAILABLE AFTER EXPIRY OF LIMITATION PERIOD.
Fact of the Case:
The petitioner, M/s. Tarun Agrawal, challenged the impugned order dated November 13, 1986, issued by the Employees' State Insurance Corporation (ESIC), on the grounds that it was not a valid assessment order under Section 45-A of the Employees' State Insurance Act, 1948 (the Act). The petitioner also contended that the order was passed without providing an opportunity of being heard, and that the demand for dues for a period of five years prior to the claim was barred by the limitation period specified in the proviso to Sub-section (1-A) of Section 77 of the Act.
Finding of the Court:
The Court held that the impugned order was a valid assessment order passed under Section 45-A of the Act. The Court found that the petitioner had been given sufficient opportunity to be heard through the notice issued under Annexure-1, but had failed to submit an effective reply. The Court also held that the limitation period of five years under Section 77 (1-A) proviso did not apply in this case, as the claim had been raised continuously and the cause of action had arisen on the date the claim was first made by the Corporation.
Issues: 1. Whether the impugned order was a valid assessment order under Section 45-A of the Act? 2. Whether the petitioner was given an opportunity of being heard before the assessment order was passed? 3. Whether the demand for dues for a period of five years prior to the claim was barred by the limitation period specified in the proviso to Sub-section (1-A) of Section 77 of the Act?
Ratio Decidendi: 1. The Court held that the impugned order was a valid assessment order under Section 45-A of the Act, as it was passed after considering the petitioner's reply to the notice issued under Annexure-1. The Court found that the petitioner had not submitted an effective reply, and therefore, there was no infirmity in the order for alleged non-consideration of the petitioner's reply. 2. The Court held that the petitioner was given sufficient opportunity to be heard before the assessment order was passed. The Court found that the petitioner had been issued a notice under Annexure-1, asking them to show cause why the proposed assessment should not be made. The Court held that the petitioner had failed to submit an effective reply to the notice, and therefore, there was no merit in the contention that the petitioner was not given an opportunity of being heard. 3. The Court held that the limitation period of five years under Section 77 (1-A) proviso did not apply in this case, as the claim had been raised continuously and the cause of action had arisen on the date the claim was first made by the Corporation. The Court found that the petitioner had been raising claims for dues from time to time, and that the Corporation had been issuing notices and conducting inspections. The Court held that the cause of action had arisen on the date the claim was first made by the Corporation, and therefore, the limitation period of five years had not expired.
Final Decision: The Court dismissed the writ petition, holding that the impugned order was a valid assessment order passed under Section 45-A of the Act, that the petitioner had been given an opportunity of being heard, and that the limitation period of five years under Section 77 (1-A) proviso did not apply in this case.
( 1 ) MR. Tarun Agrawal, learned Advocate has while supporting the writ petition assailed the impugned order contained in Annexure 5 to the writ petition on the ground that the same is not an assessment order under Section 45-A of the Employees State Insurance Act, 1948 (hereinafter referred to as the act ). Even if for argument sake the impugned order is said to be an assessment order in that event it was passed in contradiction to the proviso to Section 45-A namely without any opportunity of being heard, therefore, the same is invalid. He contends further that no demand could be made in respect of a period of five years prior to the date of the claim as provided in the proviso to Sub-section (1-A) of Section 77 of the Act, therefore, in the present case the claim having been made in the year 1986 for the period between 1971 to 1983 could not be sustained so far as period prior to 1981 which is beyond five years of 1986. His other contention is that respondents did not take into consideration the reply given by him on the basis of show cause notice which is Annexure 1 to the writ petition issued to them on September 18, 1986, therefore, the impugned order suffers from infirmity and perversity. According to him unless a valid assessment under Section 45-A is made, no procedure for recovery could be initiated under Section 45-B. He contends further that the dues which are claimed have already been paid up by the petitioner which is apparent from the relevant record produced by him showing deposit of those amounts.
( 2 ) MR. P. K. Asthana holding brief of Mr. B. N. Asthana, learned standing counsel appearing on behalf of Employees State Insurance Corporation, contends that the claim was made long before in the inquiry report of different dates the particulars of which have been disclosed in para 9 of the counter affidavit and, therefore, the question of limitation of five years as provided in proviso to Sub-section (1-A) of Section 77 cannot be attracted in as much as the claims were made immediately with regard to the respective periods after respective inspections were carried on and the reports were submitted which find mention in para 9 of the counter affidavit. According to him regarding the claim in dispute the petitioner had initiated a proceeding being case No. 23 of 1976 which was decided finally in the first appeal from order against the petitioner whereas he has also filed Civil Misc. Writ Petition No. 5200 of 1974 which was ultimately dismissed on november 10, 1981, therefore, the claim was made before mischief period of five years as mentioned in Sub-section (1-A) of Section 77 of the Act. Therefore, according to him the said contention of Mr. Agrawal cannot be sustained. Mr. Asthana further contends that the assessment order is contained in Annexure 3 which is dated November 13, 1986 which order was passed after considering the petitioners reply pursuant to the notice dated September 18, 1986 as contained in Annexure 1 to the writ petition. The order dated April 2, 1987 as contained in annexure 6 was being initiated of recovery proceedings under Section 45-B after serving a notice dated March 31, 1987 whereby it was pointed out that despite asking the petitioner to deposit the amount he did not deposit the said amount. It appears from Annexure 5 which is dated April 27, 1987 that the petitioner had been asking for further time for tracing out the documents and records because the matter related to old period and therefore, the recovery should be postponed. This also goes to show that dues were claimed earlier. According to Mr. Asthana there is an order dated November 13, 1986 which is the order of assessment and, therefore, the petitioner cannot contend that there is no order of assessment. The question of hearing according to him was dependent on the facts and circumstances of the case whether the petitioner had submitted his reply as alleged by him but no reply is being shown to have been submitted
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