Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(AP) 12419

HIGH COURT OF ANDHRA PRADESH
K Sreenivasa Reddy, J
R. Srivalli – Appellant
Versus
Union Of India – Respondent
WRIT PETITION NO: 23255/2016

Advocates:
For the Appellants/Petitioners: J UGRANARASIMHA
For the Respondents: K JAGAN MOHAN REDDY, P DURGA PRASAD SC FOR APSRTC, P RAJASEKHAR, B G RAVINDER REDDY, VENKATESHWARLU GUMMADAVELLY

An order under Section 45A of the ESI Act must consider all relevant evidence; if an authority passes an order without reviewing specific documentary proof regarding the non-engagement of labour, the court may set it aside and direct a fresh hearing to ensure procedural fairness.

Headnote:(A) Employees' State Insurance Act, 1948 - Section 45A - Adjudication of contribution - Non-compliance with procedural fairness - The 2nd respondent passed an order under Section 45A without considering the specific evidence (certificate from Health Officer) produced by the petitioner indicating that no labour was supplied during the period in dispute (01.06.2010 to 31.03.2011). The court observed that the impugned order, though issued after offering an opportunity for hearing, became unjustifiable once documentary evidence contradicting the claim was brought to light. The court has the power to remand matters where there is a failure to consider material evidence at the stage of quasi-judicial determination. (Paras 16, 17)

Facts of the case:
The petitioner, a labour contractor, challenged the recovery proceedings and the order passed under Section 45A of the ESI Act, 1948, demanding contributions for the period 2010-2011. The petitioner contended she did not engage employees during that period and had certificates to prove no work was executed, contrary to the department's presumption.

Findings of Court:
The Court found the impugned order issued by the respondent to be unsustainable in light of the fresh documentation provided by the petitioner which was not available to the authority at the time of the original determination. It directed a fresh adjudication.

Issues: Whether the orders passed under Section 45A of the ESI Act, 1948, determining contribution liabilities, were passed without due consideration of the petitioner's evidentiary claims regarding non-engagement of labour.

Ratio Decidendi: When new documentary evidence is produced that contradicts the basis of an ad-hoc recovery order under Section 45A, an appellate or writ court is justified in setting aside the order to allow for a fresh hearing and consideration of such evidence to ensure compliance with principles of natural justice.

Result: Writ Petition disposed of; impugned orders set aside; matter remanded for fresh C-18 notice and hearing.

Table of Content
1. relief sought under article 226 regarding esi act compliance. (Para 1 , 2)
2. counter-affidavit claims regarding contractor liability and coverage. (Para 3 , 4)
3. submission of party contentions on coverage and contribution obligations. (Para 5 , 6 , 7 , 8)
4. court analyzing document validity and procedural fairness requirements. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17)
5. direction for fresh adjudication preserving natural justice. (Para 18 , 19)

Date on which Order was reserved : 03.03.2026

Date on which Order was pronounced : 10.04.2026

Date on which Order was uploaded on the website of the High Court : 10.04.2026

Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ, order or direction more particularly one in the nature of writ of mandamus, declaring the action of the 2nd respondent in issuing the proceedings vide No.AP/Ins.II/ 52000282330001001 dated 5.5.2016 of the 2nd respondent and also consequential order vide& No.AP/INS-II/52- 00-028233-000-1001/493 dated 15.7.2015 proceedings of the 2nd respondent as illegal, unconstitutional, colourable exercise of power and contrary to the provisions of the Employees State Insurance Act, 1948 and the rules and regulations framed thereunder, and also contrary to the proceedings of the No.E5/ 122(7)/2012-RM(NLR) dt.13.03.2012, and set-aside the same

IA NO: 1 OF 2016(WPMP 28637 OF 2016

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the proceedings of No. AP/Ins.II./52000282330001001 dated 5-5-2016 and No. AP/INS II/52-00-028233-000-1001/ 493, dated 15-07-2015 issued by the 2nd respondent, pending disposal of the writ petition.

IA NO: 2 OF 2017(WPMP 141600 OF 2017

Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased

Counsel for the Petitioner:

1.J UGRANARASIMHA

Counsel for the Respondent(S):

1.K JAGAN MOHAN REDDY

2.P DURGA PRASAD SC FOR APSRTC

3.P RAJASEKHAR

4.B G RAVINDER REDDY

5.VENKATESHWARLU GUMMADAVELLY

The Court made the following:

O R D E R

This Writ Petition was filed seeking the following relief:

“…to issue an appropriate Writ, Order or direction more particularly one in the nature of Writ of Mandamus, declaring the action of 2nd respondent in issuing the Proceedings vide No.AP/Ins.II/52000282330001001, dated 05.05.2016 of 2nd respondent and also consequential Order vide No.AP/INS-II/52-00-028233-000-1001/493, dated 15.07.2015 proceedings of 2nd respondent, as illegal, unconstitutional, colourable exercise of power and contrary to the provisions of the Employees State Insurance Act, 1948 and the rules and regulations framed thereunder and also contrary to the Proceedings of No.E5/122(7)/2012-RM (NLR), dated 13.03.2012 and set-aside the same and pass such other order or orders …”

2. Contents of the affidavit filed by the Writ Petitioner, in brief, are that 2nd respondent awarded a Tender vide Proceedings No.E5/122(7)/2012-RM (NLR), dated 13.03.2012 specifying her contract only for Two (02) years, and it was further mentioned that it can be extended for One (01) more year; that the said contract specified the number of workers as Four (04) Sweepers and One (01) Attender and also specified the amount at Rs.28,901/- per month. The said proceeding confirms the total employees limited to Five (05) only.

(b) The intention of Legislature is clear that 1st respondent can invoke its powers to cover any Unit as stipulated under Section 1 (5) of the Employees’ State Insurance Act, 1948 (for brevity ‘the ESI Act, 1948’). The individual, who covered the Writ Petitioner, is none other than an Inspector, under Section 45 of the ESI Act, 1948, without any verification of the documents. The Writ Petitioner was covered on adhoc basis by

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2026 Supreme(Online)(AP) 12419

HIGH COURT OF ANDHRA PRADESHK Sreenivasa Reddy, JR. Srivalli – AppellantVersusUnion Of India – RespondentWRIT PETITION NO: 23255/2016

An order under Section 45A of the ESI Act must consider all relevant evidence; if an authority passes an order without reviewing specific documentary proof regarding the non-engagement of labour, the court may set it aside and direct a fresh hearing to ensure procedural fairness.

HIGH COURT OF ANDHRA PRADESH
K Sreenivasa Reddy, J
R. Srivalli – Appellant
Versus
Union Of India – Respondent
WRIT PETITION NO: 23255/2016