J U D G M E N T

The order dated 20.09.2017 passed in E.I.O.P.No.5 of 2011 is under challenge in the present Civil Miscellaneous Appeal.

2. The Substantial Question of law raised by the appellant, which reads as under:

“(a) Whether in the teeth of the admitted factual position that the property purchased in a public auction conducted under SARFAESI Act could be termed as transfers that factory or establishment in whole or in part, by sale, gift, lease or license or in any other manner whatsoever so as to attract Section 93A of the ESI Act?

(b) Whether the Impugned Order suffers from an error of Jurisdiction, particularly in view of the Section

93A of the ESI Act?

(c) Whether the claim of the Respondent is barred by limitation by virtue of proviso to Section 45-A of the ESI Act.

(d) Whether the claim of the Respondent is maintainable against the Appellant in the absence of an order determining contributions under Section 45A of the ESI Act after giving reasonable opportunity of being heard.

e) Under the facts and circumstances of the case, can this Appellant be held liable for payment of compensation?”

3. The learned counsel appearing on behalf of the appellant confined with the substantial question of law by stating that under Section 93-A of the ESI Act, auction purchase of factory under the SARFAESI Act from the Bank cannot be covered. The auction purchase of a property from a Bank under the SARFAESI Act is not covered under Section 93A of the ESI Act and therefore, the Recovery imposed by the respondent/ Corporation is directly in violation of the provisions of the Act and thus, the orders passed by the ESI Court is liable to be scrapped.

4. In reliance, the learned counsel for the appellant cited the judgment in the case of Sri Angappa Spinning Mills and Ors., Vs Regional Commissioner, Employees Provident Fund Tamilnadu and Pondicherry, in W.P.No.3760 and 4151/1979, dated 29.10.1985, wherein the scope of Section 17B of the Employees Provident Fund and Miscellaneous Petition Act was considered by this Court and he referred the following observations made by this Court in Paragraph 6 and the same is extracted hereunder:

“6.............The liability to pay contribution and other sums on transfer of an establishment is specially provided for under section 17-B of the Act. The need for making special provision fastening liability for the payment of contribution and other sums on the transferee is a clear pointer that otherwise no person other than the employer would be liable for its payment. To put it differently, the underlying principle behind section 17-B of the Act is that the employer, who is liable under section 6 of the Act to pay the contribution and other sums, cannot by merely resorting to the device of transfer, be permitted to avoid such liability and, therefore it is, provision is made under section 17-B of the Act that the employer as well as his transferee shall be jointly and severally liable to pay the contribution and other sums up to the date of transfer. The specification of the period also indicates that primarily the liability would be that of the transferring employer, and by reason of the transfer, the liability on the employer would not cease, but would continue to exist and would also be fastened upon the transferee, though limited to the value of the assets obtained by the transferee by such transfer. Section 17- B of the Act, by making a special provision for the joint liability of the transferor and the transferee with reference to contributions and other sums due from the employer up to the date of such transfer, also clearly brings out that but for section 17-B of the Act, the transferor-employer alone would be liable. In other words, the employer cannot be permitted to defeat his obligation to pay the contributions and other sums by transferring the establishment and, therefore it is, that up to the date of the transfer, the transferor and the transferee are both made liable jointly and severally. But at