Pre-deposits can be credited against future liabilities in ESI disputes.

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 27.02.2026 CORAM THE HONOURABLE MRS.JUSTICE K.GOVINDARAJAN THILAKAVADI,J.

M/s.I-Net Secure Labs Private Limited Rep., by its Authorized Signatory Mr.Prabhakar Natrajan, Old No.569, New No.914,Poonamallee High Road, Arumbakkam, Chennai, Tamil Nadu-600 106. …Appellant Vs.

1.The Deputy Director, Employees State Insurance Corporation, 143, Sterling Road, Nungambakkam Chennai-600 034.

2.The Recovery Officer, Employees State Insurance Corporation, 143, Sterling Road, Nungambakkam Chennai-600 034.

…Respondents Prayer: This Civil Miscellaneous Appeal is filed under Section 82(2) of the Employees State Insurance Act, 1948, against the order passed by the learned Employees Insurance Court (Principal Labour Court) Chennai, dated

12.08.2025 passed in I.A.No.1of 2025 in O.P.Sr.No.282 of 2025.

For Appellant : Ms.R.S.Pornima For Respondents : Mr.J.Dharmaraj for R1 & R2

JUDGME NT

This appeal is preferred against the order passed in I.A.No.1 of 2025 in O.P.SR.No.282/2025 dated 12.08.2025 passed by the Employees Insurance Court (Principal Labour Court) Chennai.

2.The appellant has preferred an application under Section 75 (2-B) of the Employees State Insurance Corporation Act, 1948 (herein after referred as ESI Act) before the ESI Court, seeking for exemption from depositing 50 % of the amount due as claimed by the respondents under Section 45 AA of the ESI Act, 1948 vide No.TN/51-00-125518-000-0999/Ins I and to declare that the amount of Rs.29,36,595/- which is the balance amount of Rs.39,15,460/- after adjusting 25% pre-deposit amount of Rs.9,78,865/- which was demanded under Section 45 A determination order for the Section 45AA appeal, being determined is not 'contribution' payable for the financial year 2019-2020 under the provisions of the said Act.

3.By the impugned order, the learned Judge disposed the application under Section 75 (2B) of the ESI Act, by directing the appellant to deposit 50% of the demanded amount of Rs.29,36,595/- for numbering the petition.

Aggrieved by this, the present appeal is filed.

4.Ms.R.S.Pornima, learned counsel for the appellant would submit that, the appellant is a private limited company having 80 employees on payroll, engaged predominantly in the business of supply of manpower service for the installation of CCTV and provide security, as well as execution of AADHAR related services. While so, on 10.07.2024, the 1^st respondent issued an order dated 08.07.2024 under Section 45 (A) of the ESI Act, directing the principal employer of the appellant to pay a sum of Rs.39,15,460/- towards contribution based on alleged omitted wages, namely ''DC and Project Advances'' and ''Service'' for the Financial Year 2019-2020, where as, no contribution is required to be paid under the ESI Act on payouts identified as advances and services. Aggrieved by the order of the 1^st respondent, the appellant preferred an appeal under Section 45 AA of the ESI Act before the Appellate Authority, after depositing a sum of Rs.9,78,865/- being the 25% of the contribution so ordered, in terms of Section 45-AA of the ESI Act. The said appeal was dismissed on 16.04.2025, against which the appellant preferred an appeal under Section 75 of the ESI Act, before the ESI Court along with an application under Section 75 (2B) of the ESI Act, seeking for a waiver of the precondition of depositing 50% of the contribution determined by the Corporation, considering that 25% of the alleged contribution had already been remitted. The ESI Court without appreciating the above facts, vide order dated 12.08.2025 dismissed the said application and directed the appellant to deposit 50% of the demanded amount for numbering the appeal. Hence, this appeal.

5.On the other hand, Mr.J.Dharmaraj, learned counsel for the respondents 1 & 2 /Department has opposed the prayer. It is submitted th