THE HON’BLE JUSTICE B.R.MADHUSUDHAN RAO CIVIL MISCELLANEOUS APPEAL NO.1195 OF 2017

JUDGMENT:

1. This Appeal is filed under Section 82(2) of the Employees’s State Insurance Act, 1948 (for short ‘ESI Act’) by the appellant aggrieved by the judgment passed by the Employees Insurance Court and Chairman, Industrial Tribunal – I, Hyderabad, in E.I.C.No.38 of 2009, dated 29.08.2017.

2. Appellant herein is the petitioner and the respondents herein are the respondents before the Industrial Tribunal at Hyderabad.

3.1 Petitioner has filed petition under Section 75(1)(g) of the ESI Act numbered as E.I.C.No.38 of 2009. Petitioner is the partnership firm, situated at House No.17/377 Gooty road at Anantapur and was engaged in the business of decortication of ground nuts, covered under the ESI Act by the respondent No.1 and has been paying ESI contributions due to the ESI Corporation, during the period it employed man power and paid wages to them. Petitioner did not engage any person for wages and did not pay any wages from 2/2000 to 9/2001 and April, 2004 to till date i.e., 30.11.2009. Due to change in the mode of business on account of practical reasons, no contributions to the ESI Corporation were payable at all from that time till now. IT statement for the financial year 2004-2005 is filed.

3.2 The Recovery Inspectors of ESI Corporation visited the petitioner premises on 19.11.2009 with attachment order of immovable properties of M/s.Meda Ramaiah Shetty Oil Mills in Form ESI CP-12 bearing No.52.Q/7718/06 dated 17.11.2009 and threatened the managing partner that they would attach the properties and seal its premises unless the entire amount is paid. The managing partner of the petitioner informed the respondents that the name and style of his firm is M/s. Meda Ramaiah Shetty Oil Mills but not M/s. Meda Ramaiah Shetty Oil Company and the petitioner is not at all liable to pay contribution to the ESI Corporation since April 2/2000 to 9/2001 and 4/2004 to till date i.e, 30.11.2009 and no notice or orders or certificates are served on them or on ex-managing partners. The Recovery Inspector has threatened the petitioner to seal the premises if the entire amount is not paid on the spot. Petitioner was not in a position to pay the entire amount on the spot and obtained demand drafts bearing Nos.474751 and 474752 dated 19.11.2009 for Rs.25,000/- each in favour of respondent No.2 drawn on Karuru Vysya Bank, Ananthapur branch. The Recovery Inspector has compelled the managing partner of the petitioner to issue a post dated cheque for Rs.91,611/- bearing Cheque No.960889, dated 30.11.2009 in favour of the Recovery Officer, drawn on ING Vysya Bank, Ananthapur, under the threat of sealing the premises. The action of the respondents and their Recovery Inspector in attaching the properties of the petitioner, in Form ESI CP-12 bearing No.52.Q/7718-06 dated 17.11.2009.

3.3 The petitioner has instructed the respondent No.2 not to present the said cheque for encashment as per his telegram dated 26.11.2009 as funds were insufficient and prayed to set aside the attachment order dated 17.11.2009 with a direction to the respondents to return the DD amount of Rs.50,000/- (two in number) with interest at the rate of 25% per annum .

4. Respondents have filed their counter and contended that as per the provisions of the Factories Act, 1948, the petitioner has to submit a closure notices to the Inspector of Factories and all other statutory authorities, submit all relevant registers and records for inspection for certifying the closure that no claim will be raised by the respondents. But he failed to do so in spite of giving several opportunities. The Income Tax Returns for the assessment year 2004-2005 does not indicate that the factory was closed but it proves that it is doing business. Petitioner submitted returns for one year only out of six to seven years. Respondents did not jump to initiate recovery steps all of a sudden, but respondent No.1 has periodically issu