The High Court · 2025

by the parties, allowed the petition frled by respondent No.1- petitioner with costs and the notice bearing No.52.Q/01O6-03 dated 28.02.2006 and the order under Section 45-G of tlre Act dated 13.1O.2008 are set aside and the respondent No. 1-petitioner is entitled to withdraw the arnount of Rs.5,49,O65/- deposited by them on 3O.1O.2OOB uide IA.No.175 of 2008 after the expiry of Appeal time which is impugned in the present Appeal. I 6174 BRMR,J cMA 496_2016

9. Learned counsel for the appellants-respondent Nos.1 to 3 submits that foilowing are the substantial question of law in the Appeal which are as under: a) Whether, the E.l court committed al error in giving a Itnding with regard to the proceedings leading up to the passing of the order under Section 45 A of the E.S.I. Act in a challenge to the collateral recovery proceedings under Section 45(G) of the Act, as could be seen from the scheme of the provisions of the E.S.l. Act, 1948. b) Whether, the E.i court committed an error in giving a finding on the order passed under Section 45-A in the absence of aly plea or issue as required under order VI, Rule 2 CPC. c) Whether, the Employees Insurance Court committed an error in gtrri.rg , frnding on the order passed under Section 45-A of the Act more particularly the challenge to tJ'.e said order by the respondent university is barred by limitation under section 77 (l-A) of E.S.I. Act.

10. Notice got issued to respondent No. l-petitioner in the Appeal is served on 22-09.2016 but none appeared. Respondent No.2- respondent No.4 failed to advance his argurnents in spite of affording o pportunity.

11. Nou'the points for consideration are:

1. Whether the learned Tribunal was justilied obserr.ing in the order about Section 45-A of E.S.I. 1nt r) 7lL4 BRMR,J cMA 496 2016 2 3 in a cha-llenge to the recovery proceedings under Section 45-C of t]'e Act? Whether the claim of respondent No.l-petitioner is barred by limitation under Section 77(1-,{) of E.S.I. Act? Whether ttre order passed by the learned Tribunal in E.l.C.No.57 of 2OO8, dated 24.11.2O15 suffers from any perversity or illegality? If so, does it require interference of this Court?

12. The evidence of PW.1 with that of Exs.Pl to P5 are eschewed, they are not taken into consideration by the learned Tribunal.

13. The documents marked through PW.2 are Exs.P6 to P10. Ex.P6 dated 28.03.2006 issued by Recovery Officer vacating tlre Prohibitory Order issued to the Bank (respondent No.2-respondent No.4). Ex.P7 is the Notification dated i5.05.2002 in G.O.Rt.No.439 with regard to grant of exemption to Andhra Pradesh Government Text Book Press, Hyderabad from the provisions of E.S.l. Act,

1982. Ex.P8 is the Notification dated 05.05. 1992 in G.O.Rt.No.679 which states that Government has exempted Department of Publication and Press, Osmania University, Hyderabad from a-11 provisions of E.S.I. Act for the period from 01.O4.1962 to

31.03.1993 which is not in dispute in the case. Ex.P9 is the Prohibitory Order wherein State Bank of Hyderabad, Osmania University Campus, Hyderabad (respondent No.2-respondent No.4) : I 8lt4 BRMR,J cMA_496 2016 is restrained from making pa5rments. Ex.P10 is the Order under section 45(G) of E.S.l. Act, 1948, dated 13.10.2008 in No.52.Q/0106-O3 where under respondent No. 1-petitioner failed to pay arrears due under the E.S.l. Act in respect of certificate No.AP/lNS.l/52-O 106-03 dated i0.07. 1998; 18.07.2000 and

16.01.2O01 amounting to Rs.21,96,259/- towards balance due which includes further interest up to 15.10.2008. The challenge in the E.l.C.No.57 of 2OO8 are Exs.Pg and P10.

14. It is the case of respondent No.l-petitioner that in spite of making applications to the Government for exemption from E.S.I. Act, Government has not taken a cail. It is appropriate to refer to Ex.R1 which is a Writ Petition filed by Osmania University, Hyderabad represented by its Registrar against Government of Andhra Pradesh (respondent No. 1) and others uide WP.No.5492 of 20O6 filed under Article 226 of the Constitution of India with a direction to the Government of Andhra Pradesh to pass appropriate orders in the matter of granting permanent exemption under E.S.I. Act. The above said Writ Petition was disposed of on 27.08.2008 and the operative portion is as under: "The frrst respondent filed counter afhdavit. It is stated in the counter afhdavit that the exemption sought for by the petitioner has been rejected by the first respondent on 5-06.2003 and the same has been communicated fo the 9lt4 BRMR,J cMA 496_2016 petitioner. Copy of the letter addressed to the petitioner has been placed on record, which reads as hereunder. "With reference to your letter l"r cited, I am directed to inform that the request to grant of exemption from all the prorisions of ESI Act 1948 on permanent basis with effect from 1990 onwards, cannot be accepted in view of the observations of the standing committee for exemptions that the Osmania University is situated within the lirnits of twin cities of Hyderabad and Secunderabad and Employees can avail the Medical facilities provided by ESI at any ESI Dispensar5r in Hyderabad ald Secunderabad. Hence tJle request is hereby rejected. In view of the decision of the first respondent conveying to the petitioner regarding its rejection for exemption from the purview of the ESI Act, this Writ Petition does not survive and the same is accordingly dismissed as infructuous".

15. The representations made by respondent No. l-petitioner to the Government were rejected on 05.06.2003 itself and copies of the sarne is also sent to Osmania University, Hyderabad. E.I.C. No.57 of 2008 is filed on 14.10.2008.

16. Respondent No.l-petitioner has also filed petition under Section 75 (1)(g) of E.S.i. Act to declare the action of appellant Nos. 1 and 2-respondent Nos. 1 and 2 in applying the provisions of E.S.l. Act and also the action of respondent No.2 therein (Recovery Officer) in issuing orders in proceedings No.52.e/O106-85, dated \,q I ! 1Olt4 BRMR,J cMA_496 2016 t-.i

17.01.2000 is illega1, unconstitutional in not considering the application of the petitioner (Osmania University) dated 01.04.i998 as iilegal and to set aside the proceedings, dated 17 .OL.2OOO holding that the provisions of Employee State insurance Act, 1948 are not applicable to the petitioner University. Ex.R2-E.I.C. No. 1O2 of 2OOl came to be dismissed for default without costs urrCe order dated 27.11.2OO3. The respondent No.1-petitioner has suppressed the said fact in the E.I.C.No.57 of 2008.

17. The evidence of PW.2 is the same with that of the petition averments in E.I.C.No.S7 of 2OO8. In his cross-examination, he stated that Osmania University is a Autonomous Body and paying salary @ Rs. 15,000/ - per month to the employees from 2005 (revised pay scales) and Osmania Universit5r failed to pay cofltributions for the period from O 1 .04. 1993 to till date (2 1.O8.2O22) and E. S. I. Corporation collected certain contributions through the Bank account and exemption granted under Ex.P7 is to Text Book Press but not to the Osmania Universit5r. PW.2 admitted that they are liable to pay the remaining contributions if any after adjusting the recovery already made.

18. The admission made by PW.2 goes to show that they are liable to pay the remaining contributions to the appellant No.l- respondent No. 1. /- '/ tuL4 BRMR,J cMA,496_2016 t9. Respondent No.1-petitioner has challenged the order under Exs.P9 and P10 but the learned trial Court has gone to the extent of stating that 'lt is not known whether the order under Section 45-A was passed based on assumed wages or the claim pertains on actual only without there being an order under Section 45-A. It is not the case of respondent No. l-petitioner that they were not given reasonable opportunity while passing order under Section 45-A of the E-S.1. Act-

20. karned counsel for the appellants submits that in absence of challenging Section 45-A order, respondent No.1-petitioner cannot challenge Section 45(G) order.

27. The appellate authority to prefer an Appeal against the order passed under Section 45-A of E.S.I. Act is Section 45-AA which shall be before the Insurance Commissioner, the Additional Commissioner, the Regional Director and .Joint Director as per Regulation 31-D of the Employees State Insurance (General) Regulations, 1950

22. Under Section 77 (1)(A) of the E.S.L Act states that application shall be made within a period of three years from the date on which the cause of action arose. .r:_.*.,.- I tzlL4 BRMR,J cMA_496_2016

23.1. ESI Corpn. Vs. CC.Santhakumarl, the Supreme Court observed as under: "The legislature has provided for a special remedy to deal wittr special cases. The determinaLion of the claim is left to the Corporation, which is based on the informatiorl available to it. It shows whether information is suflicient or not or the Corporation is able to get information from the employer or not, on the available records, the Corporation could determine the arrears. So, the non-availabilit5, of the records after five years, as per the Regulations, would not debar the Corporation to determine the amount of arrears. Therefore, if the provisions of Section 45-A are read with Section 45-B of the Act, then, the determination made by the Corporation is concerned. It may not be final so far as the employer is concerned, if he chooses to challenge it by firling an application under Section 75 of the Act. If the employ er faiis to challenqe tl:e sard determination under Section 75 of the Act before thc lourf- !194 lhq determination under Section 45-A becomes hnal against the employer as well. As such, there is no hurdle for recove4y o! t}te arnount determined under SecLion 45-B of the Act invokins t]:e mode of recove 45-C to 45- 1. " as contemolated in Section

23.2. In M/s.Cosmo Computer Printers Vs. The Employees' State Insurance Corporation2, the High Court of Madras held that "Appellant-company cannot challenge t-Ile recovery proceedings without challenging the correctness of the p$.f . passed under 1 2oo7 (1) scc 584 2 cMA No.285 of 2020 dated 27.07.7020 of the Hjgh court of.ludicature at Madras t3/74 BRMR.J cMA_496 2016 Section 45-A of the E.S.I. Act. The same view is followed in E.S.l. Corporation Vs. R.Shanti3.

24. The learned trial Court has travelled beyond the pleadings and discussed about tJle orders passed under Section 45-A of E.S.l. Act in Para No.1 1 of its order. Respondent No. l-petitioner has challenged the recovery proceedings in the E.l.C. but not the orders passed under Section 45-A of the E.S.l. Act. ) )

25. Though respondent No. 1-petitioner has stated that he is not aware of the show cause notices issued by E.S.I.C. which cannot be a ground to allow the E.l.C.No.57 of 2OOa. { {

26. In view of the decisions stated supra at Para Nos.23.1 & 23.2 respondent No.l-petitioner cannot challenge the order passed under Section S(G) of the E.S.I. Act, 1948 without challenging the correctness of the order passed under Section 45-A of E.S.l. Act. The order passed by the Tribunal is perverse and the same is liable to be set aside in view ofthe reasons above.

27. Civil Miscellaneous Appeal is allowed and the order passed by Employees Insuranci Court and Chairman Industrial Tribunal-l at Hyderabad in EIC.No.57 of 2008 dated24.11.2015 is setaside, 3 https://indiankan oon.orgl dcx,,l 3S2B47B/ I 14114 BRMR,J cMA_496,2016 i consequently petition filed by the respondent No.l-petitioner is dismissed. There shall be no order as to costs. Interim Orders if any shall stands vacated. Misceilaneous application/ s stands closed. SD/-K.SRINIVASA RAO JOINT REGISTRAR //TRUE COPY// SECTION OFFICER To

1. The Employees lnsurance Court and Chairman, lndustrial Tribunal-l at Hyderabad. (With Records )

2. One CC to SRl. P RAJASEKHAR, Advocate IOPUC] 3. One CC to SRl. E MADAN MOHAN RAO, Advocate [OPUC] 4. Two CD Copies prlPSL l IirT E r'l (,) [t tt$ts {ot,5r' HIGH COURT DATED: 0911212025 JUDGMENT CMA.No.496 of 2016 ALLOWING THE CMA 0 I}\ lnq1 IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD TUESDAY, THE NINTH DAY OF DECEIVIBER TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE JUSTICE B.R.MADHUSUDHAN RAO CIVIL MISCELLANEOUS APPEAL NO: 496 OF 2016 Between

1. Employees State lnsurance Corporation LTD, A.P.Region with its office situated at 5-9-23, Hill Fort Road, Hyderabad. Rep.by its Managing Director. 2. The Recovery Officer, Employees State Insurance Corp. Ltd, 5-9-23, Hill fort road, Hyderabad.

3. The Deputy Director, Employees State lnsurance Corporation, Adarshnagar, Hyderabad. ...APPELLANTS/RESPONDENTS AND

1. Osmania University. Hyderabad, Rep.by its Registrar.

2. State Bank of Hyderabad, Osmania University Campus, Hyderabad, Rep.by its Chief Manager RESPONDENT/PETITIONER ...RESPONDENT/ 4th RESPONDENT . Appeal Under Section 82 of ESI Act, 1948 against the Decree and Order dated: 24-11-2015 in E.l.C. No.5712008 on the file of tne Employees lnsurance Court and Chairman lndustrial Tribunal- I at Hyderabad. This appeal coming on for hearing and upon perusing the grounds of appeal. the judgment and Decree of the Lower Court and the material papers in the case and upon hearing the argument of Sri. P Rajasekhar, Advocate for the Appellants and Sri. E Madan Mohan Rao, Advocate for the Respondent No.2 This Court doth Order and Decree as follows '1. That the Civil Miscellaneous Appeal be and hereby is allowed, 2. That the order passed by Employees lnsurance Court and Chairman lndustrial Tribunal-l at Hyderabad in ElC.No.57 of 2008 dated 24.11.2015 is set aside, consequently petition filed by the respondent No.1 petitroner is dismissed;

3. That save as aforedaid, the decree of the tribunal shall stand Closed in all other respects; and

4. That there shall be no order as to costs in this appeal //TRUE COPY' SD/-K.SRINIVASA RAO JOINT REGISTRAR G SECTION OFFICER To 1 The Employees lnsurance Ccurt and Chairman, lndustrial Tribunal-l at Hyderabad. 2. Two CD Copies prrPSt HIGH COURT DATED: 0911212025 DECREE CMA.No.496 of 2016 ALLOWING THE CMA 0 la 12'< a