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Judgment
Sharad Kumar Sharma, J
A very peculiar, but an interesting issue, which has been sought to be answered by the appellant, while preferring the appeal from order, invoking the provisions contained under Section 82 of the Employees’ State Insurance Act, 1948, is while giving a challenge given to the order dated 04.02.2013 passed by the Employees Insurance Court/Civil Judge (Senior Division), Dehradun in ESI Case No.02 of 2003, Sri Ganesh Packaging vs. ESI Corporation and Others, whereby the claim petition has been rejected holding it to be not maintainable in view of the provisions contained under Section 77(1A) of the Employees’ State Insurance Act, and accordingly while preferring the appeal, the appellant has framed the following questions to be answered by this Court, which is extracted hereunder:-
“(a) Whether E.S.I. Court below rightly applied provision of Section 77(1A) of The Employees’ State Insurance Act, 1948 and were justified in holding that although the Act is not applicable to the petitioner/appellant but the petition presented by him is barred by provision of Section 77(1A) of the Act?
(b) Whether once the ESI Court itself held that the provisions of the Employees’ State Insurance Act, 1948 were not applicable to the appellant establishment, the Court ought to have decreed the petitioner’s/appellant’s suit in toto?”
What has been argued by the learned counsel for the appellant, is that the principal cause of action for the claimants to approach before the Employees’ State Insurance Court and by way of filing Employees Insurance Case No.02 of 2003, had been on the basis of issuance of notice of 14.10.2003 thereby intending to recover the defaulted amount, claiming the arrears of Rs.71,427/- alongwith the interest payable on it. Accordingly, even before the Employees’ State Insurance Court, the appellant had in the Claim Petition which was instituted on 06.11.2003, had categorically specified in his stand taken before it, seeking a declaration that Employees’ State Insurance Act of 1948 is not applicable, in view of the bar created by the provisions contained under Section 77(1A) of the Act, but however if the cause of action for the appellant to institute the proceedings is taken into consideration, as pleaded in the claim, it was emanating from the orders which were passed by the Recovery Officer of the Employees’ State Insurance Corporation on 14.10.2003 and if the subject head under which the recovery has been sought to be made for the aforesaid amount is taken into consideration, reads as under:-
“Summons to defaulter under Rule 83 of the II Schedule to the Income Tax Act of 1961 to be read with Section 45(C) to 45 (I) of the Employees’ State Insurance Act of 1948 as amended”
The argument of the learned counsel for the appellant, in the light of the substantial questions, which has been framed by him in the appeal is that when based on the principal objection which was taken by the appellant, before the court below, about the sustainability of the proceedings, in view of the bar created by the provisions contained under Section 77 (1A) of the Act, was raised and that was accepted by the Court in that eventuality, the principal proceedings itself, which was initiated by invoking the provisions contained under Section 45(C) to 45 (I) of the Employees’ State Insurance Act, would be rendered to be, not tenable.
In order to answer the aforesaid question, if the impugned cause of action, for the appellant to approach before the Employees State Insurance Court is taken into consideration, it was qua the action taken under Section 45(C) to 45(I) of the Act, for recovering the amount as referred therein. But, if the provisions of Section 45(C) of the Act, itself is taken into consideration, it provides that the process of recovery of any amount which was due and which could be resorted to be recovered under the provisions contained under Section 45(C) of the Act could be only qua the amount, which falls to be due under the provisions of Employees State Insurance Act, itself. The simplicitor language of Section 45(C) of the Act is extracted hereunder:-
“[“45-C. Issue of certificate to the Recovery Officer.— (1) Where any amount is in arrear under this Act, the authorised officer may issue, to the Recovery Officer, a certificate under his signature specifying the amount of arrears and the Recovery Officer, on receipt of such certificate, shall proceed to recover the amount specified therein from the factory or establishment or, as the case may be, the principal or immediate employer by one or more of the modes mentioned below : —
(a) attachment and sale of the movable or immovable property of the factory or establishment or, as the case may be, the principal or immediate employer;
(b) arrest of the employer and his detention in prison;
(c) appointing a receiver for the management of the movable or immovable properties of the factory or establishment, or, as the case may be, the employer:
Provided that the attachment and sale of any property under this section shall first be effected against the properties of the factory or establishment and where such attachment and sale is insufficient for recovering the whole of the amount of arrears specified in the 18 certificate, the Recovery Officer may take such proceedings against the property of the employer for recovery of the whole or any part of such arrears.
(2) The authorised officer may issue a certificate under sub-section (1) notwithstanding that proceedings for recovery of the arrears by any other mode have been taken.”
Meaning thereby the recourses of Section 45(C) of the Act, for the purposes of enforcing a recovery, could only be invoked when the amount has fallen due to be recovered, as per the provisions of Employees State Insurance Act of 1948, but in a very peculiar circumstances, when the Court has observed that the proceedings of Case No.02 of 2003, would not be maintainable before it under Section 75 of the Act, because of the bar created by Section 77(1A) of the Act and holding the proceedings to be not tenable, in that eventuality, the very basis of proceedings before the Employees Compensation Commissioner which were held under Section 45(C) to 45 (I) of the Act, itself would not be maintainable, when the provisions of Act itself has been held to be not applicable to the appellant’s organization.
In that eventuality, once the Court holds that the proceedings of Case No.02 of 2003, is not tenable under the provisions of Section 75 of the Employees State Insurance Act, to be read with Section 77(1A) of the Act, in that eventuality, the recovery proceedings under Section 45(C) to 45 (I) of the Act, cannot be partially permitted to be sustained when the recovery under the Act itself pertains to the recovery for an amount, which is due to be paid under the Employees State Insurance Act itself. In that eventuality, when the proceedings under Section 75, itself has been ousted from the ambit of the Act of 1948, the recovery resorted to under Section 45(C) of the Act, will itself become a nonest exercise without competence because Section 45(C) itself which forms to be part and parcel of the Act of 1948, for recovering an amount due under the Act. Even if it is an amount due under the Act, and the Court has observed that the provisions of the Act will not be applicable over an organization of the appellant, while holding the same as not sustainable, the simultaneous proceedings, which has been initiated against the petitioner by invoking the Section 45(C) to 45 (I) of the Act by issuance of the recovery notice by the Employees State Insurance Recovery Officer on 14.10.2003, would not be permitted, to be sustained in the eyes of law, particularly when the provisions of the Act, itself has not been applicable.
In that eventuality while allowing the appeal from order and setting aside the impugned order of 04.02.2013, if any amount is due to be paid by the appellant, as per the notice of 14.10.2003, I am of the view, that it cannot be recovered under Section 45(C) to 45 (I) of the Employees’ State Insurance Act, when the Act was itself not made applicable over the appellant’s organization and that too particularly in the light of the fact, that the respondents herein has not put a challenge to the impugned order by filing any other independent appeal or a cross appeal. In that eventuality, the very enforcement of Section 45(C) to 4(I) of the Act, would not be maintainable. Hence, while sustaining the order to the effect, that once the Court has held that the proceedings are not maintainable under the Act, then quite obviously the consequential procedure of recovery too, would be without competence, hence, the appeal is allowed limited to the extent, that this Court is not disbursing the observations which had been made, that the proceedings would not be maintainable because the provisions of Employees State Insurance is not applicable, but then too, the Court ought to have considered the impact of impugned action taken by an order of 14.10.2003, under Section 45(C) to 45 (I) of the Act, if the Act itself is not applicable then obviously, the recovery of the Recovery Officer under Section 45(C) to 45 (I) of the Act would too not apply on the appellant, but this would be without prejudice to the rights of the respondents to resort, to an appropriate proceeding if at all tenable under law except, other than the provisions of Employees’ State Insurance Act.