Nagar Palika Parishad and Others vs Deputy Director/Regional Director Employees State Insurance

Sibghat Ullah Khan, J.—List revised. No one appears for respondent. Heard Sri C.K. Parekh, learned counsel for the petitioners.

The question involved in this case is whether Employees State Insurance Act 1948 (E.S.I. Act) applies on Municipal Corporations/Municipalities or not? Recovery Officer, ESI Corporation, Kanpur had already recovered an amount of about Rs. 16 lacs from the petitioner and issued notice for payment of further amount of about Rs. 17 lacs. Neither any counter affidavit has been filed nor any one is present for respondents Deputy/Regional Director and Recovery Officer, ESI Corporation, Kanpur. Learned counsel for the petitioner has cited two authorities, one of Hon''ble Supreme Court and the other of Uttrakhand High Court. The Hon''ble supreme Court in its Municipal Committee, Abohar Vs. Regional Commissioner, E.S.I. Corpn. and Another, , held that ESI Act does not apply on a Municipal corporation. That case was from Punjab. Following that judgment Uttarakhand High Court decided the case of Nagar Palika Hardwar Vs. Employee State Insurance Corporation and Others, and applying the said judgment of Hon''ble Supreme Court held that Municipalities constituted under U.P. Municipalities Act are also exempted from the operation of ESI Act. Learned counsel for the petitioners states that Nagar Palika Saharanpur which is petitioner in this writ petition has now become Corporation with effect from October 2010. In view of above authorities ESI Act does not apply to the petitioner; neither it applied when it was Municipality nor it applies after it became corporation. Accordingly all the orders passed and notices issued against petitioner by the authorities under ESI Act including orders and notices dated 7.12.2005, 22 or 23.12.2005, 6.12.2005, 23/28.9.2005, 20.1.2006 are set aside. The amount of Rs. 16 lacs recovered by E.S.I. Corporation from the petitioner shall be returned to the petitioner within three months from date of service of certified copy of this order upon the authority concerned of ESI Corporation.

Writ petition is allowed.