DESEIN PVTD LIMITED Vs. DEPUTY DIRECTOR BIG CELL

JUDGEMENT

(1.) According to the averments in the petition the petitioner is a private limitedcompany engaged in rendering consultancy and ancillary services to its clients in thepower sector. Even before the provisions of the Employees' State Insurance Act,1946 were extended to the establishment of the petitioner, its employees had beengiven medical, maternity and other benefits which were more generous than thoseprovided under the E.S.I. Act. After the provisions of the E.S.l. Act were held to beapplicable to the petitioner, it had no option but to start making contributions inaccordance with provisions of the E.S.I. Act. Respondent No. 1 - the Deputy Director,Regional Office, ESl Corporation passed an ex parte assessment order dated8.8.1997 against the petitioner under Section 45A of the ESl Act. No notice of thesaid proceedings had been received by the petitioner. Hence, the petitioner submittedan application (Annexure P1 dated 9.4.1998) to respondent No. 1 praying to setaside the ex parte order dated 8.8.97. However, no action was taken by the respondenton the said application for setting aside the ex parte order. The petitioner alsosubmitted an application (Annexure P2 dated 9.4.1998) to respondent No.1 requestinghim to withdraw the recovery certificate issued on the-basis of the ex parte assessmentorder dated 8.8.1997 since the petitioner had filed an application for setting asidethe said ex parte order. The petitioner also submitted Annexure P3 application dated9.4.98 to respondent No. 5- Lt. Governor, NCT of Delhi - praying for retrospectiveexemption under the provisions of the E.S.I. Act for the period from 2.10.1988 to31.7.1996. No order was passed on Annexures P2 and P3 application also Copiesof Annexures P1, P2 and P3 applications were forwarded by the petitioner torespondent No. 3 - Recovery Officer, Regional Office, ESl Corporation - requestinghim not to take any coercive action on the basis of the ex parte assessment order tillthe said applications were disposed of. The petitioner also submitted on 23.4.1998praying for exemption under the provisions of the ESl Act. However, no action wastaken on the said application by the Labour Commissioner. The petitioner again sentletter dated 15.5.1998 to respondent No. 1 seeking action on Annexures P1 and P2applications. However, respondent No.1 did not take any action or respond to thesaid letter. In the mean while, respondent No. 3 - Recovery Officer - issued twonotices dated 6.4.1998 and 15.4.1998 requiring the General Manager (HRD) of thepetitioner to show cause as to why he should not be committed to the civil prison inexecution of the recovery certificate forwarded to him under Section 45 A (2) of theESI Act. In the above circumstances the petitioner filed this writ petition praying fordirection to the respondents to dispose of the petitioner's applications as per lawand for restraining respondents 3 and 4 from resorting to coercive process againstthe petitioner to enforce recovery of the dues on the basis of the ex parte assessmentorder till the expiry of a reasonable period after the disposal of the petitioner'sapplications in accordance with law.

(2.) While issuing notice to the respondents to show cause as to why the writ petitionshould not be admitted, this Court stayed the recovery proceedings against thepetitioner. A counter affidavit has been filed on behalf of respondents No. 1,3 and 4opposing the prayers in the writ petition.

(3.) According to the averments in the counter affidavit filed on behalf of respondents1, 3 and 4 before passing the ex parte assessment order dated 8.8.1997 underSection 45 A of the ESI Act a show cause notice dated 28.7.97 had been issued tothe petitioner by respondent No. 4 calling upon the petitioner to show cause as to whyad hoc assessment be not made for its non compliance with the provisions ofSections 39 and 40 of the ESI Act and directing the petitioner to pay the contributionfor the period from 2.10.1988 till 31.7.1996. The petitioner was also given anopportunity to represent through its authorised representative for a personal hearingon 8.8.97. The said notice was duly served on the petitioner through registered A.D.post. However, no one appeared for the petitioner on 8.8.1997 and hence the adhocassessment was made final by the Deputy Regional Director, ESI Corporation. Theorder passed on 11.9.1997 under Section 45 A of the ESI Act calling upon thepetitioner to pay a sum of Rs. 36,87,915.40 was sent to the petitioner by Registeredpost and it was duly received by the petitioner on 19.9.1997 in his office. However,the petitioner did not deposit the amount in terms of the order passed under Section45A of the ESI Act and therefore on 17.2.1998 the ESI Corporation sent an applicationto the Recovery Officer in terms of Section 45-C to 45-I of the ESI Act. But thepetitioner failed to comply with the order passed under Section 45 C of the ESI Act.