ORISSA RURAL HOUSING & DEVELOPMENT CORPORATION LTD Vs. DEPUTY DIRECTOR (REVENUE), EMPLOYEES STATE INSURANCE CORPORATION, BBSR

JUDGEMENT

(1.) The Orissa Rural Housing and Development Corporation Ltd., a Government of Orissa Undertaking, which is coming under the administrative control of H and UD Department and guided by the Rules and Regulations of Public Enterprises Department of Government of Orissa, has filed this application challenging the action of the opposite party in demanding the ESI (Employee State Insurance) contribution and also exercising power compelling it to accede to the demand without deciding the applicability of the Employees' State Insurance Act, 1948 to the petitioner- establishment.

(2.) The factual matrix of the case, in hand, is that the Deputy Director (Revenue), ESI Corporation issued a letter on 11.03.2002 demanding ESI contribution for the period from 01.01.2001 to 30.09.2001 on ad hoc basis and called upon the petitioner to show cause within a period of 15 days as to why the assessment should not be made, as proposed, and fixed the hearing of the case to 02.05.2002. In response to the said letter, the petitioner submitted its reply on 27.03.2002 stating inter alia that it is a government owned undertaking coming under the administrative control of H and UD Department, Government of Orissa and payment of salary, other allowances etc., inclusive of medical reimbursement benefit, to its employees are guided and made, vide Public Enterprises Department resolution dated 16.08.1995, therefore, the provisions of Employees' State Insurance Act, 1948 (for short "ESI Act, 1948") are not applicable to it. Without considering the said aspect, the opposite party went on issuing letters demanding ESI contribution for the periods from 10/2001 to 9/2002 and 10/2002 to 3/2005 on ad hoc basis, similar to 11.03.2002, and as per the letter dated 03.11.2005 fixed the personal hearing to 09.12.2004 on Section 45-A of the ESI Act, 1948. In response to the said letter dated 03.11.2005, the petitioner reiterated the facts, vide its letter dated 08.12.2005, and requested to waive the demand and exempt the petitioner-Corporation from the purview of the ESI Act, 1948.

(3.) Mr. S. Mishra, learned counsel appearing for the petitioner contended that the ESI Act, 1948 has no application to the petitioner corporation since it is not coming under sub-section (4) and (5) of Section-1 of the said Act and more over the employees of the corporation are enjoying the medical facilities as provided to the government employees substantially similar or superior to the benefits provided under the ESI Act, 1948. It is further contended that when a specific plea was taken before the opposite party with regard to applicability of the ESI Act, 1948 to the petitioner establishment and/or regarding exemption, as contemplated under the statute, the opposite party proceeded with the matter under Section 45-A of the ESI Act, 1948. It is contended that the petitioner corporation is a State owned undertaking and is not a "factory" or "establishment" as mentioned in the statute, as such the ESI Act, 1948 has no application to the petitioner corporation, when its employees are getting benefits as per the government rules without subscribing anything, therefore, it is to be exempted from the purview of the said Act. It is thus contended that the opposite party was duty bound to decide that issue before proceeding with the matter further under Section 45- A of the ESI Act, 1948 and, having not done so, the action taken by the opposite party is arbitrary, unreasonable and contrary to the provisions of law and violative of principles of natural justice.