FAO-2758-1996 (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA Employees State Insurance Corporation Vs. M/s B.T.M. Oil Mills and others CORAM: HON’BLE MR. JUSTICE HARKESH MANUJA Present: Mr. Vinod Kumar, for the appellant. HARKESH MANUJA, J. (ORAL) 1. By way of present appeal, challenge has been laid to the order dated 06.10.1994 passed by the learned Presiding Officer, Employees Insurance Court, Chandigarh, whereby the application preferred by respondent No.1 under Section 75 of the Employees’ State In 1948 (for short, “the Act”) came to be allowed and the demand order dated 17.06.1992 (Ex.A5), raising contribution of Rs. 21,437/ of Rs. 8,300/- for the period December, 1987 to November, 1988 was set aside. 2. Briefly stating, respondent No.1 approached the ESI Court pleading that it was merely a unit of M/s Birla Textile Mills, engaged in extraction of oil from cotton seeds supplied by the principal unit, whose manufacturing activity comprised cotton ginning and pres respondent No.1, the principal unit was a seasonal factory and its activities were incidental and connected with the manufacturing process of the principal unit and, therefore, respondent No.1 also stood exempted from (O&M) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO Date of Decision: Employees State Insurance Corporation M/s B.T.M. Oil Mills and others HON’BLE MR. JUSTICE HARKESH MANUJA Vinod Kumar, Advocate for the appellant. **** HARKESH MANUJA, J. (ORAL) By way of present appeal, challenge has been laid to the order dated 06.10.1994 passed by the learned Presiding Officer, Employees Insurance Court, Chandigarh, whereby the application preferred by respondent No.1 under Section 75 of the Employees’ State In 1948 (for short, “the Act”) came to be allowed and the demand order dated 17.06.1992 (Ex.A5), raising contribution of Rs. 21,437/ for the period December, 1987 to November, 1988 was set y stating, respondent No.1 approached the ESI Court pleading that it was merely a unit of M/s Birla Textile Mills, engaged in extraction of oil from cotton seeds supplied by the principal unit, whose manufacturing activity comprised cotton ginning and pres respondent No.1, the principal unit was a seasonal factory and its activities were incidental and connected with the manufacturing process of the principal unit and, therefore, respondent No.1 also stood exempted from IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH FAO-2758-1996 (O&M) Date of Decision: 22.07.2026 …Appellant …Respondents HON’BLE MR. JUSTICE HARKESH MANUJA By way of present appeal, challenge has been laid to the order dated 06.10.1994 passed by the learned Presiding Officer, Employees Insurance Court, Chandigarh, whereby the application preferred by respondent No.1 under Section 75 of the Employees’ State Insurance Act, 1948 (for short, “the Act”) came to be allowed and the demand order dated 17.06.1992 (Ex.A5), raising contribution of Rs. 21,437/- along with interest for the period December, 1987 to November, 1988 was set y stating, respondent No.1 approached the ESI Court pleading that it was merely a unit of M/s Birla Textile Mills, engaged in extraction of oil from cotton seeds supplied by the principal unit, whose manufacturing activity comprised cotton ginning and pressing. According to respondent No.1, the principal unit was a seasonal factory and its activities were incidental and connected with the manufacturing process of the principal unit and, therefore, respondent No.1 also stood exempted from By way of present appeal, challenge has been laid to the order dated 06.10.1994 passed by the learned Presiding Officer, Employees Insurance Court, Chandigarh, whereby the application preferred by surance Act, 1948 (for short, “the Act”) came to be allowed and the demand order dated along with interest for the period December, 1987 to November, 1988 was set y stating, respondent No.1 approached the ESI Court pleading that it was merely a unit of M/s Birla Textile Mills, engaged in extraction of oil from cotton seeds supplied by the principal unit, whose sing. According to respondent No.1, the principal unit was a seasonal factory and its activities were incidental and connected with the manufacturing process of the principal unit and, therefore, respondent No.1 also stood exempted from SANJAY GUPTA 2026.07.28 17:48 I attest to the accuracy and integrity of this document FAO-2758-1996 (O&M) the applicability of the Act. On the aforesaid premise, challenge was laid to the demand dated 17.06.1992. 3. Upon notice, the appellant-Corporation contested the claim by filing a written statement, asserting that the process of extraction of oil from cotton seeds was an independent manufacturing activity having no nexus with the process defining a seasonal factory under the Act. It was further pleaded that respondent No.1 was an independent factory covered under Section 2(12) of the Act and, therefore, liable to pay contributions. A preliminary objection regarding maintainability of the application under Section 75(2-B) of the Act was also raised. 4. From the pleading of the parties, following issues were framed:- “1. Whether the order dated 18.06.92 of the respondent is liable to be quashed same being illegal? OPP 2. Whether the application is not maintainable? OPR 3. Relief.” 5. The learned Presiding Officer vide order 06.10.1994 dismissed the application while holding that since the main unit of the applicant was a seasonal factory, thus the demand of contribution for the period 01.03.1981 to 30.11.1987 was quashed. 6. Aggrieved of the order dated 06.10.1994, the present appeal has been preferred. 7. I have heard learned counsel for the appellant and gone through the paper-book. 8. In the present case, it is not in dispute that prior to the issuance of the impugned demand, respondent No.1 had already challenged the applicability of the provisions of the Employees' State Insurance Act, 1948 as well as the demand of contribution raised by the appellant-Corporation SANJAY GUPTA 2026.07.28 17:48 I attest to the accuracy and integrity of this document FAO-2758-1996 (O&M) by invoking the jurisdiction of the Employees' Insurance Court under Section 75 of the Act. In the previous proceedings, challenge was laid to the order dated 01.04.1980 extending the coverage of the Act to respondent No.1, besides questioning the demand of contribution amounting to Rs.41,932/- for the period 01.03.1981 to 30.11.1987 besides assailing the interest of Rs.13,542/-, on the plea that respondent No.1 was merely a unit of the principal seasonal factory and, therefore, exempted from the applicability of the Act. 9. The aforesaid proceedings culminated in the judgment dated 09.12.1992 (Ex.A1) passed by the Employees' Insurance Court, Chandigarh, whereby the application preferred by respondent No.1 was accepted. The Court categorically held that respondent No.1 was exempted from the provisions of the Act being a seasonal factory and consequently set aside both the order of coverage as well as the consequential demand of contribution. The operative part of the judgment reads as under:- “11. As per findings on all the issues, petitioner No.2 is found exempted from the provisions of the ESI Act being a seasonal factory and the order of coverage thereof dated 1.4.1980 being illegal is set aside and further the order dated 9.4.1980 to require the petitioner to pay Rs.41932/- with interest of Rs.13542/- is also set aside being illegal. For the circumstances of the case, parties are left to bear their own costs. Copy of the judgment be placed on the case of the second petition. File be consigned to the record room.” 10. Admittedly, the aforesaid judgment dated 09.12.1992 was never challenged by the appellant-Corporation before any higher forum and, thus, attained finality. It is only thereafter that the appellant proceeded SANJAY GUPTA 2026.07.28 17:48 I attest to the accuracy and integrity of this document FAO-2758-1996 (O&M) to issue another demand dated 17.06.1992, claiming contribution for the subsequent period i.e. December, 1987 to November, 1988, which came to be challenged before the learned Employees' Insurance Court in the present proceedings. 11. The principal argument raised by learned counsel for the appellant that there can be no estoppel against a statute, therefore, the earlier judgment could not preclude the Corporation from enforcing the provisions of the Act. The submission, though legally unexceptionable in abstract, is wholly misconceived in the facts of the present case. The controversy herein is not governed by the principle of estoppel but by the binding effect and finality attached to a judicial determination. Once the competent Court had declared the coverage of respondent No.1 under the Act to be illegal and the said adjudication had attained finality, the appellant-Corporation could not ignore the same and continue to raise fresh demands founded upon the very order of coverage which no longer survived in the eyes of law. In the absence of any subsequent order of coverage, change in the statutory provisions or alteration in the factual position, the impugned demand could not have been sustained. 12. The appellant has not been able to point out any subsequent statutory amendment, change in factual circumstances or fresh order of coverage which could independently justify the demand in question. The impugned demand is merely a continuation of the earlier action already held to be illegal. Therefore, no fault can be found with the reasoning adopted by the learned ESI Court. 13. Consequently, finding no illegality or perversity in the impugned order dated 06.10.1994 passed by the learned Employees’ Insurance SANJAY GUPTA 2026.07.28 17:48 I attest to the accuracy and integrity of this document FAO-2758-1996 (O&M) Court, Chandigarh, the present appeal being devoid of merit is hereby dismissed. 14. Pending miscellaneous application(s), if any, shall also stand disposed of. 22.07.2026 (HARKESH MANUJA) sanjay JUDGE Whether speaking/reasoned? Yes/No Whether Reportable? Yes/No SANJAY GUPTA 2026.07.28 17:48 I attest to the accuracy and integrity of this document