HIGH COURT OF JAMMU AND KASHMIR AND LADAKH AT JAMMU Case: WP(C) No. 1451/2020 M/S 3752 Sunil Singh Sambyal Security Agency ….Petitioner/Appellant(s) Through :- Mr. N.S.Khera Advocate Mr. Harmit Kumar Mehta Advocate. V/s UOI and others Through :- Mr Harshvardhan Gupta CGSC CORAM: HON’BLE MS. JUSTICE MOKSHA KHAJURIA KAZMI, JUDGE JUDGMENT(ORAL) 1 Through the medium of instant writ petition, the petitioner seeks to set aside order dated 15.01.2020 passed by respondent No.3, whereby the petitioner has been directed to pay the contribution amount to the tune of Rs.6,93,413.00 within a period of 60 days from the date of passing of the order. In terms of the said order, the petitioner has also been directed to pay interest under Section 39(5) of the Employees’ State Insurance Act, 1948 (hereinafter referred to as the “ESI Act”). The petitioner further seeks to quash a communication dated 11.08.2020, sent by respondent No.3 to respondent No.4 seeking recovery of the aforesaid contribution, along with interest, in terms of the order dated 15.01.2020. A further direction is sought upon the respondents to delete the Employer/Petitioner code No. 19000177090000999 from the database 2 of the Employees’ State Insurance Corporation database, under which the impugned order dated 15.01.2020 has been issued. Factual Matrix: 2 The Petitioner is a security agency operated by its proprietor, a permanent resident of UT of Jammu and Kashmir. Respondent No.3 passed the impugned order requiring the petitioner to pay a contribution amounting to Rs.6,93,413 for the period from May, 2016 to August, 2019 under Code No. 19000177090000999, which, as per the petitioner, was never allotted to or used by it at any time and that the petitioner has never been a defaulter and has no liability pending with the respondents. Furthermore, respondent No.3, vide communication dated 11.08.2020, asked respondent No.4 to recover the aforesaid contribution, along with interest, amounting to Rs..9,02,396/- from the petitioner. The petitioner, after submitting the necessary particulars and on the basis of a report of inspection conducted by the Society Security Officer, was authorized to operate the Employees’ State Insurance Corporation portal against Employer Code No. 19000175610000999 from April 2016 vide authorization letter dated 26.03.2016. Thereafter, the petitioner started depositing the contributions against the said Employer Code regularly every month since April 2016 till date 3 On 29.11.2019 respondent No.3 issued a show cause notice dated 29.11.2019 proposing determination and recovery of contributions from the petitioner on notional wages of Rs.8250 per month per employee for the period from 05.2016 to 12/2016 and Rs.11,550 per month for the period from 01/2017 to 08/2019 per employee, totalling Rs.6,93,413. It is pertinent to mention here that the said show cause notice was issued against Employer Code 3 No. 190001770900000999 which, according to the petitioner, was never allotted to or used by the petitioner for any purpose and may have inadvertently been created as a duplicate or incorrect entry in the respondents’ database. The petitioner submitted objections to the said show cause notice, along with copies of return of contributions made under the correct Employer Code No. 19000175610000999 for the period from 04/2016 to 08/2019. Multiple representations were also filed by the petitioner before respondent No. 2, requesting deletion of the incorrect/duplicate Employer Code No. 19000177090000999 from the ESIC records. However, respondent No. 3, without considering the objections and representations, passed the impugned order. 4 Respondent No. 3, vide letter dated 12.02.2020, informed the petitioner of the option to file an appeal against the impugned order after depositing 25% of the assessed amount. The petitioner sought an extension of time to file the appeal, which was denied by respondent No.3. Subsequently, on 11.08.2020, respondent No. 3 issued a communication to respondent No. 4, thereby directing recovery of the contribution along with interest, in accordance with the impugned order 5. The impugned order has been challenged on the grounds of arbitrariness and non-application of mind, and violation of the principles of natural justice. It is submitted that respondent No. 3 failed to consider the objections filed by the petitioner along with returns of contributions made under Employer Code No.9000175610000999 for the relevant period. The petitioner submits that it has never operated under Employer Code No. 19000177090000999, which appears to be an erroneous or duplicate entry in 4 the ESIC database. It is submitted that since the petitioner runs a single establishment, it could not have been allotted more than one Employer Code, and the incorrect code has caused undue prejudice. It is further submitted that the petitioner have already deposited the required contributions under the correct Employer Code, and, therefore, it should not be compelled to make duplicate payments. 6 Notice in this petition was issued on 21.10.2020, on which date this Court, while issuing notice to the respondents, ordered that subject to the deposit of Rs. 5.00 lakhs by the petitioner within ten days from the date of the order with the Registrar Judicial of this Court, execution of the impugned order dated 15.01.2020 shall remain stayed. 7 When the matter was taken up for hearing today, learned counsel for the petitioner was asked with regard to the maintainability of the writ petition in light of the availability of alternative remedy of appeal under Section 45-AA of the ESI Act. He submitted that though such a remedy exists, the petitioner had approached the competent authority by filing application seeking extension of time to file an appeal but the said application was rejected by the said Authority. Learned counsel for the respondents referred to Section 75 of ESI Act and proposed that it would be appropriate to grant liberty to the petitioner to approach the Employees’ Insurance Court, in terms of the said provision, which could be directed to adjudicate the issues involved. 8 The learned counsel for the petitioner does not dispute the aforesaid legal position and submits that the present writ petition may be disposed of 5 directing the petitioner to approach the Employees Insurance Court for redressal of its grievance. 09 In order to settle the controversy, it would be appropriate to refer to Section 75 of the ESI Act, which reads as under: 75. Matters to be decided by Employees' Insurance Court. (1)If any question or dispute arises as to- — (a)whether any person is an employee within the meaning of this Act or whether he is liable to pay the employee's contribution, or (b)the rate of wages or average daily wages of an employee for the purposes of this Act, or (c)the rate of contribution payable by a principal employer in respect of any employee, or (d)the person who is or was the principal employer in respect of any employee, or (e)the right of any person to any benefit and as to the amount and duration thereof, or (ee) any direction issued by the Corporation under section 55A on a review of any payment of dependants' benefit, or (g)any other matter which is in dispute between a principal employer and the Corporation, or between a principal employer and an immediate employer or between a person and the Corporation or between an employee and a principal or immediate employer, in respect of any contribution or benefit or other dues payable or recoverable under this Act, or any other matter required to be or which may be decided by the Employees' Insurance Court under this Act, such question or dispute subject to the provisions of sub-section (2A) shall be decided by the Employees' Insurance Court in accordance with the provisions of this Act”. 10 From a perusal of the provision, it is evident that any dispute regarding contributions or benefits between a principal employer and the Corporation, or any related party, is to be adjudicated by the Employees’ Insurance Court. 6 11 In view of the above, and with the consent of learned counsel for the parties, this writ petition is disposed, leaving it open to the petitioner to resort to the appropriate remedy that may be available under the law, more particularly under Section 75 of the ESI Act. It goes without saying that the time consumed in filing applications before the competent authority seeking extension of time to file appeal, as well as in pursuing this writ petition, shall not prejudice the petitioner in availing such remedy. It is further clarified that nothing in this order shall be construed as an expression of opinion on merits of the case. Until the matter is adjudicated by the Employees’ Insurance Court, the operation of the impugned order dated 15.01.2020 as well as the subsequent communications shall remain stayed. The Employees’ Insurance Court shall provide an opportunity of hearing to both parties and shall endeavour to decide the matter expeditiously in accordance with law. The amount deposited in the Registry, along with the interest accrued thereon in terms of order dated 21.10.2020, shall be transmitted forthwith to the Employees' Insurance Court. 12. The writ petition is disposed of in the aforesaid terms. (MOKSHA KHAJURIA KAZMI) JUDGE Jammu 30.04.2025 Sanjeev Whether the order is speaking: Yes/No. Whether the order is reportable: Yes/No.