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2025 DAILYLAW 46089 (KAR)

GURUJYOTHI EDUCATION SOCIETY v. DEPUTY DIRECTOR

WP/35913/2018 · 2025-02-24

Anant Ramanath Hegde

body2025

Judgment text

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- 1 - NC: 2025:KHC:8094 WP No. 35913 of 2018 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE ANANT RAMANATH HEGDE WRIT PETITION NO. 35913 OF 2018 (L-ESI) BETWEEN: GURUJYOTHI EDUCATION SOCIETY, A SOCIETY REGISTERED UNDER THE KARNATAKA SOCIETIES REGISTRATION ACT, 1960 KHB COLONY, KUVEMPUNAGAR, 2ND STAGE, HASSAN-573201, REPRESENTED BY ITS SECRETARY, SRI A R MANJUNATHA BABU. …PETITIONER (BY SRI. A M SHODHAN BABU, ADVOCATE) AND: DEPUTY DIRECTOR, ESI CORPORATION, SUB-REGIONAL OFFICE, IST FLOOR, ESI DISPENSARY BUILDING, BADEMAKAN EXTENSION, BANGALORE-MYSORE ROAD, MYSORE-570007. …RESPONDENT (BY SRI C SHASHIKANTHA, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER PASSED BY THE RESPONDENT DATE 17.5.2018 VIDE ANNEX-A AND LETTER DATED 28.5.2018 OF THE RESPONDENT AT ANNEX-G. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP THIS DAY, ORDER WAS MADE THEREIN AS UNDER: Digitally signed by C HONNUR SAB Location: HIGH COURT OF KARNATAKA - 2 - NC: 2025:KHC:8094 WP No. 35913 of 2018 CORAM: HON'BLE MR JUSTICE ANANT RAMANATH HEGDE ORAL ORDER This petition is filed assailing the order dated 17.05.2018 marked at Annexure-A passed by the respondent and also the letter dated 28.05.2018 marked at Annexure-G and letter dated 04.09.2018 marked at Annexure-H issued by the sole respondent. 2. In terms of Annexure-A dated 17.05.2018, an order is passed under Section 45-A of the Employees State Insurance Act, 1948 (for short 'Act, 1948'). In terms of the said order, the respondent has ordered the petitioner to pay ₹77,220/- as arrears of contribution under the Act, 1948. Later, as a follow up to order at Annexure-A, a demand notice in terms of Annexure-G dated 28.05.2018 is issued to pay the amount determined in terms of Annexure-A. Since the payment was not paid, one more notice was issued on 04.09.2018 to pay the said amount. It is also noticed that in terms of Annexure-H, interest at the rate of 12% per annum is also demanded on the areas - 3 - NC: 2025:KHC:8094 WP No. 35913 of 2018 of contribution. There is no dispute that the interest payable is statutorily fixed under the Act, 1948. 3. Learned counsel appearing for the petitioner taking through the facts of the case would contend that the petitioner is an institution which though covered by the Act, 1948 has also the benefit of the amnesty scheme which was launched in the year 2017. Under the scheme called as "SPREE", the petitioner institution is registered and the petitioner is entitled to claim benefit under the said scheme and petitioner is not liable to pay any contribution for the period prior to the petitioner institution was registered under the SPREE scheme. 4. It is his further contention that though the petitioner is registered under the SPREE scheme, the respondent authority has demanded contribution for the period before the said scheme and as the petitioner is registered under this scheme with effect from 1st June, 2017, there cannot be any demand under the Act, 1948 prior to 1st June, 2017. - 4 - NC: 2025:KHC:8094 WP No. 35913 of 2018 5. It is also his further contention that the respondent issued a notice to the petitioner demanding contribution for the period covering from 01.05.2016 to 31.12.2016 and the petitioner replied to the said notice vide reply dated 24.04.2018 market at Annexure-F stating that the petitioner has availed the benefit of the SPREE scheme and is not liable to pay any contribution prior to the date of registration i.e. 01.06.2017 and also petitioner contented that the payment is made after 01.06.2017 and same is not taken into account while issuing the demand notice. 6. Learned counsel would further submit that despite a specific reply in writing clarifying the position of law as well as factual position, the respondent authority has not considered the reply and passed the order. Thus, he would contend that though the order is appealable, in view of violation of principles of natural justice, the writ petition is maintainable. On the score that the authority had no jurisdiction to demand contribution for the period - 5 - NC: 2025:KHC:8094 WP No. 35913 of 2018 before 01.06.2017, the order is without the jurisdiction as such, the writ petition is maintainable. 7. Learned counsel appearing for the respondent on the other hand, would raise a preliminary objection on the premise that the writ petition is not maintainable as the impugned order at Annexure-A is appealable and the provision of law is clearly mentioned in the impugned order indicating where the appeal lies. He would further submit that the appeal mandates deposit of the amount as such, to evade such deposit, the writ petition is filed bypassing the efficacious statutory remedy available under law. 8. Learned counsel appearing for the respondent referring to the merits of the matter would also contend that the benefit of the SPREE scheme is not available to the petitioner given the fact that the scheme is available to only those persons who are not registered under the Act of 1948. The respondent authority had conducted inspection and noticed that the petitioner institution - 6 - NC: 2025:KHC:8094 WP No. 35913 of 2018 though governed by the provisions of Act, 1948 did not register itself under the Act, 1948 and noticing this default on the part of the petitioner, the respondent has issued a code registering the petitioner under the Act, 1948. 9. Learned counsel appearing for the respondent referring to the provisions of the scheme would contend that the scheme is available only to those establishments which are kept out of the ESI coverage for whatever reasons. The relevant portion of the scheme dated 06.01.2017 reads as under:- "The One time drive SPREE, intends to extend the social security benefits to all-eligible under the Act, who have till now been kept out of the ESI coverage, for whatsoever reasons." 10. It is further submitted that after issuance of a code number under the Act, 1948, a communication is sent to the petitioner asking them to furnish the list of employees and despite the service of notice in the prescribed form, the petitioner has not come forward to - 7 - NC: 2025:KHC:8094 WP No. 35913 of 2018 comply with the requirement under the Act, 1948 and the Regulation made thereunder. Thus, he would contend that the petitioner is not eligible for the benefit of the scheme and the petitioner is required to make payment even for a period before 1st June, 2017. 11. This Court has considered the contentions raised at the bar and perused the records. 12. It is to be noticed from the relevant portion of the scheme extracted above, that the scheme is made applicable only to those persons who are not registered under the provisions of the Act, 1948. 13. The records placed by the respondent would reveal that the code (after registration under the Act, 1948) has been issued to the petitioner after making inspection and noticing the fact that the petitioner institution is covered under the Act. 14. Though the learned counsel for the petitioner would contend that the further procedure contemplated - 8 - NC: 2025:KHC:8094 WP No. 35913 of 2018 under the Regulations post issuance of the code is not complied by the respondent by confirming the names of the employees, what is required to be noticed is the petitioner has defaulted by not furnishing the names of the employees pursuant to notice in Form No.1. Thus, the petitioner cannot take a contention that it is not registered under the provisions of Act, 1948 to claim benefit under the scheme launched on 06.01.2017. This being the position, the Court cannot hold that the order is passed without jurisdiction. Thus, the remedy by way of an appeal is very much available. Nevertheless, the writ petition is of the year 2018 and we are in 2025 and argument is also advanced on the merits of the matter as well. It is also noticed that in the statement of objection, the contention relating to alternative remedy is not raised in the first instance and the matter is pending before this Court for the last 6 years. Under these circumstances, this Court has proceeded to decide the case on merits notwithstanding alternative remedy of appeal being available. - 9 - NC: 2025:KHC:8094 WP No. 35913 of 2018 15. Coming to the merits of the case, it is also noticed that the scheme launched in 2017 is not applicable to the petitioner. The petitioner was already issued a code number under the Act, 1948. Once the code number is issued, the petitioner is required to furnish the list of employees in its establishment and thereafter, was required to make contribution as required under the provisions of the Act, 1948. The petitioner has clearly defaulted. The petitioner has not questioned the order issuing a code number before the launch of this scheme. 16. It is not the case of the petitioner that the petitioner is not an establishment covered under the Act, 1948 and the provisions of the Act, 1948 are not applicable to the petitioner-establishment. Thus the petitioner is bound to make necessary contribution as required under the provisions of the Act, 1948. 17. Though, the counsel for the petitioner would contend that the objections raised by the petitioner by way of reply and also the enclosures produced by the petitioner - 10 - NC: 2025:KHC:8094 WP No. 35913 of 2018 are not considered by the authority, it is relevant to notice that the objection raised is to the effect that the petitioner is exempted from contribution prior to the period 1st June 2017. 18. This Court has already noticed that the petitioner is not entitled to the benefit of this scheme as the code was already issued registering the petitioner under the Act, 1948. 19. That being the position, even if the authority has not considered the objections by the petitioner, this Court has considered the said objection and has taken a view that the petitioner is not entitled to the benefit and the objection raised is without any merit. 20. For the aforementioned reasons, this Court is of the view that the impugned demand is valid. 21. The petitioner shall make the payment as ordered along with the interest to the respondent. On such payment being made, the respondent shall take - 11 - NC: 2025:KHC:8094 WP No. 35913 of 2018 further steps to ensure that the payment covers the risk of the employees as per the provisions of the Act, 1948 and Regulations. 22. Learned counsel for the petitioner at this juncture would submit that after the new code was issued under the scheme, the petitioner has been making contributions under the new code and since this Court has taken a view that the new scheme is not applicable, the new code will also be not a valid code and the contributions made by the petitioner should be adjusted to the code issued by the respondent before the launch of this scheme. 23. This Court finds merit in the said submission. A direction is issued to the respondent to enable the petitioner to make further contributions to the old code issued by the respondent and all payments made under the new code shall be adjusted in the old code. 24. The amount in deposit before this Court along with interest shall be released in favour of the respondent. - 12 - NC: 2025:KHC:8094 WP No. 35913 of 2018 25. The petitioner shall pay the balance amount. 26. The petitioner is entitled to adjust the interest which is earned through Bank deposit in respect of 25% of the amount which is deposited before this Court. After adjusting the said interest earned on bank deposit, the petitioner shall pay the balance portion of the interest. 27. Writ petition is disposed of. Sd/- (ANANT RAMANATH HEGDE) JUDGE CHS List No.: 1 Sl No.: 29