- 1 - HC-KAR NC: 2025:KHC:49631-DB MFA No. 745 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF NOVEMBER, 2025 PRESENT THE HON'BLE MRS. JUSTICE ANU SIVARAMAN AND THE HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL MISCELLANEOUS FIRST APPEAL NO.745 OF 2024 (ESI) BETWEEN: 1. THE ADDITIONAL COMMISSIONER AND REGIONAL DIRECTOR, EMPLOYEES STATE INSURANCE CORPORATION NO.10, BINNY FIELD, BINNYPET, BENGALURU - 560 023. REPRESENTED BY AUTHORISED REPRESENTATIVES 2. THE DEPUTY DIRECOTOR EMPLOYEES STATE INSURANCE CORPORATION NO.10, BINNY FIELDS, BINNYPET BENGALURU - 560023. REP. BY AUTHORISED REPRESENTATIVES …APPELLANTS (BY SMT. GEETHA DEVI M. P., ADVOCATE) Digitally signed by CHANNEGOWDA PREMA Location: High Court of Karnataka - 2 - HC-KAR NC: 2025:KHC:49631-DB MFA No. 745 of 2024 AND: EPIANCE SOFTWARE PRIVATE LIMITED NO.2, MANTRI TOWERS 9TH B MANI ROAD EX-CHAIRMAN LAYOUT BANASAWADI MAIN ROAD BENGALURU - 560043 REPRESENTED BY ITS FINANCE MANAGER MR. JAYANTH M KUMAR …RESPONDENT (BY SRI. VACHAN H U., ADVOCATE) THIS MFA IS FILED U/S.82 OF THE EMPLOYEES STATE INSURANCE ACT, 1948, AGAINST THE ORDER DT.27.06.2023 PASSED IN ESI APPLICATION NO.2/2020 ON THE FILE OF THE EMPLOYEES STATE INSURANCE COURT AT BENGALURU, ALLOWING THE APPLICATIONS FILED U/S.75 OF ESI ACT. THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER: CORAM: HON'BLE MRS. JUSTICE ANU SIVARAMAN and HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL - 3 - HC-KAR NC: 2025:KHC:49631-DB MFA No. 745 of 2024 ORAL JUDGMENT (PER: HON'BLE MRS. JUSTICE ANU SIVARAMAN) This appeal is filed against the order dated 27.06.2023 in ESI Application No.02/2020 on the file of the Employees State Insurance Court at Bengaluru. 2. Heard the learned counsel appearing for the appellants as well as the learned counsel appearing for the respondent- Establishment. 3. The following substantial questions of law have been raised in this appeal; 1. "Whether it was necessary to issue notice and then determine amounts of contribution payable on the omitted wages which were based on actual from the records of the Respondent establishment? 2. Whether the ESI Court has failed to exercise its jurisdiction under Section 75 of the ESI Act as held by this Hon'ble Court in Escorts Case reported ILR 1986 KAR 3595?" 4. We have considered the contentions advanced on either side. - 4 - HC-KAR NC: 2025:KHC:49631-DB MFA No. 745 of 2024 5. We notice from the order under challenge that the ESI Court has specifically found that the Notice issued under Section 45(A) of the Employees' State Insurance Act, 1948 ('ESI Act' for short) was only in respect of two headings, while the order has been passed on additional headings, including office maintenance, repair and maintenance, security service charges and other overhead charges, etc. 6. It is contended that the ESI Court came to the conclusion that without specific Notice to the employer and behind its back, the order has been passed in respect of the additional headings. 7. Learned counsel appearing for the appellants submits that the ESI Court was fully empowered to consider the contentions with regard to the additional headings as well. It is submitted that when the books and accounts were produced, it was found that additional headings were also available and it was in the above circumstances that the contribution has been demanded in the additional headings. It is submitted that the respondent- establishment could have raised its contentions - 5 - HC-KAR NC: 2025:KHC:49631-DB MFA No. 745 of 2024 with regard to the additional headings, which could have been considered on merits by the ESI Court. 8. Learned counsel appearing for the respondent, on the other hand, contends that the Notice issued under Section 45(A) of ESI Act was specifically only in respect of two headings and that the determination of contribution on further headings was without Notice to the employer. 9. It is submitted that the employer has no objection to any further enquiry being conducted, if the same is permissible in law, in respect of the period in question. 10. Having considered the contentions advanced, we are of the opinion that in view of the admitted position that the Notice under Section 45(A) of the ESI Act was issued only in respect of two headings, the question whether it is necessary to issue Notice to determine contribution payable on the omitted wages based on actuals revealed from the records of the respondent-establishment requires to be answered in the 'affirmative'. - 6 - HC-KAR NC: 2025:KHC:49631-DB MFA No. 745 of 2024 11. In the above view of the matter, we are of the opinion that there is no error in the order passed by the ESI Court. The appeal accordingly fails and the same is dismissed. The appellants are at liberty to issue fresh notice and conduct fresh enquiry in respect of the period in question, if law permits. The amount, if any, deposited by the respondent- establishment before the appellant- ESI Corporation, shall be refunded to the employer in accordance with law. Pending applications shall stand disposed of. Sd/- (ANU SIVARAMAN) JUDGE Sd/- (VIJAYKUMAR A. PATIL) JUDGE PN List No.: 1 Sl No.: 2