$~24 * IN THE HIGH COURT OF DELHI AT NEW DELHI # CNR No. DLHC010472502022 + FAO 322/2022 & CM APPL. 54422/2022 CM APPL. 54423/2022, CM APPL. 54424/2022 EMPLOYEE STATE INSURANCE CORPORATION .....Appellant Through: Ms. Kaveri, Mr. Mahesh Srivastava, Mr. Vaibhav, Manu Srivastava, Mr. Gaurav Singh, Advs. versus M/S SAI SECURITY SERVICES .....Respondent Through: Mr. Mahboob and Mr. Shoaib Khan, Advocates CORAM: HON'BLE MR. JUSTICE MANOJ KUMAR OHRI O R D E R % 21.09.2026 1. The present appeal has been filed under Section 82 of the ESI Act, 1948 (hereinafter referred to as the “Act”) read with the provisions of the Delhi High Court Rules against the judgment dated 13.08.2021 passed by the ld. SCJ-cum-Rent Controller, South East District, Saket Courts Complex, New Delhi in ESIC No. 26/16, titled as “M/s Sai Security Services v. ESIC”. 2. Vide the impugned order, the show cause notice as well as the recovery certificate issued by the appellant were set aside, except to the extent of Rs.16,000/-, which was held payable by the respondent towards the ESIC contribution. The respondent has not assailed the aforesaid finding. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/09/2026 at 11:39:44 3. Briefly stated, the appellant had issued a show cause notice to the respondent, which was engaged in the business of providing security guard services, alleging non-payment of ESIC contributions for the period from 01.01.2009 to 28.02.2013. The respondent, before the ESIC Court, took the stand that it had closed its business and its proprietor had thereafter joined the Merchant Navy. The respondent also relied upon the documents relating to surrender of its service tax number and other documents to establish closure of the business. The appellant, however, failed to place any material on record to establish that the respondent continued its business beyond May 2009. The ESIC Court, accordingly, came to the conclusion that the liability of the respondent could only be determined for the period from February 2009 to May 2009. The respondent had admitted its liability to the extent of Rs.16,000/- towards ESIC contribution for the said period. The demand for the remaining period was accordingly set aside. 4. Before this Court, learned counsel for the appellant submits that the learned ESIC Court ought not to have restricted the liability to the period up to May 2009 and that the assessment for the entire period covered by the demand ought to have been upheld. It is also submitted that the impugned judgment does not deal with the liability towards statutory interest. 5. Learned counsel for the respondent, on the other hand, submits that the assessing officer, who had made the assessment and issued the recovery certificate, as well as the notice under C-19, was not examined and, therefore, there was no material to rebut the respondent’s case regarding closure of the business. It is further submitted that the amount of Rs.16,000/- had already been deposited before the learned ESIC Court on 30.09.2014. He, however,on instructions,undertakes that the statutory interest payable This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/09/2026 at 11:39:44 from February 2009 till September 2014 shall be deposited. 6. This Court has considered the submissions made and have perused the material on record. The respondent had taken a specific stand that its business had closed in May 2009. This was not a plea raised in isolation, as the respondent had also placed on record documents relating to surrender of its service tax registration. While surrender of the service tax registration may not, by itself, conclusively establish the exact date on which the business ceased to operate, it was certainly a relevant circumstance to be considered while examining the respondent’s plea of closure. The appellant, despite the said plea having been specifically raised, did not bring on record any material to show that the respondent continued to carry on the business of providing security services, or that it continued to have employees covered under the Act, after May 2009. The assessment, insofar as it related to the period thereafter, thus remained unsupported by any material establishing continuation of the establishment during the said period. In these circumstances, the learned ESIC Court was justified in restricting the liability to the period which stood established from the material before it. 7. The fact that the Assessing Officer,who had issued the recovery certificate and had issued the notice under C-19 dated 29.05.2014, was not examined assumes significance in the aforesaid circumstances. The respondent was not merely disputing the quantum of the demand, its specific case was that the establishment itself had ceased to operate. Once such a defence was taken and was supported by the documents on record, the basis on which the appellant sought to continue the assessment up to 28.02.2013 required to be established. No such material has been pointed out before this Court. At the same time, there is no dispute with regard to the liability of This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/09/2026 at 11:39:44 Rs.16,000/- for the period from February 2009 to May 2009, which was admitted by the respondent and has, as submitted, already been deposited before the learned ESIC Court. The finding of the learned ESIC Court to that extent, therefore, does not call for interference. 8. As regards the statutory interest, the respondent shall pay the statutory interest payable, within the stipulated time, in accordance with law. 9. In view of the aforesaid, the present appeal, alongwith the pending applications, accordingly stands disposed of in the above terms. MANOJ KUMAR OHRI, J SEPTEMBER 21, 2026 sn This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 25/09/2026 at 11:39:44