IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED:23.12.2010 CORAM: THE HON'BLE MR.JUSTICE K.CHANDRU W.P.NO.13531 to 13533 OF 2010 and M.P.Nos.1,1 and 1 of 2010 M/s India Pistons Ltd., rep. by its Director Huzur Garden, Sembium, Chennai 600 011. ...Petitioner in all W.Ps. Vs. The Deputy Director, The Employees' State Insurance Corporation Regional office (Tamil Nadu) 143, Sterling Road, Chennai 600 034. ...Respondent in all W.Ps. Petitions filed under Article 226 of the Constitution of India praying to issue a writ of Certiorari calling for the records connected with file No.TN/Ins-VI/51-00-003075-000-0606 of the respondent i.e. ESI Corporation, Chennai-34 and to quash the order dated 4.6.2010 made therein. For Petitioner: Mr.Sanjay Mohan for M/s Ramasubamaniam Associates For Respondent: Mrs.S.Jothivani Standing Counsel(ESI Corporatio O R D E R These writ petitions are filed by the employer challenging the order passed under Section 45-A of the ESI Act,1948 dated 4.6.2010. By the said order, the petitioners were informed that an inspection report was called for which would show that the petitioner had not paid their due amounts which worked out to Rs.7,52,430/- for the period from 2004-2005 in respect of W.P.No.13531 of 2010, Rs.83,98,963/- for the period from 2001-2002 and 2002-2003 in respect of W.P.No.13532 of 2010 and of https://hcservices.ecourts.gov.in/hcservices/ Rs.17,14,533/- in respect of W.P.No.13533 of 2010 for the period 2003-2004. 2. The writ petitions were admitted on 28.6.2010. Pending the writ petitions, this Court granted interim stay on condition that the petitioner deposits 25% of the total contribution in W.P.No.13531 of 2010 and 10% of the total contribution in W.P.Nos.13532 and 13533 of 2010. It is now claimed by Mr.Sanjay Mohan, learned counsel appearing for M/s Ramasubramaniam Associates that the said condition was complied with. 3. In normal circumstances, this Court would have directed the authorities to go before the ESI Court under Section 75 of the ESI Act. The Supreme Court in ESI Corpn. v. C.C. Santhakumar reported in (2007) 1 SCC 584 held that in respect of a notice under Section 45-A of the ESI Act, which is not challenged under Section 75 of the Act, the authorities can deem it a final order and proceed to recover the amount. 4. However, the Parliament has now amended the ESI Act by Central Act 18 of 2010 and provided a new Section 45AA in the Act. Section 45A of the Act also undergone change by the introduction of a proviso to that section. The amendment Act was brought into force with effect from 01.06.2010 as per the Government notification in SO 1296/E published in the Gazette of India dated 1.6.2010. 5. In the light of this amendment, learned counsel for the petitioner submits that when the authorities passed the impugned order, they have lost sight of the amendment made to the Act. Admittedly, the impugned order came to be made on 4.6.2010 and they ought to have taken note of the proviso to Section 45A of the Act which reads as follows: "Provided further that no such order shall be passed by the Corporation in respect of the period beyond five years from the date on which the contribution shall become payable" 6. Any person who is aggrieved by any order passed under 45A of the Act has now been provided with an appeal remedy in terms 45AA which reads as follows: "45AA. If an employer is not satisfied with the order referred to in section 45A, he may prefer an appeal to an appellate authority as may be provided by regulation, within sixty days of the date of such order after depositing twenty-five per cent of the contribution so ordered or the contribution as per his own calculation, whichever is higher, with the Corporation: https://hcservices.ecourts.gov.in/hcservices/ Provided that if the employer finally succeeds in the appeal, the Corporation shall refund such deposit to be employer together with such interest as may be specified in the regulation". 7. However, the respondent themselves have admitted in their circular sent on 24.6.2010 that for a formal decision, on notifying the Appellate Authority may take some more time. Though it is now claimed by a circular dated 4.8.2010, appellate authorities have been notified by introducing new regulation 31-D, those regulations are yet to be published in the Gazette as required under the Act. The circulars dated 24.06.2010 and 4.11.2010 cannot be taken as substitute for the regulation to be made in terms of Section 97 of the ESI Act. The Act requires the Corporation to make regulation after prior publication in the gazette. 8. The contention of Ms.Jothivani, learned counsel for the respondent that they should abide by the provisions of Section 75 of the Act may not be proper. The Act itself now provided under Section 45AA of the amended ESI Act to go before the Appellate Authority. Admittedly the orders impugned in these writ petitions came to be made on 04.06.2010. Therefore, the petitioner can have the benefit of amended provision and obviously the Appellate Authority have not been notified under the regulations and in terms of Section 45AA of the Act, the petitioner can very well approach this Court. 9. The contention raised by Mr.Sanjay Mohan, learned counsel for the petitioner was that in passing the impugned orders, the proviso to Section 45A of the Act must be taken note of. The Parliament has now directed that no order can be passed by the Corporation in respect of period beyond 5 years from the date of which, the contribution shall become payable. 10. A perusal of the impugned order shows that the proviso to Section 45A of the Act has not been kept in mind and it consists of periods barred by the proviso as well as the periods not covered by the proviso. Hence, this Court is of the view that the impugned order must be set aside and the respondent to redo the exercise afresh in the light of the proviso, after giving opportunities to the petitioner. If any order is passed pursuant to the direction given by this Court, the petitioner can always work out his remedy in terms of the Act and in case, if appellate authorities are notified, they can always approach the appellate authority. The writ petitions are allowed to the extent indicated above. No costs. The Miscellaneous Petitions stand closed. https://hcservices.ecourts.gov.in/hcservices/ 11. At this stage, Mr.Sanjay Mohan, learned counsel for the petitioner submitted that by virtue of the orders passed dated 28.6.2010, the petitioner had deposited amounts and if the impugned orders are quashed, they are entitled to get the refund of the said amount. Since this Court had not decided the merits of the liability of the petitioner and has only permitted the ESI authorities to perform their statutory duties in accordance with the amended provision, the question of refund of the deposit made, pursuant to the interim orders passed by this Court on 28.6.2010 can be decided after the outcome of the orders to be passed by the ESI Corporation. Sd/- Asst.Registrar. /true copy/ Sub Asst.Registrar. VJY To The Deputy Director, The Employees' State Insurance Corporation Regional office (Tamil Nadu) 143, Sterling Road, Chennai 600 034. 3 CCS TO m/S.S. Jothivani & Divya, Sr. 91992, 91991 & 91990 W.P.NO.13531 to 13533 OF 2010 and M.P.NOS.1,1 & 1 OF 2010 RV (CO) kk 27/1 https://hcservices.ecourts.gov.in/hcservices/