IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN FRIDAY, THE 15TH JULY 2011 / 24TH ASHADHA 1933 WP(C).No. 4581 of 2007(U) -------------------------------------- PETITIONER(S): ------------------------ 1. K.V. ZAKIR HUSSAIN, S/O. AVARAN KUTTY HAJI, MANAGING DIRECTOR, SWADESHI GRANITE INDIA (P) LTD., CHERUVANNUR, FAROKE, KOZHIKODE. 2. K.V. AVARANKUTTY HAJI, S/O. ITHALUKUTTY HAJI, M/S. SWADESHI GRANITE(INDIA PVT.LTD., CHERUVANNUR, FAROKE, KOZHIKODE. BY ADV. SRI.P.V.KUNHIKRISHNAN RESPONDENT(S): --------------------------- 1. THE REGIONAL DIRECTOR, E.S.I. CORPORATION, NORTH SWARAJ ROUND, TRICHUR-20 2. THE RECOVERY OFFICER, EMPLOYEES STATE INSURANCE CORPORATION, THRISSUR. 3. SUB REGISTRAR, SUB REGISTRAR OFFICE, FAROKE, KOZHIKODE. R1 & R2 BY ADV. SRI.P.SANKARANKUTTY NAIR, SC, ESI CORPN R3 BY GOVERNMENT PLEADER SRI.ANTONY MUKKATH THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15/07/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: sts WP(C)NO.4581/2007 APPENDIX PETITIONER'S EXHIBITS: P1 COPY OF THE LEASE DEED DATED 22/5/1989. P2 COPY OF THE JUDGMENT IN WPC NO.31014/2006 DATED 20/12/2006. P3 COPY OF THE REPRESENTATION SUBMITTED BY THE 1ST PETITIONER TO THE RECOVERY OFFICER DATED 21/12/2006. P4 COPY OF THE ORDER PASSED BY THE 2ND RESPONDENT DATED 23/1/2007. RESPONDENT'S EXHIBITS: NIL /TRUE COPY/ P.A.TO.JUDGE sts S. SIRI JAGAN, J. ------------------------------------------- W.P.(C) No.4581 OF 2007 ---------------------------------------------- Dated this the 15th day of July, 2011 JUDGMENT The 1st petitioner claims to be the Managing Director of a Company by name 'Swadeshi Granite (India) Pvt. Ltd'. The 2nd petitioner is his father. Respondents 1 and 2 attached the properties belonging to the 2nd petitioner in which the 'Swadeshi Granite (India) Pvt. Ltd, has established a factory. The petitioners allege that by Ext.P1 lease deed, the property has been leased to the Company. There is another establishment by name 'Swadeshi Tiles' of which another son of the 2nd petitioner is the Managing Director. 'Swadeshi Tiles' committed default in payment of contributions under the Empolyees’ State Insurance Act. The ESI Corporation proceeded against the property of the 2nd petitioner for recovery of the contributions due. The 1st petitioner earlier approached this Court by filing W.P.(C) No.31014/2006 by which by Ext.P2 judgment, the 1st petitioner was directed to file a representation before the 2nd respondent, who was directed to consider and pass orders on the same. W.P.(C)No.4581/07 2 Pursuant to the same, the 1st petitioner filed Ext.P3 representation, which was rejected by Ext.P4 order. The petitioners are challenging Ext.P4 seeking the following reliefs: “a) Call for the entire records, which leads to Exhibit-P4 and issue a writ of certiorari quashing the same. b) Issue a writ of mandamus or writ order or direction, directing the respondents to release the attachment of the property covered by Exhibit-P1 agreement for the dues from the M/s. Swadeshi Tiles Works to the 1st respondent and to communicate the aforesaid decision to the 3rd respondent forthwith”. 2. The only contention raised by the petitioners is based on Section 45C of the Employees State Insurance Act. According to the petitioner, in view of the proviso to sub Section 1 of the said Section, the attachment and sale of any property under that Section shall first be effected against the properties of the factory or establishment and only when such attachment and sale is insufficient for recovering the whole of the amount of arrears specified in the certificate, the Recovery Officer may take such proceedings against the property of the employer for recovery of the whole or any part of such arrears. 3. I have heard both sides. I am not inclined to exercise my discretionary jurisdiction in favour of the petitioners for more than one reason. First of all, the owners of the property are the father and two sons and the two W.P.(C)No.4581/07 3 establishments are run by them. Admittedly, there is no transfer of title of the property. What is relied upon claiming transfer of property is a lease deed executed by the 2nd petitioner in favour of the Company in which the 1st petitioner is the Managing Director, who is the son of the 2nd petitioner. The defaulter firm is run by the 2nd son of the 2nd petitioner. Secondly, in Ext.P3 representation filed by the 1st petitioner pursuant to Ext.P2 judgment, such a contention was never raised. Thirdly, in Ext.P3, the 1st petitioner has misrepresented that in Ext.P2 judgment there is a finding that liability of M/s.Swadeshi Tile Works, Cheruvannur, Faroke for payment of contributions to the E.S.I Corporation arose subsequent to the transfer of the property by the 2nd petitioner to 'Swadeshi Granite (India) Pvt. Ltd'. There is no such finding in Ext.P2 judgment. What has been stated in Ext.P2 judgment is that, according to the petitioners, the transfer took place before the liability of the 2nd petitioner arose. That is not a finding. It is only reiteration of the contentions of the petitioner therein. Lastly, this Court passed an order dated 12.2.2007 as follows: “Notice and interim stay for six months on condition that the petitioners deposit half of the amount due to the Corporation on or before 27-3- 07 and the remaining amount in monthly installments of Rs.75,000/- payable on or before W.P.(C)No.4581/07 4 the last working day of every month. If there is any default, the benfit of this order will not be given. This order will not stand in the way of the respondents taking any action against any other property belonging to the defaulter.” The petitioners did not pay the amounts as directed therein. The petitioners approached this Court for extension of time to comply with that order by filing I.A.No.4313/2007, in which this Court passed the following order on 23.3.2007: “This is an application filed by the petitioner for extension of time to pay the first of the installments directed to be paid as per order dated 12.02.07. I am not inclined to extend the time. However, it would be open to the petitioner in the I.A. to pay the amount and seek condonation of delay in paying the same. However, this order shall not preclude the respondents from taking appropriate proceedings for recovery for not complying with the interim order”. Admittedly, the petitioners have not complied with the interim order. In any event, insofar as there is no transfer of property by transferring the title of the property to the company, the petitioners cannot now raise any contention based on Section 45C. Further, M/s. 'Swadeshi Tile Works', for whose liability the proceedings have been initiated, has not come forward with a contention on the basis of the proviso to Section 45(1). In the above circumstances, there is no merit in this writ petition and accordingly the same is dismissed. S. SIRI JAGAN, JUDGE acd W.P.(C)No.4581/07 5 W.P.(C)No.4581/07 6