IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.5421 of 2000 M/s Amber Restaurant, Frazer Road, P.S. Kotwali, District- Patna through 1. (a) Abhishek Singh, grand son of Late Babuni Devi (b) Poonam Singh (c) Chanda Devi Both grand daughter of late Babuni Devi (d) Sidhant Singh, Minor grand son of late Babuni Devi, under the guardianship of his natural mother Smt. Chanda Singh. . . . . . . . Petitioners. Versus 1. THE EMPLOYEES STATE INSURANCE Corporation, Pancha Deep Bhawan, Jawahar Lal Nehru Marg, P.S. Kotwali, District- Patna through its Director. 2. Joint Director, Employees State Insurance Corporation, Panchadeep Bhawan, Jawahar Lal Nehru Marg, Patna, Bihar. 3. The Revenue Recovery Officer, Employees State Insurance Corporation, Pancha Deep Bhawan, Jawahar Lal Nehru Marg, Patna, Bihar. . . . . . Respondents. ----------- 12/ 24.12.2009 Heard learned counsel for the petitioners and the State. The petitioners has prayed for (1) quashing notice dated 16.12.1998 / 13.01.1999 issued in the name of Mamta Restaurant for payment of Rs. 18,494.56 against contributions under the Employees State Insurance Act, 1948 for different periods between April 1977 to December, 1981; for (ii) quashing order dated 24.08.1999 issued against Mamta Restaurant in pursuance to the representation of the said establishment holding them jointly and individually liable for the payment of the said demand; (iii) for quashing order dated 13.01.2000, whereby while disposing the representation dated 21.09.1999, directed the petitioners to deposit a sum of Rs. 45,544/- and for quashing the certificate proceeding drawn against them. The petitioner’s restaurant was run by the sole proprietor late Tribhuwan Prasad Singh in the seventies and after his death on 31.12.1978, by his two sons namely late Sanjay Singh and late Ajay - 2 - Singh till 1981. Thereafter the establishment was ultimately closed. The petitioners state that all the bills were cleared and due informations were given to all the concerned. The establishment was given on rent to Bhola Prasad Srivastava and Sri Suman Kant Rehani for running another restaurant in the name and style of “Ghazal Restaurant”. On 1st day of September, 1982 the aforesaid restaurant did not run well and it was closed within a year. After the closure of Ghazal Restaurant in 1982, the premise was taken by one Jamuna Prasad Singh for running a restaurant in the name of M/s Mamta Restaurant with effect from December, 1984. The said restaurant continues till date and is a different establishment from petitioner’s restaurant, which was closed in the year 1981. Unfortunately, both sons of late T.P. Singh, namely Sri Sanjay Singh and Ajay Singh also died prematurely on 02.10.1990 and 14.09.1994. After their death, Smt. Babuni Devi (now dead) wife of late Tribhuwan Prasad Singh looked after the estate of the family. In the first week of September, 1999 she was informed that some notice have been served upon M/s Mamta Restaurant with regard to payment of contribution by the Principal Employer of M/s Amber Restaurant to the Employees State Insurance Corporation for the period pertaining to 01.04.1977 to 03.11.1981 initially for an amount of Rs. 18,494.56 paise. As it would appear from the letter of demand dated 16.12.1998 / 13.01.1999 (Annexure-1), issued under Section 40 read with Section 39 of the Employees State Insurance Corporation Act, 1948 (hereinafter referred to Insurance Act, 1948). - 3 - Subsequently, without assigning any reason, the aforesaid amount was raised to 45,544/- by letter dated 24.08.1999 issued under the signature of Deputy Director of the Corporation, as contained in Annexure 2. This letter too was served on M/s Mamta Restaurant. It would appear from Annexures 1 and 2 that the aforesaid demand was made on M/s Mamta Restaurant and after receiving such information, the petitioner on her own violation presented before the respondent authorities and submitted a written report, as contained in Annexure-3. She stated that the aforesaid demand was raised without issuance of notice to her. Petitioner has filed a supplementary affidavit and in paragraph 3 it has been stated that even during the pendency of her representation, a sum of Rs. 5255.45 paise and Rs. 4500 has been withdrawn from the seized S.B.I. Bank Account no. 01050 / 070070 on 18.11.1999 and 23.12.1999 from the account of M/s Mamta Restaurant. Learned counsel further states that again on 26.01.2000, a further amount of Rs. 7,000/- was withdrawn from the aforesaid Bank account totaling Rs. 16,755.75 paise. True copy of letter dated 09.12.1999 issued by the Chief Manager, State Bank of India, Fraser Road is annexed as Annexure-6. Despite this, a certificate proceeding being no. P/ 42-3722/ Ins. 1 dated 31.05.1999 was initiated for recovery of the aforesaid demands. A copy of show-cause notice has been annexed as Annexure 7. Petitioner appeared before the Joint Director (Recovery) Employees State Insurance Corporation on 12.03.2002 through her counsel and - 4 - submitted that no liability is due against the petitioner. In any view of the matter a sum of Rs. 16,755/- out of total initial amount of Rs. 18,524.56 paise has already been withdrawn. Mr. Amar Nath Deo, learned counsel for the petitioner submits that in fact, now the entire due amount of Rs. 45,544/- has been withdrawn from the bank towards insurance claim. Corporation has appeared and filed counter affidavit. He submits that as per Section 75 of the E.S.I. Act, 1948, the petitioner should have filed complaint petition before the Employees Insurance Court, Patna. Under Section 45 of the Act, the Insurance Inspector is authorized to make inspection of any Factory or Establishment and thereafter corporation is competent to take steps for recovery of the contribution and other dues of the employees. The Corporation states that the demand was raised on actual basis and as such provision of Section 45 A of the Act in respect of determination of contribution in the mode mentioned therein would not be applicable. He submits that 45 A of the Act would be applicable in respect of a factory / establishment, wherein no reasons or records are submitted, or any inspector or other officials of the corporation has been prevented by the principal or immediate employer in exercising his functions or discharging his duties under Section 45 of the Act, such is not the case here. Learned counsel submits that the impugned order (Annexure 1) raising the demand to the tune of Rs. 18,524.56 paise under Section 40 read with Section 39 and subsequently raising it to - 5 - Rs. 45,444/- (Annexure 2) is bad in law. He submits that such demand issued after 17 years is not tenable in law. Further more, the demand was raised in the year 1999-2000 when the principal employer had already died in the year 1978. Thereafter his sons, who managed the restaurant which eventually closed on 1981, too died in 1990 and 1994. Further more, as the ill luck would be, Smt. Babuni Devi, wife of late T.P. Singh and mother of late Sanjay Singh and Ajay Singh too passed away on 04.04.2008. Thus, over the period not only the principal employer died, but his sons and his wife too died. He submits that the Restaurant was closed in the year 1981 and no one is expected to keep the records for a long time, and not for 17 years. Learned counsel finally states that in any view of the matter, the entire dues have already been recovered from the Bank account of M/s Mamta Restaurant. The main plea of the counsel for the Corporation is that if there is a due, it can be recovered any time and petitioners ought to have availed the alternative remedy by moving Insurance Court. Heard counsel for the parties. Admittedly, the dispute in question is of the year 1977 to 1981. The demand was raised vide Annexure 1 under Section 40 read with Section 39 of the Act, after a long lapse of 17 years on 13.01.1999, when not only the principal employer had died, but his only two sons namely Sanjay Singh and Ajay Singh too died in the year 1990 and 1994. Further more, notice was not served on the original petitioner Smt. Babuni Devi, now since dead and substituted by his grand children. However, coming to know - 6 - of the same, as a responsible citizen, she filed a representation before the authorities concerned stating that the Restaurant was closed in the year 1981 and the premises / building was given to some other persons to run their own establishment with their own employees. All the previous employees of the petitioner’s have left the job after closure of the Restaurant. The respondent Corporation in paragraph 7 of the counter affidavit has stated as follows: “That it is relevant to mention here that the notices have been issued and actions as such have been taken by the respondents authorities of the E.S.I.C. against M/s. Mamta Restaurant Fraser Road Patna for the recovery of dues of contribution amount under the provisions of E.S.I. Act, 1948 as amended upto date but the instant writ application has been filed by M/s. Ambar Restaurant which has got no locus standi to file the instant writ application. Hence, the instant writ application is premature and has become infructuous also and as such the present writ application is fit to be dismissed out right under the present facts and circumstances of the case and also in the eye of law and E.S.I. Act.” It would appear from counter affidavit that Amber Restaurant no more exists, instead, a Mamta Restaurant has been established. Further more, notice of demand has been raised in the year, 1999 after a lapse of 18 years, much after the death of the proprietor and his two sons. The widow of late proprietor T.P. Singh, who too died in the year, 2008, being a house wife, could not be expected to keep records after death of her sons in 1990 and 1994. Such demand raised after 18 years of closure of the establishment, and that too much after the death of - 7 - principal employer and his only two sons is unreasonable and arbitrary, being violative of Article 14 of the Constitution of India. Respondents are themselves liable for the delay in raising the demand and cannot be allowed to raise such stale claims after 18 long years. Furthermore, the material on record shows that the respondents themselves have accepted short payments for period in question. In the result, this writ application is allowed. The impugned order contained in Annexures 1 and 2 and the initiation of the certificate proceeding is also quashed. As the amount in question has already been withdrawn from the account of M/s Mamta Restaurant, it will be open for the affected party to seek of refund of the amount so withdrawn. Uday/ (Samarendra Pratap Singh, J.)