The Hindu Business Line : ESI contribution: `HC cannot interfere at notice stage'

Chennai April 18 The Madras High Court has held that when sufficient safeguards were provided in the Employees State Insurance Act in regard to show-cause notices served on employers on determination of arrears, this Court could not interfere at that stage.

The Supreme Court, which went into this question, had said that remedy was available under Section 75 of ESI Act wherein all questions of law on facts could be gone into, Mr Justice K. Chandru said, adding that proviso to Section 45A had been introduced by Amending Act of 1989, which clearly said that even resort to Section 45A could not be done in an ex parte manner and only after giving an opportunity to employer.

Sufficient Safeguards

Petitioner Rialto Enterprises Ltd, Chennai, challenged a notice dated November 20, 2006, wherein the respondent (Regional Director, ESI, Chennai) made a calculation of due of a sum of Rs 2,48,18,692 and stated that if the employer did not satisfy authorities, necessary notice under Section 45A would be issued. The petitioner contended that following an order by Supreme Court [reported in 2007 (1) SC 584 equivalent to 2007 (1) SC cases (L&S) 413], show-cause notice was liable to be quashed.

The Judge held that one could not expect that authorities would be blind to provisions of law and would confirm show-cause notice, especially in the present context, where a personal hearing had been provided and no final orders had been passed by ESI.

It was premature to interfere with the said order. When sufficient safeguards were provided in the ESI Act, it was not for this Court to interfere with show-cause notice, for whatever grievance projected by the petitioner.

Since the writ petition had been dismissed, it was open to ESI Corporation to fix a date for hearing, and if still the petitioner persisted in non-cooperation, then it was open to the Corporation to take appropriate proceedings under the law.

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