IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF JULY, 2019 BEFORE THE HON’BLE MR. JUSTICE L. NARAYANA SWAMY WRIT PETITION NO.26186 OF 2010 (L-ESI) BETWEEN:
VISVESVARAYA IRON & STEEL PLANT (UNIT OF STEEL AUTHORITY OF INDIA LTD., BHADRAVATHI – 577 301 BY IT’S SR. MANAGER LAW AND GPA HOLDER SHRI.H.N.VENKATESH ... PETITIONER (BY SRI.J KANIKARAJ, ADV.) AND:
1. EMPLOYEES STATE INSURANCE CORPORATION NO.4, DOLLAR HEIGHTS 3RD & 4TH FLOOR DOLLARS COLONY, GOKUL ROAD HUBLI - 580 030.
2. THE SECRETARY LABOUR, SHRAMSHAKTI BHAVAN NEW DELHI (AMENDED CAUSE TITLE VIDE ORDER DATED 03.12.2012) ... RESPONDENTS (BY SRI.K.KRISHNAPPA, ADV. FOR R1; SRI.KALYAN BASAVARAJ, ASG FOR R2) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE IMPUGNED ORDER DATED 16.08.2010 VIDE ANNEXURE-A.
THIS PETITION COMING ON FOR PRONOUNCEMENT OF ORDER THIS DAY AFTER HAVING HEARD AND RESERVED FOR ORDER ON 16.04.2018, THE COURT MADE THE FOLLOWING:
O R D E R The petitioner has filed the present writ petition challenging the order datd 16.8.2010 passed under Section 45-A of Employees’ State Insurance Corporation Act, 1948 determining the contribution amounting to Rs.31,74,39,043.00 for the period from 1.2.1999 to 31.10.2007 and directing the petitioner to pay the same within a period of 15 days from the date of order with interest at 15% p.a. up to 30.9.2005 and from 1.10.2005 onwards at 12% p.a. as provided under Section 39(5)(a) of the Act, read with Regulation 31-A and give intimation to that effect to the respondent office, failing which it shall be caused to be recovered under the provisions of Section 45(c) to 45(l) of the said Act, through the Recovery Officer of the ESI Corporation.
2. It is case of the petitioner that petitioner is engaged in the manufacture of Special & Alloy Steels and has around 1500 employees working at its plant at Bhadravathi. The wages and other service conditions prevalent in the petitioner establishment is at par with any other similar Public Sector Enterprise. It has extended welfare facilities much beyond statutorily prescribed amenities, to its employees’. The lowest wages paid to its regular workmen is above Rs.15,000/- per month, barring a few workmen who draw wages slightly lower than Rs.15,000/- per month. The petitioner has provided housing accommodation and has a township of its own, runs a school for the community and also has full fledged 115 bed hospital, with all modern amenities and facilities. It has employed specialist doctors in almost all areas of medical specialization and it is a full- fledged medical centreand is also a referral hospital. The petitioner spends around 4.5 crores annually towards hospital expenses alone. Erstwhile Mysore State, acquired and sanctioned around 1108 acres of land in the villages Hutta, Jannapura and Anehalli and allotted the said lands as inam lands, for the purposes of setting up iron works, which was later renamed as Visvesvaraya Iron & Steel Plant, and subsequently became a unit of Steel Authority of India Ltd., The Central Government issued notification dated 21.1.1999 published vide gazette of India Part-2, bringing in areas comprising of revenue villages of Anekoppa, Jedi Katte, Hebbandi of HobliKasaba – I and Taluk Bhadravathi in District Shimoga, for the purposes of coverage of establishments/factories under the Act and scheme. The petitioner being located in revenue villages of Hutta, Jannapura and Anehalli, was not covered and hence the Act itself is not applicable to the petitioner establishment. However, it was intimated vide its letter of 27.09.2007 by the respondent that petitioner’s establishment is coverable under the Act and claimed contributions from 1.2.1999. This was disputed by the petitioner on the ground the villages in which petitioner’s establishment is situated, was not notified and hence the Act is not applicable and further contended that number of coverable employees under the Act right from 1997 to September 2007were only 16 employees’. The respondent issued notice in Form C-18 calling upon the petitioner to pay an amount of Rs.9,22,16,196.00 for the period 1999 to 2007 and to show cause within 15 days as to why the said proposal be not determined as payable. Since the petitioner objected to the same, proceedings under Section 45-A of the Act was initiated and the petitioner participated in the said proceedings. The petitioner made written submission contending that the Act is not applicable to their establishment on the ground that the villages in which their factory is located are not notified for the purpose of coverage under the Act and also produced wage particulars of all employees paid during the period from 1999 to 2007. However, without considering the same, impugned order was passed under Section 45-A of the Act. Hence this writ petition.
3. The respondents filed statement of objections contending that there is a statutory remedy available to challenge the order under Section 75 of E S I Act before the E S I Court. Admittedly, as stated in Para-12 of the writ petition, there are 16 coverable employees. The ESI Court has decided the coverage of the petitioner in case Nos.7/1992 and 8/2000. The petitioner has paid E S I Contributions from 01.11.2007 onwards. Thus they pray for dismissal of the writ petition.
4. I have heard the learned counsel for the petitioner and the learned counsel for the respondents and perused the impugned order.
5. The learned counsel for the petitioner submitted that provisions of the Act are not applicable in view of notification issued by the Central Government not covering the revenue villages in which the petitioner factory is located and that the competent authority ought to have determined the number of employees coverable under the Act, determine the wages paid to them and then ought to have calculated the actual contributions payable identifying the workmen. The respondent without going into any of these aspects, despite all particulars being furnished during the course of personal hearings, has passed the impugned order.
6. On the other hand, the learned counsel for the respondents sought to dismiss the writ petition on the ground of alternative statutory remedy of appeal. It is submitted that ESI Court has decided the coverage of the petitioner in case Nos.7/1992 and 8/2000. The petitioner has paid E S I Contributions from 01.11.2007 onwards. Therefore, there is no merit in the contentions sought to be urged by the petitioner and thus prayed for dismissal of the wit petition.
7. The petitioner has sought similar contentions before the competent authority where personal hearing was given to the petitioner. The said contentions were rejected by the competent authority on the ground of not producing materials in support of the said contentions. It cannot be disputed that as against the determination made under Section 45-A of the Act, there is a statutory appeal provided under Section 75 of the Act. When there is an alternative efficacious remedy is provided, ordinarily this court would not entertain the writ petition filed without exhausting the said alternative remedy. This Court has granted an interim order of stay to the impugned order by the order dated 16.9.2010. The same shall enure to the benefit of the petitioner till petitioner avails an alternative remedy and the ESI Court considers the prayer for stay to be filed by the petitioner.
8. In the circumstances, this writ petition is disposed of reserving liberty to the petitioner to avail the remedy of statutory appeal within a period of fifteen days from the date of receipt of copy of this order along with an application for stay of the impugned order, in which event the interim order of stay granted by this Court would enure to the benefit of the petitioner till the similar prayer is considered by the ESI Court.
akd Sd/- JUDGE