Employees'' State Insurance Corporation and Others vs Southern India Poly Products (P) Ltd.

B. Kemal Pasha, J.—The Employees'' State Insurance Corporation, whose orders dated 5.9.2008 challenged as Exts. A2 to A4 before the Employees'' Insurance Court, Palakkad in I.C. No. 80/2008 and are set aside by the said Court through order dated 28.3.2011, has come up in appeal.

The Employees'' State Insurance Corporation (''ESI Corporation'', for short) could trace out some amounts of contributions to be paid by the respondent herein, for which notices were issued thereby calling upon them to produce documents and records. All such demands of the ESI Corporation fell in deaf ears. Finally, Exts. A2 to A4 orders under section 45-A of the ESI Act were issued by the ESI Corporation to the respondent herein in which it has been clearly stated that in spite of repeated demands, the respondent had failed to avail any opportunity of being heard or to file a statement showing the actual amount of contribution payable. It was in that context, the ESI Corporation has passed Exts. A2 to A4 orders. It seems that those orders are per se orders passed under section 45A of the ESI Act. The said orders were challenged by the respondent before the ESI Court. The Court below found that those orders are not orders passed under section 45A of the ESI Act and as there were disputes, the ESI Corporation ought to have approached the Court below under section 75(2) of the ESI Act for getting the disputes resolved. The ESI Corporation has come up in appeal.

Heard the learned Standing Counsel Sri. T.V. Ajayakumar for the ESI Corporation. In spite of notice, there is no representation for the respondent.

The learned Standing Counsel for the ESI Corporation has pointed out that only on the basis of an averment made by the respondent in the application filed before the Court below as I.C. No. 80/2008, the Court below has come to the conclusion that all the records were produced by the respondent and, therefore, the ESI Corporation ought not to have passed an order under section 45A of the Act. It is evident that the respondent is presently disputing the amounts. At the same time, it has come out that in spite of notices, the respondent had not turned up to offer any personal hearing or to produce any statements showing the correct contribution payable or records relating to it. It is in such a context, Exts. A2 to A4 orders were passed by the ESI Corporation. In such a context, it cannot be said that the ESI Corporation was not having any power or authority to pass an order under section 45-A of the Act. When failure on the part of the respondent has been attributed by the ESI Corporation in producing the statement or records, it has to be considered that it is a circumstance in which the ESI Corporation is empowered to pass an order under section 45-A of the ESI Act. Exts. A2 to A4 are such orders passed under section 45-A of the ESI Act. In such case, the ESI Corporation need not approach the ESI Court for the determination of the contribution. Such orders under section 45-A has the force of law as if it is a best judgment assessment in taxation matters. There is no reason for the Court below to interfere with Exts. A2 to A4 orders passed by the Corporation on the basis of the best judgment assessment under section 45-A of the ESI Act as the said contributions formed part of omitted wages, and when the ESI Corporation had to assess it on the basis of their information and the available records. Matters being so, the impugned order is liable to be set aside.

In the result, this appeal is allowed and the impugned order is set aside.