# M/S Aryan Group of Guard Services, Lko v. U.O.I. & Ors

- **Citation:** (2023) 9 ILRA 973
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2023-08-23
- **Case number:** Writ-C No. 6418 of 2023
- **Bench:** Alok Mathur
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-aryan-group-of-guard-services-lko-v-u-o-i-ors-50815
- **Pages:** 5

## Headnote

Civil Law - Employees' St. Insurance Act,
1948 - Sections 44, 45, 45A, 45AA, 45C &
45E - Recovery of Contributions - Validity
of Recovery Order - Petitioner challenged
recovery order dated 17.01.2020 issued by
respondent No. 2 under Sections 45-C to 45-I,
seeking recovery of Rs.67,33,238/- as unpaid
contributions and interest for November 2018 to
July 2019, alleging it was issued without
determination under Section 45A. Respondents
argued
that
petitioner's
self-declared
contributions on ESIC portal (C-6 compliance
register) justified direct recovery, as the amount
was known. Court held that under the Act's
scheme, employers must file returns under
Section 44, which are scrutinized under Section
45 by Social Security Officers. Determination of
contributions under Section 45A is mandatory,
even if returns are filed, before initiating
recovery under Sections 45C to 45I. Absence of
a
Section
45A
order
renders
recovery
proceedings
illegal,
as
employers
cannot
challenge recovery amounts under Section 45E,
but can appeal a Section 45A determination
under Section 45AA. No determination under
Section 45A was made, making the recovery
order arbitrary and contrary to law. Order dated
17.01.2020 quashed, with liberty to respondents
to pass fresh orders under Section 45A. (Paras
7-9, 12-16)

Writ petition allowed.

List of Cases Cited:
Hem Kumar Gogoi Vs Employees' St.Insurance
Corporation & ors., (2016) 09 Gau CK 0004

## Text

9 All. M/S Aryan Group of Guard Services, Lko. Vs. U.O.I. & Ors.
973
order of promotion and in case the order
was permitted to continue for a long spell
of time, then the order should be passed
after affording an opportunity of hearing to
the parties. In the present case, the order of
reversion
has
been
passed
without
affording of opportunity of hearing to the
petitioner, therefore, the order is not
sustainable in law.

20. On perusal of the order, it is
well settled that the same has been
passed without applying the mind in
regard to law settled. the judgments
relied upon by learned counsel for the
petitioner are fully applicable to the
facts and circumstances of the present
case, whereas that of the learned
Standing
Counsel,
they
are
distinguishable in nature and are not
related to the facts and circumstances of
the present case.

21. In view of the reasons recorded
above, the writ petition succeeds and is
allowed. The
impugned
order
dated
24.4.2003
is
hereby
quashed.
Consequences to follow.
----------
(2023) 9 ILRA 973
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: LUCKNOW 23.08.2023

BEFORE

THE HON'BLE ALOK MATHUR, J.

Writ-C No. 6418 of 2023

M/S Aryan Group of Guard Services, Lko.
 ...Petitioner
Versus
U.O.I. & Ors. ...Respondents

Counsel for the Petitioner:
D.P. Dutt Tiwari, Chandra Mohan
Counsel for the Respondents:
A.S.G.I., Shishir Pradhan

Civil Law - Employees' St. Insurance Act,
1948 - Sections 44, 45, 45A, 45AA, 45C &
45E - Recovery of Contributions - Validity
of Recovery Order - Petitioner challenged
recovery order dated 17.01.2020 issued by
respondent No. 2 under Sections 45-C to 45-I,
seeking recovery of Rs.67,33,238/- as unpaid
contributions and interest for November 2018 to
July 2019, alleging it was issued without
determination under Section 45A. Respondents
argued
that
petitioner's
self-declared
contributions on ESIC portal (C-6 compliance
register) justified direct recovery, as the amount
was known. Court held that under the Act's
scheme, employers must file returns under
Section 44, which are scrutinized under Section
45 by Social Security Officers. Determination of
contributions under Section 45A is mandatory,
even if returns are filed, before initiating
recovery under Sections 45C to 45I. Absence of
a
Section
45A
order
renders
recovery
proceedings
illegal,
as
employers
cannot
challenge recovery amounts under Section 45E,
but can appeal a Section 45A determination
under Section 45AA. No determination under
Section 45A was made, making the recovery
order arbitrary and contrary to law. Order dated
17.01.2020 quashed, with liberty to respondents
to pass fresh orders under Section 45A. (Paras
7-9, 12-16)

Writ petition allowed.

List of Cases Cited:
Hem Kumar Gogoi Vs Employees' St.Insurance
Corporation & ors., (2016) 09 Gau CK 0004

(Delivered by Hon'ble Alok Mathur, J.)

1. Heard Sri D.P. Dutt Tiwari, learned
counsel for the petitioner as well as Sri
Shishir Pradhan for respondent No.s 2 and 3.

2. The counter affidavit filed on
behalf of respondent Nos. 2 and 3 is taken
on record.
974 INDIAN LAW REPORTS ALLAHABAD SERIES

3. By means of the present writ
petition the petitioner has sought quashing
of the recovery order dated 17.1.2020
issued by opposite party No.2 under
Section 45-C to 45-I of the Employees
State Insurance Act, 1948 (hereinafter
referred to as the Act of 1948).

4. The petitioner has challenged
aforesaid recovery order on the ground that
the same has been passed without carrying
out any proceeding or passing any order
under Section 45 A of the Act of 1948 and
without passing any order of assessment as
statutory required by sub-section (1) of
Section 45A of ESI Act straight away
directing the Recovery Officer Employees'
State Insurance Corporation, Sub Regional
Officer, Sarojani Nagar, Lucknow (opposite
party No.3) from recovering an amount of
Rs.67,33,238/- is illegal and arbitrary.

5. Sri Shishir Pradhan, on the other
hand, has submitted that in the present case
letter was issued on 1.1.2020 to the
petitioner asking him to show cause as to
why he has not deposited statutory
insurance contribution amount for the
workers engaged by the petitioner for
which
the
contribution
details
were
submitted and were available on ESIC
portal. It is stated that the petitioner himself
had declared contribution amount payable
and numbers of workers engaged by him
for the period November, 2018, December,
2018, January, 2019, February, 2019,
March, 2019, April, 2019, May, 2019, June,
2019 and July, 2019 in online C-6
compliance register of ESIC and, therefore,
as the amount was known, no order or
determination under Section 45A with
regard to the establishment and straightway
recovery proceedings were initiated. He has
annexed a copy of the return filed by the
petitioner.

6. The petitioner has also challenged
the order dated 17.1.2020 passed by
Deputy Director thereby seeking to recover
the amount of contribution under Section
45 C to 45 I of the Act of 1948. In the said
order it is stated that the provisions of ESI
Act are applicable upon the petitioner and
the
petitioner
was
required
to
pay
Rs.61,82,611/- as contribution in respect of
its
employees
for
the
period
from
November, 2018 to July, 2019 plus interest
at the rate of 12 per cent per annum for
each day and, hence, the total amount
recoverable was Rs.67,33,238/-.

7. The only issue which requires to be
determined by this Court is as to whether
the recovery as sought to be made by the
respondents by means of the impugned
order could have been passed without
resorting to the provisions of Section 45 A
of the Act of 1948? In this regard,
according to the scheme contained in the
Act of 1948. Under Section 44 Employers
have to furnish returns and maintain
registers, in certain cases. ? (1) Every
principal and immediate employer shall
submit to the Corporation or to such officer
of the Corporation as it may direct such
returns in such form and containing such
particulars relating to persons employed by
him or to any factory or establishment in
respect of which he is the principal or
immediate employer as may be specified in
regulations made in this behalf.

(2) Where in respect of any factory or
establishment the Corporation has reason
to believe that a return should have been
submitted under sub-section (1) but has not
been so submitted, the Corporation may
require any person in charge of the factory
or establishment to furnish such particulars
as it may consider necessary for the
purpose of enabling the Corporation to
9 All. M/S Aryan Group of Guard Services, Lko. Vs. U.O.I. & Ors.
975
decide whether the factory or establishment
is a factory or establishment to which this
Act applies.

(3) Every principal and immediate
employer shall maintain such registers or
records in respect of his factory or
establishment as may be required by
regulations made in this behalf.

8. Once the returns as provided for
under Section 44 are filed the same are
required to be examined by the respondentcorporation under Section 45 of the said
Act where it is provided that Social
Security
Officers
appointed
by
the
Corporation may for the purposes of
inquiring into the correctness of any of the
particulars stated in any return referred to
in section 44 or for the purpose of
ascertaining whether any of the provisions
of this Act has been complied with ?

(a) require any principal or immediate
employer
to
furnish
to
him
such
information as he may consider necessary
for the purposes of this Act ; or (b) at any
reasonable
time
enter
any
office,
establishment, factory or other premises
occupied by such principal or immediate
employer and require any person found in
charge thereof to produce to such Social
Security Officer] or other official and allow
him to examine such accounts, books and
other documents relating to the employment
of persons and payment of wages or to
furnish to him such information as he may
consider necessary ; or (c) examine, with
respect to any matter relevant to the
purposes
aforesaid,
the
principal
or
immediate employer, his agent or servant,
or any person found in such factory,
establishment, office or other premises, or
any person whom the said Social Security
Officer or other official has reasonable
cause to believe to be or to have been an
employee;(d) make copies of, or take
extracts from, any register, account book or
other document maintained in such factory,
establishment, office or other premises ;

(e) exercise such other powers as may
be prescribed.3) [A Social Security Officer]
shall exercise such functions and perform
such duties as may be authorized by the
Corporation or as may be specified in the
regulations. [(4) Any officer of the
Corporation authorized in this behalf by it
may, carry out re-inspection or test
inspection of the records and returns
submitted under section 44 for the purpose
of verifying the correctness and quality of
the inspection carried out by a Social
Security Officer.]

9.

Section
45 A
deals
with
determination of contributions in certain
cases. ? (1) Where in respect of a factory or
establishment
no
returns,
particulars,
registers
or
records
are
submitted,
furnished or maintained in accordance with
the provisions of section 44 or any [Social
Security Officer] or other official of the
Corporation referred to in sub-section (2)
of section 45 is 5[prevented in any manner]
by the principal or immediate employer or
any other person, in exercising his
functions or discharging his duties under
section 45, the Corporation may, on the
basis of information available to it, by
order,
determine
the
amount
of
contributions payable in respect of the
employees
of
that
factory
or
establishment.]

10. In case the employer is aggrieved
of such determination Section 45AA
provides for an appeal against such a
determination. Section 45 C provides for
issuance of recovery certificate by the
Recovery Officer, which provides that (1)
Where any amount is in arrears under this
976 INDIAN LAW REPORTS ALLAHABAD SERIES
Act, the authorized officer may issue, to the
Recovery Officer, a certificate under his
signature specifying the amount of arrears
and the Recovery Officer, on receipt of
such certificate, shall proceed to recover
the amount specified therein from the
factory or establishment or, as the case may
be,

11. It is further provided under
Section 45 E that when the authorized
officer issues a certificate to a Recovery
Officer under section 45-C, it shall not be
open to the factory or establishment or the
principal or immediate employer to dispute
before the Recovery Officer the correctness
of the amount, and no objection to the
certificate on any other ground shall also be
entertained by the Recovery Officer.

12. From the aforesaid, provisions it
is clear that a mechanism for determination
of the amount due upon upon the
employees as its contribution under the Act
of 1948 has been clearly provided. The
employer is mandated to file its return
under Section 44 of the Act. The said return
is to be scrutinized by Social Security
Officer under Section 45 of the Act and
treating the return filed under Section 44 or
the report submitted by Social Security
Officer under Section 45 is treated as
determining
the
outstanding
by
the
employer under Section 45 A of the Act.
Sub clause 2 of the Section 45 A clearly
provides that such determination would
amount
to
an
order
made
by
the
Corporation under Section 45 A (1) and
shall be sufficient proof of the claim of the
Corporation under Section 75 or for
recovery of the amount determined by such
order as an arrears of land revenue under
Section 45 B or the recovery under Section
45 C to Section 45 I.

13. From the aforesaid it is clear that
under 45 A it is provided that determination
for certain amount will have to be made in
all cases where contribution of the
employer is contested.

14. In absence of any order passed
under Section 45A no recovery can be
proceeded against. This also seems to be
the only interpretation in as much as the
employer is restrained from challenging the
amount stated in the recovery notice and
the order issued by the Recovery Officer
while determination made under Section 45
A is appeal-able under Section 45 AA and it
is only either the order under Section 45 A
is finalized and in case no appeal is filed or
after the appeal is filed and subsequently
the order of appellate authority under
Section 45 AA the amount has been finally
determined and the respondents can,
therefore, proceeded to recover the amount
under Section 45 C.

15. In view of the above, this
Court is of the considered opinion that
even if the employer has not filed any
return still the respondents are duty
bound to make determination under
Section 45 A of the Act of 1948. In the
present case, it is not disputed that there
is no determination under Section 45A
and the respondents have directly
proceeded to pass recovery notice under
Section 45 E which accordingly is
illegal and arbitrary and contrary to the
provisions of the Act. This aspect of the
matter has already been considered by
the Gauhati High Court in the case of
Hem Kumar Gogoi Vs. Employee''s
State Insurance Corporation and others
reported in (2016) 09 Gau CK 0004, the
relevant portion of which is quoted as
under:-
9 All. Anjuman Siddiquia Jamia Noorul Oloom Munshipur, Mubarakpur Azamgarh & Ors. Vs.
 State of U.P. & Ors.
977

"20.
Unless
there
is
an
order
determining the amount of contribution
payable in respect of employees of the
factory or establishment under Section 45 A
(1), Section 45 A(2), Section 45 B and 45 C,
will not come into the play. In absence of
any final order passed under Section 45 A
(1), as demonstrated by the materials on
record,
the
impugned
order
dated
10.06.2010 has to be construed as being
without jurisdiction in the eye of law. "

16. In light of the above, no
determination under Section 45 A has been
made by the respondents and accordingly
the recovery proceedings initiated against
the petitioner are illegal and arbitrary and
contrary to the provisions of law. The order
impugned dated 17.1.2020 issued by
opposite party No.2 under Section 45-C to
45-I of the Employees State Insurance Act,
1948 is quashed and all the proceedings in
pursuance of the said order are also set
aside.

17. Liberty is granted to the
respondents to pass fresh orders as per
Section 45 A and accordingly proceed
further in the matter in accordance with
law.

18. The writ petition thus stand
allowed.
----------
(2023) 9 ILRA 977
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 06.09.2023

BEFORE

THE HON'BLE KSHITIJ SHAILENDRA, J.

Writ-C No. 11005 of 2023
with
Writ-C No. 5992 of 2023
Anjuman Siddiquia Jamia Noorul Oloom
Munshipur, Mubarakpur Azamgarh & Ors.
 ...Petitioners
Versus
State of U.P. & Ors. ...Respondents

Counsel for the Petitioners:
Sri Ami Tandon, Sri Anoop Trivedi (Sr. Advocate)

Counsel for the Respondents:
C.S.C.

Civil Law - Uttar Pradesh Board of
Madarsa Education Act, 2004 - Sections 2,
3, 9, 10 & 13 - Constitution of India, 1950
- Article 14 & 226 - Validity of S.I.T. Report
and Government Resolution - Natural Justice -
Petitioners
challenged
the
order
dated
09.01.2023 approving the Resolution dated
19.12.2022, based on the S.I.T. report dated
30.11.2022, which recommended criminal action
and withdrawal of recognition for 219 nonexistent Madarsas, including petitioners', for
alleged embezzlement of funds under the
Madarsa Modernisation Scheme. Petitioners
argued that the S.I.T. investigation was exparte, violating natural justice, and the
Madarsa in Writ-C No. 11005 was closed in
2017. Respondents contended that the S.I.T.
conducted thorough spot and portal-based
inspections, finding petitioners' Madarsas
non-existent, with funds misappropriated in
collusion with officials. Court held that the
St.Government's power under Section 13(4)
allows
immediate
action
without
Board
reference, potentially diluting natural justice
principles.
Section
10(2)(vi)
ensures
opportunity for institutions to respond before
Board action. The Division Bench order dated
09.02.2023 in Criminal Misc. Writ Petition
No. 1131 of 2023 upheld the S.I.T. report
and Resolution, finding no legal requirement
for prior notice in preliminary inquiries for
F.I.R. lodging. Interim orders in related cases
were deemed per incuriam for ignoring the
Division
Bench
ruling.
Writ
petitions
dismissed, with liberty to petitioners to raise
grievances before competent authorities.
Interim orders vacated. (Paras 33-36, 39-43,
52)

Writ petitions dismissed.