Authority: High Court of Judicature at Madras

Order Date: 31-07-2026

Case Overview

  • Parties: Appellant – M/s. Pro-Interactive Services (India) Private Limited, New Delhi; Respondent – The Assistant Director, Employees State Insurance Corporation Ltd, Chennai.
  • Proceedings: Civil Miscellaneous Appeal No.2148 of 2026 filed under Section 82 of the Employees' State Insurance Act, 1948 against the order dated 18.11.2025 passed by the Employees' Insurance Court (Principal Labour Court), Chennai in E.I.O.P.No.24 of 2016.
  • Background: The appellant, a private limited company providing industrial security services, paid ESIC contributions up to November 2011. For the period December 2011 to May 2013, contributions were unpaid. An adjudication order under Section 45A dated 19.08.2015 assessed a contribution of Rs 6,85,328 for 71 employees.
  • Notice History:
  • Form C‑18 notice dated 06.08.2014 proposing the contribution of Rs 6,85,328 (delivered & door locked).
  • Notice dated 17.02.2015 calling for a personal hearing – no acknowledgment.
  • Notice dated 20.04.2015 sent to Chennai and Delhi addresses; received at Delhi and acknowledged, but appellant did not appear on 20.05.2015.
  • Notice dated 10.06.2015 informing the appellant that the inquiry was fixed for 06.07.2015; notice received but no appearance.
  • Appellant’s Contentions:

1. No notice was served before the Section 45A adjudication order.

2. The appellant ceased operations in Tamil Nadu from December 2011 to May 2013, therefore no contribution was payable.

3. The Social Security Officer should have inspected the premises; lack of inspection violated statutory pre‑conditions for invoking Section 45A.

  • Evidence Presented:
  • Returns for 186 employees (99 on leave, 87 active in November 2011 with contribution paid).
  • Ex.P.1 – termination contract with M/s. Indus Towers (insufficient to prove cessation of operations).
  • Ex.P.2 – payroll returns indicating continued employment.
  • Legal Precedent Cited: Supreme Court judgment in Carborandum Universal Ltd. Vs. ESI Corporation (2025 SCC OnLine SC 2865) stating Section 45A may be invoked only when there is non‑production of records or obstruction of inspection.

Court’s Reasoning

  • The appellant admitted receipt of the notice dated 27.11.2015, negating the claim of non‑service.
  • Repeated notices and opportunities to appear were provided; the appellant’s failure to attend personal hearings satisfied the “obstruction of inspection” criterion.
  • The appellant could not substantiate the claim of no employees in Tamil Nadu; payroll returns showed 71 employees for the disputed period.
  • The Supreme Court’s Carborandum principles were applied: mere inadequacy of records does not permit Section 45A; however, the appellant’s non‑appearance and failure to produce all documents constituted obstruction, fulfilling the statutory pre‑conditions.
  • Consequently, the High Court found that the Employees' Insurance Court correctly invoked Section 45A and that the adjudication order of Rs 6,85,328 was lawful.

Final Outcome

  • The civil miscellaneous appeal is dismissed.
  • The order dated 18.11.2025 in E.I.O.P.No.24 of 2016 is confirmed.
  • No costs awarded to either party.

Topics: Employees' State Insurance, Section 45A Assessment, Supreme Court Precedent