Authority: High Court of Orissa at Cuttack

Order Date: 29.10.2026

Case Overview

  • Parties: Petitioner – M/s. Sai +2 Science Residential College, Baripada, Mayurbhanj; Opposite Parties – Deputy Director (Revenue), Employees' State Insurance (ESI) Corporation, Bhubaneswar and others.
  • Nature of Proceeding: Writ petition under Articles 226 and 227 of the Constitution challenging a Garnishee Order dated 18.08.2025 issued under Section 45G of the ESI Act, 1948.
  • Demand Timeline: Notices issued by ESI Authority covered May 2013 to January 2017 (Form C‑11, C‑18, ad‑hoc notices). Subsequent letters indicated additional contribution periods: Feb 2017‑Mar 2018 and May 2018‑Aug 2022.
  • Procedural History:
  • Hearing fixed for 04.05.2017; written response filed on 01.05.2017; no further hearing recorded.
  • After 2018, ESI authority responded only in 2025, leading to the Garnishee Order under Section 45G.
  • Petitioner learned of the order through its bank and sought documents on 03.09.2025; ESI supplied annexed documents (Annexure‑5 series).
  • Opposite parties could not produce any order under Section 45‑A, which is required when contribution is undisputed.
  • Various notices referenced: C‑11 (19.11.2014) for contribution from 01.05.2013; Show‑Cause Notice (06.06.2016) without specific statutory citation; Form‑C‑18 (07.04.2017) ad‑hoc; letters dated 07.12.2018, 09.01.2018, 07.02.2018, and 28.05.2025 (Form‑C‑19) seeking compliance.
  • Admissions Alleged: Opposite parties argued the petitioner admitted liability in letters dated 01.05.2017, 09.01.2018, and 07.02.2018, but the Court held these communications do not constitute a legal admission sufficient to justify the garnishee order.
  • Demand Amount: Form ESI CP‑2 demand notice dated 11.06.2025 sought Rs 5,26,696 for May 2013‑Jan 2017, with interest calculated up to 27.05.2025.
  • Recovery Process: Initiated on 08.09.2025; garnishee order served to petitioner on 18.08.2025 and to the bank on 09.09.2025.
  • Legal Submissions:
  • Petitioner argued violation of natural‑justice principles and procedural irregularity (no Section 45‑A order, no hearing).
  • Opposite parties cited Section 75 of the ESI Act to claim non‑maintainability and relied on precedents (A.B.S. Engineering case, Hotel Brideway case).
  • Court rejected reliance on those precedents, emphasizing factual dissimilarity.
  • Judicial Reasoning:
  • Cited constitutional jurisprudence (Whirlpool Corp. vs. Registrar of Trade Marks, various Supreme Court pronouncements) affirming the High Court’s plenary power under Article 226 and the need to examine jurisdictional and procedural defects.
  • Determined that the garnishee order was arbitrary, lacked statutory basis, and breached the principle of reasonableness.

Final Outcome

  • The garnishee order dated 18.08.2025 (Section 45G) and related orders (28.05.2025, 09.01.2018) are set aside and quashed.
  • Any amount debited from the petitioner’s bank account must be reverted forthwith.
  • The writ petition is allowed and disposed of with no costs awarded.

Topics: Legal; ESI Compliance