Authority: High Court at Calcutta, Constitutional Writ Jurisdiction (Appellate Side)
Order Date: 23 September 2026
Case Overview
- Petitioners: State Bank of India & Anr.; Respondents: Employees State Insurance Corporation (ESIC) & others; RBI also a party.
- The dispute arose from garnishee orders dated 14 Feb 2025 and 11 Mar 2025 issued by a Recovery Officer under the Employees’ State Insurance (ESI) Act, declaring SBI’s Durgapur C‑Zone branch a “deemed defaulter” for Rs 9,084,887.
- The orders were based on alleged non‑payment of ESI dues by Pascas Associate, a constituent of the SBI branch, whose current account No. 3296298908 had a zero balance and was “inoperative” since 31 Dec 2020.
- A prohibitory order under Section 45H ESI Act (25 Jun 2024) and a show‑cause notice (12 Nov 2024) had been issued to Pascas Associate; ESIC later declared SBI a deemed defaulter under Section 45G(3)(x) ESI Act (14 Feb 2025).
- The garnishee order of 11 Mar 2025 directed the RBI to remit Rs 9,084,887 plus interest of Rs 2,034.08 per day (12% p.a.) from 12 Mar 2025, and to prohibit further debits from the constituent’s account.
- RBI deducted the amount from SBI’s account, but on 25 Aug 2026 the amount was credited back to SBI, as evidenced by documents placed before the Court.
- ESIC’s affidavit alleged that the constituent failed to pay arrears, but the Court found no proof that SBI had transferred any funds, and noted the account had been inactive for years.
Final Outcome
- The Court held the garnishee orders of 14 Feb 2025 and 11 Mar 2025 were not in accordance with law and constituted an abuse of process; they are hereby quashed and set aside.
- All applications connected with the orders are disposed; the interim order, if any, is vacated.
- The RBI’s earlier deduction is effectively reversed, and a certified copy of the judgment will be provided to the parties upon compliance with formalities.
Topics: Legal Judgment, Banking Regulation