VINEET Saran, J. - (1.) The Employees State Insurance (ESI) Corporation recovered certain amount of Employees State Insurance from the Petitioner-U. P. State Road Transport Corporation (UPSRTC) even though the matter regarding grant of exemption to the petitioner-Corporation from the applicability of the ESI Act was pending with the State Government, It is such dispute between the two statutory Corporations, which has been brought before this Court.
(2.) THE brief relevant facts are that the petitioner-Corporation has three wings; namely, workshop, operational and administrative. Treating its workshop wing to be a factory, the provisions of the Employees State Insurance Act were made applicable to the employees of such wing. The workers of the workshop wing had been agitating the matter for being exempted from the provisions of the Employees State Insurance Act. Such workers, as well as the petitioner-Corporation, had earlier filed writ petitions before this Court, in which initially interim orders had been granted but ultimately the said writ petitions were dismissed on 19-7-2001 with the direction that the petitioners therein may approach the ESI Court for redressal of their grievances. The petitioner-Corporation thereafter approached the ESI Court (respondent No. 3) for staying the recovery of any amount under the Employees State Insurance Act from the petitioner-Corporation. When the ESI Court did not pass any order, and in the meantime on 27-3-2003 the Recovery Officer under the Employees State Insurance Act issued recovery certificate directly to the Bank, this writ petition was filed, initially with the prayer for quashing the said recovery. At the time of the filing of this writ petition, since the bank had already attached the amount of Rs. 84,90,902/-, on 7-4-2003 this Court directed that the amount so attached under the impugned recovery notice may not be withdrawn by the ESI Corporation. However, thereafter since the bank had already prepared the Bankers' cheque in favour of the ESI Corporation, on 16-4-2003, this Court modified the interim order, the operative portion of which is quoted below: "the Bankers' cheque has been issued in favour of E. S. I. Corporation, the same may be encashed because it has been stated by the E. S. I. Corporation that before issuing bankers' cheque, the amount has been debited to the account of UPSRTC. The staying of encashment of the bankers' cheque will not result any benefit by way of interest to the UPSRTC and on the other hand it will deprive the B. S. I. Corporation from interest. Therefore balance of convenience is in favour of the E. S. I. Corporation. " It was in such circumstances that the amount that was to be recovered from the petitioner-Corporation was credited to the account of the respondent E. S. I. Corporation. At this stage, certain developments that had taken place prior to the filing of this writ petition may also be noted. The petitioner-Corporation had on 24-7-2002 already filed an application under Section 88 read with Section 91-A of the ESI Act before the State Government for granting exemption from the applicability of the Act with retrospective effect from 14-1-1986. However, since during the pendency of such application, the petitioner-Corporation apprehended that the ESI Corporation may initiate recovery proceedings against them, the Managing Director of the petitioner-Corporation wrote to the State Government on 25-2-2003 apprising it of the factual situation and requested that the ESI Corporation be directed not to make any recovery. Considering that the application of the petitioner-Corporation for exemption was under active consideration, the following order was passed by the State Government on the same date i. e. 25-2-2003: "this application has been presented before me by M. D. U. P. S. R. T. C. on behalf of U. P. State Road Transport Corporation. The issue of exemption of employees of U. P. S. R. T. C. from the provisions of ESI Act, 1948 is already under consideration by the undersigned vide Hon'ble High Court's Order dated 10- 10-2002 in writ petition number 44018 of 2002. Pending the final disposal of the issue as per the directions of the Hon'ble High Court, the opposite party No. 2, the Employees State Insurance Corporation through its Regional Director, Employees' State Insurance Corporation, Kanpur is restrained from attachment of any Bank account and property of U. P. State Road Transport Corporation. Let this order be sent to Regional Director Employees State Insurance Corporation, Kanpur for the information and compliance of the above order with a copy to Managing Director, U. P. State Road Transport Corporation, Tihri Kothi, Lucknow. "
(3.) IT was in the backdrop of the aforesaid facts that the recovery notice dated 27-3-2003 issued by the ESI Corporation had been challenged in this writ petition in which the interim orders of 7-4-2003 and 16- 4-2003 had been passed, details of which have already been noted above. Subsequently, during the pendency of this writ petition, on 5- 5-2003, the State Government issued a notification under Sections 88 and 91-A of the ESI Act granting exemption to the petitioner-Corporation from the operation of the Act with retrospective effect from 14-1-1986. The petitioner then approached the Recovery Officer of the ESI Corporation for refund of the amount already recovered, which was refused by the order dated 28-7-2003. Then by way of an amendment application, the aforesaid notification and the order dated 28-7-2003 were brought on record and the prayer made in this writ petition was suitably amended, and the prayers for quashing the order dated 28-7-2003 and also for a direction to the ESI Corporation to refund the amount of Rs. 84,90,902/- alongwith interest, were added.;