- (1.) Both the appeals are at the instance of the ESI Corporation against the order passed by the ESI Court quashing a notice under Section 45A of the ESI Act. The notice was issued by the Corporation to the respondent-firm on the ground that a unit established at Mohindergarh was to be treated as a single unit along with the respondent's unit at Neelam Chowk. The notice came to be issued when the ESI Corporation found that the respondent-firm had submitted returns and making their contributions only in respect of their unit in Neelam Chowk and they had not made contribution for employees at Ballabgarh. The treatment as two units falling under one single entity was on the basis that the salary register at Neelam Chowk also included the payment details of the employees at Ballabgarh unit. When the respondent-firm was contending that they were indeed two units and also argued for the position that the ESI Act was not extended to the geographical limits of Ballabgarh, the ESI Court found that the respondent-firm was actually denying its liability under Section 45A of the ESI Act and consequently, it shall be only the ESI Corporation which must seek for an adjudication before the ESI Court as regards the applicability regarding the Act and the enforcement of its provisions to the unit at Ballabgarh. The ESI Court relied on several decisions including the judgment of the Full Bench of the Karnataka High Court in Regional Director ESI v. M/s. Fibre Bangalore (P) Limited, 1980 AIR(Kar) 86 which was the subject of adjudication before the Supreme Court under the same title EMPLOYEES STATE INSURANCE CORPORATION v. F FIBRE BANGALORE (P) LTD, 1997 AIR(SC) 2441 . The Supreme Court set aside the judgment of the Full Bench of the Karnataka High Court and held that when a notice was issued under Section 45A of the ESI Act, a Company which was aggrieved by it shall alone be competent to approach the ESI Court for inviting adjudication regarding the applicability or otherwise of the provisions of the Act. I have gone through the order and I find that the ESI Court has not rendered an adjudication on merits and the contentions raised with regard to the geographical extension of the Act to a unit at Ballabgarh at the relevant time as well as on the issue whether the unit at Ballabgarh could be seen to be same unit connected to the unit at Neelam Chowk in which case the notice was in order or whether the unit at Ballabgarh was an independent unit which could not be treated as a unit connected to the Neelam Chowk. This adjudication ought to have been taken when the firm was before the Court challenging the notice invoking the provisions of the ESI Act to the respondent-firm. In the light of the judgment of the Supreme Court, referred to above, the matter requires to be adjudged on merits particularly with reference to the applicability of the Act and the identity of the respondent's unit at Ballabgarh either as an independent unit or as the same unit as Neelam Chowk.
(2.) The Court, while disposing of the challenge, has also taken a view that even notice under Section 45A was barred by limitation. This view cannot also be taken as correct in view of the judgment in ESI Corporation v. C.C. Santhakumar, 2006 AIR(SCW) 6427 where the Supreme Court held that there is no limitation period prescribed for passing recovery order based on determination under Section 45A. The Court has further held that three years limitation period provided for under Section 77(1-A) and five years limitation period provided for under Section 77(1-A) Explanation (b) proviso will have no relevance to orders passed under Section 45A of the ESI Act. The ESI Court would therefore undertake an adjudication on merits. The impugned orders are set aside and the matter is remitted to the ESI Court for disposal in the light of above observations. There is no representation for the respondent. The ESI Court shall issue a notice to the respondent before undertaking adjudication in the manner referred to above.;