Judgment:
ORDER
V. Kanagaraj, J.
1. The petitioner Hotel has filed this writ petition against the E.I. Court, the E.S.I. Corporation and the Special Tahsildar (E.S.I. Recovery) praying to issue a writ of certiorari to call for the records and to quash the order dated August 4, 1992 made by the first respondent in C.M.P. No. 42 of 1992 in E.I.O.P. of 1992.
2. Heard the learned Counsel appearing for the petitioner and the respondents as well.
3. In the affidavit filed in support of the writ petition the Attorney of the petitioner would contend that the petitioner Hotel is a Unit of Spencer International Hotels Limited, a company incorporated under the Companies Act, 1956, having its registered office at Madras and 'it is engaged in the business of hoteliering; that the petitioner Hotel employs about 450 employees and wherever it is applicable, the provisions of the E.S.I. Act have been complied; that the petitioner company is also providing facilities for In-Company training and the trainees undergo training in designated trade in pursuance of a contract of traineeship and they are paid a monthly stipend without any element of employment whatsoever.
4. The petitioner would further contend that while so, the second respondent sent a letter dated November 9, 1990 thereby directing the petitioner to pay contribution amounting to Rs. 79,609.30 for the period from January 1, 1981 to January 31, 1985 in respect of contribution payable to the employees designated as trainees and coverable under the Act with further intimation mat the said amount if not paid, shall be recoverable as an arrear of land revenue under Section 45-B; that the petitioner sent a reply notice in its Ref. No. RS/SV, dated April 19, 1991 clarifying that wages were not paid to the trainees, but only stipend, farther pointing out that there was no employer-employee relationship between the petitioner and the trainees who were taken as per the scheme to get training in various designated trades ultimately requesting to drop the claim. But inspite of such explanations offered, the second respondent in his letter dated July 5, 1991 holding that the trainees appointed by the petitioner have been employed for wages and that they are designated only as trainees and advised the petitioner to submit contributions in respect of them.
5. The further case of the petitioner is that while such was the state of affairs, the second respondent by his notice dated September 30, 1991 sent under Section 5 of the Revenue Recovery Act, 1890 addressed to the third respondent for the recovery of the contributions under Section 45-B of the said Act requesting him to recover a sum of Rs. 83,453.70 mat the petitioner submits that they received a Notice in Ref. No. E.S.I./MDS/552/91 dated December 1991 from the third respondent initiating distraint proceedings for the recovery of the said sum; that aggrieved by the order of the second respondent dated July 5, 1991 and the subsequent pursuance of the claim made through the third respondent for a sum of Rs. 83,453.70 and having no other alternative remedy, the petitioner would come forward to say that it was constrained to approach the first respondent for a declaration that the order dated July 5, 1991 of the second respondent is illegal, arbitrary and contrary to the provisions of law.
6. It is the further case of the petitioner that along with the said main petition, the petitioner also filed two miscellaneous applications under Section 75 of the E.S.I. Act, viz. C.M.P. No. 42 of 1992 being an application for waiver of the pre-deposit to be made under Section 75(2)(b) of the Act and C.M.P. No. 43 of 1992 for stay of all further proceedings pursuant to the notice of the third respondent dated December 1991; that after full hearing, the first respondent dismissed the waiver application in C.M.P. No. 42 of 1992 and the stay application in C.M.P. No. 43 of 1992 by his order dated August 4, 1992 and having no other alternative remedy, the petitioner is constrained to approach this Court seeking the relief as sought for in the writ petition.
7. In the counter filed on behalf of the second respondent it would be contended that the Inspector of the Corporation having visited the premises of the petitioner on various dates that is from August 2, 1984 to January 10, 1985 and verified the relevant records and submitted the inspection reports on November 30, 1984 and January 21, 1985 stating thereby that the employer has not covered the employees under the designation 'trainees' and has not paid the E.S.I, contribution in respect of the period from January, 1981 to January, 1985 to the tune of Rs. 79,609.30. Hence, the Corporation issued the notice dated November 9, 1990 claiming contribution giving a time of 15 days for payment of the dues.
8. Even though the employer disputed the same vide his letter dated April 19, 1991, the Corporation in its letter dated July 5, 1991 reiterated their stand and advised the employer to pay the contributions so claimed, that since the employer failed to pay the contribution, the Corporation, issued C-19 dated September 30, 1991 to the Special Tahsildar (Recoveries) for the recovery of the dues under the Revenue Recovery Act; that on the basis of C-19, the Special Tahsildar issued a communication to the employer to pay the dues, the employer filed two miscellaneous petitions in C.M.P. Nos. 42 and 43 of 1992, the former for waiver of the deposit to be made under Section 75(2)(b) of the Act and the later for stay of all further proceedings pursuant to the notice of the said Tahsildar.
9. The further averments of the counter is that on account of the stay granted by this Court in W.M.P. No. 20914 of 1992 in the above writ petition, the E.S.I, proceedings have been stalled relating to the deposit of 50 per cent to be made under Section 75(2)(b) of the Act which is a statutory requirement and the writ is not maintainable and on this short ground alone, the writ petition deserves to be dismissed, that even otherwise, if the petitioner is aggrieved of such an order of the E. S.I., he could have filed an appeal against the same and no writ will lie. On such and other grounds, the counter would ultimately pray to dismiss the writ petition with costs.
10. A fair assessment of the facts and: circumstances of the case encircling the whole affair connected to this writ petition and having regard to the materials placed on record and upon hearing the learned Counsel for both parties, what comes to be known is that since the Corporation after verifying the relevant records of the petitioner company, the employer on various dates that is from August 2, 1984 to January 10, 1985 by the Inspector of the Corporation and on his report submitted dated November 30, 1984 and January 21, 1985, it came to be known to the Corporation that the employer has not covered the employees under the designation 'trainees' under the Act and had not paid the employees E.S.I. Contribution in respect of them to the tune of Rs. 79,609.30 for the period from January, 1981 to January, 1985 issued notice in Form C-18 dated November 9, 1990 and reiterating the same by another letter dated July 5, 1991 and in spite of such notice, since the employer failed to pay the contribution the Corporation issued C-19 dated September 30, 1991 to the third respondent Tahsildar (E.S.I. Recoveries) consequent to which, the employer had filed two miscellaneous applications in C.M.P. No. 42 of 1992 for waiver of the deposit of 50 percent of the amount due from the petitioner and another in C.M.P. No. 43 of 1992 for stay of all further proceedings pursuant to the notice of the third respondent. Since it has been decided by the first respondent dismissing the waiver application and treating the stay application as infructuous and aggrieved of such orders having filed the above writ petition filing along with it the Writ Miscellaneous Petition No. 20914 of 1992 in which an interim stay having come to be passed by this Court on September 24, 1992 without effecting the payment of 50 per cent deposit as warranted by Section 75(2)(b) of the E.S.I. Act, the petitioner has to face the result of the writ petition.
11. On the part of the petitioner Hotel, they would come forward, to say that the trainees undergo training in designated trade in pursuance of the contract of traineeship on payment of monthly stipend having fixed without any element of employment intermingled or intertwined and in spite of that the petitioner has been directed to pay the contribution amounting to Rs. 79,609.30 for the period starting from January, 1981 to January, 1985 designating them as trainees.
12. On the part of the Insurance Corporation, it would be argued that the employer having come to be found not covered under the designation of trainees under the Act had not paid the-E.S.I. contribution in respect of them for the said period from January, 1981 to January, 1985. Hence, following the procedures, they issued notice in Form C-18 dated November 9, 1990 and reiterating the same by letter dated July 5, 1991 and inspite of such repeated demands since the petitioner company did not come forward to pay the E.S.I, contribution for their trainees, the Corporation was left with no option, but to issue C-19 dated September 30, 1991 to the third respondent for the recovery of the dues under the Revenue Recovery Act.
13. Though the main issue is concerned with the recovery of E.S.I, contribution for the trainees from the petitioner Hotel pertaining to the year January, 1981 to January, 1985 still what comes to be known is that under the amended provisions of law under Section 75(2)(b) of the E.S.I. Act, the principal employer must deposit 50 per cent of the amount due from him as claimed by the Corporation unless the Court for reasons to be recorded in writing waive or reduce the amount to be deposited. It is relevant to extract the amended provisions of law that is Sub-section 2(b) added with Section 75 of the E.S.I. Act.
Section 75(2)(b) of the Act reads,
'No matter which is in dispute between a principal employer and the Corporation in respect of any contribution or any other dues shall be raised by the principal employer in the Employees Insurance Court unless he has deposited with the Court fifty per cent of the amount due from him as claimed by the Corporation.
Provided that the Court may, for reasons to be recorded in writing, waive or reduce the amount to be deposited under this sub-section.'
14. No doubt, it is statutory provision of law which is mandatory in nature and unless the Court for reasons to be recorded in writing waives or reduces the 50 per cent of the amount due to be deposited, the employer must comply with the section and in such event, the Court has declined to waive such deposit by the petitioner and dismissed the waiver application filed by the petitioner in C.M.P. No. 42of 1992 further dismissing the said application in C.M.P. No. 43 of 1992 also as infructuous.
15. Therefore, the only course open for the petitioner is to deposit the said amount in compliance of the legal provisions, but neither the petitioner complied with the provisions of law in making the deposit of 50 per cent of the amount due from him, nor did he even choose to file a regular appeal, but has resorted to this Court by means of the writ petition and with the help of an order of interim stay dated September 24, 1992 still, the petitioner has not complied with the legal provisions and in the circumstances of the case, there is absolutely no justification on the part of the petitioner to decline to effect the said payment either under pretext that the trainees are undergoing training in pursuance of a contract of traineeship or in any other manner and the only course open for the petitioner is to deposit the said amount as warranted by the section.
16. In the above circumstances of the case, neither the petitioner has any legal right to ward off depositing 50 per cent of the amount due by him to the Corporation, nor is there any other course open for him in the present circumstances and hence so far as the apprentices having come under the designation as trainees under the Act, the petitioner employer is covered under the contribution provisions and for non compliance of the same, the respondents have acted within their powers and jurisdiction to issue notice under Form C-18 as they have issued on November 9, 1990 and then to issue the further direction to the third respondent in Form C-19 dated September 30, 1991 for the recovery of the dues to be effected under the Revenue Recovery Act and when the petitioner has landed with the first respondent Court, unless the Court exempts or waives or reduces the 50 per cent of the amount that is to be deposited for reasons to be recorded in writing, automatically, Section 75(2)(b) of the Act prevails upon the petitioner from out of which there is no escape and hence it is high time that the petitioner complied with the relevant provisions of the E.S.I. Act in the manner required by the respondents. Hence, the interference of this Court sought for by the petitioner into the order passed by the first respondent dated August 4, 1992 is not at all called for.
17. In result, the writ petition fails and the same is dismissed. No costs.
18. Consequently, connected W.M.P. is also dismissed.