The Employees State Insurance Corporation (Tamil N vs St Josephs College of Engineering

Court
Madras High Court

W.A.No.2067 of 2026
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 30-10-2026
CORAM
THE HONOURABLE DR JUSTICE G. JAYACHANDRAN
AND
THE HONOURABLE MR.JUSTICE E.MANOHARAN
W.A.No.2067 of 2026
CNR:{HCMA011512472025}
The Employees State Insurance Corporation (Tamil Nadu),
Rep. by its Additional Commissioner
and Regional Director 143, Sterling
Road, Nungambakkam,
… Appellant
Chennai-600 034
Vs
St Josephs College of Engineering
Rep. by its Chairman Dr. B.Babu
… Respondent
Manoharan
Prayer: Writ Petition has been filed under Clause 15 of the Letters Patent,
pleased to set aside the impugned order passed by the learned Single Judge in
W.P.No.21471 of 2024 dated 19.09.2024 and allow the above Writ Appeal.
For Appellant: Mrs. G.Narmadha
For Respondent: Mr.S.Rajasekar
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W.A.No.2067 of 2026
O R D E R
(Order of the Court was made by G.Jayachandran J.)
Intra-Court appeal is filed by the Employees’ State Insurance Corporation
(in short, ‘ESIC’), being aggrieved by the order passed by the Learned Single
Judge directing the Corporation to reconsider the proposal of imposing damages
on the employer for non-payment of contributions in time.
2. The short point involved in this case is that the respondent, which is an
Education Institution, was asked to pay contributions under the ESIC scheme
for its employees. The demand was the subject matter of Writ Petitions filed by
several institutions and ultimately, the Full Bench of this Court held that they
are liable to pay contributions. However, the delay in paying the contribution
and the levy of damages or penalties shall be subject to Section 91 C of the ESI
Act and Rule 53 of the Employees’ State Insurance (Central) Rules, 1950.
3. As far as this respondent is concerned, he has paid the contribution
belatedly with interest. However, the respondent is aggrieved by imposing of
damages. According to the respondent, the reasons for belated payment are the
intervening Covid -19 pandemic period and the pendency of the matter before
the Full Bench of this Court.
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W.A.No.2067 of 2026
4. The Learned Single Judge, having considered the contentions raised by
the ESIC and the petitioner, remitted the matter back for fresh consideration
with the following observations:
“13. Since the pandemic situation is an
extraordinary one, the authorities can not expect that to
be listed as one of the conditions prescribed under Rule 53
of the ESI Act. The Court has mandated in its judgment to
consider the claim of waiver in letter and spirit. Since the
impugned order has been passed, without having least
regard to the spirit in which the Full Bench had directed, I
feel it appropriate to direct the respondent to redo the
exercise by following the spirit and object of the
directions/observations made in the orders of the Full
Bench.”
5. Mrs.G.Narmadha, Learned Counsel appearing for the appellant/ESIC,
submits that a harmonious reading of Section 91 C of the ESI Act and Rule 53
of the Employee’s State Insurance (C) Rules, 1950 would clearly show that the
respondent is not entitled for any waiver of damages.
6. The Full Bench of this Court, after considering the scope of Section
91C regarding the power of the ESIC to sanction Writing off contribution,
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W.A.No.2067 of 2026
interest and damages in case of loss or impossible of recovery, had not given
any immunity or right to the Educational Institutions to seek waiver. Therefore,
there is no necessity to remit the order for fresh consideration and even if it is
remitted back, it will be only be an empty formality.
7. The Learned Counsel appearing for the ESIC further submitted that
since the decision of the Full Bench dealing with Section 91 C of the ESI Act,
as spoken in paragraph Nos.136 to 138 of All India Private Education
Institutions Association, Rep. By its State General Secretary K.Palaniyappan
vs. State of Tamil Nadu Rep. By Principal Secretary to Government, Labour
and Employment Department and another reported in (2020) 5 CTC 93 (FB),
is the subject matter of Special Leave Petition pending before the Hon’ble
Supreme Court, wherein interim stay of operation of the order has been granted.
8. The Learned Counsel for the respondent, in alternate submitted that
dehors of the specific direction of the Learned Single Judge to reconsider
imposing of damages, the respondent is ready to participate in the Amnesty
Scheme and has also submitted the proposal to the Corporation on 30.09.2020
and if the Corporation/appellant is directed to consider the proposal for
Amnesty, the respondent is ready to accept the order passed under the Amnesty
scheme.
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W.A.No.2067 of 2026
9. Considering the rival submissions and alternate proposal given by the
respondent, we find that the Corporation had given a restricted meaning to
Section 91 C of the Act read with Rule 53 of the Employee’s State Insurance
(C) Rules, 1950.
10. The Learned Single Judge, taking note of extraordinary and
unexpected situation that arose due to Covid-19 pandemic, had directed the
st
Corporation to reconsider whether the case of the 1 respondent can be brought
within the umbrella of Rule 53 of the Employee’s State Insurance (C) Rules,
1950, to give waiver in full or in part.
11. We do no find any reason to hold that the direction of the Learned
Single Judge to reconsider suffers from any illegality or infirmity. Therefore,
we dismiss the appeal with liberty to the Corporation to either consider afresh
the proposal to impose damages on the respondent in the light to the
observations made by the Learned Single Judge or process the Amnesty
application made by the assessee and pass appropriate orders. Either of the two
options can be exercised by the Board and the respondent shall be made known
the outcome of the decision within a period of four weeks.
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W.A.No.2067 of 2026
12. Accordingly, the Writ Appeal is dismissed. There shall be no order as
to costs.
(Dr. G.JAYACHANDRAN, J.) & (E.MANOHARAN J.)
30-10-2026
Index :Yes/No.
Speaking/Non-speaking order
Internet :Yes.
Neutral Citation :Yes/No.
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W.A.No.2067 of 2026
Dr. G.JAYACHANDRAN, J.
AND
E.MANOHARAN, J.
bsm
W.A.No.2067 of 2026
30-10-2026
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