An order under Section 45-A was quashed for failure to provide an effective hearing.

The petitioner, a proprietorship concern engaged in horticultural activities and working as a sub-contractor for Jindal Steel, Angul, challenged an order purportedly passed under Section 45-A of the Employees’ State Insurance Act, 1948.

The order, bearing No. 7235, was dated 29 October 2024 but signed by the Deputy Director (Revenue-II) on 21 November 2024.

It recorded that the petitioner’s proprietor had attended a hearing on 27 August 2024, sought three weeks’ time to produce records, and thereafter failed to attend the hearing fixed for 13 September 2024.

The petitioner had submitted a letter dated 12 November 2024 seeking refixation of the hearing, which bore the receiving endorsement of the ESIC office.

The petitioner also challenged the garnishee order dated 20 November 2025 affecting its bank account with State Bank of India, Nalco Branch, Angul.

1. Whether the order under Section 45-A of the ESI Act was liable to be set aside for want of an effective opportunity of hearing before adjudication.

2. Whether the garnishee order affecting the petitioner’s bank account required modification pending fresh adjudication by the ESIC authority.

The Court applied Section 45-A of the Employees’ State Insurance Act, 1948, which empowers the competent ESI authority to determine contributions where the employer fails to submit returns, records, or other particulars, subject to observance of procedural fairness.

The Court further applied the principles of natural justice, particularly the requirement that an affected party must receive a real and effective opportunity to be heard and to produce supporting evidence before an adverse determination is made.

The Court found that the chronology raised a serious procedural defect: although the order recorded non-appearance on 13 September 2024, the petitioner had submitted a request for refixation of hearing on 12 November 2024, before the authority signed the order on 21 November 2024.

Considering the receiving endorsement on the petitioner’s letter and the dates appearing on the order, the Court concluded that the petitioner had not been granted an effective opportunity to produce records and adduce evidence before the Section 45-A determination.

Since the petitioner sought only a fresh opportunity of hearing and the merits had not been examined, remand for re-adjudication was considered appropriate.

Pending such adjudication, the Court balanced the petitioner’s need to operate its account against the ESI authority’s claim by permitting operation subject to maintaining a balance of Rs.1,00,000.

The petitioner was directed to appear before the authority on 5 October 2026 with all supporting documents, whereupon the authority was to fix a hearing and permit the petitioner to adduce evidence and produce records.

The garnishee order dated 20 November 2025 was modified to permit operation of the State Bank of India account subject to maintenance of a balance of Rs.1,00,000, which would remain subject to the outcome of the fresh adjudication.

The writ petition was disposed of without expressing any opinion on the merits of the petitioner’s substantive claim.