Orissa HC Quashes ESI Garnishee Order Against +2 Science College, Citing No Section 45-A Order Or Effective Hearing

The petitioner, an educational institution, challenged a garnishee order dated 18 August 2025 issued under Section 45G of the Employees’ State Insurance Act, 1948, to recover alleged contribution arrears.

The Corporation’s notices and demands concerned contribution periods beginning in May 2013 and extending through January 2017; the petitioner disputed that it had admitted liability and contended that no order under Section 45A had been passed and no effective hearing had been afforded.

The Corporation confirmed that no Section 45A order had been passed, but argued that such an order was unnecessary and that the writ petition was barred by the alternative remedy under Section 75.

The petitioner invoked the High Court’s writ jurisdiction on grounds of procedural irregularity and denial of natural justice.

Section 45A of the ESI Act was treated as requiring an adjudicatory order by the authority in the circumstances at issue, while Section 45G was the provision invoked for the garnishee recovery; Section 75 provides a statutory remedy but does not impose an absolute bar on writ jurisdiction.

Under Whirlpool Corporation v. Registrar of Trade Marks, a High Court may entertain a petition despite an alternative remedy, including where principles of natural justice have been violated or proceedings are without jurisdiction.

The Court also relied on A.V. Venkateswaran v. Collector of Customs and Calcutta Discount Co. Ltd. v. ITO for the principle that the alternative-remedy rule is discretionary, and on Quinn v. Leathem for the proposition that decisions must be applied in light of their particular facts.

The Corporation expressly stated that no order under Section 45A had been passed, and the record did not demonstrate that the petitioner had received an effective hearing before recovery was pursued.

The letters relied on by the Corporation—including the petitioner’s request that the authority ascertain the actual contribution payable and its request to change its portal credentials—did not establish an admission of the assessed liability.

In those circumstances, the Court found procedural irregularity and a failure to comply with natural justice. Those defects justified entertaining the writ petition notwithstanding the Section 75 remedy.

It allowed the writ petition and set aside the orders dated 9 January 2018 and 28 May 2025, together with the garnishee order dated 18 August 2025.

Any amount appropriated from the petitioner’s bank account pursuant to those orders was directed to be restored forthwith; there was no order as to costs.