Writ Jurisdiction may be Exercised to Bypass Statutory Limitation where the Cause of Action is Obscure.

The Petitioner, a proprietorship firm in Jagatsinghpur, challenged a Garnishee Order dated 22.07.2025 issued under Section 45G of the ESI Act.

It also challenged an order dated 01.12.2017 which retrospectively covered the establishment under the Act from October 2011.

The Petitioner contended it was never served notice of the Section 45A proceedings.

The ESI Corporation argued that the Petitioner must approach the Employees’ Insurance Court (E.I. Court) under Section 75, noting that such applications must typically be filed within three years of the cause of action.

However, the 2017 order contained clerical inconsistencies regarding the coverage date, and the Garnishee order failed to cite the foundational Section 45A order.

1. Whether the Petitioner is barred by the three-year limitation period under Section 77 of the ESI Act given the lack of clarity regarding the service of foundational orders.

2. Whether the High Court should exercise its extraordinary writ jurisdiction to direct the E.I. Court to hear the matter on merits despite potential delay.

Section 75(1)(g) of the Employees’ State Insurance Act, 1948, which mandates that disputes between a principal employer and the Corporation regarding dues be decided by the E.I. Court.

Section 77(1-A), which prescribes a three-year limitation period from the date the cause of action arises for filing such applications.

Section 75(2-B), which requires a mandatory deposit of 50% of the disputed amount, but grants the E.I. Court the discretion to waive or reduce this deposit.

The Court observed that the "cause of action" date was "nebulous" and "obscure" because the ESI Corporation’s orders contained inconsistencies (e.g., listing a coverage date of 01/01/0001) and lacked evidence that the petitioner was served with the original Section 45A determination.

Due to the absence of foundational documents to establish when the three-year limitation period began, the Court determined that strict adherence to the limitation period would be unjust.

To balance the interest of the Corporation with the Petitioner’s right to a fair hearing, the Court utilized its jurisdiction under Article 226 to bypass the limitation barrier and the 50% pre-deposit rule, substituting it with a fixed deposit of Rs. 3,00,000/-.

The E.I. Court was ordered to hear the case on its merits without dismissing it on the grounds of limitation/delay.

The Petitioner was directed to deposit Rs. 3,00,000/- as a high-interest fixed deposit as security, which would satisfy the requirements of Section 75(2-B) for entertaining the application.

The ESI authorities were further directed to provide all authenticated documents to the Petitioner within ten working days of request to facilitate the filing.