(Prayer: Appeal filed under under Section 82 (2) of the ESI Act, 1948 against ESIOP No.7 of 2024 dated 11.07.2025, on the file of the Employees State Insurance Court, Coimbatore.)

1. This appeal has been filed under Section 82 (2) of the Employees' State Insurance Act, 1948, [hereinafter referred to as 'the Act'] against the order passed in ESIOP No.7 of 2024 dated 11.07.2025, on the file of the Presiding Officer, Principal Labour Court, Coimbatore, dismissing the petition filed by the appellant under Section 75 of the ESI Act and confirming the adjudication order passed by the ESI Corporation under Section 45A of the Act dated 06.10.2021.

2. Heard the learned counsel for the appellant and the learned counsel for the respondents.

3. The case of the appellant is that M/s.Neurotronix Systems India Private Limited was established in the year 1994 and the unit is engaged in the design, development, manufacturing etc., of products that answers the clients electronic requirements and needs.

4. The 1st respondent initiated proceedings under Section 45A of the Act and passed an order dated 06.10.2021 assessing the contribution payable at Rs.3,51,839/- for the period from 01.10.2016 to 30.11.2020 and directed the appellant to pay the amount within a period of 60 days.

5. The appellant aggrieved by the said order filed a petition before the Principal Labour Court, Coimbatore under Section 75 of the Act by taking a stand that the appellant was not carrying on with any manufacturing process for the unit in question and for whatever unit the appellant was operating, the ESI contribution was paid without fail for the period from October 2016 to March 2020. In view of the same, the appellant questioned the adjudication order fixing the contribution at Rs.3,51,839/- and directing the appellant to pay this amount.

6. The ESI Corporation filed a counter and took a stand that the appellant was carrying on with the establishment at Nanjundapuram Road, Ramanathapuram, Coimbatore and it was covered under the Act with effect from 01.01.2007 and an ESI code number was also allotted. There were totally 19 employees who were working in the establishment. Subsequently, the appellant established another unit at Pollachi main road and this was also covered under the Act and a separate ESI code was given by a letter dated 23.05.2008. Hence, the appellant was expected to pay the contribution for both the units separately. While so, the unit at Nanjundapuram, Coimbatore, had defaulted in the payment of contribution for the period from August 2013 to July 2019. The show cause notice was issued both to the establishment as well as the principal employer. Inspite of the receipt of notice, there was no response and hence notice for conducting the adjudication was issued in C-18 Form on 29.12.2020. The appellant was also called upon to attend the personal hearing to represent their case with necessary documents. The appellant did not appear before the authority during the hearing. Once again the notice was issued by fixing the hearing on 14.04.2021 and this notice was duly received and acknowledged. No one appeared for the hearing.

7. Once again, the ESI Corporation issued a notice dated 26.4.2021 by fixing the hearing on 19.05.2021. Since there were restrictions due to pandemic, yet another notice was issued on 14.07.2021 and the date of enquiry was fixed on 19.08.2021. The appellant did not avail any of these opportunities. In view of the same, the Competent Authority after duly considering all the relevant factors determined the contribution as per the proviso to Section 45A of the ESI Act on assumed notional wages, for 11 employees for the period from 01.10.2016 to 30.11.2020 amounting to Rs.3,51,839/- and the order was issued under Section 45A of the Act dated 06.10.2021. Hence, the ESI Corporation sought for the dismissal of the petition.

8. The Labour Court on considering the facts and circumstances of the case and on appreciation of evidence came to the conclusion that the appellant did not avail any opportunity that was given to them and in view of the same, the ESI Corporation was left with no alternate option except to determine the contribution on assumed notional wages and the order was passed. The Labour Court came to the conclusion that the appellant has not proved their case and the disputed claim pertains to the unit that was run at Nanjundapuram. Accordingly, the order passed by the Authority under Section 45A of the Act was upheld and the petition was dismissed. Aggrieved by the same, the present appeal has been filed before this Court.

9. This Court heard the learned counsel for the appellant and the learned Standing Counsel appearing on behalf of the ESI Corporation, in order to ascertain as to whether any substantial question of law is involved in this case. It is a pre-requisite under sub Section (2) of Section 82 of the ESI Act, 1948.

10. The main ground that was urged before this Court is that the order passed by the ESI Corporation under Section 45A is not in line with the judgment of the Apex Court in Carborandum Universal Ltd., Vs. ESI Corporation reported in MANU/SC/1698/2025. The second ground that was urged is that there is only one unit that was functioning after 2013 since both the units have merged and therefore, there is no question of making the appellant pay the contribution for the unit which has ceased to operate from the year 2013 onwards.

11. Insofar as the first ground raised, the Apex Court in the above judgment in Carborandum Universal Ltd., has categorically held that for the invocation of Section 45A of the Act, there are two conditions which are functional requirement to invoke Section 45A viz., non-production of records or obstruction of inspection. In the case in hand, repeated notices were sent to the appellant and the appellant has not chosen to attend the enquiry and submit the relevant records. As a result, the authority was not in a position to proceed further with the enquiry. Therefore, the authority was well within their power to assess the contribution based on assumed notional wages for 11 employees. The authority has satisfied the requirement under Section 45A of the Act. Therefore, the judgment of the Apex Court in Carborandum case will not come to the aid of the appellant.

12. Insofar as the second ground is concerned, no documents were filed either before the adjudicating authority or before the Court below to substantiate the merger of both the units. For the first time, the documents were placed before this Court in the appeal. The same has been filed by way of additional typed set of papers.

13. In the case in hand, this Court is dealing with the unit which has been allotted Code No.56001065090000602. According to the appellant, the merger had taken place in the year 2013 itself and only one unit is functioning thereafter. In the very same additional typed set of papers at Page No.54, the payment details have been provided. It is seen that for the so called unit which has been closed in 2013, contribution has been paid as late as in 2023. Similarly, the contribution has been paid during August 2025 also. If the unit is not functioning from 2013 onwards and both units have merged, it defies common-sense as to why the appellant will keep paying the contribution for a non-existing unit. This itself shows that the appellant is not sure whether both the units are functioning or only one unit is functioning at the relevant point of time.

14. It is clear from the above that even if the matter is remanded back to the Labour Court, nothing much can be established. In any event, this Court does not find any substantial question of law involved in this appeal and therefore the pre-requisite for entertaining the appeal under Section 82 of the Act, has not been satisfied.

15. The order passed by the Labour Court does not suffer from any perversity warring the interference of this Court. Hence, the order of the Labour Court is confirmed.

16. The learned counsel for the appellant submitted that there is an Amnesty Scheme in force and therefore the appellant should be given the opportunity to exercise their right under the Amnesty Scheme. If any Amnesty Scheme is available and the appellant makes an application, the same can be dealt with by the ESI Corporation in line with the terms of the Amnesty Scheme. Except giving this clarity, nothing further can be observed by this Court.

17. In the result, this Civil Miscellaneous Appeal is dismissed in the above terms. No costs. Consequently, connected miscellaneous petition is closed.