Madras High Court
Saratha Matriculation School vs The Deputy Director on 12 March, 2026
W.P(MD)No.29438 of 2025
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 12.03.2026
CORAM
THE HONOURABLE MR.JUSTICE HEMANT CHANDANGOUDAR
Writ Petition(MD)No.29438 of 2025
and
W.M.P(MD)Nos.22754 & 22758 of 2026
Saratha Matriculation School
rep. by its Correspondent,
424-C, Madurai Main Road,
Sankar Nagar,
Tirunelveli District - 627 357.
.. Petitioner
Vs
1.The Deputy Director,
Employees State Insurance Corporation,
Sub Regional Office,
Salaistreet,
Vannarpettai,
Tirunelveli District - 627 003.
2.The Recovery Officer,
Employees State Insurance Corporation,
Office of the Recovery Office,
Sub Regional Office,
Salai Street,
Vannarpettai,
Tirunelveli District - 627 003.
3.The Branch Manager,
Indian Overseas Bank,
Naranammalpuram,
Tirunelveli - 627 357.
..Respondents
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W.P(MD)No.29438 of 2025
Prayer: Writ Petition filed under Article 226 of the Constitution of
India, praying this Court to issue a Writ of Certiorari to call for the
records relating to the impugned order passed by the first respondent
No.66-00-040016-000-1302/45-A/SRO/TLI/459-18/ dated
03.12.2024 and the consequential impugned Garnishee order passed
by the second respondent in No.66000400160001302/RRC/SRO/TLI
dated 22.08.2025 and quash the same as illegal.
For Petitioner : Mr.M.Jerin Mathew
For Respondents : Mr.R.Ravikumar for R1 & R2
Mr.N.Dilipkumar for R3
ORDER
The petitioner challenges the order dated 03.12.2024, bearing
No.66-00-040016-000-1302/45-A/SRO/TLI/459-18, passed by the
first respondent and the consequential Garnishee Order passed by the
second respondent in No.66000400160001302/RRC/SRO/TLI dated
22.08.2025. By the said impugned order, the petitioner has been
called upon to pay a sum of Rs.17,53,389/-, being the arrears of
employees’ contribution for the period from February 2013 to April
2018 under the Employees’ State Insurance Act, 1948.
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W.P(MD)No.29438 of 2025
2. The petitioner is a school covered under the provisions of the
Employees’ State Insurance Act, 1948, and has been assigned the
necessary code under the Act. Therefore, the petitioner is under a
statutory obligation to pay contributions in accordance with Section
40 of the Act, read with Regulations 29 and 31 of the ESI (General)
Regulations framed thereunder.
3. The first respondent issued a communication dated
26.02.2014 stating that payment of contribution to ESI was being
withheld due to litigation initiated by the Association of Schools before
the High Court. Since the petitioner failed to pay the contributions as
required under law, a show cause notice dated 29.10.2018 was issued
to the petitioner for the said period, calling upon the petitioner to
explain why the contribution specified therein should not be assessed
under Section 45-A of the Act. The petitioner did not submit any reply
to the show cause notice and also did not participate in the enquiry
conducted under Section 45-A of the Act. Thereafter, the first
respondent, after considering the materials available on record,
passed the impugned order.
4. The learned counsel appearing for the petitioner submitted
that the impugned order passed by the first respondent is barred by
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W.P(MD)No.29438 of 2025
limitation, as it was issued more than five years after the contribution
became payable. In support of this submission, reliance was placed
on the second proviso to Section 45-A of the Act and the decision of a
Coordinate Bench of this Court.
5. Per contra, the learned standing counsel appearing for
respondents 1 and 2 submitted that the second proviso to Section 45-
A has been interpreted by the Bombay High Court, wherein it has
been held that while the assessment fixing the liability for employees’
contribution can relate only to a period of five years, the assessment
order itself may be passed beyond the said period of five years.
Therefore, according to the learned counsel, the proviso does not
mandate that the assessment order must necessarily be passed within
five years from the date on which the contribution became payable. In
support of this submission, reliance was placed on the judgment of
the Bombay High Court reported in 2019 (5) ALL MR 728 (M/s. Anil
Chat Bhandar vs. Deputy Regional Director and another).
6. The submissions of the learned counsel appearing on either
side have been considered.
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W.P(MD)No.29438 of 2025
7. Admittedly, the assessment relates to the period from
February 2013 to April 2018. The show cause notice was issued on
29.10.2018. The petitioner did not participate in the enquiry
proceedings. The impugned order records that a show cause notice
was issued and that an opportunity of personal hearing was afforded
to the petitioner. However, the impugned order does not indicate that
any reply was submitted by the petitioner or that the petitioner
participated in the enquiry. Though the proceedings were initiated on
29.10.2018, the impugned order came to be passed only on
03.12.2024.
8. The second proviso to Section 45-A of the Act states that no
order shall be passed by the Corporation in respect of a period beyond
five years from the date on which the contribution became payable. In
other words, the order of assessment under Section 45-A must be
passed within five years from the date on which the contribution
became payable. In similar circumstances, a Coordinate Bench of this
Court, in C.M.A.(MD) No.1326 of 2015 dated 20.03.2023
(Employees’ State Insurance Corporation vs. M/s. Sree Visalam
Chit Fund Ltd.), has held under Regulation 32(2) of the Employees’
State Insurance (General) Regulations, 1950, an employer is required
to maintain ESI records only for a period of five years from the date of
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W.P(MD)No.29438 of 2025
the last entry. Earlier, Section 45-A of the ESI Act did not prescribe
any limitation for passing assessment orders. However, by the
amendment introduced in 2010, the second proviso to Section 45-A
provides that no order determining contribution shall be passed after
five years from the date on which the contribution became payable.
Therefore, if an order under Section 45-A is passed beyond the said
five-year period, it would be barred by limitation and unsustainable in
law.
9. Following the aforesaid pronouncement, another Coordinate
Bench of this Court, in C.M.A.(MD) No.1120 of 2017, by order
dated 14.08.2024, allowed the appeal and held that the impugned
order therein was barred by limitation.
10. The Bombay High Court, while interpreting the second
proviso to Section 45-A, has held that the said proviso restricts the
power of the Corporation to pass an order determining the
contribution only within a period of five years from the date on which
the contribution became payable, and not beyond the said period.
11. In other words, the Bombay High Court held that the
competent authority under Section 45-A can pass an assessment
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W.P(MD)No.29438 of 2025
order only in respect of the contribution payable for a period of five
years, and not beyond that period. In the said decision, the
assessment related to a period of less than five years. In the present
case, the assessment covers a period exceeding five years, and
therefore the principle laid down in the said judgment is also
applicable to the facts of the present case.
12. A strict interpretation of the second proviso to Section 45-A
makes it clear that no assessment order can be passed after the
expiry of five years from the date on which the contribution became
payable, which interpretation has been rightly adopted by the
Coordinate Bench of this Court.
13. The contention of the learned counsel appearing for
respondents 1 and 2 that the present Writ Petition is not maintainable
without exhausting the alternative remedy of appeal provided under
Section 75 of the Act cannot be accepted. It is well settled that a writ
petition is maintainable where an order is passed without jurisdiction.
In the present case, the impugned order passed by the first
respondent lacks statutory authority, as it has been passed beyond
the limitation period of five years.
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W.P(MD)No.29438 of 2025
14. In such circumstances, this Court is of the view that the
impugned order passed by the first respondent is barred by limitation
and is therefore liable to be set aside, along with the consequential
Garnishee Order.
15. Accordingly, this Writ Petition is allowed and the impugned
order dated 03.12.2024 bearing No.66-00-040016-000-1302/45-
A/SRO/TLI/459-18 passed by the first respondent, as well as the
consequential Garnishee Order passed by the second respondent in
No.66000400160001302/RRC/SRO/TLI dated 22.08.2025, are
hereby quashed. No costs. Consequently, the connected miscellaneous
petitions are closed.
12.03.2026
NCC : Yes/No
Index : Yes/No
Internet:Yes
skn
To
1.The Deputy Director,
Employees State Insurance Corporation,
Sub Regional Office,
Salaistreet,
Vannarpettai,
Tirunelveli District – 627 003.
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W.P(MD)No.29438 of 2025
2.The Recovery Officer,
Employees State Insurance Corporation,
Office of the Recovery Office,
Sub Regional Office,
Salai Street,
Vannarpettai,
Tirunelveli District – 627 003.
3.The Branch Manager,
Indian Overseas Bank,
Naranammalpuram,
Tirunelveli – 627 357.
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W.P(MD)No.29438 of 2025
HEMANT CHANDANGOUDAR, J.
skn
Writ Petition(MD)No.29438 of 2025
and
W.M.P(MD)Nos.22754 & 22758 of 2026
12.03.2026.
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