Employees State Insurance Corporation Vs Dinendra Ratansi (Bombay High Court)
Bombay High Court held that the liability to pay ESI dues is of the company and in the event of there being an occupier, he is liable to meet the demand. However, the liability of the occupier is not personal.
Facts- By the present appeal, the appellant – Employees State Insurance Corporation (ESIC) challenges the order passed by the Employees Insurance Court, Mumbai, whereby the ESIC Court set aside the Order of ESIC, directing the occupier of the factory to pay ESIC dues in his personal capacity.
The questions of law that arises for consideration in the present appeal is that whether the occupier (who is also one of the Directors), is personally liable for payment / recovery of ESIC contributions in case the company defaults in remittance of contribution of E.S.I.?
Conclusion- Division Bench of Punjab and Haryana High Court in the case of ESIC V/s. S. Gurdial Singh, has held that ESI dues can be recovered from the assets of the factory and not from the directors personally although one of the director was also nominated as occupier. Supreme Court in the case of ESIC V/s. Gurdial Singh has upheld the Judgment of Division Bench, wherein it is held that all the directors (one of them being an occupiers) are not personally liable. The Single Judge Judgment of this Court in the case of G.N. Mathur has clear held that the liability to pay ESIC dues of the occupier is not personal.
