HARDEVSINH NARUBHA JADEJA PROPRIETOR OF RAJASHRI CORPORATE SERVICESversusTHE REGIONAL DIRECTOR, ESI CORPORATION

      C/SCA/2271/2026                                      ORDER DATED: 23/02/2026




            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

              R/SPECIAL CIVIL APPLICATION NO. 2271 of 2026

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      HARDEVSINH NARUBHA JADEJA PROPRIETOR OF RAJASHRI
                    CORPORATE SERVICES
                           Versus
        THE REGIONAL DIRECTOR, ESI CORPORATION & ANR.
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Appearance:
RONITH JOY(9560) for the Petitioner(s) No. 1
MR AV NAIR(5602) for the Respondent(s) No. 1,2
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 CORAM:HONOURABLE MR. JUSTICE HEMANT M.
       PRACHCHHAK

                                 Date : 23/02/2026

                                     ORAL ORDER


1.     Present petition is       led by the petitioner under Article 226 of
the Constitution of India read with the provisions of the Employees
State Insurance Corporation Act, 1948 (hereinafter be referred to as
“the Act”) challenging the interim order dated 09.01.2026 passed by
the    learned          Employees’    State    Insurance     Court,     Ahmedabad
(hereinafter be referred to as “the ESI Court”) in ESI Application No.
53 of 2025 whereby, the learned Court has directed the petitioner to
deposit 50% of the alleged demand amount, failing which, the
respondent-Corporation has been permitted to recover the entire
amount.


2.       Brief facts giving rise to the present petition are that, after
retirement in the year 2013, the petitioner started a proprietorship
 rm and obtained an ESIC Code. That, the nature of activity was
limited to supply of manpower on job to job basis. That, the petitioner
had undertaken certain contractual work at Junagadh Dairy, which



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    C/SCA/2271/2026                              ORDER DATED: 23/02/2026




came to an end vide letter dated 30.04.2016 and thereafter, the
petitioner's activities, if any, were con ned to Bhuj, which was an ESI
exempted area. It is the case of the petitioner that, till October 2018,
whatever minimal work was being undertaken was carried out from
Bhuj and the rm was operating from a rented premises, which was
vacated in the year 2018, and thereafter, the establishment stood
closed and since then, the petitioner has not carried out any activity
attracting coverage under the ESI Act. That, earlier, for the period
10/2013 to 08/2015, the petitioner was served with a notice under
Form CP-2 dated 29.11.2017 and upon receipt of the said notice, the
petitioner paid the demanded contribution along with damages, and
the said issue stood fully concluded and closed by the respondent-
Corporation. That, despite the aforesaid factual position, in the year
2022, the respondent-Corporation issued a C-18 ad-hoc notice, which
was served at an old address. Upon becoming aware of the same, the
petitioner appeared before the authority on 14.12.2022 and furnished
documents relating to closure of establishment and exemption of
area. Without conducting any inspection, without verifying the
documentary record supplied by the petitioner, and without
appreciating the actual factual position, the respondent No.1 passed
an order under Section 45A of the ESI Act dated 14.12.2022, raising a
demand of Rs. 48,16,350/-, which is wholly arbitrary and disconnected
from reality. That thereafter, the respondent No.2 initiated coercive
recovery proceedings and issued Form CP-4 dated 08.08.2024,
seeking recovery of Rs. 73,78,823/-, shockingly attaching the pension
account of the petitioner maintained with SBI Bank, without any prior
personal visit, veri cation or application of mind. Being aggrieved by
the arbitrary demand and illegal recovery proceedings, the petitioner
 led ESI Application No. 53 of 2025 along with an application for
interim protection before the learned Employees' State Insurance


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     C/SCA/2271/2026                              ORDER DATED: 23/02/2026




Court, Ahmedabad. Even after the        ling of the said application and
during pendency thereof, the respondents illegally debited amounts of
Rs. 37,035/- on 14.05.2025 and Rs. 35,226/- on 30.05.2025 from the
petitioner's pension account, thereby compelling the petitioner to
approach the Court urgently. That, considering the illegality of
recovery from a pension account, the learned ESI Court, by order
dated 04.06.2025, stayed the recovery proceedings and directed
release of the petitioner's pension account. However, by the
impugned order dated 09.01.2026, the learned ESI Court, while
deciding Exhibits 2, 7 and 10, has mechanically directed the petitioner
to deposit 50% of the alleged demand, failing which the respondents
have been permitted to resume recovery proceedings, thereby
eAectively nullifying the earlier stay order without assigning any
reasons.


3.    Being aggrieved and dissatis ed with the order dated
09.01.2026 passed by the learned Employees’ State Insurance Court,
Ahmedabad in ESI Application No. 53 of 2025, the petitioner has
preferred this petition.


4.    Heard Mr. Ronith Joy, learned counsel appearing for the
petitioner and Mr. A.V. Nair, learned counsel who appeared on
advance copy on behalf of the respondents.


5.    Learned counsel Mr. Joy has submitted that the impugned order
passed by the ESI Court is illegal, unjust, arbitrary, erroneous and
contrary to the facts and material on record and the provisions of the
Act and therefore, the same is required to be quashed and set aside.
He has submitted that the ESI Court has grossly erred in proceeding
on the assumption that the requirement of deposit under Section


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     C/SCA/2271/2026                             ORDER DATED: 23/02/2026




75(2B) of the ESI Act operates as an absolute and automatic mandate.
He has submitted that the ESI Court has failed to consider the
undisputed and speci cally pleaded fact that the petitioner is a retired
Army personnel, presently surviving on pension               and limited
employment as a security guard, and is not carrying on any business
activity whatsoever. He has submitted that the ESI Court has failed to
consider that the establishment of the petitioner had ceased
operations years prior, that whatever limited work was undertaken
was con ned to an ESI exempt area, and that the demand raised
under Section 45A itself is under serious challenge, however, without
examining these foundational aspects, the ESI Court has imposed a
condition, which is erroneous, illegal and unjust. He has submitted
that the ESI Court has acted illegally in virtually nullifying and
overruling the earlier stay order dated 04.06.2025 passed by its
predecessor, whereby recovery proceedings were stayed and the
petitioner's pension account was directed to be released, however,
the ESI Court has passed the impugned order without disclosing any
reasons for departing from the earlier order and such an approach is
impermissible in law and reFects non application of mind. He has
submitted that the ESI Court has failed to appreciate the grave
illegality and harshness involved in attachment and recovery from the
petitioner's pension account. Over and above the grounds agitated in
the memo of petition, learned counsel Mr. Joy has urged that the
impugned order is required to be quashed and set aside and the
present petition is required to be allowed.


6.    As against that, learned counsel Mr. A.V. Nair, appearing for the
respondents, has opposed the present petition and submitted that
there is no any in rmity or any illegality in the impugned order passed
by the ESI Court and therefore, no interference is required to be called


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        C/SCA/2271/2026                                                        ORDER DATED: 23/02/2026




for in the present petition. He has submitted that the ESI Court has
rightly directed the petitioner to deposit 50% of the alleged demand
amount and therefore, the present petition is required to be
dismissed.


7.         I have heard the learned counsel appearing for the respective
parties and perused the material placed on record. I have also gone
through the impugned order passed by the ESI Court. Considering the
fact that the main ESI Application is pending adjudication before the
ESI Court, which is comping up in the month of March, the petitioner
has challenged the order at an immature stage and therefore, this
Court is not inclined to entertain the present petition.


8.       In the result, the present petition being devoid of any merits
deserves to be dismissed and it is accordingly, dismissed. There shall
be no order as to costs.

                                                                   (HEMANT M. PRACHCHHAK,J)

Dolly




  Original copy of this order has been signed by the Hon'ble Judge.
  Digitally signed by: DOLLYBEN CHETANBHAI VADUKAR(HC01392), PRIVATE SECRETARY, at High Court of Gujarat on 24/02/2026 15:21:28


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