Between vs The Employees State Insurance on 28 August, 2025

Andhra Pradesh High Court – Amravati

Between vs The Employees State Insurance on 28 August, 2025

APHC010446162025

                   IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI
                                (Special Original Jurisdiction)
                                                                           3459

                        THURSDAY, THE TWENTY EIGHTH DAY OF AUGUST
                             TWO THOUSAND AND TWENTY FIVE

                                    PRESENT

           THE HON'BLE SMT. JUSTICE SUMATHI JAGADAM

                     WRIT PETITION No.22730 OF 2025
Between:
HDFC Bank Limited                   ---                 Petitioner
                                   and
The Employees State Insurance
Corporation and others        ---                       Respondents

Counsel for the Petitioner : M/s. Indus Law Firm

Counsel for the Respondents :

The Court made the following ORDER:

On 12.08.2025, the petitioner issued a Demand Draft in favor
of the 2nd respondent for Rs.19,12,942/-. The 2nd respondent
misread the order passed in I.A. No.669 of 2025 in ESI O.P.
No.Nil/2025, dated 18.07.2025, and returned the Demand Draft to
the petitioner on 12.08.2025. The Demand Draft was cancelled, and
the amount was credited to the account of the 3rd respondent. The
petitioner submitted his explanation to the show-cause notice, dated
13.08.2025. Without considering this explanation, the 2nd
respondent issued the impugned order, dated 18.08.2025, deeming
the petitioner a ‘defaulter’.

2. Learned counsel for the petitioner submits that the petitioner
has complied with the Garnishee Notice, dated 07.08.2025, by
executing the Demand Draft No.042620, dated 12.08.2025, in favor
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WP No.22730/2025

of ‘ESIC Fund A/c.No.1’. The counsel states that the order, dated
18.07.2025, was misinterpreted, and as a result, the funds were no
longer available in the petitioner’s account. Additionally, the
petitioner’s counsel notes that the 3rd respondent made a
representation on 18.08.2025, and the 4th respondent made a
representation on 19.08.2025 to the 2nd respondent, indicating their
readiness to issue a bank guarantee for the amount of
Rs.19,12,942/-. The counsel further argues that provisions 45G(3)(i)
of the Employees State Insurance Act, 1948, and Section 226(3)(i)
of the Income Tax Act, 1961, are similar, citing Para No.4 of the
Hon’ble Apex Court decision in Beharilal Ramcharan v. Income
Tax Officer, Special Circle ‘B’ Ward, Kanpur, and another1. They
contend that respondents should issue notice and conduct an
inquiry to establish fraud. Since no notice has been issued for
establishing fraud, the respondents cannot take any coercive steps
against the petitioner.

3. Learned counsel for the petitioner further relied on the interim
stay granted by this Court in W.P. No.19966 of 2025, dated
01.08.2025, and prayed for a similar relief.

4. On the other hand, learned counsel appearing for the
respondents – ESI Corporation submits that the petitioner has
willfully misled the office by giving false information and did not
comply with the garnishee orders issued under Section 45-G of the
Act. She further avers that no further debit transaction from the
petitioner’s bank will be allowed without transferring the amount and
requests time to get instructions.

1

(1981) 3 SCC 473
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WP No.22730/2025

5. In view of the rival submissions, there shall be interim
suspension of the impugned order, dated 18.08.2025, passed by the
2nd respondent, for a period of twelve (12) weeks.

List the matter after eight (8) weeks.

_________________________
JUSTICE SUMATHI JAGADAM
DSH