Appellate Authority u/s 45 AA – Part III – The unlawful instructions

The ESIC Hqrs Office had issued instructions to all the Regional Directors long back advising them that the quasi-judicial authorities who issued orders under Sec. 45 A and under Sec. 85 B should not be included as witnesses in E.I.Court cases to defend the order. It was also instructed that if the employer wanted the quasi judicial officer to be produced as a witness, it must be strongly objected to, as it was not a practice to call any judicial or quasi judicial authority to defend his own order.

But, after the insertion of Sec. 45 AA in the ESI Act, in the year 2010, instructions were issued on 04.11.2010, that the quasi judicial authority which issued the order under Sec. 45 A should appear as a party during the course of proceedings before the Appellate Authority under Sec. 45 AA.

The Hon’ble Supreme Court has, in Union Of India Vs Orient Engg. & Commercial Co. Ltd. on 7 October, 1977, said:

“Indeed, it will be a very embarrassing and, in many cases, objectionable if every quasi-judicial authority or tribunal were put to the necessity of greeting into the witness box and testify as to what weighed in his mind in reaching his verdict. We agree with the observations of Walsh, A.C.J. in Khub Lal v. Bishambhar Sahai where the learned Judge has pointed out that the slightest attempt to get to the materials of his decision,, to get back to his mind and to examine him as to why and how he arrived at a particular decision should be immediately and ruthlessly excluded as undesirable.”……….“We do not think that every Munsif and every Judge, every Commissioner and, every arbitrator has to undergo a cross-examination before his judgment or award can be upheld by the appellate court, How vicious such an approach would be is apparent on the slightest reflection. Of course, if a party has a case of mala fides and makes out prima facie that it is not a frivolous charge or has other reasonably relevant matters to be brought out the court may., in given circumstances, exercise its power to summon even an arbitrator, because nobody is beyond the reach of truth or trial by Court. In the present case, after having heard counsel on both sides, we are not satisfied that on the present material there is justification for the examination of the arbitrator. We therefore set aside the order.”

The Revenue Manual does not take into account the earlier instructions which were correct.

The instructions issued by the Hqrs on 04.11.2010 were incorrect and unlawful. The Appellate Authority under Sec. 45 AA is not superior to the E.I. Court, as the E.I.Court can entertain appeal against the orders of the authority under Sec. 45 AA. Yet, the Hqrs instructions say that the quasi judicial officer should appear before the authority under Sec. 45 AA but not before the E.I. Court. What will happen if the employers cite this provision and convince the E.I.Courts to summon the officers who issued orders under Sec. 45 A to appear before the E.I.Court too to stand the test of cross examination? Was this aspect examined in the file before the instructions were issued on 04.11.2010? Was the issue set right, at least, after the anomaly was brought to the notice of the Hqrs.? No. The instructions still hold.

In Pradip Kumar Sarawgi & Sons Vs. Commissioner Of Taxes, on 26 June, 2003, the Hon’ble Supreme Court has held as under:

“No authority, superior to an assessing authority, can interfere with the quasi-judicial functions of an assessing authority by issuing administrative directions. The Apex Court has in Orient Paper Mills Ltd. v. Union of India, (1969) SC 48, made the position of law in this regard clear in the following words :

“If the power exercised by the Collector was a quasi-judicial power as we hold it to be that power cannot be controlled by the directions issued by the Board. No authority however, high placed can control the decision of a judicial or a quasi-judicial authority. That is the essence of our judicial system. There is no provision in the Act empowering the Board to issue directions to the assessing authorities or the appellate authorities in the matter of deciding disputes between the persons who are called upon to pay duty and the department. It is true that the assessing authorities as well as the appellate authorities are Judge in their own cause; yet when they are called upon to decide disputes arising under Act they must act independently and impartially. They cannot be said to act independently if their judgment is controlled by the directions given by others”.

We hope the aforesaid anomalies created by the unwarranted instructions dated 04.11.2010  and the  numerous other inconsistencies and inadequacies in the Revenue Manual would be set right in the new dispensation in the interest of the organization.

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