Page 18 - Banking Finance October 2025

LEGAL UPDATE

27,000 pending legal cases subject to change), as per the Act. The Ministry stated that the ESIC Re-
Employees with daily average wages of gional Directors and Sub-Regional Of-
may be resolved as ESIC Rs. 176 or less are exempt from pay- ficers have been empowered to pro-
approves Amnesty Scheme ing their contribution. cess withdrawals during this period. In
many cases, the companies have also
2025 As per the Ministry, no damages will be folded up.
levied on settlement of ad-hoc assess-
Around 27,000 cases pending for the
ments by paying actual con
last 15 years may get resolved with the Cheque bounce convict
Employees' State Insurance Corpora- Effective from October 1, 2025, to
tion (ESIC) approving the 'Amnesty September 30, 2026, the scheme pro- can make deal, avoid jail:
Scheme 2025', a onetime dispute reso- vides a structured mechanism for em- SC
lution initiative aimed at reducing the ployers to settle legal disputes with the A person can avoid a jail term after
backlog of legal matters and promot- ESIC outside the courts being convicted in a cheque bounce
ing compliance under the ESI Act. tributions and interest. The scheme case if they reach a compromise with
This decision was taken during the also allows withdrawal of cases where the complainant, Supreme Court said,
196th ESI Corporation meeting held employers have already paid dues, holding that once a compromise deed
recently in Shimla under the chairman- subject to payment of 10 per cent of is signed between the parties, convic-
ship of Mansukh Mandaviya, Union disputed damages or penalty, said the tion under Section 138 of Negotiable
Minister for Labour & Employment and Ministry of Labour and Employment. In Instruments Act cannot be sustained.
Youth Affairs & Sports. the normal circumstances, the penalty A bench of justices Aravind Kumar and
can go up to 100 per cent of the Sandeep Mehta said the offence of
Effective from October 1, 2025, to
amount. dishonour of cheque was mainly a civil
September 30, 2026, the scheme pro-
vides a structured mechanism for em- Cases filed by the ESIC for non-submis- wrong and had been made specifically
ployers to settle legal disputes with the sion of records or delayed payments, compoundable. "This court referred
ESIC outside the courts, the Ministry of which were later complied with, will the offence under Section 138 NI Act
Labour and Employment said in a also be withdrawn with court permis- as a Civil Sheep in Criminal Wolf's Cloth-
statement. sion, the amnesty scheme assured. ing which meant issues agitated by the
parties under the said provision are of
As of March 31 this year, around Court cases filed up to March 31, 2025, private nature which are brought
27,000 cases were pending in various are eligible for dispute resolution un- within the sweep of criminality jurisdic-
courts but mainly concentrated in der this scheme. tion in order to strengthen the cred-
Delhi, Maharashtra, Tamil Nadu and However, the ESIC has decided not to ibility of the negotiable instruments,"
Kolkata. give any relief where companies have the bench said while referring to an

The cases increased since after ad-hoc gone to courts after the final assess- earlier verdict of the SC.
assessment insurance contributions by ment by the ESIC, Ministry sources said. The court set aside a Punjab and
the ESIC, companies do not agree and Of the 27,000 cases, there are also Haryana HC ruling that had refused to
knock on the doors of designated insur- those where criminal cases have been quash conviction in a cheque dishonour
ance courts spread across the country. filed against employers under Section case after settlement between the

Under the ESI Act, employees contrib- 85 of the ESI Act. parties.
ute 0.75 per cent of their wages to the This section of the Act deals with pun- SC said when parties enter into an
ESI fund, while employers contribute ishment for offences committed by agreement and compound the of-
3.25 per cent, adding to a total of 4 employers, such as failure to pay con- fence, they do so to save themselves
per cent. This contribution is manda- tributions, making false returns or ob- from the process of litigation, allows
tory for establishments with 10 or structing inspections. The offenders them to do so. Hence, courts cannot
more employees who earn up to Rs. are liable to face imprisonment and override such compounding and im-
21,000 per month (this wage limit is fines. pose its will, it said.

16 | 2025 | OCTOBER | BANKING FINANCE