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Section 93A – Employees State Insurance Act, 1948

Employees State Insurance Act, 1948

 

 

93A. LIABILITY IN CASE OF TRANSFER OF ESTABLISHMENT. –

 

1[93A. Liability in case of transfer of establishment.—Where an employer, in relation to a factory or establishment, transfers that factory or establishment in whole or in part, by sale, gift, lease or licence or in any other manner whatsoever, the employer and the person to whom the factory or establishment is so transferred shall jointly and severally be liable to pay the amount due in respect of any contribution or any other amount payable under this Act in respect of the periods up to the date of such transfer :

 

Provided that the liability of the transferee shall be limited to the value of the assets obtained by him by such transfer.

 

COMMENTS

 

A plain reading of section 93A of the ESI Act, makes it clear that the word ‘transfer’ in section 93A has a different connection than ‘transfer’ under the Transfer of Property Act, hence the purchaser of property cannot be held liable to pay ESI contributions of an establishment; ANK Seals, Nagpur v. Employees’ State Insurance Corporation, Nagpur, 2006 LLR (SN) 1277: 2007 (1) LLJ 310 (Bom HC).

 

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1. Ins. by Act 38 of 1975, sec. 6 (w.e.f. 1-9-1975).

 

 

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Employees’ State Insurance Act, 1948

 

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