Bombay High Court Halts ESIC's Fresh Show Cause Notices Over Quashed Inspection Report

Court Grants Ad-Interim Relief to Foundever CRM India Pvt. Ltd., Citing Disobedience of Prior Judgment

In a significant ruling, the Bombay High Court has restrained the Employees' State Insurance Corporation (ESIC) from proceeding with fresh show cause notices issued to Foundever CRM India Pvt. Ltd. The court observed that these notices were based on an inspection report that had already been quashed in a prior judgment.

The division bench, comprising Justices R.I. Chagla and Farhan P. Dubash, addressed a writ petition filed by Foundever CRM India Pvt. Ltd. The petitioners sought to declare the show cause notices, dated 6th October 2025, as illegal, arguing that they relied on an inspection report from 15th July 2024, which had been nullified by the court's earlier judgment on 19th September 2025.

The court emphasized that ESIC's reliance on the nullified report to issue fresh notices constituted a wilful disobedience of the prior court order and amounted to an illegal act. This violation prompted the court to grant ad-interim relief, effectively restraining ESIC from taking further action based on these notices until the matter is resolved.

During the proceedings, counsel for the petitioners, Mr. Rashmin Khandekar, argued that the assignment of the case to this bench was appropriate, as it was a writ for enforcing the court's prior orders. He referenced a decision by the Calcutta High Court in Bibekananda Mondal v. State of West Bengal, which supports the maintainability of a second writ application for enforcing an earlier court order.

ESIC's counsel, Mr. Shailesh S. Pathak, raised preliminary objections regarding the maintainability of the writ petition and argued on the merits of the fresh show cause notices. However, the court found that the ESIC's actions were in direct contravention of the September judgment, which had explicitly quashed the inspection report forming the basis of the contested notices.

The court's ruling underscores the comprehensive power vested in High Courts under Article 226 of the Constitution of India to address and remedy injustices. This judgment reaffirms the principle that actions taken in defiance of court orders are not only contemptuous but also legally invalid.

The bench has directed ESIC to file an affidavit-in-reply within three weeks, with the petitioners granted two weeks thereafter to file a rejoinder. The matter has been scheduled for further consideration on 7th January 2026.

Bottom Line:

Article 226 of the Constitution of India empowers High Courts with comprehensive authority to remedy injustice wherever it is found.

Statutory provision(s): Article 226 of the Constitution of India

Foundever CRM India Pvt. Ltd. v. Employees' State Insurance Corporations, (Bombay)(DB) : Law Finder Doc Id # 2812927