Recovery Officer, appointed under Section 45(I)(b) of the ESI Act has been empowered to recover ESI Contribution, Interest and Damages determined under the provisions of Section 45(A), Regulation 31A, under Section 85(B)(I) and Regulation 31C of the ESI Act. Such Recoveries are made under the provisions of Section 45(C) to 45(I) of the Act, provisions contained in second and third schedule to the Income Tax Act, 1961(43 of 1961) and Income Tax (Certificate Proceedings) Rule 1962 as amended from time to time, with necessary modifications/substitutions of certain words referred as arrears.
For effecting such recoveries, the Recovery Officer issues Notice of demand in Form CP-2 allowing 15 days time to make compliance thereof. In the event of failure to comply with such Notice, the Recovery Officer follows one or more of the following modes of recovery:
- Attachment and sale of the movable and immovable property of the factory or establishment/Principal/immediate Employer.
- Arrest of the Employer and his detention in prison.
- Appointing a receiver for the management of the movable and immovable property of the factory or establishment/ Principal/ immediate employer.
- In case of bouncing of cheques, prosecution against defaulting employers are filed U/s 138 (b) of Negotiable Instrument Act, after allowing 15 days time to defaulting employer to make payment against bounced cheques.