The Employees Insurance Court (Principal Labour Court) has set aside an order attaching bank account of Director of Handlooms and Textiles, Tamil Nadu, for recovery of about ₹10.5 lakh towards damages for default by cooperative spinning mills.

In its petition, the Handlooms and Textiles department said the attachment order was passed by Employees’ State Insurance Corporation (ESIC) on March 14, 2011 and alleged that it was illegal and sought a refund. It also said its role was only that of the Registrar and noted that a separate administrator was appointed to the individual cooperative spinning mills. The department said it was neither the principal employer nor the immediate employer of defaulting cooperative spinning mills. The administrator alone was the principal employer, it added. The court noted that ESIC had not stated that the department was holding the amount of the defaulted mills and the department had pleaded that it was not the principal employer, which had not been disputed.

It was evident that the department had no liability towards the defaulted mills and the notice issued by ESIC was not maintainable, it added and ordered the refund of the amount.