JUDGMENT : 1. Rule returnable forthwith. Learned Assistant Government Pleader Ms. Surbhi Bhati and learned advocate Mr. Sachin Vasavada waive service of notice of rule on behalf of respondent Nos. 1 and 2 respectively. 2. The petitioner Co-operative Society has filed this petition with the following prayers: - “(A) Your Lordship may be pleased to Admit and allow this petition; (B) Your Lordship may be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other writ, order or direction quashing and setting aside the order dated 04-09-2021 and further be pleased to direct the respondent to grant the application for exemption for the respective periods that is from 2/10/2018 to 1/10/2019, 2/10/2019 to 1/10/2020 and 2/10/2020 to 1/10/2021; (C) Pending admission, hearing and final disposal of the present Special Civil Application, Your Lordship be pleased to stay implementation of the recovery order dated 09.12.2021 passed by respondent no. 2; (D) Pending admission, hearing and final disposal of the present Special Civil Application, Your Lordship be pleased to direct the respondent to consider the application for grant of exemption; (E) Your Lordship be pleased to pass such other and further orders as may be deemed fit, just and proper in the peculiar facts and circumstances of the present case.” 3. In this case Notice dated 22.02.2022, was issued. Thereafter, vide order dated 07.10.2022, stay against recovery notice dated 09.12.2021, was granted. Considering the issue involved and with consent of learned Advocate for respective parties, matter is taken up for final hearing. 4. The petitioner is a co-operative society established under Gujarat Co-operative Societies Act, 1961. The said society was set up on 08.11.1960 for organizing the farming sector for getting better benefit for farmers and milk producers. The Society is engaged in production, distribution and supply of milk and milk products throughout the State of Gujarat. It is not in dispute that the provisions of Employees State Insurance Act, 1948 (‘the ESI Act’ for short) are applicable to the petitioner from its inception and under the provisions of the ESI Act, they are exempted from the application of the Act. It is case of the petitioner that since they are exempted from the application of the ESI Act, upon filing the appropriate applications exemption was granted right from 02.10.1982 till 01.10.2002. It is case of the petitioner that since they are exempted from the application of the ESI Act, upon filing the appropriate applications exemption was granted right from 02.10.1982 till 01.10.2002. 4.1 Earlier, the application seeking grant of exemption for the period 1993 onwards was not decided and petitioner received a recovery notice dated 31.07.1996. The petitioner preferred Special Civil Application No. 5496 of 1997 before this Court and this Court vide order dated 06.08.1997 directed the respondents to consider the application in accordance with the provisions of the Act and accordingly, the petitioner got exemption from 1993 onwards. Thereafter, time and again pursuant to the direction of this Court, the petitioner was granted exemption from application of the ESI Act. Thus, the petitioner was granted exemption from its inception till 2017-18. 4.2 Similarly, the petitioner applied for exemption for the year 2018-19, 2019-20, and 2020-21 v ide applications dated 10.05.2018, 25.07.2019 and 16.06.2020 respectively. It is case of the petitioner that the said applications were not decided and kept pending. The respondent No. 1, thereafter passed an order dated 04.09.2021, rejecting the applications of the petitioner stating that no retrospective exemption is permissible. The respondent relied upon Section 91A of the ESI Act. Consequently, recovery notice dated 09.12.2021, was served to the petitioner. Aggrieved by the order dated 04.09.2021 and recovery notice dated 09.12.2021, the present petition is filed. 5. Heard learned advocate Mr. Ajay Mehta for the petitioner, learned advocate Mr. Sachin Vasavada for the respondent – Corporation and learned Assistant Government Pleader Ms. Surbhi Bhati for the respondent – State. 6. Learned advocate for the petitioner relied upon earlier orders in Special Civil Application No. 5496 of 1997, Special Civil Application No. 1987 of 2005, Special Civil Application No. 15785 of 2013 and Letters Patent Appeal No. 1036 of 2014 to submit that for earlier years the applications of the petitioner seeking exemption from the Act were decided pursuant to the directions of this Court. 6.1 He submitted that despite no change in the circumstances, exemption was denied for the year 2018 onwards for no reason. Exemption from inception of the Cooperative Society till the year 2017-18 was granted. As per second proviso to Section 87 of the ESI Act, an application for renewal of exemption is required to be made, three months before the date of expiry of the exemption period. Exemption from inception of the Cooperative Society till the year 2017-18 was granted. As per second proviso to Section 87 of the ESI Act, an application for renewal of exemption is required to be made, three months before the date of expiry of the exemption period. Once renewal application is made a decision on the same is to be taken by appropriate Government within 2 months from receipt of such application. Learned Advocate submitted that since exemption was to get over w.e.f. 02.10.2018, the petitioner made an application dated 10.05.2018 which was prior to 3 months before the date of expiry, followed by another two applications for year 2019-2020 and 2020-2021 In the applications, it was requested to grant exemption for a further period of one year respectively. Further, in the said applications, earlier exemption granted was also referred. Therefore, the petitioner acted in consonance with the provisions of Section 87 of the ESI Act. 6.2 Despite that an order dated 04.09.2021 was passed rejecting the applications of the petitioner dated 10.05.2018, 25.07.2019 and 15.06.2020 for the period from 02.10.2018 to 01.10.2019, 02.10.2019 to 01.10.2020 and 02.10.2020 to 01.10.2021 respectively. In the impugned order referring to Section 91(A) of the ESI Act, it was stated that retrospective exemption is not permissible. This is not a case where the petitioner is seeking exemption retrospectively. Since renewal application was not for claiming retrospective exemption provisions of Section 91(A) of the ESI Act would not be applicable. Therefore, the impugned order is illegal. Even the opinion dated 13.07.2018 by the Government to Respondent No.1, has been ignored. Therefore, the order dated 04.09.2021 deserves to be quashed and set aside and the respondents may be directed to decide application seeking exemption by allowing the same for the respective periods from 02.10.2018 to 01.10.2019, 02.10.2019 to 01.10.2020 and 02.10.2020 to 01.10.2021. 7. On the other hand, learned advocate Mr. Sachin Vasavada for respondent No. 2 – ESI-Corporation submitted that for renewal of exemption for the year 2018-19, the application was furnished belatedly on 10.05.2018. As per Section 89 of the ESI Act, before granting exemption or renewal of exemption under Section 87 or 88 of the ESI Act, the State Government needs to give reasonable opportunity to the Corporation to make a representation before decision is taken. As per Section 89 of the ESI Act, before granting exemption or renewal of exemption under Section 87 or 88 of the ESI Act, the State Government needs to give reasonable opportunity to the Corporation to make a representation before decision is taken. Therefore, pursuant to the applications of the petitioner opinion was sought vide communications dated 16.05.2018 and 11.06.2018, from ESI Corporation. In response to the same, the respondent No. 2 ESI Corporation gave its opinion on 13.07.2018 stating that it is not a fit case to grant exemption since the petitioner does not provide social security benefits which are similar or superior to the benefit available under ESI Act. 7.1 Referring to the other communications which are annexed with the affidavit-in-reply, he submitted that rest of the opinions are not required to be gone into. Learned advocate for the respondent No. 2 reiterated that the respondent No. 2 cannot decide the application of the petitioner with retrospective effect and since the petitioner has failed in filing the applications within time as stipulated under the Act, the present petition deserves to be rejected. Since no decision was taken within two months from the date of receipt of renewal application, the petitioner is duty bound to initiate action immediately after it. 7.2 In support, he relied upon decision of Hon’ble Supreme Court in the case of Employees State Insurance Corporation V/s Kakinada Municipality and Others reported in (2022) 2 SCC 56 to submit that for grant of exemption, procedure contemplated under the provisions of the ESI Act, is to be followed. 8. Learned Assistant Government Pleader Ms. Surbhi Bhati for the respondent – State has adopted the arguments advanced by learned advocate Mr. Sachin Vasavada for the respondent – Corporation. 9. Considered the submissions and the decisions relied upon. Upon re-visitation of the facts, it is noticed that the petitioner earlier applied for exemption from application of ESI Act and was considered right from its inception. Thus, the petitioner was granted exemption from application of ESI Act from 02.10.1982 to 01.10.2018. Since exemption earlier granted was to expire on 01.10.2018, the petitioner made an application for grant of exemption under Section 87 of the ESI Act. Thus, the petitioner was granted exemption from application of ESI Act from 02.10.1982 to 01.10.2018. Since exemption earlier granted was to expire on 01.10.2018, the petitioner made an application for grant of exemption under Section 87 of the ESI Act. The details of the applications made are as under: Period of Exemption Date of Application Date of Expiry 02.10.2018 to 01.10.2019 15.05.2018 01.10.2018 02.10.2019 to 01.10.2020 25.07.2019 01.10.2019 02.10.2020 to 01.10.2021 15.06.2020 01.10.2020 9.1 Thus, for all three years i.e 2018-2019. 2019-2020 and 2020-2021, separate applications were made prior to three months from the date of expiry. Section 87 and 89 of the ESI Act reads as under: - “87. Exemption of a factory or establishment or class of factories or establishments – The appropriate government may, by notification in the Official Gazette and subject to such conditions as may be specified in the notification, exempt any factory or establishment or class of factories or establishments in any specified area from the operation of this Act for a period not exceeding one year and may from time to time by like notification renew any such exemption for periods not exceeding one year at a time. Provided that such exemptions may be granted only if the employees in such factories or establishments are otherwise in receipt of benefits substantially similar or superior to the benefits provided under this Act: Provided further that an application for renewal shall be made three months before the date of expiry of the exemption period and a decision on the same shall be taken by the appropriate Government within two months of receipt of such application. 89. Corporation to make representation- No exemption shall be granted or renewed under section 87 or section 88, unless a reasonable opportunity has been given to the Corporation to make any representation it may wish to make in regard to the proposal and such representation has been considered by the appropriate government.” 9.2 Thus, as per the second proviso, for renewal, an application shall have to be made 3 months before the date of expiry of the exemption period. In this case, though the applications were filed as referred in earlier para, all of them remained unanswered and not decided within the time specified in second proviso to Section 87 of the Act. Once, the applications remained unanswered, adverse inference cannot be drawn. In this case, though the applications were filed as referred in earlier para, all of them remained unanswered and not decided within the time specified in second proviso to Section 87 of the Act. Once, the applications remained unanswered, adverse inference cannot be drawn. Further, though the decision on such application was required to be taken by the appropriate Government within two months, admittedly it was not taken and therefore, contention of respondent No. 2 – ESI Corporation that the application was filed belatedly is contrary to the facts . The submission of learned Advocate for ESI that since the application for renewal was not decided within two months, the petitioner ought not to have waited and filed application for the subsequent year and therefore it is a case of retrospective renewal, in the opinion of this court is misconceived. The applications preferred by the petitioner were not seeking retrospective renewal, the reference made in the order dated 04.09.2021 of Section 91(A) of the ESI Act is also misconceived and therefore erroneous. Section 91A of the ESI Act reads under: 91A. Exemptions to be either prospective or retrospective Any notification granting exemption under section 87, section 88, section 90 or section 91 may be issued so as to take effect either prospectively or retrospectively on such date as may be specified therein” 9.3 The said Section stipulates that notification granting exemption under Section 87, 88, 90 and 91 of the ESI Act may be issued to take effect prospectively or retrospectively . 10. Now the contention of learned Advocate for the respondent No-2 Corporation that the opinion dated 10.11.2020, of ESI corporation is of vide importance does also not merit acceptance because the order dated 04.09.2021, does not refer to the lesser facilities available to the employees of petitioner. No change of facilities from earlier years has been referred, and no reasons are recorded for rejection. The denial of exemption without any reason by placing sole reliance on Section 91(A) of the ESI Act, in the opinion of this Court is contrary to the provisions and deserves to be quashed and set aside. 11. In view of above, the order of respondent No. 1 dated 04.09.2021 is quashed and set aside. Consequently, the recovery notice dated 09.12.2021, is also quashed and setaside. 11. In view of above, the order of respondent No. 1 dated 04.09.2021 is quashed and set aside. Consequently, the recovery notice dated 09.12.2021, is also quashed and setaside. The respondents are directed to consider the applications dated 10.05.2018, 25.07.2019 and 15.06.2020 for the period from 02.10.2018 to 01.10.2019, 02.10.2019 to 01.10.2020 and 02.10.2020 to 01.10.2021 in light of what is held hereinabove and in accordance with Law. 12. The petition is partly allowed. Rule is made absolute to the above extent.