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LCTSL under scanner over ₹4.77-crore ESIC liability, civic chief orders review
In an official communication to the LCTSL managing director, Lucknow civic body chief Gaurav Kumar pointed out that the company failed to deduct ESIC contributions from the wages of contractual workers between 2016 and January 2020, despite the deductions being mandatory under law. The omission eventually led the Employees’ State Insurance Corporation (ESIC) to recover ₹2.98 crore from the company. In addition, ESIC imposed a penalty of ₹1.79 crore in October 2025, taking the total financial burden on the publicly funded transport company to ₹4.77 crore.
The Lucknow municipal commissioner has ordered a review into a ₹4.77-crore financial liability incurred by the Lucknow City Transport Services Ltd (LCTSL), directing the city bus operator to identify officials responsible for the lapse after mandatory Employees’ State Insurance (ESIC) contributions were not deducted from the salaries of contractual employees for nearly four years.
In an official communication to the LCTSL managing director, Lucknow civic body chief Gaurav Kumar pointed out that the company failed to deduct ESIC contributions from the wages of contractual workers between 2016 and January 2020, despite the deductions being mandatory under law. The omission eventually led the Employees’ State Insurance Corporation (ESIC) to recover ₹2.98 crore from the company. In addition, ESIC imposed a penalty of ₹1.79 crore in October 2025, taking the total financial burden on the publicly funded transport company to ₹4.77 crore.
Describing the lapse as a serious violation of statutory provisions, the commissioner has sought a detailed explanation on why the deductions were not made and why the penalty was eventually imposed.
Vimal Rajan, managing director and regional manager of LCTSL, said the municipal commissioner was examining the matter and had sought details of officials posted during the period under scrutiny. He said a report would be submitted within the next two to three days. Rajan added that the corporation was yet to ascertain the exact number of contractual employees whose ESIC contributions were not deducted between 2016 and 2020, as records were still being verified.
The letter, dated July 22, 2026, states that LCTSL had earlier informed the civic body about action taken following a resolution passed at its 49th Board meeting in December 2025. However, the commissioner said the submission did not include the original records required to establish the facts of the case, making it impossible to examine the matter comprehensively.
The commissioner has now directed LCTSL to submit all relevant documents, including records explaining the reasons for the ESIC recovery and the subsequent penalty. The company has also been asked to furnish details of any departmental action initiated against officials responsible for the lapse.
In a move aimed at fixing accountability, the civic chief has sought a date-wise list of finance department officers and employees posted between 2016 and 2020, when the lapse occurred, as well as those serving when the penalty was imposed in 2025-26.
According to the letter, the information is required to determine responsibility for the financial loss suffered by LCTSL.
The commissioner also pointed out that despite a reminder sent through an official email on June 13, 2026, the required records had not been furnished, delaying further action. The latest communication directs LCTSL to submit the information on priority so that the issue can be placed before the company’s next Board meeting with complete documentation.
