PRESTOLITE INDIA LIMITED Vs. REGIONAL DIRECTOR

JUDGEMENT

(1.) - This appeal arises out of the special leave granted by this Court on application under Article 136 of the Constitution of India against the decision of the Punjab and Haryana High Court in First Appeal from Order No. 7 of 1981 dated March 9, 1981. It may be stated here that the appeal was to be heard by the Single Bench of the High Court. But in view of the importance of the points raised in a number of similar matters a reference was made before the Division Bench of the High Court and the Division Bench answered the reference in F.A.O. No. 476 of 1978. In terms of the decision rendered in the said First Appeal, the appeal preferred by the appellant in the High Court namely, F.A.O. No. 7 of 1981 was dismissed in limine by the Division Bench. The said F.A.O. No. 7 of 1981 arose out of an adjudication dt. 24-12-1979 made by the Regional Director, Employees' State Insurance Corporation, Haryana imposing damages for a sum of Rs. 51,857.40 under Section 85(B)(1) of the Employees' State Insurance Act as contained in Annexure 'A' of the Special Leave Petition. The appellant-company thereafter made an application under Section 75 of the Act and such application was dismissed by an order dated 11-10-1980 passed by the Judge, Employees State Insurance Court, Ballabhgarh. After disposal of the said application, F.A.O. No. 7 of 1981 was preferred before the High Court. The facts leading to the aforesaid proceedings are to the following effect:

(2.) Mr. Mehta, learned counsel appearing for the appellant has contended before us that although in the written representation various reasons were indicated by the appellant as to why the payment could not be made within the time frame, such written representation had not been taken into consideration by adverting to the grounds indicated in the representation by the Regional Director who passed the impugned order mechanically holding that the reasons were not legally tenable. He has submitted that the Regional Director being quasi-judicial authority was required to dispose of the objection or the representation made by the appellant by applying his mind to the facts and circumstances of the case and by clearly indicating why the objections were not tenable for basing his decision. But unfortunately, no reason was indicated, by the Regional Director in support of the conclusion that the reasons were not legally tenable. it is quite apparent from the order of the Regional Director that there was total non-application of mind in discharging quasi-judicial duties and functions. In this connection, reference was made by the learned counsel to the decision of this Court made in Organo Chemical Industries v. Union of India, AIR 1979 SC 1803. In the said decision, power under Section 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, was taken into consideration. On the question of reasoned order to be made by the adjudicating authority, this Court has referred to an earlier decision of this Court in Siemens' case (AIR 1976 SC 1785) by quoting the observations made therein to the following effect (at p. 1789 of AIR):

(3.) Mr. Goswami, learned counsel for the respondents has, however, submitted that it would have been appropriate if the Regional Director had given reasons in some details for disposing of the show cause proceeding. But in the facts and circumstances of the case, the adjudication made by the Director was quite just and fair and on the face of the representation no other order was warranted. Since no injustice has been made to the appellant, for the mere technicality that the adjudicating authority has not indicated detailed reasons for its finding the impugned orders should not be set aside. He has also contended that specific case of prejudice suffered on account of impugned adjudication had not been raised in the application under Section 75 of the Act and it also does not appear that before the High Court such contentions were specifically raised. Hence, the appellant should not be permitted to raise such contentions at the time of hearing of this appeal. Mr. Goswami has submitted that the grounds taken in the written representation were vague and the appellant was given the opportunity of personal hearing but such opportunity was not availed of and no material was produced before the adjudicating authority to substantiate the grounds made in the representation for delayed payment. Accordingly, the Regional Director had rightly rejected the representation by holding that the reasons advanced were not legally tenable. Mr. Goswami has also submitted that under the Employees' State Insurance General Regulations guidelines have been indicated as to how damages for delayed payment are to be imposed. Since such guidelines have been followed no exception should be made to the impugned adjudication.