E S I CORPORATION Vs. BAGSVIG

JUDGEMENT

(1.) Heard both sides.

(2.) Respondent was issued with a demand notice demanding contributions payable to the Employees State Insurance Corporation. The respondent challenged the same before the Employees' Insurance Court by filing I.C.79 of 1990. At the time of hearing, it was submitted that the liability was admitted, but only prayed that they may be given time for payment of the amount in instalments. Therefore, the application was disposed of by granting facility to pay the arrears covered in the letter of the E.S.I. Corporation dated 22.11.1990 in 12 monthly instalments starting from first day of December, 1993. Accordingly, the amount was paid in instalments. Thereafter, the Corporation demanded interest for proportionate delays. Challenging that the respondent filed I.C. No. 59 of 1994. The E.I. Court held that no interest can be levied.

(3.) Section 39(5)(a) of the Employees' State Insurance Act provides that if any contribution payable under this Act is not paid by the principal employer on the date on which such contribution has become due, he shall be liable to pay simple interest at the rate of 12% per annum. This is a statutory provision. The dates when contributions are due are also fixed in the statute. Merely because the E.I. Court has granted instalment facility to pay off the principle contributions, it cannot be stated that statutory interest is waived. Employees' Insurance Court has no authority to waive the statutory interest. The amount due has to be paid to the Corporation from the respective dates when they became due with proportionate interest till the payment is effected.