REGIONAL DIRECTOR ESI Vs. T K BHASKARAN

JUDGEMENT

(1.) Appeal is at the instance of Employees' State Insurance Corporation challenging the judgment in I.C. No.6 of 1985 of the Employees' Insurance Court, Alleppey. Respondent herein challenged before the court below proceedings initiated by the appellant under S.85 - B of the Employees State Insurance Act claiming damages to the extent of Rs.3,921/- for the delayed payment of contribution for the period ended on 9/76, 3/77, 9/77, 11/77, 1/78, 3/78, 5/78, 9/78, 11/78 and 1/79. The Employees' Insurance Court found that there was no delay in paying the contribution and therefore the appellant was not justified in assessing the damages. It is this finding that is under challenge in this appeal.

(2.) The relevant facts are as follows: - The respondent was a contractor of Toddy Shop Nos.6 and 7 at Alleppey Range. When the appellant took steps to cover the two toddy shops by combining them, the respondent challenged the proceedings before the E.I. Court. By judgment dated 23.6. 1977 the E.I. Court took the view that the two toddy shops should be treated as one and the same. The above judgment was taken in appeal by the respondent before this Court. The appeal was dismissed on 15.3.1979. These facts are undisputed. During the pendency of the appeal before this Court since there was no order of stay, a notice under S.45A of the E.S.I. Act was issued assessing the contribution from the respondent for the a period from 28.3.1976 to 31.3.1977. Originally a notice was issued on 14.7.1977 and later another notice on 12.2.1979. Thereafter proceedings were issued imposing damages for delay in making the payment. These proceedings were challenged by the respondent herein before the E.I. Court as I.C. No. 15/78 and I.C. No.90/79. The E.I. Court set aside the proceedings holding that the show cause notice was defective. Thereafter, fresh show cause notice was issued by the appellant on 1.6.1982, which was also set aside by the E.I. Court in I.C. No. 12/83. While setting aside the order imposing damages the E.I. Court observed that the appellant herein was at liberty to issue fresh notice and to impose damages in accordance with law.

(3.) Pursuant to the above judgment, a fresh show cause notice was issued by the appellant on 24.9.84. Thereafter the order dated 27.10.1984 was issued levying damages to the extent of Rs.3,921/- which was challenged in I.C. No.6/85. Going by the show cause notice dtd. 24.9.84 the period of delay in making payment of contribution were between 16 days to 2 years and 4 months. For computing the delay, in the show cause notice, what was taken into consideration was the provisions contained under Regulation.31 of Employees' State Insurance (General) Regulations, 1950, as it stood at the relevant time. The court below found that the assessment of delay can be made only with reference to the proceedings dated 12.2.1979, under which the contribution for the period upto 31.3.1977 was assessed on adhoc basis. The court below also noted that under the proceedings dated 12.2.1979 the applicant was asked to discharge the liability within ten days and after granting such time to the applicant it cannot be held that there was no delay in payment of contribution, if the amount has been paid within 10 days. Therefore, according to the court below, the delay of more than one year calculated in the show cause notice was unsustainable. The court below took the view that there was no apparent delay after the issuance of demand notice under S.45A and therefore the appellant herein was not justified in invoking powers under S.85B of the E.S.I. Act. The order dated 25.10.1984 was therefore set aside.