REGIONAL DIRECTOR EMPLOYEES STATE INSURANCE CORPORATION Vs. SAMSONS RUBBER INDUSTRIES PRIVATE LIMITED

JUDGEMENT

(1.) THE Employees' State Insurance Corporation has filed this appeal as against the order dated February 21, 1989, passed by the Employees' Insurance Court, Madras, in E.S.I.O.P. No. 19 of 1986. THE appellant, by its notice dated February 19, 1986, called upon the respondent to pay a sum of Rs. 2, 255 as damages for the delayed payment of contribution for the period from September, 1976, to July, 1978. THE respondent questioned the said demand by filing a petition under Section 75 of the Employees' State Insurance Act, wherein, it is stated that (1) the respondent has paid the said contribution amount in time, and hence, the damages claimed by the appellant is not correct; (2) the appellant had no legal authority to levy and claim damages, as there was no valid delegation of the powers. THE appellant resisted the said petition on the ground that the damage was claimed under the notice dated October 27, 1979, and, the respondent should have filed the petition within a period of three years from the said date, but whereas, he has filed the petition only in the year 1986, and that, therefore, the petition filed by the respondent under Section 75 of the Employees' State Insurance Act is barred by time under Section 77(1-A) of the Act. THE Employees' Insurance Court, after taking into consideration all the aspects of the case and also the materials placed before it, came to the conclusion that the damages claimed by the appellant is not proper, and that the appellant was not delegated with the power to take action, and that petition filed by the respondent was in time and thereby allowed the petition. Aggrieved by the same, the Employees' State Insurance Corporation has filed this appeal.THE learned advocate for the appellant has submitted that, though the appellant paid the contribution amount in time, there was a delay of eight days in the submission of the cards duly stamped, to the Corporation and, therefore, the respondent is liable to pay damages. THE fact that the respondent paid the contribution amount in time, is not in dispute. But, however, it appears that there was a delay of eight days in forwarding the cards duly stamped to the Corporation. Section 85-B provides for, recovery of damages, which runs as follows : "Where an employer fails to pay the amount due in respect of any contribution or any other amount payable under this Act, the Corporation may recover from the employer by way of penalty such damages, not exceeding the amount of arrears as may be specified in the regulations of the Act. It should be borne in mind that in claiming damages, it should be seen, whether the firm has made profits by retaining the money, and if so, to what extent. Here, the contribution amount payable has been paid in time and there was a delay of eight days, which is only negligible, in sending cards to the appellant and the said delay has not caused any loss or damages to the Corporation. Further, the claiming of damages under section is not mandatory and discretion is given to the Corporation, which should be exercised in a fit and proper manner, which should not be punitive in nature. THE respondent, having paid the contribution amount in time, should not be penalised to pay damages for the delay of eight days in sending cards, and only in the said circumstances, the Employees' Insurance)Court has come to the conclusion that the damages claimed by the respondent is not proper and maintainable. THE very same view was taken by the Division Bench of the Karnataka High Court in the case of Regional Director, Employees' State Insurance Corporation v. Blue Star Ltd., 1981 (59) FJR 191. But, however, the appellant relied upon the decision rendered by the Apex Court in the case of Sovrin Knit Works v. Employees' State Insurance Corporation, 1997-II-LLJ-671. It is a case, where the establishment has not paid the contribution amount in time, and, therefore, the Corporation has called upon the establishment to pay damages on delayed payment with interest. But, in our case, the contribution amount has been paid in time and the damages was claimed only for the delay in sending cards and hence, the abovesaid decision is not applicable to our case.Thiru J. Josephnath, learned advocate for the respondent, has submitted that the appellant was not at all entitled to pass an order as there is no delegation of powers as contemplated under Section 94-A of the Employees' State Insurance Act, which states :" THE Corporation, and, subject to any regulations made by the Corporation in this behalf, the Standing Committee may direct that all or any of the powers and functions which may be exercised or performed by the Corporation or the Standing Committee, as the case may be, may, in relation to such matters and subject to such conditions, if any, as may be specified, be also exercisable by any officer or authority subordinate to the Corporation.

(2.) FIRSTLY, it is contended that under Section 94-A of the Act, Corporation has been empowered to delegate the power to one of the officers, but, the officer-delegatee has no power to further delegate to any other officer. Therefore, exercise of the power by the officer is bad in law. When we requested Shri S. K. Gambhir to produce the order passed by the Corporation authorising the officer, he is unable to place his hands on the order passed by the Corporation. But he seeks to contend that the Regional Director, one Mr. G. R. Nair was a delegates officer to whom power was delegated by the Corporation, pursuant to its resolution. Therefore, the order is bad in law. Unless we look into the order passed by the Corporation, it is difficult to see whether it is a further delegation. It is seen under Section 94-A of the Act that the Corporation has been empowered to authorise any of its officers. It would be obvious that the Regional Director is one of the officers in the region. Necessarily, he is a competent officer to exercise the power under the Act on behalf of the Corporation. It was conceded in the lower Court that he was so authorised. So, the officer has power to pass the order imposing damages and interest thereon for delayed payment.