JUDGMENT - D.R. DHANUKA, J.:--This appeal involves consideration of an important question of law as to interpretation and application of section 85(B) of Employees State Insurance Act, 1948 as it stood prior to its amendment by Amending Act No. 29 of 1989. 2. The Employees State Insurance Corporation has preferred this appeal against an order dated 30th June, 1979 passed by Employees State Insurance Court, Pune, in Application (ESI/ICP) No. 4 of 1979. By the impugned order, the trial Court declared that the Employees State Insurance Corporation was not entitled to recover a sum of Rs. 905/- from M/s. Shri Ganesh Foundry Pvt. Ltd. as demanded by the impugned notice No. 33; 3721 dated 14th January, 1977. The relevant facts are briefly summarised hereinafter. 3. It is not in dispute that the respondent in this appeal i.e. Shri Ganesh Foundry Private Limited, is covered by and under the provisions of the Employees State Insurance Corporation Act, 1948. It is not in dispute that the respondent was liable to pay necessary amount of contribution to the Corporation in time as contemplated under section 40 of the Act. It is not in dispute that the respondent delayed payment of the amount payable for the period ending 27th September, 1975, 31st January, 1976 and 31st March, 1976. In view of the delay caused by the respondents in complying with the above referred statutory obligation, Employees State Insurance Corporation passed its order (Exh. 14) calling upon the respondent to pay a sum of Rs. 905/- to the applicant as and by way of damages in the nature of penalty under section 85(B) of the Act. 4. At the material time, section 85(B)(1) of the Act as it stood prior to its amendment by Amending Act No. 29 of 1989 provided as under:- "85(B)(1):-Where an employer fails to pay the amount due in respect of any contribution or any other amount payable under the Act, the Corporation may recover from the employer such "damages" not exceeding the amount of arrears as it may think fit to impose. Provided that before recovering such damages, the employer shall be given a reasonable-opportunity of being heard". Section 85(B) of the Act was amended by Amending Act No. 29 of 1989 whereby the expression "penalty" was specifically inserted in the said provision. The said amending Act came into force with effect from 12th October, 1989. Provided that before recovering such damages, the employer shall be given a reasonable-opportunity of being heard". Section 85(B) of the Act was amended by Amending Act No. 29 of 1989 whereby the expression "penalty" was specifically inserted in the said provision. The said amending Act came into force with effect from 12th October, 1989. This appeal requires consideration and interpretation of unamended section 85(B) of the Act. 5. The learned Counsel for the appellant has rightly submitted that section 85(B)(1) of the said Act as it stood prior to its amendment always meant to confer powers on the Corporation to impose damages in the nature of penalty on the defaulting employer and the said section could not be interpreted to mean that the Corporation could recover damages from the defaulting employer only if it suffered actual loss as a result of delay caused so as to indemnify itself for such loss. The learned Counsel for the Appellant submits that the Amending Act has merely specified the nature of levy under section 85(B) of the Act as penal though it was always so by necessary implication. The question to be asked is what is the meaning of the word "damages" as used in section 85(B)(1) of the unamended Act having regard to the scheme of the Act and the object of the provision in the context and setting in which it appears. 6. The learned Counsel for the appellant has invited attention of the Court to judgments of various courts on the subject. Perhaps there is no judgment of this Court on the subject. At least none has been brought to the notice of the Court. I shall now proceed to discuss the unamended section 85(B)(1) of the Act. 7. It cannot be disputed that the expression "damages" has several shades of meaning and much depends upon the scheme and the object of the provision. It is well settled law that a provision of law could not be interpreted by the courts so as to virtually nullify the same. 8. In (National Jute Manufacturers Corporation Ltd. v. Employees State Insurance Corporation and another) 1, (1992) II C.L.R. 127, the High Court of Calcutta held that the levy of damages as per section 85(B)(1) was a levy in the nature of penalty to teach a lesson to the defaulters Counsel. 8. In (National Jute Manufacturers Corporation Ltd. v. Employees State Insurance Corporation and another) 1, (1992) II C.L.R. 127, the High Court of Calcutta held that the levy of damages as per section 85(B)(1) was a levy in the nature of penalty to teach a lesson to the defaulters Counsel. In this case, the High Court held that though the expression "damages" was used in the said section, the said expression could not be restricted to mean damages as understood in a contractual or a tortious action. In this case A.N. Ray, J., speaking for the Court referred to earlier judgment of the High Court of Calcutta on the same subject delivered by Justice Manas Nath Roy in (Prabartak Jute Mills Limited v. Employees State Insurance Corporation Limited)2, reported in 1992 Vol. II Calcutta Law Journal, 248. In this case, the High Court of Calcutta took the same view. Regulations framed by the Corporation under section 97 of the Act provides for levy of interest. Almost in all cases, the defaulting employer is required to pay the delayed amount of contribution alongwith interest at a negligible rate. In the above referred case, the High Court of Calcutta held that Regulation 31(a) framed under section 97 of the Act providing for levy of interest at the rate of 6 per cent per annum and 85(B) of the Act providing for imposition of statutory penalty covered entirely different fields. 9. The learned Counsel for the appellant also relied upon judgment of High Court of Madras in the case of (Madras Hotel Ashoka (P) Limited v. Employees State Insurance Corporation)3, reported in 1993(II) C.L.R. 1045. In this case also the High Court of Madras took the same view. In para No. 9 of the said judgment reference is to be found to the view taken by the High Court of Karnataka as well as the High Court of Kerala to the same effect in various decided cases. A Division Bench of the High Court of Madras in (Beema Manufacturers (P) Limited v. E.S.I.C.)4, (1990) II C.L.R. 63 held that the levy of damages under section 85(B) of the Act was penal in character. A Division Bench of the High Court of Madras in (Beema Manufacturers (P) Limited v. E.S.I.C.)4, (1990) II C.L.R. 63 held that the levy of damages under section 85(B) of the Act was penal in character. In case of (Hind Art Press v. E.S.I.C.) 5, reported in (1989) II LLN, 394, it was held by the High Court of Karnataka that section 85(B) of the Act was both compensatory as well as penal in nature and was intended to enforce discipline on the management of establishments covered by the Act. The High Court of Kerala has taken the same view. It appears to me that it is not necessary to multiply the authorities. The submission made by the learned Counsel for the appellant appears to be well founded in law. I am in respectful agreement with the view taken by the courts of Calcutta, Madras, Karnataka and Kerala in the above referred cases. 10. It is unfortunate that the employees Inssurance Court has held that no damages could be imposed under section 85(B) of the Act on the ground that Corporation had suffered no loss as a result of delay caused in payment of contribution by the employer. In my opinion, the reasoning and the conclusion of trial Court is clearly erroneous in law. 11. In my opinion, the Employees State Insurance Court was definitely in error when it took the view that no damages or penalty could be levied on the defaulting employer unless the Corporation had suffered an actual loss be reason of the default committed by the employer. The Corporation never suffers a loss as a result of default committed by the establishments covered under the Act except the loss of interest. No proof of the loss is necessary before exercising the statutory power conferred under the said section. In my opinion section 85(B) of the Act was enacted by the legislature as a disciplinary measure and the Corporation is entitled to levy damages in the nature of penalty subject to ceiling prescribed under the said section depending upon the facts and circumstances of each case. I am also of the view that the Amending Act has merely made the provision explicit what was already implicit in the unamended provision. I am also of the view that the Amending Act has merely made the provision explicit what was already implicit in the unamended provision. The learned Counsel for the appellant has also invited attention of the Court to the recent judgment of the Supreme Court in the case of (M/s. Prestolite of India Limited v. The Regional Director and another) 6, reported in A.I.R. 1994 Supreme Court, 521. In this case the Apex Court has held that the adjudicating authority can take mitigating circumstances into consideration while quantifying the amount of damages, leviable under the said provision. It appears that the learned Counsel for the appellant is supported in his submission by the ratio of this judgment also at least indirectly if not directly. 12. The appellant-Corporation has levied damages in the nature of penalty on the defaulting employer in sum of Rs. 905/- only. No case is made out for interference with the quantum of damages/penalty imposed by the corporation on the respondent-employer by its notice/order dated 14th January, 1977. 13. In the result, the Appeal is allowed. The judgment and order of the Employees State Insurance Court dated 30th June, 1979 is set aside. The application made by the employer being Application ESI/ICP/No. 4 of 1979 is dismissed. M/s. Shri Ganesh Foundry Pvt. Ltd. is directed to pay an amount of Rs. 905/- to the Corporation, if not already paid or realised, within one month from today. No order as to costs. Appeal allowed.