JUDGMENT D.P.S. Chauhan, J. 1. Cause list revised. Counsel for the respondent not present. 2. The service on the respondent, as is pointed out, has been effected but no one has appeared to represent the respondent and no return has been filed. The case is posted for final hearing. 3. Heard the learned counsel for the petitioner Shri Abhay Sapre and Shri Neeraj Vegar. In the petition, the petitioner has prayed for issuance of a writ in the nature of certiorari, quashing the impugned notice dated April 30, 1990 (Annexure P-2) and also the order dated May 15, 1990 (AnnexureP-3). 4. The brief facts of the case, confined to the controversy are that:-- The petitioner is a State Co-operative Marketing Federation Limited, registered under the Madhya Pradesh Co-operative Societies Act, 1960. The dispute was as to whether the provisions of the Employees' State Insurance Act, 1948 (for brevity, hereinafter referred to as the Act) could be made applicable to the co-operative society, as the said Act applies initially, in the first instance, to the Factory. 5. The controversy was settled by this Court in W.P. No. 554/1987 filed by the Federation before the Indore Bench of the Madhya Pradesh High Court. In the decision, it was found that the Federation is covered by the provisions of the Act. Demand notices were sent to the Federation during the pendency of the aforesaid writ petition and against the demand notice the Federation preferred an appeal under Section 82 of the Act (being M.A. No. 339/86) before the Madhya Pradesh High Court at Jabalpur challenging the impugned demand as bad as the same was issued without holding any enquiry, without giving any opportunity of being heard, to the petitioner Federation and it was also submitted that the Act does not apply to the cooperative societies. This appeal is pending but the Writ Petition M.P. No. 554/87 which was decided on July 29, 1989 holds the field and as such, the Federation complied with the notices by contributing the payment towards contribution. The District Marketing Officer, Jabalpur had deposited by way of contribution an amount of Rs. 1,39,375.70 P. for the period of 1976 to 1988, and the payments were being made from time to time by the District Marketing Officer, Jabalpur. However, there occurred some delay in making these contributions only because of the legal controversy being pending before the High Court. 1,39,375.70 P. for the period of 1976 to 1988, and the payments were being made from time to time by the District Marketing Officer, Jabalpur. However, there occurred some delay in making these contributions only because of the legal controversy being pending before the High Court. Thereafter, a notice dated April 30, 1990 was served by the respondent under Section 85 of the Act which is Annexure P-2 to the petition. The notice is dated April 30, 1990 and a fortnight's time was allowed to show cause as to why the damages at the rate of 19% per annum be not imposed upon them and the date given for hearing was May 8, 1990. 6. Learned counsel for the petitioner submitted that the notice itself was defective as the time allowed for filing reply to the show-cause notice dated April 30, 1990 upto May 15, 1990 and anterior to that, there was no question of giving any hearing to the petitioner as the petitioner had a right to file his reply on or before May 15, 1990 and thus, the notice itself seems to be defective. The date of hearing should have been given after May 15, 1990. 7. Apart from this, Section 85-B of the Act gives the power to recover damages and it provides that 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 such damages not exceeding the amount of arrears as it may think fit to impose. It was only a case for recovery of the damages as the payment was delayed on account of the circumstances as mentioned in the petition and as is mentioned above that the position of law was not settled in regard to the applicability of the Act to the co-operative societies and subsequent to the settlement of the position of law, the amount as claimed was deposited. 8. Under Section 85 of the Act, it is the discretion of the concerned authority and the discretion is not supposed to be arbitrary. While imposing such a penalty, the authority was not supposed to impose the penalty in view of the background in which the payment could not be made promptly. While taking proceedings under Section 85-B of the Act, it was not the case that no payment was made. While imposing such a penalty, the authority was not supposed to impose the penalty in view of the background in which the payment could not be made promptly. While taking proceedings under Section 85-B of the Act, it was not the case that no payment was made. Apart from this, the very foundation of the impugned notice i.e. Annexure P-2 was itself defective as the notice allowed time for 15 days which ended on May 15, 1990 but the date of hearing was given as May 8, 1990 and as such the order dated May 15/16, 1990 which is Annexure P-3 to the petition is shaky as by the notice Annexure P-2 a fortnight's time was given which time expired on May 5, 1990 for filing reply to the show-cause notice but before that, in the said notice i.e. before the expiry of 15 days' time, a date of hearing of the matter was fixed as May 8, 1990 which indicates arbitrariness on the part of the concerned authority. 9. There is no one to contest the matter. 10. In view of the above, the writ petition succeeds and is allowed. The impugned notice dated April 30, 1990 (Annexure P-2) as well as the order dated May 15/16, 1990 (Annexure P-3) are quashed. In the facts and circumstances of the case no order as to costs. Security amount, deposited if any, may be refunded.