Judgment :- K.K. Usha, J. This is an appeal at the instance of the E.S.I. Corporation challenging the order passed by the E.I. Court, Palakkad in I.C. 4/96. Respondent-Society engaged in the manufacture of tiles, bricks and pottary items, was the applicant before the E.I. Court. It challenged Ext. A2 notice dated 30.10.1995 as well as Ext. A6 notice dated. 14.11.1995 demanding damages under S.85B of the E.S.I. Act in respect of delayed payment of E.S.I, contribution for different periods ending in November 1989 and interest on the above amount. E.I. Court accepted the contention raised by the applicant and set aside Exts. A2 and A6 notices. 2. E.S.I, dues from the applicant for the period ending November, 1989 was finally determined as per Ext. A5 proceedings dated 9.11.1990 of the opposite party. An amount of Rs. 87,060/- was arrived at as dues by the Society on negotiation between the parties and the Society was granted instalment facility to remit the above amount. Following are the relevant terms and conditions of Ext. A5. 1. The total arrears of Rs. 87,060 (or arrears as may be reconciled after taking into account the payment, if any, made through District Collector) is to be paid in 24 equal monthly instalments. Each instalment to be paid in the form of a Demand Draft in favour of E.S.1. Corporation by 15th of each month. Instalment for November to be paid by 15th November 90. Current dues should also be paid from month to month without delay. 2. In case of default of any single instalment or current dues, prosecution action besides Revenue Recovery will be launched without further reference to them. 3. Prosecution proposal, if any, pending will not be taken subject to the above conditions. 4. The District Collector may be informed about this instalment arrangement and if necessary RR action can be withdrawn without prejudice to initiating fresh RR action in the event of failure to pay any single instalment of current dues. 5. The society will give a revolving bank guarantee guarantying the payment of monthly instalment." 3. E.I. Court took the view that after granting instalment facilities as per an agreement between the parties, the Corporation cannot demand interest or damages on the above amount. We are in full agreement with the above view taken by the Corporation. A reference to the terms and conditions in Ext. E.I. Court took the view that after granting instalment facilities as per an agreement between the parties, the Corporation cannot demand interest or damages on the above amount. We are in full agreement with the above view taken by the Corporation. A reference to the terms and conditions in Ext. A5 would show that interest and damages had been waived by the E.I. Corporation taking into consideration the financial difficulties of the Society. After having entered into an agreement and fixing the quantum of arrears on the basis of such agreement and allowing the applicant to pay the arrears in instalments, the Corporation cannot be permitted to demand interest on damages for the period during which the society paid the amount in instalments without any default as per the terms of the agreement. We therefore find no merit in this appeal. The appeal stands dismissed.