Judgment :- 1. The Regional Director, Employees State Insurance Corporation, who is the respondent before the ESI Court and the Court of District Judge, Thanjavur has preferred the above Civil Miscellaneous Appeal against the judgment and decree dated 30.04.1993 made in ESI Op No. 200 of 1988 by the said court on ground (i) that the court below erred in holding that Section 85-B of the Employees State Insurance Act (hereinafter referred to as the ‘Act’) could be invoked only in cases of failure of payment of contribution whereas Section is attracted when the contribution is not pad within the time prescribed under the Act and Regulations; (ii) that the court below failed to note that the delayed payment of the contribution is a default within the meaning of Section 85-B of the Act and is liable for imposition of damages; (iii) that the court below erred in holding that the damages need not be paid when the contributions were paid without considering the fact that it had not been paid in time; (iv) that the court below further erred in holding that once the contribution is paid, Section 85-B of the Act cannot be invoked; (v) that the court below failed to note that the provisions of the Act apply apriorivigor once an establishment fulfils the requirements of the Act; and (vi) that the court below failed to note that the primary obligation is cast on an establishment to file the return and failure to file the return itself is a default. 2. In consideration of the facts and circumstances as pleaded by parties and having regard to the materials placed on record and upon hearing the learned counsel for both, what is disclosed is that the petition had been filed by the respondent herein before the ESI Court under Section 75 (i) of the Act praying to set aside the order passed by the respondent in TN/INS/VIII/51/11504/42 dated 17.10.1988 holding that the levy of damages under Section 85-B of the Act is illegal and void. 3. The petitioners case is that the respondent Corporation demanded a contribution of a sum of Rs. 3868.15 for the period covering from 14.5.1978 to 30.11.1979 as per the order dated 26.4.1984; that the amount had been paid with interest on five different occasions and that the entire demand was cleared. 3. The petitioners case is that the respondent Corporation demanded a contribution of a sum of Rs. 3868.15 for the period covering from 14.5.1978 to 30.11.1979 as per the order dated 26.4.1984; that the amount had been paid with interest on five different occasions and that the entire demand was cleared. But under the notice dated 28.7.1988, the Corporation had called for explanation as to why damages should not be collected at 19 per cent under Section 85-B of the Act for delayed payment of the contribution; that explanations have been offered and without consideration of which, the appellant had passed the order to pay damages of Rs. 3868.15 under Section 85-B (i) of the Act. 4. The respondents contention in the said application before the lower court is that as per Section 85-B of the Act only where the employer fails to pay the contribution, the Corporation may recover damages and thereby praying to set aside the order dated 17.10.1988 requiring to pay damages. 5. On the contrary, the appellant herein the respondent before the lower court, in its counter would allege that it is entitled to demand damages under Section 85-B of the Act and that the contribution was determined under Section 45-A of the Act on 26.3.1984; that the petitioner did not pay the contribution at the first instance and the respondent is liable to pay damages under Section 85-B of the Act. 6. The court below having discussed the facts and circumstances and remarking that the entire amount of contribution along with interest pertaining to the period from 14.5.1978 to 30.11.1979 had been paid by the petitioner before 19.6.1987 that by order dated 17.10.1988, the respondent therein had demanded damages under Section 85-B of the Act; that though the petitioner failed to make the contribution for the said period covering the years 1978-79, the order demanding such payment had been passed only on 26.3.1984 that is nearly after five years. Section 85-B, Clause-1 of the Act is extracted hereunder: “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 regulation.” In the present case, demand for damages had been made after the payment of contribution, and, therefore, natural justice requires that the respondent therein is not entitled to ask for damages after the payment of contribution was made and thereby for such reasons, declaring the order dated 17.10.1988 made on the part of the appellant herein as illegal had ultimately allowed the petition filed by the respondent herein. 7. During arguments, the learned counsel appearing for the appellant laying emphasis that if the contribution is not paid in time or in the event of any default, the establishment is liable for imposition of damages under Section 85-B of the Act, would cite a judgment delivered in Rallis India Ltd. v. E.S.I. Corporation 1980 (56) FJR 430 wherein it is held as follows: “Merely because provision for payment of interest on the arrears of contribution has been made by regulation 31-A, it cannot be said that the legislature has no power to levy a penalty by way of damages on the ground of failure to pay the contribution amount, under Section 85-B of the Act. Default or delay in the payment of contribution within the period mentioned in regulation 31 would also be “failure to pay” the contribution within the meaning of Section 85-B.” 8. On the other hand, the learned senior coun sel appearing on behalf of the respondent would cite a judgment delivered in ESIC, Gauhati v. M/s. Associated Industries (Assam), Chandrapur re ported in 1990 LAB. I.C. 195 wherein it is held as follows: “The object of insertion of this new provision, as stated in the objects and reasons, was to provide for imposition of enhanced and more deterrent penalties for defaults in payment of the contributions. It is, in fact, a penalty by way of “damages”. While fixing the amount of damages, the all relevant factors are to be considered. It is, in fact, a penalty by way of “damages”. While fixing the amount of damages, the all relevant factors are to be considered. As “damages” under Section 85-B in substance is a penalty imposed on the employer for breach of statutory obligation, it should not be imposed merely because it is lawful to do so. The authority concerned will have to apply its mind to the various relevant factors such as the number of defaults, the period of delay, the frequency of defaults and the amounts involved. Even the determination of the amount of “damages” will require application of mind. Merely because an employer failed to pay the contributions in time it will not be lawful to impose maximum damages.” 9. By application of the above arguments of the learned counsel for both to the facts and circumstances of the case in hand, particularly in the context off the order passed by the court below and the wording of the Section, viz., “where an employer fails to pay the amount due in respect of any contribution” which though would connote that the Corporation is at liberty to levy the penalty as damages. The big question that is to be answered herein whether even after the recovery of the contribution is ma de with penalty, etc. whether by way of farther damages, the Corporation is entitled to proceed against the employer is the crucial point that is to be answered here. Since after every recovery has been made regarding the contribution, whether the Corporation is entitled to proceed against the industrial establishment under Section 85-B of the Act demanding dam ages that too five years after the said recovery became payable? 10. The lower court has held that natural justice requires that the respondent cannot ask for darnages after the payment of contribution was made and thereby declaring such a notice issued by the Corporation dated 17.10.1988 claiming dam ages as illegal thus allowing the petition filed by the respondent herein. So far as this crucial point as decided by the lower court is concerned, no proper or valid or tangible reason has been as signed on the part of the appellant as to how in the Circumstances of the case, the order passed by the lower court is either erroneous or repugnant to law. Hence, adhering to the norms brought forth in the judgment reported in 1990 LAB. Hence, adhering to the norms brought forth in the judgment reported in 1990 LAB. I.C. 195 (supra), it has to be decided accepting the decision arrived at by the lower court with proper application of the section to the facts of the case in hand, since the conclusion arrived at on the part of the lower court and the reasons based on which the said conclusion has been arrived at in the manner as it has been arrived at by the lower court it merits acceptance of the same thus not warranting any interference to be made into the judgment and decree passed by the ESI Court, Thanjavur. In result, the above civil miscellaneous appeal fails and the same is dismissed. The judgment and decree dated 30.4.1993 made in ESI OP No. 200 of 1988 by the ESI Court and the Court of District Judge, Thanjavur is hereby confirmed. No costs.