Judgment 1. This appeal is directed against the order passed by Employees' Insurance Court (Labour Court), Indore in Case No. 166/05 (ESI) Civil on 4-7-2006. 2. Undisputedly, provisions of the Employees' State Insurance Act, 1948 are applicable to the establishment of the respondent. 3. Record shows that by a Notice dated 21-1-2002 respondent was called upon to pay contribution for the years 92-93 and 94-95 (together with computed interest and damages) within 15 days' of receipt of notice. Only partial payment was made without disputing the liability, therefore, another statutory Notice was issued and served upon respondent giving details of the period of default and damages due upon such default. A reply was submitted praying to waive off the damages (Rs. 39,355/-). Considering the reply and the stand taken by the respondent, the authority passed the following order on 4-5-2005 under Section 85-B of the Act. xxx Pursuant to the order, a demand was raised on 13-6-2005 for Rs. 39,355/-. 4. Respondent challenged the aforesaid demand by raising a dispute under Section 75 of the Act on the ground that no opportunity of hearing was afforded before imposing damages and the same was contrary to Section 85-B of the Act as no reason was assigned for levying the maximum penalty. Appellant filed a reply to oppose the application. Appellant had taken a preliminary objection that the dispute was not maintainable without deposit of 50% in terms of Section 75 (2-B) of the Act. It was pointed out that penalty was levied as per regulations. 5. Learned Employees' Insurance Court by the order impugned held that no opportunity of hearing was afforded to the respondent before imposing cent per cent penalty. Court also held that the computation was wrong and no penalty could have levied for the period of 1995-2000. It also held that there was no deliberate delay in making the employee's contribution therefore not more than 50% penalty could have been levied on the respondent. 6. After considering rival submissions in the light of material available on record, we find learned Court below together missed the preliminary point raised by the appellant about the maintainability of dispute. Provision of Section 76(2-13) in this regard is quite clear. It is a measure provided for fulfilling aims and objects of the Act. 6. After considering rival submissions in the light of material available on record, we find learned Court below together missed the preliminary point raised by the appellant about the maintainability of dispute. Provision of Section 76(2-13) in this regard is quite clear. It is a measure provided for fulfilling aims and objects of the Act. The language is explicit and it is imperative for the employer to deposit 50% of the amount due from him as claimed by the Corporation before Court undertake to decide the dispute. The amount would include not only the contribution but also penalty and/or damages as per Section 85-B. 7. Even otherwise also there is no merit in the contentions of the respondent. Respondent was served with show-cause notice before the determination of amount of penalty. Necessary details were furnished in the show-cause notice. Personal hearing was also afforded and provisions of law including Regulation 31 were explained to Shri A.K. Choudhary who attended the hearing on behalf of respondent. All this is clear from the order reproduced above. Still Court below recorded a finding that no opportunity of hearing was given. This finding is obviously contrary to record. And on the top of every thing, the Court below while declaring the order dated 13-6-2005 null and void, went a step ahead and on its own held that the appellant is debarred from recovering damages for the period from 1995-2000. We are constrained to observe that the findings of the Court below are based on purely on surmises and conjectures. Court below failed to see and appreciated the dividing line between conjecture and inference. A conjecture may be plausible but it is of no legal value, for its essence is that it is a mere guess. An inference, in the legal sense, on the other hand, is a deduction from the evidence, and if it is a reasonable deduction it may have the validity of legal proof. In other words, an inference is a deduction from established facts and an assumption or a guess is something quite different but not necessarily related to established facts. Direction to reduce the penalty amount is also contrary to law. Section 85-B of the Act provides for levy of damages by way of penalty as may be specified in the regulations. In other words, an inference is a deduction from established facts and an assumption or a guess is something quite different but not necessarily related to established facts. Direction to reduce the penalty amount is also contrary to law. Section 85-B of the Act provides for levy of damages by way of penalty as may be specified in the regulations. In) exercise of powers conferred by Section 97 of the Act, Employees' State Insurance (General) Regulations, 1950 have been framed. An employer who is liable to pay employees' contribution commits default is not only liable to pay interest but also the damages not exceeding the rates specified in Regulation 31-C for the delay. Learned Court below while recording a finding against the appellant on behalf has also failed to notice the statutory provisions of Regulation 31-C. Thus, the order impugned is not sustainable and deserves to be set aside. 8. In the result, we allow this appeal and restore the demand raised by the appellant. There shall be no orders as to costs.