Employees State Insurance Corporation v. CMR Model High School
2022-06-15
P.SREE SUDHA
body2022
DigiLaw.ai
JUDGMENT : 1. This appeal is filed by the Employees State Insurance Corporation-petitioner against M/s. CMR Model High School-respondent aggrieved by the order dated 29.10.2021 passed in EIC No.57 of 2019 on the file of the learned Employees Insurance Court and Chairman, Industrial Tribunal-I at Hyderabad. 2. Learned counsel for the petitioner would argue that while claiming damages restricted its claim to beyond litigation period and no damages were claimed for litigation period. He would further assert that this Court dismissed batch of writ petitions on 06.10.2015 and the petitioner claimed damages from 29.10.2015 to 11.09.2016 during which period the contributions were paid by the respondent establishment, but the trial Court erroneously held that the claim of damages was made by the petitioner from February, 2010 to September, 2015 when the writ petition was pending and that the claim of the petitioner made in Ex.R1 notice clearly indicates the period of claim and it also mentioned the said fact in para eight of its written statement dated 29.09.2019 and as such the petitioner never claimed damages for the litigation period from February, 2010 to October, 2015. He would also assert that the trial Court erroneously held that the respondent establishment paid contributions immediately after passing 45-A order within the period of limitation. W.P.No.12283 of 2009 and batch were dismissed on 06.10.2015 and as such the respondent ought to pay the contributions on or before 28.10.2015 as the limitation comes to end as per Section 39(4) of the ESI Act, 1948 read with Regulation 31-C of the ESI (Gen.) Regulations, 1950 but not immediately after passing 45-A order. In fact, 45-A order was passed on 19.07.2016 and contributions were paid on 03.08.2016 that too on different dates as shown in the enclosure to Ex.R1 and thus the order of the trial Court is without appreciation of the provisions. He would also contend that the trial Court also held that there was mens rea and actus reus present in the case. The respondent herein challenged the notification which came into force on 14.10.2015 and it was dismissed in a common order dated 06.10.2015 and as such the respondent ought to have paid the entire contribution for the entire period on or before 28.10.2015 without issuance of any notice in Form C-18 and passing of 45-A order on 19.07.2016.
The respondent herein challenged the notification which came into force on 14.10.2015 and it was dismissed in a common order dated 06.10.2015 and as such the respondent ought to have paid the entire contribution for the entire period on or before 28.10.2015 without issuance of any notice in Form C-18 and passing of 45-A order on 19.07.2016. The non-compliance of payment of contributions within the stipulated time clearly shows the existence of mens rea or actus reus. He would also cited case law in a case reported in ORGANO CHEMICAL INDUSTRIES V/s. UNION OF INDIA, [ AIR 1979 SC 1803 ] in which the Hon’ble Apex Court held that imposition of damages serves two fold purposes and it results in damnification and also serves as a deterrent and the predominant object is to penalize so that the employer may be thwarted or deterred from making any further defaults, and thus the trial Court failed to appreciate that the mens rea is not an essential ingredient. He would finally argue that as the provisions of law under Sections 85-B(2) and 39(4) read with Regulation 31-C of the ESI Act, 1948 are involved, there is substantial question of law to prefer this appeal and thus requested the Court to set aside the order under challenge. 3. ESI Corporation issued an order against M/s.CMR Model High School under Section 85-B of the ESI Act, 1948 on 21.02.2019. The Additional Commissioner levied damages totalling to Rs.1,12,821/- for the wage period from February, 2010 to November, 2015 with a direction to deposit the same within thirty days from the date of the order, failing which the entire amount will be caused to be recovered as per the provisions of Section 45-C to 45-I of the ESI Act, 1948. Aggrieved by the said order, EIC No.57 of 2019 was preferred by the respondent herein before the trial Court. The trial Court after considering the arguments of both sides, allowed the petition and set aside the order dated 21.02.2019. Aggrieved by the said order, the petitioner preferred this appeal. 4. The Employees’ State Insurance Corporation issued a notice to the respondent herein on 31.12.2018. The respondent school authorities filed W.P.No.12283 of 2009 challenging the Gazette Notification vide G.O.Ms.No.582 dated 14.10.2008 before this Court, which was dismissed on 06.10.2015. Aggrieved by the said order, the school authorities preferred W.A.No.208 of 2016, which was also dismissed on 16.03.2016.
4. The Employees’ State Insurance Corporation issued a notice to the respondent herein on 31.12.2018. The respondent school authorities filed W.P.No.12283 of 2009 challenging the Gazette Notification vide G.O.Ms.No.582 dated 14.10.2008 before this Court, which was dismissed on 06.10.2015. Aggrieved by the said order, the school authorities preferred W.A.No.208 of 2016, which was also dismissed on 16.03.2016. Thereafter, the respondent school authorities addressed a letter to the Regional Director stating that it paid the entire dues to the eligible members to till date after disposal of the writ appeal and thus requested the petitioner to waive the damages. But, the petitioner herein for the reasons recorded in the order dated 21.02.2019 levied damages of Rs.1,12,821/-. 5. The trial Court in its order observed that the petitioner herein issued damages notice on 31.12.2018 along with annexure and claimed damages from February, 2010 to November, 2015 i.e. pending period of the writ petition before this Court and also given an opportunity of personal hearing on 30.01.2019. The representative of the respondent authorities appeared for personal hearing and submitted a letter on 30.01.2019 and intimated about writ petitions. But the Corporation not considered the plea taken by the respondent herein and imposed damages without ascertaining the cause for non-payment of contributions during the above said period and held that there is no mala fide intention on the part of the petitioner herein and paid contributions immediately within the statutory period and as such imposing damages against the respondent herein under Section 85-B does not arise and the order dated 21.02.2019 was set aside. 6. As per the docket order dated 11.04.2022, the matter was adjourned to 13.06.2022 at the request of the learned counsel for the respondent. Today, when the matter is called, there is no representation for the respondent. Hence, heard the arguments of the learned counsel for the petitioner and orders were reserved. 7. The petitioner mainly argued that it has not claimed damages for the period during the pendency of the writ petitions and also stated the same in its written statement. The petitioner would further submit that when the writ petition was dismissed on 06.10.2015, it is for the respondent to pay the contributions on or before 28.10.2015 but not after passing of Section 45-A order.
The petitioner would further submit that when the writ petition was dismissed on 06.10.2015, it is for the respondent to pay the contributions on or before 28.10.2015 but not after passing of Section 45-A order. The order under Section 45-A was passed on 19.07.2016 and the contributions were paid in the year 2016 that too on different dates as shown in the annexure to Ex.R1, and thus, the order of the trial Court dated 29.10.2021 is against the provisions of the ESI Act and the Regulations. The petitioner herein also stated that mens rea is an essential ingredient, but the trial Court relying upon the case law held that there is no mala fide intention on the part of the respondent herein. The non-compliance of payment of contribution within the stipulated time itself shows the existence of mens rea or actus reus. The respondent did not pay contribution before issuance of notice in Form C-18 and passing of order 45-A on 19.07.2016. 8. In spite of issuance of notice on 31.12.2018 the respondent approached this Court by way of filing writ petition and also writ appeal. Even after dismissal of the writ appeal, the respondent did not pay the contributions within the statutory period. As such, the petitioner is compelled to issue an order under Section 45-A and also rightly passed an order dated 21.02.2019 under Section 85-B of the ESI Act levying penalty. There is no infirmity in the order dated 21.02.2019. Therefore, the order of the trial Court is liable to be set aside. 9. In the result, the Civil Miscellaneous Appeal is allowed and the order dated 29.10.2021 passed in EIC No.57 of 2019 on the file of the learned Employees Insurance Court and Chairman, Industrial Tribunal-I at Hyderabad, is hereby set aside. 10. Miscellaneous Petitions, if any, pending in this appeal shall stand closed in the light of this final order.