JUDGMENT (Prayer: Civil Miscellaneous Appeal filed under Section 82(2) of the E.S.I.Act 1948 to set aside the decree and judgment of the Labour Court, Tirunelveli in ESIOP.No.9 of 2004 dated 24th March 2010.)The above appeal has been filed by the E.S.I.Corporation challenging an order passed by the Labour Court, Tirunelveli in E.S.I.O.P.No.9 of 2004 wherein two orders passed by the Corporation dated 23.09.2002 and 22.10.2002 claiming damages were set aside and the order dated 15.12.2003 claiming interest was declared to be illegal. The Labour Court had further restrained the Corporation from recovering damages from the employer. Thereafter, the Labour Court has directed the employer to pay 5% of damages for delay of 72 days in payment of contribution. 2. The E.S.I.Act was extended to the locality with effect from 1978. The employer had challenged the said extension of the Act through various proceedings before the High Court which were dismissed on 18.02.1997. Thereafter, the corporation has issued show cause notices calling upon the employer to pay contribution. Since the employer had disputed the quantum and liability, proceedings were initiated under Section 45-A of the Act and an order was passed on 18.11.1999 demanding a contribution of Rs.5,49,292/- for the period between October 1986 to March 1999. Admittedly, this order was not challenged by the employer. After dismissal of the writ petition, the employer had paid the first installment on 11.11.1999, the second installment on 29.02.2000, the third installment on 27.03.2000 and the fourth installment on 10.09.2001 towards contribution. Since the payments were made belatedly, the Corporation had initiated proceedings for recovery of damages and interest. 3. The corporation has issued a notice on 03.08.2000 claiming damages of a sum of Rs.28.802/-for the period covering January 1996 to December 1996. After giving opportunity to the employer, an order was passed on 22.10.2002 confirming the said damages. Another notice under Section 85-B of the E.S.I.Act was issued on 19.04.2001 proposing damages for Rs.2,82,320/- for a period covering October 1986 to March 1999. After giving opportunity to the parties, an order was passed on 23.09.2002 imposing damages of Rs.2,71,526/-. 4. For the delay in payment of contribution, proceedings were initiated under Section 39(5)(a) of the E.S.I.Act, by way of issuing a notice dated 24.10.2002 proposing to claim interest of Rs.3,47,913/-. After giving opportunity to the employer, a final order was passed on 15.12.2003 demanding interest of Rs.3,47,913/-. 4. For the delay in payment of contribution, proceedings were initiated under Section 39(5)(a) of the E.S.I.Act, by way of issuing a notice dated 24.10.2002 proposing to claim interest of Rs.3,47,913/-. After giving opportunity to the employer, a final order was passed on 15.12.2003 demanding interest of Rs.3,47,913/-. The two orders passed under Section 85-B on 22.10.2002 and 23.09.2002 and the order passed under Section 39(5) (a) on 15.12.2003 were challenged by employer by filing E.S.I.O.P.No.9 of 2004 before the Labour Court, Tirunelveli. 5. The main contention of the employer was that since litigation was pending from 1986 to 1997, for the period of litigation, damages and interest should not have been levied. The employer had further contended that the corporation has not properly appreciated the stand taken by the employer with regard to the waiver of the damages and interest. The employer had further contended that for the period between October 1986 to March 1999, the employees have not availed any E.S.I.benefits and the employer is being penalized to share the contribution of the employees also. He had further contended that the employer had not collected employees contribution from them and therefore, it would not possible for him to deposit the said amount. He had further contended that the establishment being an Beedi Industry, they are already covered under Beedi Welfare Cess Act and Beedi Welfare Fund Act. Therefore, the coverage under E.S.I. Act would twice taxing them. They have further contended that the similar establishments in Melapalayam area have been granted exemption by the Government of Tamil Nadu. 6. Based on the above said reason, the employer sought to set aside all the three orders. 7. The corporation had filed a counter contending that sufficient opportunity has been provided to the employer in all the three proceedings. The corporation has no discretion whatsoever to waive the interest portion which is statutory in nature. That apart, the contentions of the employer that they are already covered under different enactment was raised in the writ petition challenging the coverage and the said contentions were already rejected. The corporation had further contended that the damages have been calculated only 21 days after the date of judgement, but the contribution period alone is referred to as October 1986 to March 1999. The corporation had further contended that the damages have been calculated only 21 days after the date of judgement, but the contribution period alone is referred to as October 1986 to March 1999. The corporation had further contended that though the High Court had dismissed the writ petition filed by the employer on 18.02.1997, the employer had started compliance only from 28.01.2000 and therefore, the corporation cannot be found fault with for imposing interest and the penalty towards belated payment of contribution. 8. The E.S.I.Court after considering the oral and documentary evidence arrived at a finding that the entire contribution amount has been deposited by the employer within 72 days from the date of an order passed under Section 45-A of the E.S.I.Act. The E.S.I.Court had rejected the contention of the corporation that the crucial date for calculation of damages and interest should start from the 22nd day of the date of judgment in the writ petition. Based upon the said finding, the E.S.I.Court had set aside the order dated 15.12.2003 passed under Section 39(5) of the Act. The E.S.I.Court had quashed both the orders passed under Section 85-B of the E.S.I.Act and directed the employer to deposit 5% of the damages in view of 72 days delay in depositing the contribution amount from the date of determination of contribution under Section 45-A of the Act. This order is under challenge in the present appeal by the corporation. 9. The learned counsel appearing for the appellant corporation had contended that it is the duty of the employer to deposit the contribution amount as and when it has become due. As per Regulation No.31, within 21 days of the last day of the calender month in which the contribution fall due, the employer is liable to pay the contribution. Any notice issued by the corporation is only a reminder to the employer. If the litigation prolongs for 4 or 5 years at the instance of the employer, he cannot take advantage of his own wrong and thereafter, claim that he is not liable to pay the penalty and interest for the period during which the litigation was pending. 10. The learned counsel for the appellant had further relied upon the judgment of the Hon''ble Supreme Court reported in 2008-III LLJ 356(SC) (Goetze (India) Ltd., Vs. 10. The learned counsel for the appellant had further relied upon the judgment of the Hon''ble Supreme Court reported in 2008-III LLJ 356(SC) (Goetze (India) Ltd., Vs. Employees State Insurance Corporation) to contend that the payment of interest on delayed payment is statutory in nature and it can never be waived. The learned counsel had further relied upon the Hon''ble Division Bench Judgment of Kerala High Court reported in 2007-III-LLJ-233 (Employees'' State Insurance Corporation Vs. Hotel Methanath (Kedaram) to contend that the bona fide belief of employer of non coverage of the Act would not absolve the employer from liability to pay interest, in case ultimately if he does not succeed in the litigation. The learned counsel had also relied upon the judgment of the Kerala High Court reported in 2007-II-LLJ 145 (Bharath Coffee House Vs. Regional Director, Employees State Insurance Corporation) and contended that the period of stay cannot be excluded for the purpose of calculating interest. The learned counsel had further relied upon the Judgement of the Karnataka High Court reported in 2007-I-LLJ 292 (Employees'' State Insurance Corporation Vs. Karnataka State Small Industries Development Corporation Ltd.,) to contend that whenever the coverage is questioned and later negatived, the coverage would relate back to the date on which the establishment was covered under the Act and the interest and damages for the said period cannot be waived. Hence, he prayed for allowing the appeal and to restore the order passed by the corporation. 11. Per contra, the learned counsel appearing for the respondent had relied upon the judgment of the Kerala High Court reported in (2001) 2 LLJ 1573 ( Regional Director, E.S.I.Corporation Vs. Cannanore Spinning and Weaving Mills) to contend that the E.S.I.Court is empowered to consider the issue whether the payment of interest is mandatory in a particular case or not. He had further relied upon the Judgment of the Hon''ble Supreme Court reported in (2006) 6 SCC 604 (Employees'' State Insurance Corporation Vs. Distilleries & Chemical Mazdoor Union and others) and contended that the Hon''ble Supreme Court has confirmed the order of the High Court which has directed the employer and employees to make E.S.I contribution from the date of disposal of the writ petition since the employees have not availed any medical facilities. Distilleries & Chemical Mazdoor Union and others) and contended that the Hon''ble Supreme Court has confirmed the order of the High Court which has directed the employer and employees to make E.S.I contribution from the date of disposal of the writ petition since the employees have not availed any medical facilities. Therefore, according to the learned counsel appearing for the respondent, the E.S.I. Court was right in setting aside the order to an extent of 95% and impose 5% damages for the delay of 72 days from for the date of determination of contribution under Section 45-A of the Act. Therefore, he prayed for sustaining the order passed by the Labour Court. 12. I have considered the submissions made on either side and perused the materials available on record. 13. The respondent employer was unsuccessful in challenging the coverage of his establishment under E.S.I.Act which culminated in an order dated 18.12.1997. Thereafter, an order was passed under Section 45-A of the Act on 18.11.1999 for the period covering from October 1986 to March 1999 demanding a sum of Rs.5,49,292/-. This order has not been challenged by the employer, but he had chosen to comply with the said order by making payment in four installments from 11.11.1999 to 10.09.2001. In fact, the employer has started making first installment immediately after receipt of notice under Section 45-A of the E.S.I.Act and before passing of orders under the relevant section. Therefore, it is clear that the employer has admitted the liability to pay contribution and he had paid them belatedly under four installments. 14. According to the learned counsel appearing for the appellant, they have calculated damages and interest only after 21 days from 18.12.1997 on which the date the writ petitions came to be dismissed. However, the employer contends that the crucial date for calculation of damages and interest is only the date on which an order is passed under Section 45-A of the Act determining the quantum of contribution. Therefore, the issue that now arises for consideration is whether the date of dismissal of the writ petition confirming the coverage of E.S.I. Act should be the crucial date or the determination of contribution by the authorities under Section 45-A of the Act should be the crucial date for calculation of interest and damages. 15. Therefore, the issue that now arises for consideration is whether the date of dismissal of the writ petition confirming the coverage of E.S.I. Act should be the crucial date or the determination of contribution by the authorities under Section 45-A of the Act should be the crucial date for calculation of interest and damages. 15. The Hon''ble Supreme Court while considering the fact of interlocutory order and subsequent dismissal of the petition, has proceeded to hold that it is the duty of the Court to maintain status quo ante. The Judgement of Hon''ble Supreme Court reported in (1997) 5 SCC 772 ( Kanoria Chemicals and Industries Ltd., and others Vs. U.P.State Electricity Board and others) in paragraph No.11 has held as follows: “11......This Court held expressly that the grant of an injunction does not relieve the consumers of their obligation to pay the charges at the enhanced rates and, therefore, the demand for surcharge/interest for such period is not illegal..........The consumer files the writ petition, obtains stay of operation of the Notification revising the rates and fails in his attack upon the validity of the Notification and yet he is relieved of the obligation to pay the late payment surcharge for the period of stay, which he is liable to pay according to the statutory terms and conditions of supply – which terms and conditions indeed form part of the contract of supply entered into by him with the Board. We do not think that any such unfair and inequitable proposition can be sustained in law........ It is equally well settled that an order of stay granted pending disposal of a writ petition/suit or other proceeding, comes to an end with the dismissal of the substantive proceeding and that it is the duty of the court in such a case to put the parties in the same position they would have been but for the interim orders of the court. Any other view would result in the act or order of the court prejudicing a party [Board in this case] for no fault of its and would also mean rewarding a writ petitioner in spite of his failure. We do not think that any such unjust consequence can be countenanced by the courts....”. 16. The Hon''ble Supreme Court in a judgment reported in (1999) 7 SCC 89 ( Style (Dress Land) Vs. We do not think that any such unjust consequence can be countenanced by the courts....”. 16. The Hon''ble Supreme Court in a judgment reported in (1999) 7 SCC 89 ( Style (Dress Land) Vs. Union of Territory, Chandigarh & another) in Paragraph No.15 has held as follows: “15......It is a settled principle of law that as and when a party applies and obtains a stay from the Court of law, it is always at the risk and responsibility of the party applying. Mere passing of an order of stay cannot be presumed to be the conferment of any additional right upon the litigating party. This Court in Shree Chamundi Mopeds Ltd. Vs. Church of South India Trust Assn. held that the said portion of order by the court mean only that such order would not be operative from the date of its passing. The order would not mean that the order stayed had been wiped out from existence. The order of stay granted pending disposal of a case comes to an end with the dismissal of a substantive proceeding and it is the duty of the Court in such cases to put the parties in the same position they would have been but for the interim orders of the Court. Again in Kanoria Chemicals and Industries Ltd. & Ors. Vs. U.P. State Electricity Board & Ors. the Court held that the grant of stay had not the effect of relieving the litigants of their obligation to pay late payment with interest on the amount withheld by them when the writ petition was dismissed ultimately. Holding otherwise would be against public policy and the interests of justice.....” 17. The Hon''ble Supreme Court in a judgement reported in 2008- III- LLJ-356 (SC) ( Goetze (India) Ltd., Vs. Employees State Insurance Corporation) in Paragraph No.6 has held as follows: “6. As there was delay in making the payment of the contribution the Corporation had issued notice on June 29, 1990 at the first instance and thereafter, the order was passed under Section 45-A of the Act on July 23, 1992. The same was challenged before the ESI Court in which an interim stay was granted on October 9, 1992. During the pendency of the matter there was re-verification and the quantum payable by the payment was worked out. The liability to pay interest is statutory. There is no power of waiver. The same was challenged before the ESI Court in which an interim stay was granted on October 9, 1992. During the pendency of the matter there was re-verification and the quantum payable by the payment was worked out. The liability to pay interest is statutory. There is no power of waiver. The question of any compromise or settlement does not really arise.....” 18. A co-joint reading of the judgment of the Hon''ble Supreme Court will make it clear that as far as the liability to pay interest for the belated payment of contribution under E.S.I.Act is concerned, it is statutory in nature and neither the authority nor the Court has got any power to waive or reduce. Thought the corporation has contended that they have levied interest only after 21 days from the date of dismissal of the writ petition namely 18.12.1997, the annexure to the notice issued under Section 39(5) of the Act dated 24.10.2002 clearly shows that interest has been levied from October 1986 onwards and the same has been confirmed in the order dated 15.12.2003. Therefore, it is clear that the calculation of interest is quite contrary to the counter filed by the corporation before the E.S.I.Court. Hence, it warrants interference of this Court to restrict calculation of interest from January 1998 to March 1999. 19. A perusal of the order passed by the Corporation under Section 85-B of the E.S.I.Act on 22.10.2002 and 23.09.2009 indicate that the damages have been calculated from October 1986 to March 1999. Therefore, the imposition of penalty is also quite contrary to the counter filed by the corporation before the E.S.I.Court. The corporation would be entitled to demand and impose damages only from January 1998 to March 1999. 20. In view of the above deliberations, the order passed by the E.S.I.Court completely waiving the interest and imposing just 5% of the damages on the employer is not legally sustainable. The said finding has been arrived at by the E.S.I.Court only based upon the wrong assumption that the liability to pay contribution arises only from the date of 45-A order. On the other hand, since the coverage was disputed and the writ petition was dismissed on 18.12.1997, the liability to pay contribution arises on 18.12.1997 and the contribution has to be paid within 21 days from the said date. On the other hand, since the coverage was disputed and the writ petition was dismissed on 18.12.1997, the liability to pay contribution arises on 18.12.1997 and the contribution has to be paid within 21 days from the said date. As pointed out by the Hon''ble Supreme Court, once the coverage is confirmed by the Court, the parties would be restored to the original position as if there was no interim order and all the necessary consequences would follow. The employer even after dismissal of his writ petition challenging the coverage had waited for another two years for passing of orders under Section 45-A of the Act for which he alone has to be blamed. Therefore, the E.S.I.Court was not right in fixing the date of 45-A order as a crucial date for payment of contribution. 21. Once a statute is extended to a particular industry/locality, it is for the employer to adhere to the said statutory provisions and pay the necessary contribution on the due date. If he fails to do so or challenges the same, he is doing so at his own risk. He cannot take advantage of the litigation period and claim waiver of damages and interest. However, considering the fact that till the disposal of the writ petition, the employees were not availing any benefit and in view of Paragraph No.9 of the counter filed by the corporation before the E.S.I.Court, this Court is inclined to restrict the demand for interest and damages from January 1998 onwards. 22. In view of the above said deliberations, the order of the E.S.I.Court and the order of the E.S.I.Corporation dated 22.10.2002, 23.09.2002 and 15.12.2003 are hereby set aside. The matter is remitted back to the file of the corporation to fix the quantum of penalty and interest from January 1998 onwards. 23. With the above said observations, this civil miscellaneous appeal stands allowed. No costs.