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The Employees' State Insurance Corporation, Sub Regional Office, Madurai v/s Sree Ayyanar Spinning and Weaving Mills Ltd., Virudhunagar


Company & Directors' Information:- K K P SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1993PTC004731

Company & Directors' Information:- N R U SPINNING MILLS LIMITED [Active] CIN = U17111TZ1994PLC005591

Company & Directors' Information:- K D R SPINNING AND WEAVING MILLS LIMITED [Active] CIN = U17110DL1981PLC012864

Company & Directors' Information:- R G SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ2004PTC011274

Company & Directors' Information:- J P P MILLS PRIVATE LIMITED [Active] CIN = U17111TZ2003PTC010491

Company & Directors' Information:- SREE AYYANAR SPINNING AND WEAVING MILLS LIMITED [Active] CIN = U17111TN1962PLC004842

Company & Directors' Information:- SREE AYYANAR SPINNING AND WEAVING MILLS PRIVATE LIMITED [Active] CIN = U17111TN1962PTC004842

Company & Directors' Information:- P K P N SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1981PTC001034

Company & Directors' Information:- K R V SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1990PTC002716

Company & Directors' Information:- V R SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1979PTC000836

Company & Directors' Information:- K A S SPINNING MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ1990PTC002955

Company & Directors' Information:- V M D MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1994PTC004822

Company & Directors' Information:- P S G SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1994PTC005234

Company & Directors' Information:- A R C MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1994PTC004845

Company & Directors' Information:- C P SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1994PTC005257

Company & Directors' Information:- S AND Y MILLS LIMITED [Not available for efiling] CIN = U17111TZ1994PLC005460

Company & Directors' Information:- D C MILLS PRIVATE LIMITED [Active] CIN = U25199KL1996PTC009988

Company & Directors' Information:- N S C SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ2004PTC011093

Company & Directors' Information:- R A MILLS PRIVATE LIMITED [Active] CIN = U17111TZ2006PTC013248

Company & Directors' Information:- K T SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1990PTC002678

Company & Directors' Information:- J G SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1991PTC011033

Company & Directors' Information:- S K WEAVING PRIVATE LIMITED [Active] CIN = U17115DL2004PTC129457

Company & Directors' Information:- S P SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1979PTC000862

Company & Directors' Information:- S K WEAVING PRIVATE LIMITED [Not available for efiling] CIN = U17119GJ1998PTC034952

Company & Directors' Information:- J G SPINNING MILLS PRIVATE LIMITED [Not available for efiling] CIN = U18101WB1991PTC050845

Company & Directors' Information:- M B S SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1994PTC005005

Company & Directors' Information:- R D SPINNING MILLS LIMITED [Active] CIN = U17115PB1989PLC009763

Company & Directors' Information:- J M MILLS PRIVATE LIMITED [Active] CIN = U17111TZ2006PTC013113

Company & Directors' Information:- T K S SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1988PTC002117

Company & Directors' Information:- R K WEAVING PRIVATE LIMITED [Active] CIN = U01711TZ2002PTC010192

Company & Directors' Information:- K P M SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1995PTC006011

Company & Directors' Information:- M T A MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1989PTC003048

Company & Directors' Information:- J. C. SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17121TG2011PTC073799

Company & Directors' Information:- P A MILLS INDIA LTD. [Not available for efiling] CIN = U17111TN1990PLC019762

Company & Directors' Information:- R R R SPINNING MILLS INDIA PRIVATE LIMITED [Active] CIN = U17111TZ1990PTC002745

Company & Directors' Information:- SREE K N M SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1989PTC002396

Company & Directors' Information:- K N M MILLS PRIVATE LIMITED [Active] CIN = U17115TZ1990PTC002702

Company & Directors' Information:- SREE SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1985PTC001565

Company & Directors' Information:- G P M SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17110PB2005PTC028070

Company & Directors' Information:- P K WEAVING MILLS PRIVATE LIMITED [Active] CIN = U51311RJ2000PTC016748

Company & Directors' Information:- R R SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17111TZ1980PTC000984

Company & Directors' Information:- B B S M SPINNING MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ1990PTC002914

Company & Directors' Information:- P A SPINNING MILLS PVT. LTD. [Not available for efiling] CIN = U17111TN1989PTC018288

Company & Directors' Information:- V M MILLS PRIVATE LIMITED [Active] CIN = U17111TZ2005PTC011763

Company & Directors' Information:- M K G SPINNING MILLS PRIVATE LIMITED [Strike Off] CIN = U17115TZ1990PTC002952

Company & Directors' Information:- M P SPINNING AND WEAVING MILLS PRIVATE LIMITED [Active] CIN = U17120MH1974PTC017191

Company & Directors' Information:- V G WEAVING PRIVATE LIMITED [Active] CIN = U74899DL1994PTC063738

Company & Directors' Information:- M S SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17219PB1995PTC017064

Company & Directors' Information:- N G SPINNING MILLS PVT LTD [Active] CIN = U21010GJ1981PTC004505

Company & Directors' Information:- A A K. SPINNING MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ1995PTC005766

Company & Directors' Information:- S. S. MILLS PRIVATE LIMITED [Active] CIN = U24231GJ1988PTC010885

Company & Directors' Information:- G M MILLS PRIVATE LIMITED [Active] CIN = U51900MH1999PTC122189

Company & Directors' Information:- G P G SPINNING MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TN1987PTC014844

Company & Directors' Information:- P P WEAVING MILLS PRIVATE LIMITED [Strike Off] CIN = U17115TZ2003PTC010602

Company & Directors' Information:- E A P SPINNING MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ2005PTC011782

Company & Directors' Information:- N S K SPINNING MILLS PRIVATE LIMITED [Under Process of Striking Off] CIN = U17111TZ1994PTC004816

Company & Directors' Information:- R B MILLS PVT LTD [Active] CIN = U15141AS1949PTC001939

Company & Directors' Information:- R P K SPINNING AND WEAVING MILLS PVT LTD [Strike Off] CIN = U17119CH1987PTC007371

Company & Directors' Information:- R. A. SPINNING MILLS PVT LTD [Strike Off] CIN = U17115PB1988PTC008852

Company & Directors' Information:- K P K SPINNING MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ1961PTC000431

Company & Directors' Information:- D S R WEAVING MILLS PRIVATE LIMITED [Strike Off] CIN = U29262TZ1988PTC002255

Company & Directors' Information:- H K SPINNING MILLS PVT LTD [Active] CIN = U17111PB1986PTC006672

Company & Directors' Information:- A V S SPINNING MILLS INDIA PRIVATE LIMITED [Strike Off] CIN = U17111TZ2004PTC011275

Company & Directors' Information:- K S SPINNING MILLS PRIVATE LIMITED [Active] CIN = U17299HR2021PTC092277

Company & Directors' Information:- O P K SPINNING MILLS PRIVATE LIMITED [Strike Off] CIN = U17120DL1988PTC032165

Company & Directors' Information:- P N M SPINNING MILLS PVT LTD [Strike Off] CIN = U17111TN1981PTC008870

Company & Directors' Information:- J K K SPINNING MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ1981PTC001085

Company & Directors' Information:- R K SPINNING MILLS PRIVATE LIMITED [Strike Off] CIN = U17100KA1995PTC018864

Company & Directors' Information:- B T MILLS PRIVATE LIMITED [Active] CIN = U18101MH1997PTC109479

Company & Directors' Information:- T R MILLS PRIVATE LIMITED [Active] CIN = U17111KA1954PTC000799

Company & Directors' Information:- J K MILLS LTD [Strike Off] CIN = U17200WB1946PLC013603

Company & Directors' Information:- A B T MADURAI PRIVATE LIMITED [Active] CIN = U50102TZ2002PTC010086

Company & Directors' Information:- G M MILLS PRIVATE LIMITED [Amalgamated] CIN = U18101MH2003PTC138487

Company & Directors' Information:- J K R SPINNING MILLS PRIVATE LIMITED [Strike Off] CIN = U17111TZ1995PTC006781

Company & Directors' Information:- MADURAI SPINNING AND WEAVING MILLS PRIVATE LIMITED [Strike Off] CIN = U17291MH2015PTC264743

Company & Directors' Information:- V K K SPINNING & WEAVING MILLS PRIVATE LIMITED [Strike Off] CIN = U18101TN1979PTC007760

Company & Directors' Information:- N H SPINNING AND WEAVING PVT LTD [Strike Off] CIN = U17119PB1995PTC015906

Company & Directors' Information:- K R WEAVING MILLS PRIVATE LIMITED [Active] CIN = U17291UP2015PTC068120

Company & Directors' Information:- I.N. INSURANCE COMPANY PRIVATE LIMITED [Strike Off] CIN = U67200DL1994PTC062554

Company & Directors' Information:- INSURANCE OF INDIA LTD [Strike Off] CIN = U67200WB1936PLC008634

Company & Directors' Information:- P. D. R. SPINNING MILLS PRIVATE LIMITED [Strike Off] CIN = U17112AP2006PTC052124

Company & Directors' Information:- INDIA SPINNING AND WEAVING COMPANY LIMITED [Dissolved] CIN = U99999MH1919PTC000580

    C.M.A.(MD) No. 1283 of 2013

    Decided On, 27 July 2021

    At, Before the Madurai Bench of Madras High Court

    By, THE HONOURABLE MRS. JUSTICE R. THARANI

    For the Appellant: P. Ganapathisamy, Advocate. For the Respondent: G. Arunachalam, Advocate.



Judgment Text

(Prayer: This Civil Miscellaneous Appeal is filed under Section 82(2) of the ESI Act, 1948, to set aside the order dated 08.03.2010 passed by the Employees' Insurance Court (I.e. Labour Court), Madurai in E.S.I.O.P.No.39 of 1998, uphold the order dated 05.06.1998 of the said Corporation.)1. This Civil Miscellaneous Appeal has been filed against the judgment and decree passed in E.S.I.O.P.No.39 of 1998 dated 08.03.2010, on the file of the Labour Court, Madurai.2. The appellant herein is the respondent and the respondent herein is the petitioner in the claim petition. The respondent herein has filed a petition in E.S.I.O.P.No.39 of 1998, to declare the order passed by the Joint Regional Director, ESI Corporation in No.57-7573-11/INS.II/ME/85B/59/97 dated 05.06.1998, as null and void and for permanent injunction.3. A brief substance of the claim petition in E.S.I.O.P.No.39 of 1998 is as follows:The Deputy Director has informed the petitioner on 29.05.1997 and that the ESI contribution amount for the period from 01.08.1988 was not paid by the petitioner. The petitioner remitted the amount subsequently. Thereafter, on 01.12.1997, the Joint Director of the respondent has sent a notice as to why damages should not be imposed under Section 85(b) of the Act. Without considering the reply sent by the petitioner, the Joint Regional Director has imposed a fine of Rs.1,05,452/- (Rupees One Lakh Five Thousand Four Hundred and Fifty Two only) for delayed payment. The delay is not willful or wanten. There was not punitive circumstances justifying the imposition of damages. The proviso under Section 85(B) also provide for waiving of damages. The authorities failed to consider the same. The claim is relating to the period from 1988 to 1991 and the Department kept mum for long time. Only on 29.05.1997, the arrears were demanded. This aspect was also not considered by the respondent. As per Section 77(1)(a)(b) of the ESI Act, no claims shall be made by the Corporation, after a lapse of five years, from which the claims relates. The claims itself is barred by limitation. The respondent has imposed 100% damages for delayed payment, which is against law and facts and prayed the order to be set aside.4. The brief substance of the written statement filed by the respondent is as follows: The petitioner's firm is covered by the provision of the ESI Act. It is statutory obligation on the part of the petitioner to pay contribution due in accordance with the regulation 31. Section 85(b) provides for recovery of damages upto 100%. The respondent issued show cause notice dated 01.12.1997. After enquiry, the order was passed on 05.06.1998. The order is legal and valid. The contribution due for the year 1998 to 1990 have been paid by the petitioner after several years. The damages can be levied, after the contribution is remitted. There is no time limit for levy of damages and prayed the petition to be dismissed.5. After the trial, the Labour Court has partly allowed the petition, by directing the factory owner to pay 15% of the damages. Against which, the appellant herein has preferred this Civil Miscellaneous Appeal.6. On the side of the appellant, it is stated that a notice was issued on 20.06.1991 demanding the appellant to pay a contribution of Rs.54,418/- for the period from 01.06.1988 to 31.03.1989. The said amount was paid by the employer in two installments on 20.09.1991 and on 02.09.1997. After the notice was issued on 20.06.1991, contribution was paid for the period from 01.06.1988 to 31.03.1989. Instead of Rs.68,487/-, the factory owner has paid only Rs.45,977/-. The remaining amount is to be paid. Another notice was sent on 20.06.1997 demanding a contribution of Rs.3,95,349/- for the period from 01.04.1990 to 31.03.1996. Instead of paying Rs.3,95,349/-, only an amount of Rs.2,60,052/- was paid by the employer on 02.09.1997. The remaining amount of Rs.1,35,297/- was not paid. The detailed payment of the said ESI contribution was a conscious Act on the part of the respondent and damages can be claimed under Section 85(b) of the Act. On 01.12.1997, notice was sent for claiming damages of Rs.1,05,452/-. After giving opportunity for personal hearing, the impugned order was passed by the competent authority. It is wrong to decide that there was no intentional delay and that there was inadvertent omission. These points were not raised by the respondent at the time of enquiry. This plea was raised for the first time alleged in the petition filed by the employer before the trial Court and prayed the order passed by the labour Court to be set aside.7. On the side of the appellant, it is stated that there is no question of law involved in this case. There was no discussion regarding intention and that the trial Court wrongly come to a conclusion that the delay was not wanten or willful.8. The learned counsel for the appellant would rely upon a judgment passed by the Hon'ble Supreme Court in the case of Employees' State Insurance Corporation v. H.M.T. Ltd., and another reported in 2008 (1) L.L.N.491, wherein it is stated as follows:“Employees' State Insurance General Regulations, 1950, Regulation 31C – Interpretation and application of – payment of contributions – failure to deposit – corporation is entitled to levy damages by way of penalty not exceeding the amount of arrears – Section does not envisage levy of damages imperative in all cases.”9. In support of his contention, another judgment passed by the Hon'ble Supreme Court in the case of Mcleod Russel India Ltd., v. RPFC, Jalpaigudi & Others reported in 2014 (3) LLN 1(SC) is also cited.10. On the side of the respondent, it is stated that the respondent has remitted the amount. If at all the inspection was done within the time limit, the respondent would have paid the amount in time. But only after a lapse of nine years, the authorities have taken action against the respondent. The factory inspector has made an observation and on such observation, the respondent has paid the entire amount. Only after receiving the entire amount, the appellant has imposed damages. Most of the employers were not permanent. They used to work for one or two days and they used to leave the company. The ESI institution had not given any benefits to those employees. There was no willful default or negligence or mens rea.11. In support of his contention, a judgment passed by the Hon'ble Supreme Court in the case of Employees State Insurance Corporation v. H.M.T. Ltd., and another reported in 2008(1) LLN 491 is cited, wherein it is stated as follows:“Existence of mens rea or actus reus to contravene a statutory provision is necessary ingredient for levy of damages and/or quantum thereof.”12. On the side of the respondent, it is stated that there was no mens rea on the part of the respondent to avoid payment of contribution. In support of his contention, a judgment passed by the Assistant Provident Fund Commissioner, EPFO and another v. The Management of RSL Textiles India Pvt. Ltd., through its Director reported in CDJ 2017 SC 035, wherein it is stated as follows:“Alternatively stated, if damages have been imposed under Section 14-B, it will be only logical that mens rea and/or actus reus was prevailing at the relevant time........ In this case, there is no finding rendered by the original authority or the appellate authority with regard to mens rea or actus reus, except saying financial crises cannot be a reason to escape.”13. The learned counsel for the respondent would rely upon the Judgment of this Court in the case of Regional Provident Fund Commissioner II and another v. Sree Visalam Chit Funds Ltd., Palathur and another reported in 2010 (4) LLN 716 is cited, wherein it is stated as follows: “Unless it is established that failure to pay the contribution was attributable to the mens rea or actus reus on the part of employer, question of levying damages under section 14B of the Act does not arise”14. The respondent was not able to remit the amount at that time. The employees did not enjoy any benefits from the appellant and there was no damages to the appellant. The appellant had not explained the delay of eight years in sending the notice. The period of limitation under Section 45(a) and 77 of the Act was only five years. No explanation was ever given by the appellant in the notice or in the grounds of appeal regarding the delay on the part of appellant.15. It is seen that the appellant sent notice for the period from 01.06.1988 to 31.03.1989 and for the period from 01.04.1989 to 31.03.1990, only on 05.06.1998, that is after a lapse of seven years. A speaking order was passed by the competent authority. This delay was not explained by the appellant in the written statement filed by the appellant before the trial Court. The particulars given by the appellant in the appeal in page no.3 of typed set of paper were not stated in the written statement of the appellant before the trial Court.16. On the basis of the letter dated 04.11.1997, the employer paid a sum of Rs.83,059/- as interest. The appellant has not narrated all these points in the written statement filed by the appellant before the trial Court but the appellant is blaming the respondent for raising the ground of mens rea before the trial Court. It is seen that there is clear delay on the part of the appellant also. The respondent also has admitted that there is delay in payment of contribution. It is clear that the delay is in taking action against the employer by the appellant. The appellant is not correct in claiming the entire amount claimed as damages.17. For the above reasons, it is decided that the Labour Court is correct in awarding 15% of the amount claimed as compensation to be paid by the respondent herein. Hence, there is nothing sufficient enough to interfere

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in the order passed in E.S.I.O.P.No.39 of 1998 dated 08.03.2010, on the file of the Labour Court, Madurai and thereby, this Civil Miscellaneous Appeal is dismissed.18. The appellant is entitled to a sum of Rs.15,817/- (Rupees Fifteen Thousand Eight Hundred and Seventeen only) as compensation with interest at the rate of 7.5% from the date of the claim petition till the date of realization.19. The respondent is directed to deposit Rs.15,817/- (Rupees Fifteen Thousand Eight Hundred and Seventeen only) with 7.5% interest from date of the claim petition till the date of realization and the amount if not deposited earlier, has to be deposited within a period of 8 weeks from the date of receipt of copy of this order. On such deposit, the appellant is permitted to withdraw the award amount with proportionate interest after deducting any amount received by him earlier without filing any formal petition before the Tribunal. Excess amount, if any deposited shall be refunded to the respondent. The appellant is not entitled for interest for the default period, if there is any. No Costs.
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