JUDGMENT :

ABHAY S. OKA, J.

1. The appellant has taken an exception to the Judgment and Order dated 29th March 2010 passed by a Division Bench of Gujarat High Court in a Letters Patent Appeal. The first respondent is the Employees' State Insurance Corporation (for short “the Insurance Corporation”) established under the Employees' State Insurance Act, 1948 (for short “the said Act of 1948”).

2. By a notice dated 6th April 1990, a demand was made by the Insurance Corporation in the sum of Rs. 8,01,510/- by way of contribution payable by the appellant for the period from 30th July 1975 to 31st March 1988. The contribution was demanded as per the provisions of Regulations 29, 31 and 33 of the Employees' State Insurance (General) Regulations, 1950 (for short ‘the said Regulations’). The notice referred to un-amended Regulation 31-A of the said Regulations under which interest at the rate of 6% per annum was payable on the overdue amount. Another notice dated 16th July 1990 was issued by the Insurance Corporation by invoking Section 45-A of the said Act of 1948 demanding interest at the rate of 6% per annum on the sum of Rs. 7,79,491/- up to 19th of October 1989 and interest at the rate of 12% per annum up to 31st July 1990.

3. The appellant filed an application under Section 75 of the said Act of 1948 before the Employees' Insurance Court at Ahmedabad for challenging the said demand. By the Judgment and order dated 17th August 1993, the learned Judge of the Employees' Insurance Court declared that the appellant was liable to comply with the provisions of the said Act of 1948 with effect from 1st April 1988 and it was not liable for the period prior to 1st April 1988. Hence, the notices of demand were quashed.

4. The Insurance Corporation preferred an appeal against the said decision of the Employees' Insurance Court. The learned Single Judge of the Gujarat High Court by his Judgment and Order dated 10th July 2006 allowed the said appeal by holding that Head Office of the appellant was covered by the said Act of 1948 in the year 1975 and therefore, employees working in Branch Office of the appellant in Gujarat get covered by the beneficial sweep of the said Act of 1948. Hence, the appellant was held liable to pay contribution from 30th March 1975.

5. By the notice dated 26th July 2006, recovery proceedings were initiated against the appellant. A writ petition was filed by the appellant for challenging the said demand. It was withdrawn with liberty to make a representation. On the basis of the representation made by the appellant, the Insurance Corporation passed an order on 23rd November 2006. By the said order, the Insurance Corporation directed the appellant to pay interest on the delayed payment of contribution for the period from 30th March 1975 to 31st March 1988 amounting to Rs. 21,27,087/- and interest of Rs. 3,97,722/- at the rate of 12% per annum from 1st March 2006 to 2nd August 2006 within fifteen days. The appellant challenged the said order by filing a writ petition which was dismissed by the Judgment and order dated 9th February 2010 by the learned Single Judge. Being aggrieved by the said order, a Letters Patent Appeal was preferred by the appellant which has been dismissed by the impugned Judgment and order.

6. The submission of Shri Ritin Rai, the learned Senior Counsel in support of the appeal is that there was uncertainty about the liability of the appellant to pay contribution and the legal position was crystallised for the first time when by Judgment and Order dated 10th July 2006, the learned Single Judge of Gujarat High Court held that the appellant was liable to pay contribution from 30th July 1975. The learned Senior Counsel submitted that the liability of the appellant was crystalized only on 10th July 2006 and therefore, the arrears of contribution became payable only from that day. His submission is that interest cannot be demanded for the period prior to the said date. He submitted that clause (a) of sub-secti