The court established that the delayed payment of contributions, due to stay orders, did not constitute wilful nonpayment under the Employees' State Insurance Act, 1948, and thus, the levying of interest and recovery proceedings were not legally sustainable.

G. PATRI BASAVANA GOUD, J.

( 1 ) AT Annexure-E dated December 19, 1996, the 1st respondent- ESI Corporation has demanded a sum of Rs. 64,104/- by way of interest for nonpayment of contributions by the petitioner employer in time. At Annexure-G, the 3rd respondent-Recovery Officer has issued notice to the petitioner-employer for recovery of the above said amount. In these writ petitions under Article 226 of the Constitution, the petitioner employer seeks quashing of the said two annexures.

( 2 ) IN exercise of the power conferred by Section 2 (9) (iii) (b) of the Employees' State Insurance act, 1948, ('act' for short), the State Government issued a Notification dated March 27, 1992 enhancing wage limit coverage of the employees under the Act from Rs. 1,600/- to Rs. 3,000/ -. This Notification was challenged by the 2nd respondent-Union of the Employees of the petitioner in Writ Petition No. 15030/92. By an order dated April 30, 1992 at Annexure-A, the learned single Judge before whom the said writ petition came up, stayed the operation of the said notification dated March 27, 1992, and also directed the respondents therein including the present petitioner as well as the present 1st respondent-ESI Corporation, to forbear from giving effect to the said Notification and further directed the present petitioner not to proceed to deduct contributions towards ESI Scheme from the salary of the employees. By the order dated July 15, 1992 at Annexure-B the stay was continued until further orders. The said writ petition was disposed of by the learned Single Judge on August 5, 1992 following the order in the connected writ Petition No. 14532/92 (Workmen of Bharat Heavy Electricals Ltd. v. Union of India (1993-III-LLJ- (Suppl.)-246) (Kant ). While disposing of the above said main writ petition (supra) the learned single Judge, ex tending the doctrine, that the 'act of the Court shall prejudice no man' , restrained the ESI Corporation from recovering the amounts from the employers in respect of employees whose monthly wages are Rs. 1600-3000, up to the date of the order in the said writ petition, pro vided the said direction would not apply in case of recovery already effected in respect of some employees.

( 3 ) IN so far as the above said direction of the learned Single Judge which in effect postponed the commencement of the operation of the notification, the operation of which had been upheld by the learned Single Judge up to the date of the order in the writ petition, the ESI Corporation preferred Writ Appeals, all of which came to be disposed of by the Division Bench of this Court on July 14, 1994 holding that, while affirming the decision of the learned Single Judge regarding the validity of the concerned notification, postponement of the enforcement of the said notification is erroneous and hence the said observation of the learned Single Judge was set aside following the decision of the Supreme Court in Civil Appeal Nos. 5527-287/93 disposed of on October 11, 1993. The learned Single Judge, in the writ petitions filed by the 2nd respondent-Employees Union and by the other Employees Unions, having upheld the validity of the Notification as per the main order at ILR1992 KAR 2689 , 1992 (3 )Karlj610 , (1993 )I LLJ833 Kant , the said order was taken up in appeal by the Employees unions. The Division Bench of this Court dismissed the said appeals, affirming the decision of the learned single Judge which had upheld the validity of the Notification concerned. This was in workmen of Bharat Electronics Ltd. v. Employees' State Insurance Corporation (1996-II-LLJ-341) (Kant) disposed of on July 11, 1995. It needs to be mentioned that, after the learned Single Judge disposed of the concerned writ petitions and while the appeals were pending before the Division Bench, even the Division Bench had stayed the operation of the notification concerned vide Annexure-D. Thus it was only on July 11, 1995 that the stay of operation of the Notification, as

Click Here to Read the rest of this document