The central legal point established in the judgment is the correct interpretation and application of the provisions of the Employees State Insurance Act, 1948, particularly Sec. 85(b) in the context of delayed payment of contribution.

JUDGMENT/ORDER

1. This appeal is filed by the Employees State Insurance Corporation (hereinafter referred to as 'the ESI Corporation') under Sec. 82(2) of the Employees State Insurance Act, 1948 (hereinafter referred to as 'the ESI Act') challenging the order dtd. 23/1/2016 passed by the Employees State Insurance Court at Bangalore (hereinafter referred to as 'the ESI Court') in E.S.I. Application No.33/2010, whereby the application filed by the applicant has been allowed in part.

2. For the sake of convenience, the parties are referred to as per their rankings before the E.S.I. Court.

3. The brief facts of the case are that M/s.Kudremuch Iron Ore Company Ltd., was functioning at Mangalore. This Company was referred to BIFR and it has been merged with the applicant's Company with effect from 1/4/2007. The further case of the applicant is that they are making efforts to obtain exemption from the respondent - ESI Corporation which had provided benefits to its employees similar to that of ESI Corporation, i.e., free medical facilities, maternity benefits, sick leave compensation and workmen compensation, etc. It is the further case of the applicant that they are providing medical facilities to their employees in a private hospital, they are also collecting the contribution from the employees to pay the contribution to the ESI Corporation under Ss. 44 and 45 of the ESI Act. To pay the contribution to the ESI Corporation, the earlier facility provided to the employees has been withdrawn by issuing a Circular dtd. 19/9/2007. That circular has been challenged by the Employees Association before this Court in W.P.No. 15180/2007 and they have obtained an interim order and this Court, by order dtd. 25/9/2008 has partly allowed the writ petition, the medical facilities provided to the employees has been directed to continue. Therefore, the further case of the applicant is that in view of that they are providing medical facilities to the employees, they have not paid contribution to the ESI Corporation in time. Therefore, they are not entitled to pay any interest for the delayed payment.

4. The respondent - Corporation has issued demand notice on 3/6/2010 for payment of interest of Rs.7, 11, 542.00 for the delayed payment. Being aggrieved by the same, the applicant has filed an application before the ESI Court. The ESI Court has allowed the appeal in part, set aside the order passed by the ESI Corporation and directed the applicant to pay only 50% of the interest claimed. Being aggrieved by the same, the ESI Corporation is before this Court.

5. Sri K.Krishnappa, learned counsel appearing for the appellant has raised the following contentions: Firstly, admittedly, respondent has collected the contribution from the employees and also they have paid the contribution, there is a delay in payment of contribution, under Sec. 39 of the ESI Act and Regulation 31B of the Employees' State Insurance (General) Regulations, 1950 the Corporation has all the right to recover interest for the delayed contribution. Accordingly, ESI Corporation has issued notice. In support of his contentions, he has relied on the judgment of the Hon'ble Apex Court in the case of GOETZE (INDIA) LTD. Vs. EMPLOYEES STATE INSURANCE CORPORATION reported in AIR 2008 SC 3122. Secondly, the ESI Court has wrongly relied on Sec. 85B of the ESI Act which is not applicable to the case on hand. It is only in respect of damages is concerned. But the ESI Court has wrongly relied on the provisions of Sec. 85B of the ESI Act and passed the impugned order. Hence, the impugned order is contrary to the provisions of the ESI Act. Hence, he sought for allowing the appeal.

6. Per contra, Sri Ramesh Upadhyaya, learned counsel appearing for the respondent has raised the following contentions: Firstly, the applicant was providing a special medical facility to the employees in the private hospital. The applicant has taken a decision to withdraw that facility and to pay the contribution to the ESI Co