Siri Jagan, J.

This appeal is filed at the instance of the Employees State Insurance Corporation against the order of the Employees Insurance Court, Alappuzha in I.C.No. 104/1999 raising the following substantial questions of law:

(1) Whether the Financial difficulties or the pendency of litigation will absolve the Employer from the payment of damages by way of Penalty.

(2) Whether Sakthi Tiles' case (Supra) will empower the E.I. Court to reduce the quantum of damages imposed on the ground of pendency of litigation and the financial difficulties.

(3) Whether Section 85-B of the Employees State Insurance Act and the Regulation given unfettered right to the Corporation to impose damages by way of penalty for the belated payment of Contribution upto 100 percent."

The basic facts from which the above questions of law are sought to be raised are as detailed under.

2. The respondents herein were the employers who filed the I.C challenging the order of the appellants imposing on them damages to the tune of Rs.79,969/- under Section 85B of the Employees State Insurance Act, 1948 for delayed payment of contributions for the period from October, 1986 to March, 1987, October, 1987 to March, 1988, April, 1988 to March, 1989 and May, 1990 to March, 1991. In the I.C, the employers, after admitting that there was, in fact, delay in payment of contributions, contended that for that delay, no damages could have been imposed under Section 85B, since the delay was on account of the pendency of litigations in respect of the liability to pay contributions themselves as also financial difficulties. The appellants herein contended before the Insurance Court that once delay is admitted, the fact that there were litigations pending and the employers were in financial difficulties are not factors which could be taken into account to reduce the damages payable under Section 85B of the Act, imposition of which is at the discretion of the authorised officer under Section 85B. Repelling these contentions, based on a Division Bench decision of this Court in Regional Director, E.S.I Corporation v. Sakthi Tiles, [1988 (2) KLT 280], the Insurance Court reduced the damages leviable to Rs. 27,500/-. This decision of the Insurance Court, is under challenge in this appeal.

3. First we shall consider the second question of law raised as above as to whether the Insurance Court has jurisdiction to consider the question of waiver or reduction of damages imposed under Section 85B in exercise of its jurisdiction under Section 75 of the Act.

4. Of course, Section 75 which is the provision under which the I.C has been filed, does not specifically refer to damages as such. But, clause (g) of sub-section (i) of Section 75 would be relevant for our purpose in deciding this question, which reads as under:

"75. Matters to be decided by Employees' Insurance Court:- (1) any question or dispute arises as to—

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(g) any other matter which is in dispute between a principal employer and the Corporation, or between a principal employer and an immediate employer or between a person and the Corporation or between an employee and a principal or immediate employer, in respect of any contribution or benefit or other dues payable or recoverable under this Act, or any other matter required to be or which may be decided by the Employees' Insurance Court under this Act, such question or dispute, subject to the provisions of sub-section (2A) shall be decided by the Employees Insurance Court in accordance with the provisions of this Act."

Although, this clause does not specifically refer to damages as such, it specifically refers to other dues payable or recoverable under the Act. We are of opinion that the question as to whether the damages

imposed under Section 85B is justifiable or whether the quantum of damages imposed is in accordance with principles for computing the damages is certainly a dispute, which would fall within the ambit of clause (g) of Section 75(1). We are supported in