K.S. Radhakrishnan, J.

This appeal is preferred by the applicant in E.I.C. No.22 of 2000. Application was preferred under S.75 read with S.77 of the Employees' State Insurance Act, 1948 seeking for a declaration that the assessment and demand of interest of Rs.89,599/- for the delayed payment of E.S.I. contribution for the wage periods from 1.3.1992 to 30.9.1998 as per Ext.P3 notice and a sum of Rs.863/- as interest for the delayed payment of contribution for the wage periods from 1.10.98 to 31.3.1999 as per Ext.P5 notice and imposition of damages of Rs.42,854/- by way of penalty for the delayed payment of contribution for the wage periods from 1.3.92 to 30.9.98 as per Ext.P11 are unsustainable.

2. E.S.I. Court disposed of the application holding that the assessment and levy of interest as per Exts.P3 and P5 notices cannot be interfered with. With regard to the imposition of Rs.42,854/- as damages by way of penalty as per Ext.P11 order, Insurance Court set aside the same. This appeal has been preferred mainly against the demand of interest as per Exts.P3 and P5 notices.

3. Facts are undisputed. Contention was raised that the date fixed for payment of E.S.I. contribution is not absolute going by S.39(4) of the E.S.I. Act. Reference was made to the expression "ordinarily fall due". Further it was stated that Insurance Court held that though the two establishments of the applicant can be clubbed and treated as a single establishment for coverage under the E.S.I. Act, that decision was taken only on 12.1.1999 and even on that day no demand was made. Further, it is also stated that the finding of the Insurance Court that there is no statutory provision for relaxation of payment of interest on account of pendency of litigation is also incorrect. Liability to pay interest, it was contended, is not absolute and always flexible depending upon the facts and circumstances of each case. Department has taken a specific contention that the contribution has become payable as per the time fame set out under S.39 of the E.S.I. Act and since there was no payment, interest will accrue, as per S.39(5)(a) read with Regulations 31 and 31A of the E.S.I. (General) Regulations, 1950.

4. We notice that the scope of the above mentioned provision has been elaborately considered by a Division Bench of this court in W.A.1277 of 2003 with which we fully concur. S.39(4) of the E.S.I. Act states that the contributions payable in respect of each wage period shall ordinarily fall due on the last day of the wage period. Regulation 31 of the Employees' State Insurance (General) Regulations, 1950 stipulates that an employer who is liable to pay contributions in respect of any employee shall pay these contributions within 21 days of the last day of the calendar month in which contributions fall due. S.39(5)(a) of the E.S.I. Act states that if any contribution payable under the said Act is not paid by the principal employer on the date on which such contribution has become due, he shall be liable to pay simple interest at the rate of 12% per annum or at such higher rate as may be specified in the regulations till the date of its actual payment. Regulation 31A states that an employer who fails to pay contribution within the period specified in Regulation 31 shall be liable to pay simple interest at the rate of 12% per annum in respect of each day of default or delay in payment of contribution. Above statutory provisions make it clear that the appellant was liable to pay the E.S.I. contributions which fell due on the last day of the wage period within 21 days of the last day of the calendar month in which the contributions fell due.

5. Merely because the appellant failed to pay contribution allegedly under a bona fide impression or belief that the establishment was not covered under the provisions of the E.S.I. Act cannot absolve the appellant from the liability of paying interest on the delayed payment of E.S.I. contribution under S.39(5) read with Regulation