J.B. Koshy, J.

This appeal is filed by the Employees State Insurance Corporation. The first respondent in the appeal is a Co-operative Society organized by the Government of Kerala for providing employment opportunities to unemployed Engineers and Technicians. Since the unit was facing acute financial crisis due to erosion of working capital from 1992 onwards it was closed finally in March, 1996 and therefore the contributions to the Corporation were not remitted from August, 1994 onwards. During these periods, even the salary of the employees was not paid due to non-availability of funds. The Government took initiative to revive the Society and agreed to contribute Rs.105 lakhs to the share capital of the Society for which the members of the Society who are employees have to take shares worth Rs.27 lakhs forgoing certain amount of their salary arrears. The E.S.I. contribution arrears were paid with interest. The Corporation imposed damages on the delayed payment of contribution. The non-payment of contribution in time was not deliberate and there is no moda-fide intention and it was beyond the control of the Society and therefore, the imposition of damages was set aside