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2012 Supreme(Mad) 4949
IN THE HIGH COURT OF MADRAS
R. Subbiah, J.
Employees' State Insurance Corporation - Appellant
Vs.
M/S. Hafeez Motor Transport - Respondent
C.M.A. (MD) No. 38 of 2012
Decided On : 14-02-2012
For the Appellant : K.C. Ramalingam
For the Respondent: M. Ajmal Khan
The discretionary jurisdiction of the ESI Court to interfere in the damages awarded by the statutory authority when no deliberate omission on the part of the employer is found.
Headnote:
ESI Contribution - Reduction of Damages - Employees' State Insurance Act - Section 8SB, 45A, 85-B
Fact of the Case:
The respondent, a partnership firm, was demanded ESI contributions by the appellant Corporation. The respondent challenged the demand and subsequent damages imposed by the Corporation. The ESI Court reduced the damages to 16% as it found no intention to evade payment.
Finding of the Court:
The ESI Court found that the respondent had not intentionally delayed payments and had bona fide paid the amount, thus reducing the damages to 16%.
Issues: The main issue was whether the ESI Court's interference in reducing the damages awarded by the statutory authority was justifiable when the authority had discretionary power to award damages.
Ratio Decidendi: The ESI Court has the power to evaluate the entire matter and interfere in the discretionary jurisdiction exercised by the statutory authority if it finds extenuating circumstances or no deliberate omission on the part of the employer.
Final Decision: The appeal was dismissed as the ESI Court's interference in the discretionary jurisdiction exercised by the statutory authority was found to be justifiable.
R. Subbiah, J.
Challenging the order dated 18.5.2011 passed by the E.S.I. Court (Labour Court), Madurai, in E.S.I. O.P. No. 32 of 2010, reducing the quantum of damages awarded u/s 8SB of the Employees' State Insurance Act, the Employees' State Insurance Corporation, has filed the present appeal. The case, in brief, Is as follows:
The respondent, viz., M/s. Hafeez Motor Transport is a registered partnership firm and is engaged in the small business of transport operating mofussil and city bus service in and around Pudukottai area. The respondent is having 18 employees under various categories. The respondent has covered all the eligible employees under the provisions of the Employees' State Insurance Act ('ESI Act') and had been remitting both employees and employer ESI contributions to the appellant Corporation regularly. While so. the appellant Corporation issued two C-18 (Adhoc) notices dated 30.6.1999 and 18.7.2003, demanding ESI contributions from the respondent. Subsequently, the said notices were cancelled and the appellant Corporation issued a fresh notice in C-18 (Actual basis) dated 19.12.2003 demanding a sum of Rs. 1,78,798 towards ESI Corporation on amounts paid during the period from October.1997 to March, 2003, without affording an opportunity of personal hearing. Apart from that, the appellant Corporation had initiated revenue recovery proceedings straightway even without affording a personal hearing and had issued a notice in Form C-19 dated 31.3.2004. The respondent challenged the said notice before the Principal Labour Court, Chennai, in ESI OP No. 312 of 2004. The appellant Corporation entered appearance in the above case and after full-fledged trial, the Labour Court remitted the matter to the ESI Authority to determine the contribution by giving reasonable opportunity of hearing to the respondent, in accordance with law. Pursuant to the said order, the appellant issued a fresh demand notice dated 7.12.2007 and also granted personal hearing. In the meantime, the respondent, even before attending the personal hearing, had remitted a total sum of Rs. 78,798 by way of two demand drafts of Rs. 50,000 and Rs. 28,798 along with a covering letter. Thereafter, the respondent attended the personal hearing and made their submissions.
2. After hearing the parties, the appellant passed an order dated 25.3.2008 u/s 45A of the ESI Act, directing the respondent to pay ESI contribution of Rs. 1,77,500 during the period October, 1997 to March, 2003. In the meantime, the respondent had remitted Rs. 50,000 through a demand draft dated 30.6.2008 along with a covering letter. Thus, the respondent had remitted a total sum of Rs. 1,28,798 towards ESI contributions. Thereafter, the appellant Corporation by its notice in form C-19 dated 27.11.2008, had authorised the recovery officer to recover a sum of Rs. 48,702 towards ESI contribution along with interest. The Recovery Officer of the appellant Corporation by its proceedings dated 3.12.2008 had threatened to initiate distraint proceedings and demanded Rs. 61,134. The respondent by its letter dated 12.3.2009 had remitted the ESI contribution of Rs. 48,702; but the appellant Corporation by its notice of demand dated 20.3.2009 had demanded Rs. 14,530 with interest and accordingly, the respondent by its letter dated 13.4.2009 sent a demand draft for Rs. 14,530 to the appellant. Thus, the respondent had duly paid the contribution determined by the appellant corporation.
3. It is the further case of the respondent that subsequently, the appellant issued a notice in Form D-18 dated 2.6.2010, proposing to levy damages of Rs. 2,75,246. Pursuant to the (sic) (sic), the respondent had also attended a personal hearing and filed the statement of objections on 14.6.2010. Thereafter, the appellant Corporation passed an order dated 24.6.2010 u/s 85-B imposing damages at Rs. 1,77,489 for the delayed payment of contributions for the wage period from October, 1997 to March, 2003.
4. Challenging
