The central legal point established in the judgment is the interpretation and application of the provisions of Sections 85-B(2) and 39(4) read with Regulation 31-C of the ESI Act, 1948, and the relevance of mens rea and actus reus in the context of imposing damages.

JUDGMENT :

1. This appeal is filed by the Employees State Insurance Corporation-petitioner against M/s. CMR Model High School-respondent aggrieved by the order dated 29.10.2021 passed in EIC No.57 of 2019 on the file of the learned Employees Insurance Court and Chairman, Industrial Tribunal-I at Hyderabad.

2. Learned counsel for the petitioner would argue that while claiming damages restricted its claim to beyond litigation period and no damages were claimed for litigation period. He would further assert that this Court dismissed batch of writ petitions on 06.10.2015 and the petitioner claimed damages from 29.10.2015 to 11.09.2016 during which period the contributions were paid by the respondent establishment, but the trial Court erroneously held that the claim of damages was made by the petitioner from February, 2010 to September, 2015 when the writ petition was pending and that the claim of the petitioner made in Ex.R1 notice clearly indicates the period of claim and it also mentioned the said fact in para eight of its written statement dated 29.09.2019 and as such the petitioner never claimed damages for the litigation period from February, 2010 to October, 2015. He would also assert that the trial Court erroneously held that the respondent establishment paid contributions immediately after passing 45-A order within the period of limitation. W.P.No.12283 of 2009 and batch were dismissed on 06.10.2015 and as such the respondent ought to pay the contributions on or before 28.10.2015 as the limitation comes to end as per Section 39(4) of the ESI Act, 1948 read with Regulation 31-C of the ESI (Gen.) Regulations, 1950 but not immediately after passing 45-A order. In fact, 45-A order was passed on 19.07.2016 and contributions were paid on 03.08.2016 that too on different dates as shown in the enclosure to Ex.R1 and thus the order of the trial Court is without appreciation of the provisions. He would also contend that the trial Court also held that there was mens rea and actus reus present in the case. The respondent herein challenged the notification which came into force on 14.10.2015 and it was dismissed in a common order dated 06.10.2015 and as such the respondent ought to have paid the entire contribution for the entire period on or before 28.10.2015 without issuance of any notice in Form C-18 and passing of 45-A order on 19.07.2016. The non-compliance of payment of contributions within the stipulated time clearly shows the existence of mens rea or actus reus. He would also cited case law in a case reported in ORGANO CHEMICAL INDUSTRIES V/s. UNION OF INDIA, [AIR 1979 SC 1803] in which the Hon’ble Apex Court held that imposition of damages serves two fold purposes and it results in damnification and also serves as a deterrent and the predominant object is to penalize so that the employer may be thwarted or deterred from making any further defaults, and thus the trial Court failed to appreciate that the mens rea is not an essential ingredient. He would finally argue that as the provisions of law under Sections 85-B(2) and 39(4) read with Regulation 31-C of the ESI Act, 1948 are involved, there is substantial question of law to prefer this appeal and thus requested the Court to set aside the order under challenge.

3. ESI Corporation issued an order against M/s.CMR Model High School under Section 85-B of the ESI Act, 1948 on 21.02.2019. The Additional Commissioner levied damages totalling to Rs.1,12,821/- for the wage period from February, 2010 to November, 2015 with a direction to deposit the same within thirty days from the date of the order, failing which the entire amount will be caused to be recovered as per the provisions of Section 45-C to 45-I of the ESI Act, 1948. Aggrieved by the said order, EIC No.57 of 2019 was preferred by the respondent herein before the trial Court. The trial Court after considering the arguments of both sides, allowed the petition and set aside the order dated 21.02.2019. Aggrieved by the said ord