Delayed payment qualifies as failure to pay under Section 85B, requiring a quasi-judicial process for imposing damages.

J UDGMENT

This appeal is preferred against the order of the Industrial Tribunal, Kollam in I.C.No.3 of 2001 whereby it has quashed Exts.A1 to A8 orders. The point that arises for determination in the appeal is under Section 85B of the Employees State Insurance Act . The facts of the case would reveal that there was delay in payment and it was deposited with interest and thereafter action has been initiated under of the Act claiming damages.

2. The Employees Insurance Court relying on the decision of the Calcutta High Court inSarat Textiles(P) Ltd. v. ESI Corporation(2001(2) LLJ 744) held that the power under Section 85B can be invoked only when there is failure to pay the amount. What is found by the Insurance Court is that since the amount has already been deposited with interest, there is no failure to pay the amount and therefore cannot be invoked to levy damages. Learned counsel appearing for the Corporation has brought to my notice a decision of a Division Bench of the Calcutta High Court reported inE.S.I.Corpn. v. M/s.Braithwaite & Co.Ltd.(2004(101)

FLR1218), wherein the Division Bench held that the decision in the case of Sarat Textiles Ltd.(supra) where it has been held that delayed payment cannot amount to failure of payment is not a correct statement of law. So that decision relied on by the Insurance Court cannot be made use of to find in favour of the respondent in this appeal. Learned counsel for the Insurance Corporation had brought to my notice a decision of this Court reported in Regional Director, E.S.I.Corpn. v. The Managing Director, M/s.Transmatic System Ltd.( 2006(1) ILR 403) wherein a learned Judge of this Court held that damages claimed under Section 85 B is payable even if establishment has remitted insurance contribution with interest prior to notice claiming damages. The learned Judge had extracted the section as well as regulations 31 and 31 C. Reference has also been made to various decisions and ultimately a decision is arrived at holding that the Corporation is entitled to recover damages from the employer of the establishment. He has also cited before me the decision of the Punjab & Haryana High Court in Nipha Exports(P)Ltd. v. Employees' State Insurance Corporation (2003-III-LLJ 789) where also the Division Bench held that 'failure to pay' to be given wide and purposeful meaning and that it includes cases of delayed payment.

3. Learned counsel for the respondent would submit before me that one cannot supplement words into the section and therefore unless there is a failure of payment, Section 85B cannot be invoked. In the light of the aforesaid decisions, it is crystal clear that the words 'fails to pay' have to be given a wider interpretation and the courts have consistently taken the view that the delayed payment also amounts to failure to pay the amount.

Therefore, the said contention of the learned counsel cannot be accepted.

4.From these discussions I hold that the decision rendered by the Insurance Court is not correct on the point and it requires interference and that has to be set aside.

5.Now the next question to be considered is regarding the applicability of Section 85B . A reading of would show that it is a discretionary jurisdiction vested with the authority and one is expected to approach the subject with a judicious mind. In the decision reported in Regional Director, E.S.I.Corporation v. M/s.Blue Star 1982 Lab IC 859) it is indicated that by only stating that he had applied his mind to all relevant facts and had gone into the reasons of the employer, the responsibility of the Regional Director was not over. He must show that he applied his mind by writing a speaking order and must discuss as to what due date of payment of the contribution was, etc.etc. Learned counsel for the respondent had brought to my notice a decision of the Division Bench of this Court reported inRegional Director, E.S.I.Corpn., Trichur v. M/s.Sakthi Textiles, Quilon ( 1988(2) ILR 595 ). In the said decisi