JUDGMENT

This appeal is filed against the order of the Joint Director, ESI Corporation in E.S.I.O.P.No.2 of 2004 dated 25.01.2010. The appellant is the respondent. The respondent is the petitioner in E.S.I.O.P.No.2 of 2004.

2.Brief substance of the petition is as follows:

The petitioner has already filed a petition to declare that Beedi manufacturing business will not come under the purview of ESI Act. Since that petition was dismissed, the petitioner filed an appeal before this Court in C.M.A.No.1 of 2019. That appeal was also dismissed. The respondent sent a notice on the basis of a proceedings dated 24.05.1991, demanding contribution for the period from 01.02.1986 till 31.12.1990. The petitioner was called for an enquiry on 05.03.1991. In the letter dated 12.08.1991, the petitioner has informed the respondent that the matter was stayed by the High Court. The respondent sent a reply that the appeal was dismissed on 21.12.1998. The respondent called for the salary list of the employees from 01.02.1986 till 31.12.1990. On 22.05.2000, the petitioner sent an explanation letter to the respondent, in reply to the letter of the respondent dated 03.04.2000. From 01.01.1990 onwards, the petitioner is paying the ESI contribution. The respondent fixed the contribution at Rs.85,844/- and intimated the same to the petitioner on 08.08.2000. The proceedings for payment was made on 08.11.2000. The petitioner paid the amount and sent the challan through registered post on 30.11.2000. The petitioner is paying Rs.2/- per 1000 pieces of beedi to the Beedi Labour Welfare Board and the petitioner is paying Rs.8 Lakhs to the respondent each year. The labourers do not pay any amount towards Beedi Labours' Welfare Board. The rate of Beedi leaves is expensive. The transport charges also are so high. In Karnataka state, the Beedi manufacturing business was exempted from the ESI Act.

3.The petitioner has already paid a sum of Rs.85,844/- within five days from the date of receipt of the proceedings. But the respondent made another proceedings dated 08.10.2001 and demanded Rs.40,418/- as compensation under Section 85(b) of ESI Act. In fact, there is only 13 days delay in paying the contribution amount as per Section 45(A) of the ESI Act. Hence the order dated 10.12.2001 under Section 85(b), demanding a sum of Rs.44,418/- is to be set aside.

4.Brief substance of the counter filed by the respondent is as follows:

The petition is not maintainable. It is wrong to state that the petitioner has paid the contribution for the period from 01.02.1986 till 31.12.1990. Under Section 45(A) of the ESI Act, it is the duty of the petitioner to prove the same. It is wrong to state that the petitioner's business is facing problems due to payment of Rs.2/- per 1000 pieces of beedi to the Beedi Labourers' Welfare fund and due to the raise in the rate of beedi leaf and the transport expenses. Beedi business is not exempted from payment of ESI in Tamil Nadu. Already, the appeal filed by the petitioner before the High Court, Madras, was dismissed on 21.12.1998. Only after the dismissal of the appeal, the respondent passed the proceedings under Section 45A of the Act, demanding the petitioner to pay a sum of Rs.85,844/- towards the contribution for the period from 01.02.1986 till 31.12.1990. The notice was served on the petitioner on 08.11.2000. But the petitioner has paid the amount only on 28.11.2000. The respondent demanded a sum of Rs.40,418/- as damages due to the delay in payment.

5.No witness was examined and no document was marked on both the sides. The Tribunal has held that the respondent is entitled to 5% of the amount demanded and the ESI Court has passed an order of injunction not to collect more than 5% of Rs.40,418/- from the petitioner. Against the order, the respondent preferred an appeal before this Court.

6.On the side of the appellant it is stated that the Labour Court failed to appreciate that under Section 31 of the ESI Act, general regulations, an employer is l