IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

202 FAO-8413-2014(O&M)

Date of decision: 26.08.2025 Regional Director Employees’ State Insurance Corporation & Anr.

...Appellant(s)

Vs.

M/s Venky’s (India) Ltd.

...Respondent(s)

CORAM: HON’BLE MS. JUSTICE NIDHI GUPTA Present:- Mr. Adarsh Malik, Advocate for the appellants.

Mr. Sumeet Jain, Advocate for the respondent.

***

NIDHI GUPTA, J.

Present appeal has been filed laying challenge to the judgment dated 26.08.2013 passed by the Employees’ Insurance Court whereby the application filed by the respondent establishment under Section 75 of the Employees’ State Insurance Act, 1948 (hereinafter referred to as “the ESI Act”) for adjudication of the orders dated 16.02.2009 passed by the appellant demanding a sum of Rs.2,74,256.00 as damages & Rs.3,62,412.00 as interest and seeking directions to the appellant to refund the amount of Rs.6,16,565.00 paid by the establishment and also Rs.3,62,412.00 paid as interest under protest, has been partly allowed.

2. It is inter alia submitted by learned counsel for the appellants that it is undisputed fact on record that the respondent-employer had caused substantial delay in depositing the statutory contributions. Yet, the learned Employees' Insurance Court has returned a finding that there appears to be no mens rea on the part of the establishment for delay in payment of the amount of contribution for the period December 2000 to March 2005. The reasoning adopted by the learned El Court is that the establishment was not aware of its duty to pay contribution, which was brought to its notice during the surprise inspection visit in the year 2005. However, the learned Employees' Insurance Court has totally overlooked the document Exhibit D-3, dated 8.8.2005, whereby the establishment was specifically informed of the application of the provisions of the Act since 1.12.2000 and the said establishment was also conveyed the Code Number allotted to it for making compliance. The establishment subsequently also deposited the amount towards arrears of contribution for the period December 2000 to March 2005 on 26.6.2007. It is contended that after the establishment had been categorically made aware of the application of the statutory provisions, the non-deposit thereafter was wilful and intentional.

Despite the said finding, the learned Employees' Insurance Court has exonerated the employer-respondent of its default. As such the impugned judgment suffers from perversity.

3. It is further submitted that it is well settled law that when the provisions of the ESI Act extend to an establishment for the first time and to which an employers' Code Number is yet not allotted, the employer is required to furnish to the appropriate Revisional Office not later than fifteen days after the ESI Act becomes applicable, a declaration or registration in writing in Form 01. Thus, it is the duty of the said establishment to act positively and as such, cannot hide behind the shield of ignorance of law, which is even otherwise not a valid legal defence. Even the said plea does not survive after 8.8.2005 (Exhibit P-1/D-3). The learned Employees' Insurance Court has failed to appreciate that damages had been imposed on the establishment only for the period after 29.8.2005 i.e. after allowing 21 days from 8.8.2005, the details of which were duly provided in the show cause notice itself Exhibit D-8 dated 19.5.2008. A perusal of the same would reveal that the due date of payment for the period commencing December 2000 has been taken as 29.8.2005 and not of the year 2000/ 2001. The establishment had delayed the payment of the statutory contributions for the period commencing from 1.12.2000 by 2399 days, but the Appropriate Authority had taken the default only from the date being 21 days after the employer Code Number had been allotted to the said establishment. Thus, no damages were levied for the period of 1733 days against 2399 days. It is further submitted that as per Section 85B of the E