Knit Works Vs. Employees' State Insurance Corpn.& Anr  INSC 1525 (28 November 1996)
APPEAL NOS.403(NL)/86, 2057-58/81/3257 & 3258/82
O R D
appeals by special leave arise from the orders of the E.S.I. Court, Faridabad, Harayana. The facts in CA No. 402/86 are sufficient for
disposal of all the appeals. The appellants are establishments covered under
the provisions of the Employees' State Insurance Act, 1948 (for short, the `Act').
They did not pay the contribution for the year 1980- 81. Therefore, the
Corporation had served the notice on December 31, 1982 calling upon the appellants to pay
the damages on delayed payment with interest. The appellants had objected to it
by the petition dated February
14, 1983. The
Corporation, over-ruling the objections, passed the order on February 18, 1983 imposing the damages in a sum of
Rs.8843/- The appellants challenged it by filing application under Section
75(2) of the Act before the Insurance Court.
The Insurance Court by its order dated August 14, 1985 has upheld the damages. Since the
CA Nos.2057 & 2058 of 1981 were pending in this Court, they filed the
appeals by special leave without availing the appellate remedy in the High
contentions have been raised by Sri S.K. Gambhir, learned counsel for the
appellants. Firstly, it is contended that under Section 94-A of the Act,
Corporation has been empowered to delegate the power to one of the officers but
the officer-delegate has not power to further delegate to any other officer.
Therefore, exercise of the power by the officer is bad in law. when we
requested Shri S.K. Gambhir to produce the order passed by the Corporation authorising
the officer, he is unable to place his hands on the order passed by the
Corporation. But he seeks to contend that the Regional Director, one Mr. G.R.
Nair was a delegatee officer to whom power was delegated by the Corporation
pursuant to its resolution. Therefore, the order is bad in law. Unless we look
into the order passed by the Corporation, it is difficult to see whether it is
a further delegation. It is seen under Section 95-A of the Act that the
Corporation has been empowered to authorise any of its officer. It would be
obvious that the Regional Director is one of the officers in the region;
necessarily, he is a competent officer to exercise the power under the Act on
behalf of the Corporation. It was conceded in the lower court that he was so authorised.
So, the officer has power to pass the order imposing damages and interest
thereon for delayed payment.
then contended that under Regulation 26 and 34 of the Regulation under the Act
what is required is to purchase the contribution stamps, affix them and get
them cancelled in time. If that is done by the employer then it can be said
that the employer has paid the contribution amount in time.
Regulation 31-A which was brought in by Amendment of 1979, further requires the
employer to submit the cards duly stamped to the Corporation that is a mere
procedural formality for showing that the amount has been paid in respect of
the covered employees. As the cards were duly stamped the action taken by the
authority for imposing the penalty is bad in law. We find no force in the
seen that under Regulation 31-A, as amended in 1979, not only the card should
be duly stamped but also the same should be produced indicating due compliance
of the deposit of the employer's and the employee's contribution with the
Corporation. That has not been done. The Insurance Court had found as a fact
that the compliance has not been done. The appellants have failed to prove the
compliance, in accordance with the provisions of the Act, of the deposit of the
contribution as required under Section 85-B of the Act.
appellants committed breach of the provisions entailing imposition of damages
and interest on delayed payment.
appeals are accordingly dismissed. No costs.