Madras High Court
Esi Corporation vs Tamilnadu Medicinal Plant on 21 September, 2021
CMA.No.1684 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 21.09.2021
CORAM:
THE HON'BLE MR. JUSTICE ABDUL QUDDHOSE
C.M.A.No.1684 of 2018
and
CMP No.13182 of 2018
ESI Corporation,
Rep. by its Joint Director,
143, Sterling Road,
Nungambakkam,
Chennai - 600 034. ...Appellant
vs.
Tamilnadu Medicinal Plant
Farms and
Herbal Medicine Corporation Ltd. (TAMPCOL),
Anna Hospital Campus,
Arumbakkam,
Chennai - 600 106. ...Respondent
Civil Miscellaneous Appeal filed under Section 82(2) of the ESI
Act against the fair order and judgment passed in EIOP No.175 of 2006
dated 17.06.2015 on the file of the Employees Insurance Court (Principal
Labour Court), Chennai.
For Appellant : Mr.SP. Srinivasan
For Respondent : Mr.M.Loganathan
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CMA.No.1684 of 2018
JUDGMENT
(This case was heard through Video Conferencing)
This appeal has been filed by the ESI Corporation challenging the
impugned order dated 17.06.2015 passed by the Employees Insurance
Court (Principal Labour Court), Chennai in E.I.O.P. No.175 of 2006.
2. The following substantial questions of law has been raised by
the Appellant-Corporation in their grounds of appeal.
a) Whether the Hon'ble EI Court is justified in setting aside the
Impugned Order passed under Section 85B of the ESI Act dated
25.10.2006 on the premise that on the passing of Section 45A order
during March 2004, the respondent has paid ESI contribution and hence
no delay in payment, when the Respondents have admittedly made
delayed payment of ESI Contribution for the period 10/1985 to 12/1997,
which had attained finality?
b) Whether the Hon'ble EI Court is correct in setting aside the
Impugned Order passed under Section 85B of the ESI Act dated
25.10.2006, when a speaking order justifying the delay in payment has
been recorded by the Appellants?
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CMA.No.1684 of 2018
c) Whether the Hon'ble EI Court is justified in placing the burden
on the Appellant with regard to burden of proof of belated payment and
no financial loss on the part Respondent, when the ESI Act contemplates
monthly payment of ESI contribution if the establishment is covered and
also person approaching the Court has to prove his case being the
settled proposition of law?
3. An order dated 25.10.2006 came to be passed against the
respondent by the Appellant-Corporation under section 85B of the ESI
Act calling upon them to pay damages for the delayed payment of ESI
contributions for the period from 1985 to 1997. The respondent
challenged the said order before the Employees Insurance Court
(Principal Labour Court) in E.I.O.P. No.175 of 2006.
4. By the impugned order dated 17.06.2015, the petition filed by
the respondent in E.I.O.P. No.175 of 2006 came to be allowed in favour
of the respondent and the order dated 25.10.2006 passed by the ESI
Corporation under section 85B of the ESI Act was set aside.
5. Aggrieved by the same, this appeal has been filed by the ESI
Corporation by raising the aforesaid substantial questions of law.
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CMA.No.1684 of 2018
6. The ESI Court under the impugned order has allowed the
petition filed by the respondent in E.I.O.P. No.175 of 2006 on
17.06.2015 by giving the following reasons :
a) immediately after the demand was made by the
Appellant-Corporation under Section 45A of the ESI Act
during the month of March 2004, the respondent has paid
the contribution without any delay for the period from 10/ 85
to 12/97.
b) there was no malafide intention or deliberate delay
by the respondent in paying the ESI contribution for the
period from 10/85 to 12/97 to the ESI Corporation, by G.O.
Ms. No.85, dated 03.03.2014, the respondent was granted
exemption from ESI coverage by the Government of Tamil
Nadu. The respondent was also suffering from financial
losses during the period from 1985 to 1997, which has not
been refuted by the Appellant-Corporation.
c) there was no deliberate delay in the payment of ESI
contributions by the respondent to the Appellant-
Corporation as they have complied with the demand
immediately on receipt of the said demand from the
Appellant-Corporation.
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CMA.No.1684 of 2018
7. The delay for the payment of ESI contribution has been properly
explained by the respondent before the ESI Court. The financial losses
suffered by the respondent during the period from 1985 97 has also been
admitted by the Appellant-Corporation as seen from the impugned order.
The demand for the payment of ESI contribution for the period from
10/85 to 12/97 was received by the respondent only in the year 2004 and
immediately they have also made the payments towards ESI
contributions. Thereafter, the respondent has also been exempted from
ESI coverage as per GO MS 85, dated 3.3.2014 issued by the
Government of Tamil Nadu.
8. Admittedly, the respondent is a Government of Tamil Nadu
undertaking. As seen from the above, it is clear that there is no mens rea
on the part of the respondent to deliberately not to pay the ESI
contributions to the Appellant-Corporation and only due to the reasons
stated above, they did not pay the ESI contributions on time.
9. The issue is now well settled by the decision of the Hon'ble
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CMA.No.1684 of 2018
Supreme Court in the case of Employees' State Insurance Corporation
versus HMT Ltd. and another reported in (2008) 3 SCC 35. The
relevant paragraphs of the said judgment is extracted hereunder :
26. Existence of mens rea or actus reus to contravene
a statutory provision must also be held to be a necessary
ingredient for levy of damages and /or the quantum thereof.
27. The Division Bench of the High Court, therefore,
in our opinion, was not wrong in opining that Section 85-B
provides for an enabling provision. What, however, cannot
be appreciated is that such a construction itself would lead
to the conclusion that the High Court is entitled to substitute
its view in place of the statutory authority. In our
considered view, therefore, the matter should be considered
afresh for determination of quantum of damages, etc. in the
light of the observations made hereinbefore.
10. As seen from the aforesaid judgment there must be the
existence of mens rea or actus reus, to contravene a statutory provision
under the Employees' State Insurance Act 1948, which in the instant case
is not there as seen from the materials and evidence available on record.
As the issue is well settled, the substantial questions of law raised by the
Appellant-Corporation does not deserve any merit and accordingly, the
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CMA.No.1684 of 2018
Civil Miscellaneous Appeal is dismissed. No costs. Consequently,
connected miscellaneous petition is closed.
21.09.2021
ab/vsi2
Index: Yes/No
Internet: Yes/No
Speaking Order/Non-Speaking Order
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CMA.No.1684 of 2018
ABDUL QUDDHOSE, J.
vsi2
To :
The Presiding Officer,
The Employees Insurance Court
(Principal Labour Court), Chennai.
C.M.A.No.1684 of 2018
21.09.2021
http://www.judis.nic.in
