Madras High Court
The Employees' State Insurance ... vs M/S.Sivaraj Spinning Mills on 4 January, 2024
Author: S.Srimathy
Bench: S.Srimathy
C.M.A(MD)No.178 of 2021
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED: 04.01.2024
CORAM
THE HON'BLE MR.JUSTICE S.SRIMATHY
C.M.A(MD)No.178 of 2021
The Employees' State Insurance Corporation,
Sub-Regional officer,
2nd Main Road,
K.K.Nagar (West),
Madurai -20,
Represented by its Deputy Director. ... Appellant
Vs.
M/s.Sivaraj Spinning Mills,
Kiriyampatti,
Thadicombu,
Dindigul District,
Represented by its Chief General Manager. ... Respondent
PRAYER: Civil Miscellaneous Appeal is filed under Section 82 of the
Employees State Insurance Act, 1948, against the Order, dated
27.08.2019 of the Labour Court (Employees' State Insurance Court or, in
short, ESI Court), Madurai in E.S.I. O.P No.61 of 2011.
For Appellant : Mr.R.Ravindran
For Respondent : Mr.K.Hemakarthikeyan
1/6
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C.M.A(MD)No.178 of 2021
JUDGEMENT
The Civil Miscellaneous Appeal is filed by the Employees'
State Insurance Corporation, against the Order, dated 27.08.2019 passed
in E.S.I. O.P No.61 of 2011.
2. The Respondent is the Appellant and the Petitioner is the
Respondent herein. For the sake of convenience, the contesting parties
shall be referred based on the ranking in the original petition as
Petitioner and the Respondent.
3. The petitioner's Mill has filed a petition in E.S.I O.P No.
61 of 2011, challenging the order dated 22.07.2011, which imposed
interest on belated payment of Employees' State Insurance Corporation.
The petitioner's Mill had filed writ petition in W.P.No.23928 of 2007 for
writ of Mandamus forbearing respondents from implementing the ESI
scheme without providing the facilities and amenities and the said writ
petition was dismissed on 03.10.2007. On dismissal of the writ petition
the petitioner mill was liable to implement the ESI scheme. Thereafter
along with several other mills the petitioner mill had filed clarification
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petition in M.P.No.1 of 2008 in W.P.No.23928 of 2007 for clarification.
The clarification petition was filed stating that the notification was under
challenge from the year 2002 and later on by various employees in the
year 2007, hence the contribution was not made during the pendency of
the writ petitions and now if the management/employees are directed to
pay the contribution there will be great hardship.
4. The Hon’ble Supreme Court in ESI Corporation Vs
Jardina Hendarson Staff Association reported in (2006) 6 SCC 581
and ESI Corporation Cs. Distillaries & Chemical Mazdoor Union
reported in (2006) 6 SCC 604 have upheld the order of the Calcutta High
Court and Allahabad High Court directing payment of ESI Contribution
prospectively i.e. from the date of the judgment rendered by the
respective High Courts. Hence prayed to direct to make contribution
towards ESI only from the date of judgment and not from the date of
notification. The Hon’ble Court vide order dated 08.07.2008 had directed
the management / employees to make contribution from the date of the
order dated 03.10.2007. Based on the order dated 08.07.2008 the
petitioner mill had paid the amount on 28.07.2008 with the period of 21
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days. But the respondent corporation had imposed interest as if the
petitioner mill had paid the contribution belatedly.
5. Now the contention of the Petitioner's mill is that they
have paid the ESI contribution from the date of the Order of
Clarification, dated 08.07.2008. Therefore, the Mill is not liable to pay
interest. Such contention of the petitioner’s mill is not acceptable. When
the Hon’ble Court had clarified that the implementation of ESI is from
03.10.2007 onwards, then the petitioner mill is liable to pay from the
contribution from 03.10.2007. Even though the cut-off date is fixed in
the clarification petition dated 08.07.2008, but when the cut-off date is
fixed from 03.10.2007 then the petitioner mill is liable to pay the interest.
6. The interest is imposed through statutory provisions on
belated payment which is automatic. In case of penalty alone, the Courts
ought to see whether it is deliberate or not since the penalty is not an
automatic. Therefore, the Court below had erred in finding.
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7. Accordingly, the petitioner's Mill is directed to pay
interest to the Respondent Corporation for the belated payment, within a
period of Four weeks from the date of receipt of a copy of the Order.
8. With these observations and directions, this Civil
Miscellaneous Appeal is allowed. No costs.
04.01.2024
NCC : Yes / No
Index : Yes / No
Internet : Yes / No
KSA
To
1. The Deputy Director
The Employees' State Insurance Corporation,
Sub-Regional officer,
2nd Main Road,
K.K.Nagar (West),
Madurai -20,
2.The Section Officer,
Vernacular Section,
Madurai Bench of Madras High Court,
Madurai.
https://www.mhc.tn.gov.in/judis
S.SRIMATHY, J.
KSA
Order made in
04.01.2024
https://www.mhc.tn.gov.in/judis
