Full Judgment Text
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PETITIONER:
SOVRIN KNIT WORKS ETC.
Vs.
RESPONDENT:
EMPLOYEES’ STATE INSURANCE CORPN.& ANR. ETC.
DATE OF JUDGMENT: 28/11/1996
BENCH:
K. RAMASWAMY, G.T. NANAVATI
ACT:
HEADNOTE:
JUDGMENT:
WITH
CIVIL APPEAL NOS.403(NL)/86, 2057-58/81/3257 & 3258/82
O R D E R
These 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 Court.
The 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
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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.
It is 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.
Though 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 contention.
It is 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.
The appellants committed breach of the provisions entailing
imposition of damages and interest on delayed payment.
The appeals are accordingly dismissed. No costs.