This Civil Miscellaneous Appeal has been filed by the appellants/Employees State Insurance Corporation, against the Judgment and Decree, dated 06.07.2007 made in E.S.I.O.P.No.8 of 2001 on the file of the Labour Court (Employees' Insurance Court), Tirunelveli.
2.The case of the petitioner is that he was manufacturing Beedi and running manufacturing Unit at Agasthiyarpuram, Tirunelveli District, which comes under the purview of E.S.I Act 1948. On 16.03.2000, the E.S.I. Inspector inspected the petitioner's premises and verified the records from 01.01.1993 to February 2000 and submitted his report dated 30.03.2000. The appellant/first respondent issued Form-C18 to the petitioner on 17.04.2000 and directed the petitioner to pay Rs.1,69,772/- by way of contribution to respondent for the period from 4/95 to 2/2000 within 15 days thereof, failing which, action will be taken against the petitioner and recover the same under Section 44C to 45(1). After the issuance of Form C.19 on 17.05.2000, there was a direction by the appellant/first respondent that the petitioner shall pay Rs.2,24,745/- with interest at the rate of Rs.70.74 paise per day from 01.05.2000 and accordingly the petitioner submitted his explanation on 03.06.2000 to the appellant/first respondent. He assails the amount arrived at by the appellant/first respondent on various grounds and the same was not considered by them.
3.The appellant/first respondent has filed a counter affidavit and denied all the averments stated in the claim petition. It is stated by the appellant/first respondent in the counter affidavit that none of the records did indicate at the time of inspection made by the Inspector that the petitioner had engaged apprentices and they were being paid stipend and allegation made by the petitioner that no personal hearing was given to the petitioner to dispute the claim made by the respondent is not true and there were no records to show at the time of inspection that parcel allowance was being paid to the employees of the petitioner.
4.Before the Tribunal, the petitioner himself was examined as P.W1 and marked five documents viz., Ex.P.1 to Ex.P.5. On the side of the respondent one Ashok Kumar-Inspector of first respondent was examined as R.W.1 and four documents viz., Ex.R.1 to R.4 were marked.
5.Ex.R1?inspection report would clearly reveal that the petitioner had not engaged apprentices at the time of inspection and there was no records to substantiate the same and hence the plea made by the petitioner that he had engaged apprentices at the time of inspection and apprentices were being paid stipend is clearly ruled out by him. Ex.R1 to R4, dose not support the claim of the petitioner.
6.On perusal of oral and documentary evidence, the Presiding Officer, Labour Court, Tirunelveli has come to the conclusion that the order passed by the first respondent in T.N.57-33194/SRU/MDUINS-I, dated 17.04.2000 for payment of contribution of Rs.2,24,745/- at the rate of Rs.70.74 paise per day from 01.05.2000 is confirmed and the Tribunal has set aside only interest portion alone and the petition was partly allowed.
7.Aggrieved by the said order, the appellants/E.S.I.Corporation have preferred the Civil Miscellaneous Appeal.
8.In this Civil Miscellaneous Appeal, the appellants/Employees State Insurance Corporation has raised the following Substantial Questions of Law for consideration:
a) Whether the order of the Court below disallowing interest on the contribution due after 01.05.2000 is against the provisions of Sec.39(5) of the E.S.I.Act ?
b) Whether the Court below has power and jurisdiction to deny interest for any period disregarding the mandatory provisions of Section 39(5) of the Act and Regulation 31-A of E.S.I.(General) Regulations.?
9.The learned counsel for the appellants/Employees State Insurance Corporation have contended that the Lower Court has overlooked Section 39(5) of the E.S.I. Act and Regulation of 31 and 31-A, which are mandatory and which provide for payment of simple interest on contribution due, but not paid within time at 15% per annum. The order of the learned Employees' Insurance Court regarding interest payable on contribution due is contrary to law. He further contended that the Lower Court is wrong in ordering in clause 2 of the decree that the respondent herein need not pay interest on the contribution due after 01.05.2000 which comes to Rs.70.74 per day.
10.Head Mr.R.Ravindran, learned counsel appearing for the appellants and Mr.M.E.Ilango, learned counsel appearing for the respondent and perused the materials available on records.
11.After going through the materials on record, this Court finds that even though the Tribunal has set aside the interest portion, it has not taken into consideration regarding the procedure to be conducted by the E.S.I.Corporation. Since notice was issued to the petitioner, the petitioner has sent his explanation on 03.06.2000, which was not taken into account by the E.S.I.Corporation and has not given a fair and equal opportunity to hear the petitioner's submission.
12.On perusal of the records and material facts, the E.S.I.Corporation ought to have given sufficient opportunity, then they should have claimed the said amount.
13. The learned counsel for the respondent herein would submit that the appellants herein have not given sufficient opportunity to the respondent herein. In support of his contention, he relied upon this Court Judgment in the case of Madras Hotel Ashoka(Private), Ltd., Vs.Regional Director, Employees' State Insurance Corporation, Madras reported in 2004(2) L.L.N.1071, wherein, it had held that ? It is an admitted position that after the inspection was made by the Inspector under S.45 of the Employees' State Insurance Corporation Act, no further proceedings were initiated under Section 45A of the said Act for determination of the liability of the petitioner appellant. The learned counsel for the Corporation fairly admits that the order ought to be passed even without affording any opportunity to the appellant. We do not agree with the learned Single Judge that there was no necessity of holding any enquiry under Section 45A of the Act. It an admitted position that what was done was only the inspection under Section 45 of the Act. We would naturally expect an enquiry thereafter under S.45(A) of the E.S.I.C.Act.?
14.In view of the above, the E.S.I.Corporation has committed a mistake, the matter has be to remitted back to the E.S.I.Corporation by giving an appropriate opportunity to the petitioner. Hence this Court is of the opinion that the Labour Court (Employees' Insurance Court), Tirunelveli has passed an order without giving sufficient opportunity to the petitioner under Section 45A of the E.S.I.C.Act.,to putforth his claim or evidence regarding the claim made by the E.S.I.Corporation. Hence the matter has been remanded back to the E.S.I.Corporation to give sufficient opportunity to the petitioner and conduct an enquiry afresh, then pass necessary orders under Section 45(A) of the Employees' State Insurance Corporation Act within a period of four months from the date of receipt of a copy of this Order.
15.The learned counsel for the appellants/E.S.I.Corporation, Madurai has also relied upon the Hon'ble Supreme Court Judgment reported in 2008-III- LLJ-356(SC) in the case of Goetze(India)Ltd., and Employees State Insurance Corporation, wherein, it had held that ?When as per the provisions of the Employee's State Insurance Act, 1948 and Regulations 31 and 31-A of the Employee's State Insurance Regulations the liability to pay interest on delayed payment is statutory and therefore cannot be waived. No question for settlement or compromise arises in the matter of payment of interest?. This citation is not applicable to the present case. Since when there is no opportunity to be given for determining the liability, the question of raising interest portion will not arise.
16.In view of the above, this appeal is dismissed and the matter is remitted back to the Employees State Insurance Corporation, Represented by the Deputy Director, Sub Regional Office, Madurai 625 020 is directed to conduct the enquiry afresh within a period of four months from the date of the receipt of copy of this order after giving sufficient opportunities to the petitioner.
17.Registry is directed to send back the entire case records to the Employees State Insurance Corporation, Represented by the Deputy Director, Sub Regional Office, Madurai 625 020 along with this order copy.
18.Accordingly, the Civil Miscellaneous appeal is dismissed. No costs.
To
1.The Labour Court (Employees' Insurance Court), Tirunelveli.
2.The Record Keeper, Vernacular Section, Madurai Bench of Madras High Court, Madurai.
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