JUDGMENT S.U. Khan, J.
1. At the time of hearing, no one appeared on behalf of the respondents, hence only the arguments of learned Counsel for the appellant were heard.
2. Joint Regional Director, E.S.I., Kanpur passed two orders against respondents. One order was passed on 15.09.1982, which was slightly modified on 07.01.1983. The other order was passed on 21.04.1983. Against both the orders, respondents filed appeals before Employees Insurance Court, Saharanpur under Section 75 of Employees State Insurance Act (hereinafter referred to as 'E.S.I. Act'). The appeals were registered as Appeal No. 22 of 1983 & Appeal No. 95 of 1983 and were disposed of by common judgment dated 06.01.1986 by State Employees Insurance Court/S.D.M., Nakur, District Saharanpur. The said judgments have been challenged through these appeals.
3. The Joint Regional Director had imposed penalty under Section 85-B, E.S.I. Act as well as directed payment of interest under Regulation 31-A of the Regulations framed under the Act. In the opinion of the court below, penalty could not be imposed along with direction for payment of interest as it would amount to double jeopardy.
4. Court below has further held that penalty could be imposed only if the employer had failed to pay the amount due, however, in the instant case before any proceedings could be initiated, the amount had been paid by the employer even though the payment was late, hence panalty was not warranted.
5. Learned Counsel for the appellant has cited the following authorities:
1. 2004 (4) AWC 3106 Swastik Pharmaceuticals Varanasi v. J.R.D., U.P. holding that both damages and interest may be imposed and charged.
2. 1994 (69) FLR 842 (Bombay High Court), Joint Regional Director, Employers' State Insurance Corporation v. Ganesh Foundry Pvt. Ltd. holding that damages are penal in nature.
6. The view taken by the court below is not legally sustainable. Delayed payment is also failure to pay within time vide "Prestolite of India Ltd. v. Regional Director" and "Sovrin Knit Works v. Employees' State Insurance Corporation" In view of these authorities damages may be imposed under Section 85-B and interest may also be directed to be paid under Regulation 31-A, simultaneously.
7. However, in the aforesaid authority of Prestolite, it has been held that adjudicating authority shall take mitigating circumstances into consideration, it should not act mechanically in applying uppermost limit of damages. The employers had pleaded several mitigating circumstances like reduction in business and prolonged strike etc. The said points require consideration by the Employees State Insurance Court/S.D.M.
8. Direction for payment of interest may be a mitigating circumstance and even though it does not absolve the employer of his liability to pay damages under Section 85-B, however, it may be taken into consideration for reduction of damages and interest may be adjusted in damages to be imposed under Section 85-B.
9. Through the impugned orders, the court below directed payment of interest.
10. Accordingly, appeals are allowed. Impugned orders are set aside. Matter is remanded to Employees State Insurance Court/S.D.M., Nakur, Saharanpur for deciding the appeals in the light of observations made above.
11. As no one has appeared on behalf of the employers-respondents, hence before proceeding further, the court below shall issue notice to them.