IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN FRIDAY, THE 12TH DECEMBER 2008 / 21ST AGRAHAYANA 1930 Ins.APP.No. 94 of 2007(F) -------------------------------- IC.81/2006 of EMPLOYEES INSURANCE COURT, ALAPPUZHA .................... APPELLANT/RESPONDENT ----------------------------------- THE REGIONAL DIRECTOR, E.S.I. CORPORATION, PANCHADEEP BHAVAN, ROUND NORTH, THRISSUR - 20. BY ADV. SRI.T.V.AJAYAKUMAR RESPONDENT(S): APPLICANT ------------------------------------- TRAVANCORE PAPER MILLS (P) LTD. VALLIKUNNAM, ALAPPUZHA - 690 501 REPRESENTED BY ITS MANAGING DIRECTOR, K.S.HARILAL. ADV. SRI.P.RAMAKRISHNAN FOR R1 THIS INSURANCE APPEALS HAVING BEEN FINALLY HEARD ON 12/12/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: M.N. KRISHNAN, J. = = = = = = = = = = = = = = INS.APPEAL NO. 94 OF 2007 = = = = = = = = = = = = = = = Dated this the 12th day of December, 2008. J U D G M E N T This appeal is preferred against the judgment of the Employees Insurance Court, Alappuzha in I.C.81/06. It was an application filed seeking for a declaration to set aside Ext.P6 order whereby damages were imposed by way of penalty. The applicant approached the Court below contending that there was no willful or deliberate reason to evade payment and that it was declared as a sick unit by the District Industries Center, Alappuzha. It is also further contended that recovery proceedings initiated by various financial institutions had resulted in the delayed payment. The E.I. Court accepted the contention of the applicant and set aside the order. 2. The approach to be made in these types of cases is well settled by a ruling of this Court reported in Regional Director, ESI Corporation v. Managing Director, M/s Qetcos Ltd. (ILR 2008 (3) Kerala Series 132). In that Ins. Appeal 94 OF 2007 -:2:- case the Division Bench held that levy of damages on delayed payment of contribution is not mandatory in all cases and if there is no mensrea and employer was unable to pay the contribution in time due to circumstances beyond his control damages can be waived completely. The Division Bench also reminded regarding the necessity of mensrea and actus reus to contravene the statutory provision. From the materials available in this case it an be seen that the applicant's establishment was declared as a sick unit and so many proceedings were initiated by the financial institutions for realisation of the amount advanced and it was beyond their control to make the payment. Therefore it is manifestly clear that there was no deliberate laches or willful evasion or any contumacious conduct so as to attract the penalty of damages contemplated u/s 85B. Therefore I find that the Court below was right in setting aside the order and it does not call for any interference. So the appeal lacks merit and it is dismissed but without costs. M.N. KRISHNAN, JUDGE. ul/-