IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN TUESDAY, THE 10TH NOVEMBER 2009 / 19TH KARTHIKA 1931 Ins.APP.No. 36 of 2007() ------------------------ IC.141/2002 of EMPLOYEES INSURANCE COURT, ALAPPUZHA .................... APPELLANT: REPONDENT: ------------------------------ THE REGIONAL DIRECTOR, E.S.I.CORPORATION, THRISSUR -20. BY ADV. SRI.P.SANKARANKUTTY NAIR RESPONDENT(S): APPLICANT; ------------------------- HOTEL SEA KING , M.G.ROAD, KOCHI - 35. THIS INSURANCE APPEALS HAVING COME UP FOR ADMISSION ON 10/11/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: M.N. KRISHNAN, J. ........................................... Ins.A.No.36 OF 2007 ............................................. Dated this the 10th day of November, 2009 J U D G M E N T This is an appeal preferred against the order of the Employees Insurance Court, Alappuzha in I.C.No.141/2002. The E.S.I. Corporation has imposed the damages of Rs.22,479/= by way of penalty for the delayed payment of the contribution for the wage period from 2/79 to 3/88,10/89 to 3/90and 4/92 to 3/91. It is contended that there was no willful omission or laches on the part of the applicant and that cases were pending before various authorities and that in spite of the financial stringency, the establishment has failed to pay the dues with statutory interest and that there was no contumacious conduct. 2. The learned Employees Insurance Court relying on a decision of this Court in E.S.I Court. v. Sakthi Tiles (1988 KLT 280) held that there was nothing to establish that there was contumacious conduct with reference to the delayed payment. In the decision reported in Regional Director, ESI Corporation v. Managing Director, M/s. Qetcos Ltd. : 2 : Ins.A.No.36 OF 2007 (ILR 2008 (3) page 132), this Court held that levy of damages for delayed payment of contribution is not mandatory in all cases. If there is no mens rea and the employer was unable to pay the contribution in time due to circumstances beyond its control, damages can be waived completely. A Division Bench also relying upon the decision of the Apex Court in Employees State Insurance Corporation v. H.M.T Ltd. (AIR 2008 SC 1322) wherein para 21 reads as follows: “Existence of mens rea or actus reus to contravene a statutory provision must also be held to be a necessary ingredient for levy of damages and /or the quantum thereof”. 3. In the light of these enunciated principles and in the absence of materials to prove contumacious conduct or willful negligence to evade payment or means rea to violate the provisions of the statute, it has to be held that the discretionary jurisdiction vested under Section 85 B of the Employees State Insurance Act has to be exercised in favour of the establishment and not in favour of the Corporation. Therefore, I do not find any mistake committed by the court : 3 : Ins.A.No.36 OF 2007 and so the appeal fails and it is dismissed. M.N. KRISHNAN, JUDGE. cl