IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN MONDAY, THE 28TH JULY 2008 / 6TH SRAVANA 1930 Ins.APP.No. 4 of 2007() ------------------------------- IC.43/2002 of EMPLOYEES INSURANCE COURT, KOLLAM .................... APPELLANT/OPP. PARTY -------------------------------------- THE REGIONAL DIRECTOR, E.S.I. CORPORATION, THRISSUR. BY ADV. SMT.T.D.RAJALAKSHMY, SC, ESI CORPN. RESPONDENT/ APPLICANT -------------------------------------- THE MANAGING DIRECTOR, M/S. CITY THREATRES (P) LTD., THAMPANOOR, THIRUVANANTHAPURAM. BY ADV. SRI.GOPAKUMAR R.THALIYAL SRI.M.S.VIJAYACHANDRAN BABU THIS INSURANCE APPEALS HAVING COME UP FOR ADMISSION ON 28/07/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Rs/ M.N. KRISHNAN, J. = = = = = = = = = = = = = = INS.APPEAL NO. 4 OF 2007 = = = = = = = = = = = = = = = Dated this the 28th day of July, 2008. J U D G M E N T This appeal is preferred against the judgment of the Employees Insurance Court whereby the Court held that (1) Ext.A3 order of the respondent for the period from 4/98 to 3/99 is valid and sustainable and (2) that the assessment relating to 4/91 to 3/97 is unsustainable and (3) interest is chargeable only from the date of expiry of 21 days of passing Exts.A3 and A8 orders. These findings are challenged by the Insurance Corporation so far as it relates to the claim for the period 4/91 to 3/97. The Insurance Court has taken the view that in view of the decision of this Court in ESI Corporation v. Excel Glasses Ltd. (2003 (3) KLT 42), the ESI corporation is not competent to entertain any application which is filed beyond the period of five years. But the said decision of this Court had been reversed by the Apex Court in the decision reported in E.S.I. Corporation v. Santhakumar (2007 (1) KLT 133 (SC). The Supreme Ins. Appeal 4 OF 2007 -:2:- Court was considering the impact of S.45A and 77(1A)(b) of the E.I. Act and held that it is only an action initiated by the E.S.I. Corporation before the Court that is barred by limitation and there cannot be any limitation for an action initiated by the Corporation against the establishments. In the light of this authority, finding of the Tribunal that contribution for the period from 4/91 to 3/97 is unsustainable is to be set aside and it is done so. 2. The next question is regarding the demand of interest. The ESI Court held that only after 21 days of passing of orders on Exts.A3 and A8 the amount becomes payable. This Court has held in the decision reported in Cannanore Drug Lines v. E.S.I. Corporation (2007 (1) KLT 880) “Merely because the appellant failed to pay contribution allegedly under a bona fide impression or belief that the establishment was not covered under the provisions of the E.S.I. Act cannot absolve the appellant from the liability of paying interest on the delayed payment of E.S.I. Contribution under S.39(5) read with Regulation Ins. Appeal 4 OF 2007 -:3:- 31A. Neither the provisions in the E.S.I. Act nor the provisions in the E.S.I. (General) Regulations give any discretion to the respondent to exempt the appellant from the liability to pay interest on the delayed payment of E.S.I. Contribution. The bona fide impression of the appellant that his establishment was not covered under the provisions of the E.S.I. Act or the pendency of a dispute before the E.S.I. Court regarding the appellant's liability to pay E.S.I. contribution cannot be a valid ground for exempting the appellant from paying interest in terms of S.39(5) (a) and Regulation 31A. When the statute does not provide for any such exemption the respondent cannot exclude the amount of interest from the demand made against the appellant.” So it is made clear that just because he has got a contention that he is not covered by the Act may not exonerate him from the liability. So, this contention of the Corporation also has to be upheld and the interpretation given that you need not pay interest after 21 days of passing of Exts.A3 and A8 orders has also to be set aside. So the appeal is allowed and the above findings of the E.S.I. Corporation are set aside. But the ESI Ins. Appeal 4 OF 2007 -:4:- Court is directed to give notice fixing the amount and the it should fix the correct amount due after hearing the other side and then proceed for realisation of the amount due under the statute. The Ins. Appeal is disposed of as above. M.N. KRISHNAN, JUDGE. ul/-