1 k IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION FIRST APPEAL NO. 1059 OF 2010 WITH FIRST APPEAL NO. 318 OF 2009 WITH FIRST APPEAL NO. 420 OF 2010 Office Notes, Office Memoranda of Coram, appearances, Court's orders or directions and Registrar's orders Court's or Judge's orders. Mr. H.V. Mehta for the appellant. Ms. Rita K. Joshi i/b Ashok D.Shetty for the respondent. CORAM : D.B.BHOSALE, J. DATED : 18/11/2010. PC: 1 Heard learned counsel for the Parties. 2 These three appeals are directed against the separate judgments passed by the Employees State Insurance Court, Mumbai in E.S.I. Applications filed by the respondents under section 75 of the 2 Employees’ State Insurance Act, 1948 (for short “the Act”) for determining the contribution and interest. The Court below has allowed the applications, setting aside the orders passed by the Employees State Insurance Corporation, partly directing the respondents to pay contribution with interest at the rate of 6% per annum till the date of actual payment. Employees State Insurance Corporation by an orders under section 45-A of the Act determined the amount of contribution to be made by the respondents and the amount of interest to be paid till the date of actual payment. 3 Learned counsel for the Appellant-Regional Director, 3 Employees State Insurance Corporation confined his challenge to the impugned judgment only against the direction to pay interest at the rate of 6% per annum contending that under sub section 5(a) of section 39 of the Act the respondents are liable to pay the interest at the rate of 12% per annum for the period from 20.10.1989 to 31.08.1995 and at the rate of 15% per annum from 01.09.1995 till this date. In short, he submitted that the court below ought to have directed the respondents to pay statutory interest as provided for in sub section 5(a) of section 39 of the Act. On the other hand, learned counsel for the respondents placed heavy reliance on the judgment of this court in Regional Director, Employees State Insurance 4 Corporation vs. M/s. Hotel Suresh (2007-1-LL.J.) to submit that since the demand of contribution by the respondents relates to a period prior to 20th October, 1989, the appellants cannot claim the interest more than 6% per annum as was prevailing till 20th October, 1989. 4 I have perused the judgment in M/s Hotel Suresh case. In that case, the learned Single Judge of this Court was considering the following question: “Whether in case of a demand made under section 45-A of the said Act of 1948 which relates to a period prior to 20th October, 1989, interest at the rate of 12 per cent per annum can be ordered to be paid on the basis of the amended provision 5 which has come into force on 20th October, 1989.” 5 In paragraph 12 of the judgment, the learned Single Judge held thus: “12. In the present case the demand for compensation by the Appellant relates to a period prior to 20th October, 1989. At that time the Employees’ State Insurance (Amendment) Act, 1989 had not come into force. If the submission made by Shri Mehta appearing for the Appellant is accepted, interest at the rate of 12% per annum will be payable on the contribution payable by the Respondent. When the default was committed by the Respondent, the law provided for payment of interest at the rate of 6% per annum on the outstanding amount. On the outstanding amount 6 for the period prior to 20th October, 1989, the the Respondent cannot be penalised by directing him to pay interest at the rate of 12% per annum. The amended provision will apply in a case in which default is for a period after 20th October, 1989. Therefore, no fault can be found with the order passed by the learned Trial Judge of directing payment of interest at the rate of 6% per annum which was the rate provided prior to 20th October, 1989. The Trial Court had no discretion to award interest at the rate which is more than the rate prescribed by the statute at the relevant time. Therefore, the Trial Court has applied the prevailing rate of interest as on the date of the default. I do not agree with the view taken by the learned Single Judge of Karnataka High Court that 7 from the date on which the amendment came into force, interest at the rate of 12% per annum will be payable on contribution amount payable in respect of a period which is prior to 20th October, 1989. Retrospective effect cannot be given to a penal provision of payment of interest.” 6 In the present appeals, admittedly, the demand for contribution made by the appellant relates to the period prior to 20th October, 1989. In view thereof, in my opinion, the question that falls for my consideration is squarely covered by the judgment of this court in M/s Hotel Suresh case. Learned counsel for the appellants has neither distinguished nor made any efforts to make me to take a different view from the one taken 8 by the learned Single Judge in M/s Hotel Suresh case. In the circumstances, the appellants are not entitled to claim more interest than the rate of interest prevailing prior to 20th October, 1989. The appeals, accordingly, fail and dismissed as such. (D.B.Bhosale, J.)