IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN FRIDAY, THE 14TH NOVEMBER 2008 / 23RD KARTHIKA 1930 Ins.APP.No. 68 of 2006() ------------------------ IC.63/2004 of E.I.COURT, ALAPPUZHA. .................... APPELLANT/OPPOSITE PARTY: ------------------------------------------ THE REGIONAL DIRECTOR, E.S.I. CORPORATION, PANCHADEEP BHAVAN, SWARAJ ROUND NORTH, THRISSUR-20. BY ADV. SRI.T.V.AJAYAKUMAR RESPONDENT(S): APPLICANT: ------------------------- M/S. TARA INTERPRISES, BEACH ROAD, ALAPPUZHA, REPRESENTED BY ITS PARTNER. THIS INSURANCE APPEALS HAVING BEEN FINALLY HEARD ON 14/11/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: M.N. KRISHNAN, J. = = = = = = = = = = = = = = INS.APPEAL NO. 68 OF 2006 = = = = = = = = = = = = = = = Dated this the 14th day of November, 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.63/04. It was an application filed for declaration challenging the imposition of damages by way of penalty for the delayed payment. The Tribunal found it in favour of the establishment and it is against that decision the E.S.I. Corporation has come up in appeal. 2. I had gone through the order carefully. S.85(B) of the E.S.I. Act deal with imposition of damages as penalty. It is a discretionary jurisdiction vested with the Corporation unlike the imposition of interest. In series of decisions it has been held that the mere delay in payment shall not constitute a ground to impose damages by way of penalty for the reason it is a jurisdiction of a penal nature. The Apex Court Court held that there must be something like contumacious conduct, deliberate or willful intention to evade Ins. Appeal 68 OF 2006 -:2:- payment to attract levy of damages. Recently, a Division Bench of this Court in the decision reported in Regional Director, ESI Corporation v. Managing Director, M/s Qetcos Ltd. (ILR 2008 (3) Kerala Series 132) held that mere delay in making payment is not sufficient and the authorities are competent to waive levy of entire damages. While discussing that case the Division Bench also referred to the decision of the Apex Court wherein the Apex Court held that there must be mensrea attached to evasion of payment. 3. Here is a case where on reading of paragraph 12 of the order would reveal that there was a dispute with respect to the coverage of the establishment and thereafter, on account of financial difficulties the establishment was allowed to pay the due amount with interest in instalments. So when there was a mind to discharge the amount by paying it by way of instalments, it would show that there was no contumacious conduct to evade payment. So the decision of the E.I. Court does not call for any interference. Therefore Ins. Appeal 68 OF 2006 -:3:- the appeal lacks merit and it is dismissed without costs. M.N. KRISHNAN, JUDGE. ul/-