IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE HARUN-UL-RASHID THURSDAY, THE 30TH OCTOBER 2008 / 8TH KARTHIKA 1930 Ins.APP.No. 40 of 2004() ------------------------ IC.65/2002 of ESI COURT, PALAKKAD .................... APPELLANT/OPPOSITE PARTY: --------------------------------------------- THE REGIONAL DIRECTOR, E.S.I. CORPORATION, PANCHADEEP BHAVAN, NORTH SWARAJ ROUND, THRISSUR-20. BY ADV. SRI.T.V.AJAYAKUMAR RESPONDENT(S): APPLICANT: ------------------------- AVT MECORMICK INGREDIENTS PVT.LTD. FACTORY, PLOT NO.225/1 A5-7, KAIPOORIKARA, VAZHAKULAM, MARAMPILLY (P.O), ALUVA-683 107, ERNAKULAM DIST., KERALA, REPRESENTED BY ITS GENERAL MANAGER-HR & ADMINISTRATION. ADV. SRI.K.A.ABRAHAM SRI.S.S.NAIR THIS INSURANCE APPEAL HAVING BEEN FINALLY HEARD ON 30/10/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & HARUN-UL-RASHID, JJ. .................................................................... INS. Appeal No.40 of 2004 .................................................................... Dated this the 30th day of October, 2008. JUDGMENT Ramachandran Nair, J. This appeal is filed by the E.S.I. Corporation challenging the order of the E.I. Court holding that respondent's factory is covered only with effect from 2.5.1996 as against the claim raised from 1.12.1995 onwards. The other disputes raised in the appeal pertain to the Corporation's right to recover interest for belated payment of the contribution. We have heard counsel appearing for the appellant and counsel appearing for the respondent. 2. Respondent's factory is covered based on the voluntary declaration filed by it. However, while accepting the declaration of coverage with effect from 2.5.1996, the E.S.I. Corporation had specifically pointed out that such acceptance is subject to determination of effective date of coverage. In the course of enquiry, it was noticed that coverage was with effect from 1.12.1995 and not with effect from the date on which the company accepted coverage i.e. 2.5.1996. According to the Corporation, it was the duty of the appellant to remit contribution from the effective date of 2 coverage and if there is lapse on the part of the company, the Corporation will be entitled to recover contribution for such period. The E.I. Court held that there is no material for the Corporation to hold that coverage is with effect from 1.12.1995. We do not find any justification to interfere with this part of the order of the E.I. Court, more because without declaring coverage in advance, the employees who are the beneficiaries of the contribution would not get the benefit and in fact, they would not have made any claim. In the circumstances, this part of the order of the E.I. Court is confirmed. 3. So far as the Corporation's claim for interest for belated payment is concerned, we find that the Supreme Court has held in EMPLOYEES STATE INSURANCE CORPORATION V. SANTHAKUMAR (2007(1) KLT 133) that there is no limitation for recovery of interest. The Corporation is, therefore, entitled to recover interest for belated payment of contribution because respondent was bound to make contribution under Regulation 31 on due dates of every month. We, therefore, reverse the order of the E.I. Court on the question of interest and authorise recovery of interest for the actual period of delay in payment as provided under Regulation 31A. 4. Since the company has voluntarily declared liability and made contribution, though with delay, we do not find any justification to levy 3 damages under Section 85B of the Act. Therefore, we confirm the order of the E.I. Court cancelling the levy of damages by the Corporation. Refund, if any, will be granted or adjustment of excess paid will be made against future demands after calculation of interest liability as stated above. The appeal stands partly allowed as indicated above. C.N.RAMACHANDRAN NAIR Judge HARUN-UL-RASHID Judge pms