IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN FRIDAY, THE 12TH DECEMBER 2008 / 21ST AGRAHAYANA 1930 Ins.APP.No. 66 of 2007(F) -------------------------------- IC.143/2002 of EMPLOYEES INSURANCE COURT, ALAPPUZHA .................... APPELLANTS/ RESPONDENTS ------------------------------------------- 1. THE REGIONAL DIRECTOR, E.S.I. CORPORATION, PANCHADEEP BHAVAN, N.S. ROUND, THRISSUR-20. 2. THE RECOVERY OFFICER, E.S.I. CORPORATION, THRISSUR. BY ADV. SRI.T.V.AJAYAKUMAR RESPONDENT(S): APPLICANT ---------------------------------- MUTHOOT APT CERAMICS LTD, PLOT NO.9 COCHIN SPECIAL ECONOMIC ZONE ERNAKULAM, COCHIN-30 REPRESENTED BY ITS MANAGING DIRECTOR THOMAS MUTHOOT. ADV. SRI.E.K.NANDAKUMAR SRI.A.K.JAYASANKAR NAMBIAR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS SRI.ANIL D. NAIR THIS INSURANCE APPEALS HAVING BEEN FINALLY HEARD ON 12/12/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: M.N. KRISHNAN, J. = = = = = = = = = = = = = = INS.APPEAL NO. 66 OF 2007 = = = = = = = = = = = = = = = Dated this the 12th day of December, 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.143/02. It was an application filed seeking for a declaration that the imposition of Rs.23,087/- as damages by way of penalty for the delayed payment of contribution is unsustainable. According to the applicant the delay was occasioned not on account of any deliberate reasons nor it was intentional. They undergone severe financial crisis and therefore the applicant has prayed for setting aside the order. The respondent would contend that there is deliberate delay which calls for penalty by way of damages. After hearing the entire materials the Court below found that there is no reason to impose damages and therefore set aside that imposition. The position is fairly well settled now that the power u/s 85B is a discretionary jurisdiction which has to be judiciously exercised. There must be a contumacious conduct Ins. Appeal 66 OF 2007 -:2:- or a deliberate, willful intention to flagrantly violate the statutory mandate and in a recent decision rendered by the Division Bench of this Court reported in Regional Director, ESI Corporation v. Managing Director, M/s Qetcos Ltd. (ILR 2008 (3) Kerala Series 132) held that levy of damages on delayed payment of contribution is not mandatory in all cases and if there is no mensrea and employer was unable to pay the contribution in time due to circumstances beyond his control damages can be waived completely. The Division Bench also quoted the ruling of the Supreme Court which read as follows. “Existence of mensrea or actus reus to contravene a statutory provision must also be held to be a necessary ingredient for levy of damages or the quantum thereof.” 2. Here what is contended is financial crisis and there is nothing on record to prove any intentional or deliberate act. Therefore applying the dictum laid in the decision referred to above I do not find any ground to impose penalty by way of damages and therefore the decision rendered by Ins. Appeal 66 OF 2007 -:3:- the E.I. Court is absolutely correct and it does not call for any interference. So the appeal lacks merit and it is dismissed but without costs. M.N. KRISHNAN, JUDGE. ul/-