IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.N.KRISHNAN MONDAY, THE 15TH DECEMBER 2008 / 24TH AGRAHAYANA 1930 Ins.APP.No. 67 of 2007(F) -------------------------------- IC.90/2004 of EMPLOYEES INSURANCE COURT, ALAPPUZHA .................... APPELLANT/RESPONDENT -------------------------------------- THE REGIONAL DIRECTOR, E.S.I. CORPORATION, THRISSUR-20. BY ADV. SRI.T.V.AJAYAKUMAR RESPONDENT(S): APPLICANT ----------------------------------- THRESIAMMA GEORGE, PROPRIETRESS, M/S. JAYBEE DRY CLEARNERS, JOSE BROTHERS BUILDING, M.G.ROAD, COCHIN-16. ADV. SRI.P.RAMAKRISHNAN SRI.P.RAMAKRISHNAN SRI.C.ANIL KUMAR SRI.PRATAP ABRAHAM VARGHESE SMT.ASHA K.SHENOY THIS INSURANCE APPEALS HAVING BEEN FINALLY HEARD ON 15/12/2008, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: M.N. KRISHNAN, J. = = = = = = = = = = = = = = INS.APPEAL NO. 67 OF 2007 = = = = = = = = = = = = = = = Dated this the 15th day of December, 2008. J U D G M E N T Heard the counsel for both sides. This appeal is preferred against the judgment of the Employees Insurance Court, Alappuzha in I.C.90/04. An application was filed before the said Court seeking for declaration that the order imposing damages as unsustainable. The E.I. Court after elaborately considering the matter held against the Corporation especially in the light of the decision reported in Sakthi Tiles v. E.S.I. Corporation (1988 (2) KLT 280). The law is fairly well settled now and it has been held that S.85B is one which gives a discretionary jurisdiction to the authority to impose damages. It has been held that the said discretion has to be very carefully and judicially exercised since it is having the characteristic of a penal nature. It can be seen that it was only after a long drawn litigation the matter got ultimately settled and the liability was cast upon the establishment to pay the amount. In the decision Ins. Appeal 67 OF 2007 -:2:- reported in Regional Director, ESI Corporation v. Managing Director, M/s Qetcos Ltd. (ILR 2008 (3) Kerala Series 132) the Division Bench of this Court held that the Court has got the power to waive entire damages even on the basis of a financial crisis if there are sufficient circumstances to prove the same. It is also a settled position of law that unless there is a contumacious conduct or recalcitrant attitude for flagrantly violating the mandate of the statute it may not be proper in all cases to impose damages. Quoting the decision of the Supreme Court the Division Bench held that mensrea and actus reus are also necessary components to find out the contumacious conduct and therefore unless there is real mensrea coupled with the intention to violate the rules the damages cannot be automatically imposed. After reading the judgment of the Court below it is seen that the parties have been litigating and there has not been any specific contumacious conduct to avoid payment but it was only the long drawn litigation that had resulted in the non-payment. It cannot be considered as a contumacious conduct and it cannot also be stated that Ins. Appeal 67 OF 2007 -:3:- there is mensrea for the said delay. Therefore I agree with the finding of the E.I. Court and dismiss the appeal without costs. M.N. KRISHNAN, JUDGE. ul/-