IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE PIUS C.KURIAKOSE & THE HONOURABLE MR. JUSTICE C.K.ABDUL REHIM THURSDAY, THE 14TH JANUARY 2010 / 24TH POUSHA 1931 Ins.APP.No. 16 of 2009() ------------------------ IC.69/2006 of ESI COURT, PALAKKAD .................... APPELLANT ------------------- EMPLOYEES STATE INSURANCE CORPORATION REP BY ITS REGIONAL DIRECTOR SWARAJ ROUND NORTH,THRISSUR 680 020. BY ADV. SRI.T.V.AJAYAKUMAR RESPONDENT(S): --------------- M/S.AGREENCE FIBER FOAM (P) LTD REPRESENTED BY ITS MANAGING DIRECTOR SHRI P.V.RAGHAVAN, BALIAPATNAM, KANNUR 670 010. ADV. SRI.P.M.PAREETH FOR R1 THIS INSURANCE APPEALS HAVING BEEN FINALLY HEARD ON 14/01/2010, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: PIUS C.KURIAKOSE & C.K.ABDUL REHIM, JJ. ------------------------------------------------------------------- INS. APPEAL NO.16 of 2009 ------------------------------------------------------------------- Dated this the 14th day of January, 2010. JUDGMENT Pius C.Kuriakose, J. Being aggrieved by the order of the Employees' Insurance court setting aside Exhibit .A1 order imposing damages on the respondent for not having paid contribution collected from the employers on time, the E.S.I.Corporation is in appeal. 2. We have heard the submissions of learned counsel for the appellant corporation Sri.T.V.Ajayakumar and Sri.P.M.Pareeth learned counsel for the respondent. Mr.Ajayakumar submitted that the Insurance Court set aside Exhibit .A1 order imposing damages accepting the case pleaded by the respondent in the absence of any evidence and proof. He submitted that from the certificate of contribution payable dated 30.11.2004 duly signed by the principal employer himself, it was clearly stated that a sum of Rs.72,377.92 in respect of 192 employees had been collected by the employer and the non payment of the contribution so collected was certainly willful. According to the learned counsel, the respondent did not adduce even formal evidence for substantiating his pleadings. The learned court was carried away by Ext.A4 revenue recovery notice and Ext .A5 balance sheet for holding that the respondent was in acute financial crisis during the relevant period and accordingly took the view that the delay in the matter of payment of contribution was due to his financial 2 crisis and not to be intentional. 3. Sri.Pareeth, learned counsel for the respondent resisting the submissions of Mr.Ajayakumar submitted that the certificate of contribution referred to in the appeal memo was not actually on record. The above certificate, at any rate, pertains to the previous period. Exts.A4 and A5 rightly relied on by the court below to find out that there was no contumacious conduct or defiance of law warranting penalisation of the respondents by imposing damages. 4. We have considered the rival submissions. We notice that the finding that the respondent is not guilty of any blatant defiance of law or contumacious conduct has been arrived at by the court below accepting the pleadings raised by the respondent even though the respondent did not adduce (the respondent was the applicant) even formal evidence for substantiating that plea. We are of the view that it was not proper on the part of the court below to have relied on Exts.A4 and A5 alone to enter the finding that the respondent is not guilty of contumacious conduct or open defiance of liability. In the absence of any evidence to support the finding we are of the view that the question whether the respondent is liable to pay damages for the delay in the matter of paying contribution is to be reconsidered by the court below. We are satisfied that the impugned judgment to the extent it relates to the respondent's liability to pay damages under Section 85 3 (b) of the Employers Insurance Act is bad. Accordingly, we set aside the impugned judgment and remit I.C.69/2006 to the E.I.Court, Palakkad for deciding the question regarding the liability of the respondent for imposition of damages for the delay in the matter of payment of contribution. The court is directed to afford an opportunity to both sides to adduce evidence for satisfying their rival contentions. In compliance with the above direction the court will take fresh decision at the earliest. Pius C.Kuriakose, Judge C.K.Abdul Rehim, Judge