IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HON'BLE MR. JUSTICE M.N.KRISHNAN FRIDAY, THE 13TH NOVEMBER 2009 / 22ND KARTHIKA 1931 Ins.APP.No. 33 of 2009(G) ------------------------ EIC.65/2006 of E.I.COURT, KOZHIKODE .................... APPELLANT/RESPONDENT ---------------------------------------- THE REGIONAL DIRECTOR, E.S.I.CORPORATION, THRISSUR. BY ADV. SMT.T.D.RAJALAKSHMY, SC, ESI CORPN. RESPONDENT(S): APPLICANT ------------------------ T.K.RAJENDRAN, KEERTHI, POST CHOVVA, KANNUR. ADV. SRI.P.RAMAKRISHNAN FOR R1 THIS INSURANCE APPEALS HAVING BEEN FINALLY HEARD ON 13/11/2009, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: M.N. KRISHNAN, J. = = = = = = = = = = = = = = INS.APPEAL NO. 33 OF 2009 = = = = = = = = = = = = = = = Dated this the 13th day of November, 2009. J U D G M E N T This appeal is preferred against the order of the Employees Insurance Court, Kozhikode in I.C.65/06. The applicant moved a petition for declaration to set aside the order imposing damages for delayed payment of the contributions. The damages imposed was Rs.66,994. The applicant contended that as the establishment was a fresh one he was under the impression that he was not liable to be covered under the E.S.I. Act. It was on account of the judicial pronouncement it came under the coverage of he E.S.I.Act. It is submitted that there was no willful omission or laches or deliberate attempt in delaying the remittance. From the nature of contentions raised it can be normally seen that there was no deliberate or intentional act on the part of the establishment to avoid payment of contributions but it was disputing the whole thing before a competent Court of jurisdiction. It had also paid the INS.APPEAL NO. 33 OF 2009 -:2:- contribution with interest. As held by this Court right from 1988 there is no evidence of any contumacious conduct or deliberate intention to evade payment. It has also been cited in the decision reported in Regional Director, ESI Corporation v. Managing Director, M/s Qetcos Ltd. (ILR 2008 (3) Kerala Series 132) that there there must be mensrea also to evade payment. So also u/s 85-B the word used is 'may' and not 'shall' which gives a discretionary jurisdiction to the authority to impose damages but on sound judicial principles. Since there is no deliberate evadement or mensrea I feel this is a fit case where discretion has to be exercised in favour of the establishment rather than on the E.S.I. Corporation. This is what has been done by the E.I.Court. Therefore the appeal lacks merit and the same is dismissed. M.N. KRISHNAN, JUDGE. ul/-