Case: M/s. Prestolite (India) Limited Vs. Regional Director and Another

1. This appeal arises out of the special leave granted by this Court on an application under Article 136 of the Constitution of India against the decision of the Punjab and Haryana High Court in First Appeal from Order No. 7 of 1981 dated March 9, 1981. It may be stated here that the appeal was to be heard by the Single Bench of the High Court. But in view of the importance of the points raised in a number of similar matters a reference was made before the Division Bench of the High Court and the Division Bench answered the reference in F. A. O. No. 476 of 1978. In terms of the decision rendered in the said first appeal, the appeal preferred by the appellant in the High Court namely, F. A. O. No. 7 of 1981 was dismissed in limine by the Division Bench. The said F. A. O. No. 7 of 1981 arose out of an adjudication dated December 24, 1979 made by the Regional Director, Employees State Insurance Corporation, Haryana imposing damages for a sum of Rs. 51, 857.40 under Sectionof the Employees State Insurance Act as contained in Annexure A of the special leave petition. Thethereafter made an application under Section 75 of the Act and such application was dismissed by an order dated October 11, 1980 passed by the Judge, Employees State Insurance Court, Ballabhgarh. After disposal of the said application, F. A. O. No. 7 of 1981 was preferred before the High Court. The facts leading to the aforesaid proceedings are to the following effect2. The Regional Director proposed to impose damages on account of payment of the dues under the Employees State Insurance Act beyond theand a notice to that effect was issued to the appellant. The appellant made a written representation in response to the notice indicating the reasons for which there had been delay in making such payment. Such written representation has been annexed to the special leave petition being AnnexureAlthough an opportunity of personal hearing was afforded by the Regional Director to the appellant, such opportunity was not availed of. The written representation was stated to have been taken into consideration by the Regional Director and the same was dismissed by making the order to the following effect"I have applied my mind to all the relevant facts and have gone into the reasons stated by the employer. My findings on each of the contentions of the establishment are as underThe reasons advanced are not legally tenable. Opportunity of personal hearing afforded on November 22, 1979 has not been availed of."

Reasoning:
5. It however appears to us that the contention of Mr Goswami in the facts of the case should not be accepted. Even if the regulations have prescribed general guidelines and the upper limits at which the imposition of damages can be made it cannot be contended that in no case, the mitigating circumstances can be taken into consideration by the adjudicating authority in finally deciding the matter and it is bound to act mechanically in applying the uppermost limit of the table. In the instant case, it appears to us that the order has been passed without indicating any reason whatsoever as to why grounds for delayed payment were not to be accepted. There is no indication as to why the imposition of damages at the rate specified in the order was required to be made. Simply because the appellant did not appear in person and produce materials to support the objections, the employees case could not be discarded in limine. On the contrary, the objection ought to have been considered on merits.