Case: Standard Drum &amp; Barrel Manufacturers Company, Bombay Vs. Regional Director, Employees State Insurance Corporation., Bombay

This is an appeal filed by the Standard Drum and Barrels Manufacturing Co. Bombay against the order passed by the Employees Insurance Court at Bombay in application (ESI) 38 of 1981 decided on 30th July, 1982 rejecting the application filed by the company under section 75 of the Act, i.e. Employees State Insurance Act, 1948, for setting aside the order passed by the Regional Director, E.S.I. Bombay levying damages under sectionof the Act.2. It is an admitted position that notices were issued to the appellant company under sectionof the Act. According to the corporation the appellant employer is a chronic defaulter in payment of contribution as per the provisions of section 40 of the E.S.I. Act read with Regulations Nos. 29, 31, 34 and 26 of the E.S.I. (General) Regulations, 1950. Therefore, the corporation issues 3 notices dated 7th January, 1980, 9th July, 1980 and 1st January, 1981 being notices Nos. 5, 6 and 7 for defaults Nos. 14 to 23 proposing to determine and claim damages of Rs. 74,648.10, Rs. 64, 278/and 72,163.95 respectively for the contribution periods ending on 25th November 1978, 27th January, 1979, 31st March, 1979, 26th May, 1979, 29th September, 1979, 24th November, 1979, 26th January, 1980, 29th March, 1980 31st May, 1981 and 26th July, 1980. The appellant employer was asked to show cause by the said notices and was also afforded reasonable opportunity of being heard. Thereplied to the said notices vide their letters dated 22nd January, 1980, 14th July, 1990 and 9th February, 1981 and also appeared before the Regional Director of the Corporation on 23rd May, 1981, for hearing. The employer admitted the delay in payment of contribution but offered explanation to the effect that so all delays were caused due to pressure of work on the staff concerned and they were also in financial difficulties. The Regional Director of the Corporation found that the alleged reasons given could not be accepted as sufficient for reducation in the amount of damages as these were fifth and sixth show cause notices. However, on merits the Regional Director reduced the claim suitably in respect of the notices. As regards the 3rd notice datedthe Regional Director found that this was 7th show cause, and, therefore, there were no reasons for reducing the damages claimed. Hence he passed necessary orders on 11th of June, 1981 imposing the damages of Rs. 63,687/nd Rs. 72163.95 respectively. It is this order imposing damages upon thewhich came to be challenged in application filed under section 75 of the Act. In support of its case the appellant company examined Joseph Nair, Manager of the Company. After appreciating the material placed before him, the Judge of the Employees Insurance Court, Bombay came to the conclusion that there were no reasons for interfering with the order passed by the Regional Director and, therefore, rejected the application. It is this order of the Employees Insurance Court which is challenged in the present appeal.

Reasoning:
If all those three orders are read together it is quite clear that the Regional Director of the E.S.I. considered the explanation offered by thein its proper context. In case of two notices he reduced the claim for damages. So far as the last show cause notice is concerned, in view of the considerable delay in payment of contribution and the fact that it related to the 21st to 23rd defaults, he thought that there is no scope for any reduction in the damages. Therefore, it cannot be said that the orders passed by the Regional Director of E.S.I. are not speaking orders. The orders clearly indicate application of mind to the explanation offered by theregarding the delay in payment of contribution and, thereafter, a decision is taken by the Regional Director of the E.S.I. imposing penalty or damages. The order of the Regional Director of E.S.I. under sectioncannot be equated with the judgment of the Court containing detailed reasons. If the order passed indicates application of mind to all the relevant circumstances, and is not arbitrary then only because it is not like a judgment of the Court it cannot be held that it is not a speaking order. Therefore, in our view it cannot be said that the orders are vitiated either forof mind or that they are not speaking orders. As already observed the orders passed are speaking orders and give all the necessary particulars. Therefore, we do not find any substance in this contention of Shrithe present case it is practically an admitted position that in all 23 defaults were committed by the appellant company and it is in the case of last show cause notice that the maximum penalty is imposed. There is Corporation was quite justified in described that thewas a chronoic or a habitual defaulter and hence the maximum penalty prescribed by law was called for. Therefore, we do not find this is a case wherein any interference is called for with the discretion exercised by the Regional Director of E.S.I.