Maruthi Vilas vs Employees State Insurance on 27 August, 2008

       

  

  

 
 
  IN THE HIGH COURT OF KERALA AT ERNAKULAM

MFA.No. 903 of 2002(E)


1. MARUTHI VILAS, WILLINGDON ISLAND,
                      ...  Petitioner

                        Vs



1. EMPLOYEES STATE INSURANCE
                       ...       Respondent

2. THE RECOVERY OFFICER, E.S.I. CORPORATION

                For Petitioner  :SRI.A.V.XAVIER

                For Respondent  : No Appearance

The Hon'ble MR. Justice M.N.KRISHNAN

 Dated :27/08/2008

 O R D E R
                         M.N.KRISHNAN, J.
                          --------------------------
                       M.F.A. No. 903 OF 2002
                            ---------------------
                Dated this the 27thday of August, 2008

                              JUDGMENT

This appeal is preferred against the order of the

Employees’ Insurance Court, Palakkad, in I.C. No.84/00. The

applicant before the said court contended that it is not liable to pay

interest in the light of the fact that there was a bonafide dispute

regarding its liability and that litigations were pending in various

forums regarding its liability to pay the amount. Ultimately it has

been decided that the establishment is liable to be covered under the

Act. So the main contention argued by the Learned counsel for the

appellant is that really there was a bonafide dispute regarding its

liability to pay the amount. By virtue of the challenge of the various

orders issued, it should not be directed to pay the interest as claimed

by the ESI Corporation. The matter has come up for consideration

before the Division Bench of this court reported in Cannanore Drug

Lines v. E.S.I. Corporation [2007 (1) KLT 880]. This court held as

follows:

“Merely because the appellant failed to pay
contribution allegedly under a bonafide
impression or belief that the establishment was

MFA No.903/02 2

not covered under the provisions of the E.S.I. Act
cannot absolve the appellant from the liability of
paying interest on the delayed payment of E.S.I.
Contribution under S.39(5) read with Regulation
31A. Neither the provisions in the E.S.I. (General)
Regulations give any discretion to the respondent
to exempt the appellant from the liability to pay
interest on the delayed payment of E.S.I.
Contribution. The bonafide impression of the
appellant that his establishment was not covered
under the provisions of ESI Act or the pendency
of a dispute before the ESI Court regarding the
appellant’s liability to pay ESI contribution cannot
be a valid ground for exempting the appellant
from paying interest in terms of S.39(5)(a) and
Regulation 31A. When the statute does not
provide for any such exemption the respondent
cannot exclude the amount of interest from the
demand made against the appellant.”

In the light of this decision, it has to be held that the

appellant is not entitled to any exemption from paying interest. I do

not find any ground to interfere with the decision rendered by the EI

Court. Therefore the appeal lacks merit and it is dismissed. But I

make it clear that the instalment facility extended by the EI Court will

hold good and let the first instalment commence from 1.11.08.

M.N.KRISHNAN, JUDGE
vps

MFA No.903/02 3