JUDGMENT
R.K. Patra, J.
1. The petitioner M/s. Samrat Industries has filed this writ petition under Article Nos. 226 and 227 of the Constitution of India challenging the legality of levy of damages amounting to Rs. 8, 114.65 made under Section 85B of the Employees’ State Insurance Act, 1948 (hereinafter referred to as ‘the Act’) as per the order (Annexure-6) of the Regional Director, Employees State Insurance Corporation, Bhubaneswar-opposite party for “delayed payment of amount of contribution (both employer’s contribution and employees’ contribution) for the period of April 1, 1976 to October 30, 1978”.
2. The case of the petitioner is that it is a partnership firm and was previously being managed by one Kuidiy Rai Kakkar and following his death in the year 1983, the management of the petitioner firm was dislocated and some records were not immediately available which resulted in non-payment of contributions for certain period under the Act. The opposite party initiated Certificate Case No 13 ESI/79 for realisation of the said dues covering the period from April 1, 1976 to September 30, 1978. The entire certificate dues with interest was recovered on 1 March 10, 1987 from the petitioner by way of instalments granted by the Certificate Officer. The opposite party for a part of the aforesaid period imposed damages on the ground of nonpayment of contributions and initiated Certificate Case No. 23(ESI)/79 (for the period from September 27, 1975 to May 28, 1977) and No. 2(ESI)/83 (for the period September, 1977 and other months) for recovery of it. The damages so imposed were also recovered from the petitioner through the aforesaid certificate proceed-.ings. The opposite party, however, by notice dated October 16, 1989 (Annexure-4) called upon the petitioner to show cause as to why damages under Section 86B(1) of the Act as per the statement enclosed thereto shall not be realised. Pursuant to the said notice, the petitioner submitted his case (Annexure-5) before opposite party contending, inter alia, that there was no delay in making payment of the contributions as well as: damages because it paid all the dues as per the instalments granted by the Certificate Officer and initiation of the impugned proceedings was beyond time. The opposite party rejected the objection and passed the impugned order at An-nexure-6 imposing damages under Section 85B of the Act. The opposite party has filed his counter justifying the grounds for passing the impugned order.
3. Shri Sahu, the learned counsel for the petitioner, submitted that although no period of limitation has been prescribed for initiating a proceeding under Section 85B of the Act, it should be done within a reasonable time and in the instant case proceeding having been initiated alter 10 years, the same is liable to be quashed. In this connection, he has placed reliance on the judgment of the Supreme Court in State of Gujarat v. Panel Raghav Natha, AIR 1969 SC 1287 and Mansaram v. S.P. Pathak, AIR 1983 SC 1239. He has also submitted that the entire dues including contributions and damages which were sought to be recovered through certificate proceedings were liquidated in terms of the orders of the Certificate Officer who had permitted to make payment on instalment basis and as such, the impugned levy of further damages on the petitioner is illegal.
4. Under Section 85B of the Act, the failure of the employer to pay the amount due in respect of any contribution or any other amount payable under the Act gives jurisdiction to the Corporation to recover from the employer by way of penalty such damages not exceeding the amount of arrears as may be specified in the Regulations. The said provision does not prescribe any period of limitation for initiating proceeding for recovery of damages. There is also no other provision in the Act prescribing any period of limitation to realise the damages. The use of the words “may recover” in the said section indicates that the Legislature has given discretion to the Corporation to initiate proceeding for recovery of damages. Such discretion has to be exercised in a reasonable manner. Law is now fairly settled that where the power is conferred to effectuate a purpose it has to be exercised in a reasonable manner and the reasonable exercise of power inheres its exercise within a reasonable time. What is reasonable time is an aspect which has to be decided on the facts and circumstances peculiar to each case. Admittedly, the impugned proceeding was initiated against the petitioner after ten years in as much as the default in payment of contribution relates to the period of the years 1978-1979. This in our opinion cannot be held to be reasonable exercise of power by the opposite party within a reasonable time.
5. Besides this, admittedly, the petitioner has liquidated all the contributions and damages which were sought to be recovered through the certificate proceedings by paying the same on instalments as per the orders of the Certificate Officer. Rule 56 of Schedule II of the Orissa Public Dcmands Recovery Act, 1962 provides that payment of the amount due under any certificate may he made by instalments if the certificate Officer in whose office certificate is filed so directs. The Certificate Officer is a Court under the aforesaid Act. A competent authority having permitted the petitioner to make payment by instalments and the petitioner having duly complied with the same, we do not find any valid reason for initiating the impugned proceeding for levy of damages on the ground of ‘delayed payment’ of the contributions and damages. As a matter of fact, there was no delayed payment in the matter as all payments have been made by the petitioner pursuant to the order of the Certificate Officer who had permitted to make payments by instalments.
6. For the reasons aforesaid, the impugned order under Anncxurc-6 cannot be sustained in law which is hereby quashed. There shall be no order as to cost
7. Writ petition is allowed.
D.P. Mohapatra, J.
8. I agree