{"id":205723,"date":"2007-10-31T00:00:00","date_gmt":"2007-10-30T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/regional-director-vs-appollo-tyres-ltd-on-31-october-2007"},"modified":"2018-04-15T16:00:28","modified_gmt":"2018-04-15T10:30:28","slug":"regional-director-vs-appollo-tyres-ltd-on-31-october-2007","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/regional-director-vs-appollo-tyres-ltd-on-31-october-2007","title":{"rendered":"Regional Director vs Appollo Tyres Ltd on 31 October, 2007"},"content":{"rendered":"<div class=\"docsource_main\">Kerala High Court<\/div>\n<div class=\"doc_title\">Regional Director vs Appollo Tyres Ltd on 31 October, 2007<\/div>\n<pre>       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nMFA No. 1179 of 2001(D)\n\n\n\n1. REGIONAL DIRECTOR,ESI CORPN\n                      ...  Petitioner\n\n                        Vs\n\n1. APPOLLO TYRES LTD.\n                       ...       Respondent\n\n                For Petitioner  :SRI.P.SANKARANKUTTY NAIR\n\n                For Respondent  :SRI.S.S.NAIR\n\nThe Hon'ble MR. Justice J.B.KOSHY\nThe Hon'ble MRS. Justice K.HEMA\n\n Dated :31\/10\/2007\n\n O R D E R\n<\/pre>\n<p>                     J.B. KOSHY &amp; K.HEMA, JJ.\n<\/p>\n<p>                   &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;<br \/>\n                     M.F.A.No. 1179 of 2001\n<\/p>\n<p>                  &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;-<br \/>\n        Dated this the 31st day of October, 2007<\/p>\n<p>                              Judgment<\/p>\n<p>Koshy,J.\n<\/p>\n<p>            This case is referred to the Division Bench noticing<\/p>\n<p>conflict of views in the decisions in <a href=\"\/doc\/1389442\/\">Regional Director, ESI<\/p>\n<p>Corporation v. Cannanore Spinning and Weaving Mills<\/a> (2001 (3) KLT<\/p>\n<p>393) and <a href=\"\/doc\/515903\/\">Cannanor Drug Lines v. ESI Corporation<\/a> (2007 (1) KLT 880)<\/p>\n<p>regarding liability to pay interest on delayed contribution due to the<\/p>\n<p>stay order issued by the court.\n<\/p>\n<p>            2. Respondent is a factory covered under the ESI Act.<\/p>\n<p>The wage ceiling for coverage under the Employees&#8217; State Insurance<\/p>\n<p>Act was extended from Rs.3,000\/- to Rs.6,500\/- with effect from<\/p>\n<p>1.1.1997.   Unions challenged the above notification before this<\/p>\n<p>Court and this Court granted a stay. In view of the above stay<\/p>\n<p>order, respondent was not able to collect the contribution from the<\/p>\n<p>employees who were drawing salary between Rs.3,000\/- and<\/p>\n<p>Rs.6,500\/-, but, later, stay was vacated and coverage was accepted<\/p>\n<p><span class=\"hidden_text\">M.F.A.No.1179\/2001                   2<\/span><\/p>\n<p>by the court.     When the stay was vacated, the entire employees&#8217;<\/p>\n<p>contribution and employers&#8217; contribution were paid by the<\/p>\n<p>respondent. Then, appellant ESI Corporation demanded interest for<\/p>\n<p>the delayed payment. Contention of the respondent was that they<\/p>\n<p>were willing to pay the amount even at the first instance, but, they<\/p>\n<p>were unable to pay the amount because of the stay and, therefore,<\/p>\n<p>they are unable to pay the interest.       It is not the respondent<\/p>\n<p>employer who obtained the stay, but, employees got the stay.<\/p>\n<p>Therefore, employer was unable to       pay the contribution amount<\/p>\n<p>during the period. Since the employees who were drawing salary<\/p>\n<p>between Rs.3,000\/- and Rs.6,500\/- were not covered, employer had<\/p>\n<p>to pay the entire medical and other benefits due to them.       After<\/p>\n<p>vacation of the stay, Corporation got the entire contribution without<\/p>\n<p>paying     any    benefits, that  is,  employers&#8217;   and   employees&#8217;<\/p>\n<p>contribution. Therefore, actually, it is the Corporation who gained<\/p>\n<p>because of the stay. In any event, after paying all the benefits and<\/p>\n<p>paying retrospective contribution, whether they are liable to pay<\/p>\n<p>interest also for no fault on their part is the question.      On an<\/p>\n<p>identical facts, this Court in <a href=\"\/doc\/1389442\/\">Regional Director, ESI Corporation v.<\/p>\n<p>Cannanore Spinning and Weaving Mills<\/a> (2001 (3) KLT 393) held that<\/p>\n<p>interest is not liable.    We are of the view that interest cannot be<\/p>\n<p><span class=\"hidden_text\">M.F.A.No.1179\/2001                    3<\/span><\/p>\n<p>levied on the facts of the case.      It is true that in <a href=\"\/doc\/515903\/\">Cannanor Drug<\/p>\n<p>Lines v. ESI Corporation<\/a> (2007 (1) KLT 880), a Division Bench of this<\/p>\n<p>Court held that Corporation has no discretion to exempt employers<\/p>\n<p>from liability to pay interest for delayed payment of ESI contribution.<\/p>\n<p>If a party is not paying the contribution correctly in time on a wrong<\/p>\n<p>impression, Corporation is bound to pay interest. Even if a party<\/p>\n<p>obtains stay from the Court and later it is vacated, the employer<\/p>\n<p>who got the stay cannot say that they will not pay the interest. If<\/p>\n<p>the establishment is not paying the contribution due, even if on a<\/p>\n<p>bonafide impression that the establishment is not covered, they are<\/p>\n<p>liable to pay statutory interest on the delayed payment of<\/p>\n<p>contribution if finally it is held that the establishment is covered<\/p>\n<p>under the ESI Act. Here, employer was prevented by the stay order<\/p>\n<p>issued by the court, an act of the court, at the instance of the<\/p>\n<p>employees.       On the facts of this case, E.I. court, following the<\/p>\n<p>decision of this Court in Cannanore Spinning and Weaving Mills case<\/p>\n<p>held that interest need not be paid.        It is not a question of ESI<\/p>\n<p>Corporation granting exemption from payment of interest as interest<\/p>\n<p>cannot be waived by the ESI Corporation as held by the Division<\/p>\n<p>Bench in <a href=\"\/doc\/515903\/\">Cannanore Drug Lines v. ESI Corporation<\/a> (2007 (1) KLT<\/p>\n<p>880) if employer fails to pay contribution on a bona fide belief.<\/p>\n<p><span class=\"hidden_text\">M.F.A.No.1179\/2001                   4<\/span><\/p>\n<p>Therefore, on the facts, the decision in <a href=\"\/doc\/515903\/\">Cannanore Drug Lines v. ESI<\/p>\n<p>Corporation<\/a> (2007 (1) KLT 880) is not in conflict with the decision in<\/p>\n<p><a href=\"\/doc\/1389442\/\">Regional Director, ESI Corporation v. Cannanore Spinning and<\/p>\n<p>Weaving Mills<\/a> (2001 (3) KLT 393).         The reference is answered<\/p>\n<p>accordingly and on the facts of this case, we see no ground to<\/p>\n<p>interfere in the order of the E.I. court. Appeal dismissed.<\/p>\n<p>                                                   J.B.KOSHY<br \/>\n                                                     JUDGE<\/p>\n<p>                                                   K. HEMA<br \/>\n                                                     JUDGE<\/p>\n<p>vaa<\/p>\n<p><span class=\"hidden_text\">M.F.A.No.1179\/2001    5<\/span><\/p>\n<p>                               J.B. KOSHY AND<br \/>\n                                      K.HEMA,JJ.\n<\/p>\n<\/p>\n<p>                        &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;<br \/>\n                          M.F.A. No.1179 of 2001\n<\/p>\n<p>                        &#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;&#8212;<\/p>\n<p>                             Judgment<\/p>\n<p>                         Dated:31st October, 2007<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kerala High Court Regional Director vs Appollo Tyres Ltd on 31 October, 2007 IN THE HIGH COURT OF KERALA AT ERNAKULAM MFA No. 1179 of 2001(D) 1. REGIONAL DIRECTOR,ESI CORPN &#8230; Petitioner Vs 1. APPOLLO TYRES LTD. &#8230; Respondent For Petitioner :SRI.P.SANKARANKUTTY NAIR For Respondent :SRI.S.S.NAIR The Hon&#8217;ble MR. Justice J.B.KOSHY The Hon&#8217;ble MRS. Justice [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,21],"tags":[],"class_list":["post-205723","post","type-post","status-publish","format-standard","hentry","category-high-court","category-kerala-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Regional Director vs Appollo Tyres Ltd on 31 October, 2007 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/regional-director-vs-appollo-tyres-ltd-on-31-october-2007\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Regional Director vs Appollo Tyres Ltd on 31 October, 2007 - Free Judgements of Supreme Court &amp; 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