{"id":220911,"date":"2008-09-05T00:00:00","date_gmt":"2008-09-04T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-regional-director-vs-muthoot-apt-ceramics-limited-on-5-september-2008"},"modified":"2014-06-24T19:24:22","modified_gmt":"2014-06-24T13:54:22","slug":"the-regional-director-vs-muthoot-apt-ceramics-limited-on-5-september-2008","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-regional-director-vs-muthoot-apt-ceramics-limited-on-5-september-2008","title":{"rendered":"The Regional Director vs Muthoot Apt Ceramics Limited on 5 September, 2008"},"content":{"rendered":"<div class=\"docsource_main\">Kerala High Court<\/div>\n<div class=\"doc_title\">The Regional Director vs Muthoot Apt Ceramics Limited on 5 September, 2008<\/div>\n<pre>       \n\n  \n\n  \n\n \n \n  IN THE HIGH COURT OF KERALA AT ERNAKULAM\n\nIns.APP.No. 43 of 2008()\n\n\n1. THE REGIONAL DIRECTOR,\n                      ...  Petitioner\n2. THE RECOVERY OFFICER,\n\n                        Vs\n\n\n\n1. MUTHOOT APT CERAMICS LIMITED,\n                       ...       Respondent\n\n                For Petitioner  :SRI.T.V.AJAYAKUMAR\n\n                For Respondent  : No Appearance\n\nThe Hon'ble MR. Justice M.N.KRISHNAN\n\n Dated :05\/09\/2008\n\n O R D E R\n                           M.N.KRISHNAN, J.\n                           --------------------------\n                      Ins. Appeal No. 43 OF 2008\n                             ---------------------\n               Dated this the 5thday of September, 2008\n\n                               JUDGMENT\n<\/pre>\n<p>          This appeal is preferred against the judgment of the<\/p>\n<p>Employees&#8217; Insurance Court, Alappuzha, in I.C. No.32\/04. The ESI<\/p>\n<p>Corporation initiated action against the applicant before that court for<\/p>\n<p>levying damages by way of penalty for the delayed payment of<\/p>\n<p>contribution for the wage periods. It was challenged before the court<\/p>\n<p>below. The court below set at naught the initiation of proceedings<\/p>\n<p>and also attempted to distinguish the decision reported in <a href=\"\/doc\/1899862\/\">M\/S.<\/p>\n<p>Hindustan Times Ltd. v. Union of India<\/a> [AIR 1998 SC 688]. Time<\/p>\n<p>went again. It has been held by the courts that the mere delay in<\/p>\n<p>making the payment on account of financial loss by itself is not a<\/p>\n<p>ground for waiving the imposition of damages of a party. But the<\/p>\n<p>courts have reiterated the imposition of damages as not a routine<\/p>\n<p>realistic affair but as a sound application of judicial discretion. While<\/p>\n<p>exercising the judicial discretion, the facts to be noted are whether<\/p>\n<p>there is any contumacious conduct, deliberate evadement of<\/p>\n<p>payment and a flagrant violation of the provisions of the statute.<\/p>\n<p>One has to remember that ESI Act is also a labour welfare legislation<\/p>\n<p><span class=\"hidden_text\">Ins. Appeal No.43\/08               2<\/span><\/p>\n<p>intended to confer benefits on the employees. So one should not by<\/p>\n<p>mere reasoning of some financial difficulty be excluded from paying<\/p>\n<p>the damages. But what is important is the contumacious conduct.<\/p>\n<p>So the approach of the EI Court that the sustainment of loss is itself<\/p>\n<p>a ground for waiving the damages cannot be said to be the correct<\/p>\n<p>position by itself. But it may be one of the circumstances which can<\/p>\n<p>be also looked into by the court to find out whether really there is a<\/p>\n<p>deliberate or contumacious conduct on the part of the employer.<\/p>\n<p>Recently a Division Bench of this court had considered the matter in<\/p>\n<p>depth in <a href=\"\/doc\/1533427\/\">Regional Director, ESI Corporation v. Managing<\/p>\n<p>Director, M\/S Qetcos Ltd.<\/a> [2008 (3) ILR 132]. The Division Bench<\/p>\n<p>had also extracted various dictum laid down by the Supreme Court<\/p>\n<p>and also the object behind section 85(b) of the Act. The Apex court<\/p>\n<p>also held that &#8220;Existence of mens rea or actus reus to contravene a<\/p>\n<p>statutory provision must also be held to be a necessary ingredient for<\/p>\n<p>levy of damages and\/or the quantum thereof&#8221;.                 Here the<\/p>\n<p>establishment was running at a huge loss of more than Rs. 37<\/p>\n<p>crores.      It approached the BIFR for getting their establishment<\/p>\n<p>declared as a sick unit and seeking approval of a         rehabilitation<\/p>\n<p>scheme.       Unfortunately, on account of the limitation prescribed, it<\/p>\n<p><span class=\"hidden_text\">Ins. Appeal No.43\/08               3<\/span><\/p>\n<p>was not accepted and further proceedings are still pending. So we<\/p>\n<p>are concerned with a unit which is unable to stand by itself. There is<\/p>\n<p>noting to show that there has been any deliberate or contumacious<\/p>\n<p>conduct which warrants imposition of penalty. So it is in that respect<\/p>\n<p>I am inclined to hold that the extreme measure of imposition of<\/p>\n<p>penalty by way of damages need not be done in this case. The point<\/p>\n<p>discussed by the EI Court that the decision reported in 1998 will not<\/p>\n<p>be applicable to the facts of the present case is not correct. But<\/p>\n<p>altogether on the broader concept of imposition of damages, I am<\/p>\n<p>inclined to agree with the decision.\n<\/p>\n<p>            With these observations, the appeal is dismissed.<\/p>\n<p>                                            M.N.KRISHNAN, JUDGE<br \/>\nvps<\/p>\n<p><span class=\"hidden_text\">Ins. Appeal No.43\/08    4<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Kerala High Court The Regional Director vs Muthoot Apt Ceramics Limited on 5 September, 2008 IN THE HIGH COURT OF KERALA AT ERNAKULAM Ins.APP.No. 43 of 2008() 1. THE REGIONAL DIRECTOR, &#8230; Petitioner 2. THE RECOVERY OFFICER, Vs 1. MUTHOOT APT CERAMICS LIMITED, &#8230; Respondent For Petitioner :SRI.T.V.AJAYAKUMAR For Respondent : No Appearance The Hon&#8217;ble [&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-220911","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 v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Regional Director vs Muthoot Apt Ceramics Limited on 5 September, 2008 - 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\/the-regional-director-vs-muthoot-apt-ceramics-limited-on-5-september-2008\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Regional Director vs Muthoot Apt Ceramics Limited on 5 September, 2008 - Free Judgements of Supreme Court &amp; 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