Employees' State Insurance Corporation, Bangalore Vs. Tungabhadra Steel Products Limited, Tungabhadra Dam, Hospet (29.11.2001 - KARHC) - Court Judgment

Excerpt:
- indian succession act, 1925. section 2(h): [n. kumar,j] proof of will legal requirements duty of the court held, under the act, the will to be valid, should be reduced into writing, signed by the testator and shall be attested by two or more witnesses and at least one attesting witnesses shall be examined. if these legal requirements are not found, in the eye of law there is no will at all. therefore, the first step is that if the documents produced before the court prima facie do not satisfy these legal requirements, the court need not make any further enquiry, in so far as its due execution is concerned and can negative a claim based on the said document. further, the second step is that when the legal heirs are disinherited, the court has to scrutinise the evidence with greater.....orderb.k. sangalad, j. 1. this appeal is filed against the order dated 18-10-2000 passed in esi no. 4 of 1999 by the learned judge, esi court, hubli, allowing the application filed under section 75 of the esi act.2. the respondent is the applicant and the appellant is the respondent before the esi court at hubli.3. m/s. tungabhadra. steel products limited, hospet (hereinafter referred to as 'the company') is a subsidiary of bharat tantra nigam limited, allahabad. it is a joint undertaking of the government of india and the governments of karnataka and andhra pradesh and it is being incorporated under the provisions of the companies act. the company has been engaged in design, fabrication, erection and manufacturing of various types of gates required for river valley projects with other.....

Judgment:
ORDER

B.K. Sangalad, J.

1. This appeal is filed against the order dated 18-10-2000 passed in ESI No. 4 of 1999 by the learned Judge, ESI Court, Hubli, allowing the application filed under Section 75 of the ESI Act.

2. The respondent is the applicant and the appellant is the respondent before the ESI Court at Hubli.

3. M/s. Tungabhadra. Steel Products Limited, Hospet (hereinafter referred to as 'the company') is a subsidiary of Bharat Tantra Nigam Limited, Allahabad. It is a joint undertaking of the Government of India and the Governments of Karnataka and Andhra Pradesh and it is being incorporated under the provisions of the Companies Act. The company has been engaged in design, fabrication, erection and manufacturing of various types of gates required for river valley projects with other activities and it has employed about 990 employees. For three years prior to approaching the ESI Court, it is stated that the financial position of the company was bad and the profit margin of the company was just marginal. The company suffered a power cut of the KEB to the extent of 80%. A comprehensive wage revision took place during March 1996. On account of this, the company had to undertake additional burden. The company as it announced voluntary retirement scheme, to reduce the burden, had to face financial stringency. The company was quite regular in making contributions in respect of all employees. The company also has got branches outside Karnataka and the strength of the employees was less than 20. The medical expenses of these staff has been met by the company. It has been paying the contributions regularly in respect of the staff at Hyderabad and Bangalore.

4. During 1995 for the first time, there was a notice from the appellant dated 10-8-1993 directing the company to remit the amount of Rs. 95,697/- comprising of the contribution of Rs. 52,485-25 and interest of Rs. 45,211-75. This amount of contribution was pertaining to the period from 30-6-1984 to 26-1-1995. The company paid the contribution of Rs. 52,485-25 and requested to waive the interest. However, the Corporation refused to waive the interest. Therefore, the company paid the interestof Its. 45,211-75 on 17-11-1995. After these payments, there was a demand made by the Corporation to pay the interest of Rs. 18,114-00 for the period from 10-2-1993 to 12-9-1995 and adopted coercive methods to recover the interest amount. Therefore, the company left with no option otherwise than making the payment, had to pay the interest also.

4-A. That being the state of affairs, after a lapse of so many years, the Corporation issued show-cause notice again on 7-3-1997 claiming damages to the tune of Rs. 52,485-00 i.e., equal to the contribution already paid. The company replied to the letter dated 10-4-1996 requesting the Corporation to drop the said proceedings. However, the Corporation was quite reluctant to drop the proceedings. It is also stated that the company kept quiet all the while from 1995 till they received a letter in 1998 thinking that the Corporation had dropped the proceedings to recover the damages. But it was not so, it proceeded to recover the damages which was 100%. The Corporation also gave an opportunity to the company to put forth their submission as the company did not pay contribution on wages for the period from 1-5-1978 to 1-3-1980 and from 1-4-1981 to 26-1-1985. The company was required to make the payment of contribution within 21 days from the due date for the relevant period.

5. The company was informed about the payment of contributions on the total wages of Rs. 7,49,780-00 vide notice dated 5-11-1986. The company paid the contribution only on 12-9-1995. The Corporation gave an opportunity of personal hearing on 26-6-1998 and 28-9-1998 before claiming damages. One Mr. Krishna reddy appeared and pleaded that the claiming of the damages was against the principles of the natural justice. An order under Section 85-B on 2-2-1999 claiming damages at 100% was passed. Being aggrieved by this, the company approached the ESI Court. Based on the pleadings, the following issues have been raised:

(i) Whether the respondent is justified in Imposing 100% damages on the delayed payment made by the applicant?

(ii) Whether the applicant is entitled for waiver of damages? (iii) What order?

Issue No. (i): Negative; Issue No. (ii): Affirmative; Issue No. (iii); As per order.

6. Smt. Geethadevi, learned Counsel for the appellant fairly conceded that as far as the first issue is concerned, in view of Regulation 31-C of the ESI Regulations, the Corporation is permitted to recover the damages only to the extent of 25%. But according to her, if 25% of the amount claimed is taken and if it is multiplied by the period of delay, then the contribution goes out of the proportion. Hence, the damages that are claimed are quite reasonable and within the ambit of Regulation 31-C of the ESI Regulations.

7. Mr. Subramanya, learned Counsel for the respondent has no objection for the method of calculation arrived at. But he vehemently con-tended that the company has employed 990 employees and at one Branch at Hyderabad wherein less than 20 employees were working and due to bona fide mistake, there might be some delay and for that, the company should not be penalised if proper explanation is coming forth. According to him, substantial concession ought to have been given.

8. Merely there is a delay in proceedings, it cannot be said that the Corporation is estopped from recovering the damages. Smt. Geethadevi, learned Counsel for the appellant relied upon a decision in the case of Gram Sewa Samithi, Raipur v Regional Commissioner, Employees' Provident. Fund, Indore 1997-II-LLJ-1202 (MP), wherein it is held as follows:

'The present writ petition impugned an order of levy of damages under Section 14-B of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, passed by the respondent (Regional Commissioner, Employees' Provident Fund) against the petitioner for default in payment of the contribution due under the Act. The Court dismissed the writ petition. It observed the Act is a welfare legislation enacted for the employees in factories and other establishments'.

Another decision relied on by Smt. Geethadevi is in the case of RegionalProvident Fund Commissioner v S.D. College and Others 1997-II-LLJ-55 (SC).

9. Learned Counsel for the respondent relied upon two decisions, viz., Guindy Machine Tools Private Limited, Madras v Employees' State Insurance Corporation, Madras 2000-I-LLJ-287 (Mad.) and Madras Hotel Ashoka (Private) Limited v E.S.I.C. 1994-I-LLJ-495 (Mad.), wherein it is held as follows:

'It is not possible to lay down any hard and fast rule as to what are the matters that would have relevance in fixing the quantum of damages under Section 85-B of the Act. To lay down any formula in regard to such quantum would be to trespass upon the power of the Corporation, which is to make its independent exercise in determining the quantum under Section 85-B. However, the quantum must necessarily be related to the gravity of the penal element in the default on the part of the party. That, in turn, must depend upon the validity of the explanation the party may give for default. If the party is able to satisfy the Regional Director that though default has been committed by him, it was due to circumstances beyond his control or that despite his best efforts he could not make the contribution in time, that would certainly be a mitigating circumstance which would serve to soften the rigour of penalty that may be imposed under the section'.

10. In the above decision, there was a delay of only 76 days and 93 days in the submission of the contribution. But in the case on hand, there is enormous delay to make the contribution. With all this, there issome area wherein the discretion can be shown. The first decision cited by Mr. Subramanya, learned Counsel for the respondent makes it clear that if there is enormous delay in commencing the proceedings for recovery of damages, considerable concession can be shown even to the extent of 50%. In the case cited, there was a delay of four and a half years to eight years delay. In the case on hand also, there is almost delay of nine years in issuing the notice. In my opinion, the facts of the decided case (Guindy Machine Tools Private Limited's case, supra) and the facts of the case on hand are made akin to each other. In Guindy Machine Tools Private Limited's case, supra, the damages is reduced to 50%.

11. In the case on hand, there is a delay of more than 3,000 days in making the contribution. When the company has employed 990 employees, it cannot be so careless about the commitments especially with regard to the employees. However, looking to the facts and circumstances of the cases, I am inclined to give some concession. In my opinion, the ends of justice would be adequately met with if the damage is reduced from Rs. 52,485-00 to Rs. 40,000-00. In the light of these observations, the following order is passed:

The appeal is allowed in part and the Corporation is entitled to recover damages of Rs. 40,000-00 from the respondent-company.