9911796707
|
Home
Issues involved: Interpretation and application of Section 85B of the Employees State Insurance Act and Regulation 31C of the Employees State Insurance (General) Regulations, 1950.
Summary: The appeal before the Supreme Court concerned the interpretation and application of Section 85B of the Employees State Insurance Act and Regulation 31C of the Employees State Insurance (General) Regulations, 1950. The case originated from a judgment of the Karnataka High Court, where the validity of a notification increasing the wage ceiling for employees under the Act was challenged. The High Court had allowed the appeal in part, leading to further legal proceedings regarding the deposit of contributions, interest, and damages under the Act. The key contention revolved around whether the damages specified in Regulation 31C were mandatory or discretionary. The appellant argued that the High Court failed to consider the effect of Regulation 31C, which provides for the levy of interest and damages. The Supreme Court examined the relevant provisions of the Act, emphasizing that Section 85B empowers the Corporation to recover damages from employers for non-payment of contributions, subject to certain conditions and the principles of natural justice. The Court highlighted that while the statutory liability of the employer to deposit contributions was undisputed, the imposition of damages was not mandatory in all cases. Section 85B used permissive language ("may recover"), indicating a discretionary approach to levying damages as a penalty. The Court stressed the need for an adjudicatory process and the consideration of mitigating circumstances before imposing penalties, in line with principles of natural justice. Referring to previous legal precedents, the Court underscored the importance of strict construction of penal provisions and the requirement of mens rea or actus reus for the imposition of damages. The Court concluded that the High Court's judgment did not adequately consider these principles and remitted the matter for fresh consideration, emphasizing the need for a detailed assessment of the quantum of damages in accordance with the law. In light of the above analysis, the Supreme Court set aside the impugned judgments and remitted the case back to the High Court for a fresh determination. The appeal was allowed, with no order as to costs.
|
