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TMI Blog2011 (1) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... roughly misconceived. Accordingly, the writ petition will stand dismissed - W.P. NO. 5030 OF 2005 , 7046 OF 2005 - - - Dated:- 12-1-2011 - K. CHANDRU, J. R. Parthiban for the Petitioner. A. Paramasivam for the Respondent. JUDGMENT 1. The petitioner has filed the present writ petition seeking to challenge an order dated December 6, 2004, passed under section 45A of the Employees State Insurance Act, 1948 (for short "the ESI Act") by the respondent ESI Corporation. By the said order, the petitioner was directed to make a contribution of Rs. 4,39,028 in respect of the period 1997-98 and 1998-99. The petitioner being the principal employer was directed to make good the amounts together with interest. The said order was not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterim order obtained by the trade union, they could not pay even their own contribution. After the dismissal of the writ petition, the Department started demanding the entire amount of contribution together with interest. 4. The said trade union also filed W.P. No. 15901 of 2000 directing the management not to recover the amounts and that writ petition was also dismissed. But in the writ petition filed by the petitioner in W.P. No. 16486 of 2000, by an order dated September 27, 2000, this court held that determination under section 45A was not proper. Hence it was set aside with liberty to proceed afresh. Thereafter, the Department gave a notice, dated July 19, 2003, demanding payment of a sum of Rs. 4,39,028 together with interest. Even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BIFR proceedings cannot prevent the ESI authorities from enforcing the provisions of the Act. 7. With reference to challenge under section 45A, of the Supreme Court vide its judgment in ESI Corpn. v. C.C. Santhakumar [2007] 1 SCC 584, held that the only remedy open to the aggrieved person is to approach the appropriate ESI Court with a petition filed under section 75 of the ESI Act. The following passages found in paragraphs 17, 25, 28, 30 and 31 may be usefully extracted below : "17. Prior to the incorporation of section 45A under Act 44 of 1966, the only resort available to the Corporation was section 75, for recovery of contribution through the court. Since this procedure was found to be impracticable and delayed process involved, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate could be equated to either a suit, appeal or application in the court. Under section 68(2) and sections 45C to 45-I, after determination of contribution, recovery can be made straightaway. If the employer disputes the correctness of the order under section 45A, he could challenge the same under section 75 of the Act before the ESI Court... 28. What section 75(2) empowers is not only the recovery of the amounts due to the Corporation from the employer by recourse to the ESI Court, but also the settlement of the dispute of a claim by the corporation against the employer. While this is so, there is no impediment for the Corporation also to apply to the ESI Court to determine a dispute against an employer where it is satisfied that such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry for the Corporation to seek a resolution of the dispute before the ESI Court, while the order was passed under section 45A. Such a claim is recoverable as arrears of land revenue. If the employer disputes the claim, it is for him to move the ESI Court for relief. In other cases, other than cases where determination of the amount of contributions under section 45A is made by the Corporation, if the claim is disputed by the employer, then, it may seek an adjudication of the dispute before the ESI Court, before enforcing recovery." 8. On the question of interest, it must be noted that the Supreme Court has held that on the matter of interest, there cannot be any private negotiations and the interest is an automatic liability on the employ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ult and could not be subjected to penalty under section 42 of the Karnataka Agricultural Income-tax Act. A reading of section 42 of the Act will show that it is not similar to section 39(5) of the ESI Act. Further, as for the ESI Act, the Supreme Court had decided the matter in Goetze (India) Ltd. s case (supra). 10. In so far as the ESI Act is concerned, payment of interest is a must on delayed payment whereas levy of damages is in the nature of penalty. Therefore, any waiver or modification of damages under section 85B may be possible but not for interest levied in terms of section 39(5) of the ESI Act. 11. The other decisions cited in Yeshaswi Cashew v. State of Karnataka [2001] 124 STC 465 (Kar.) , is a judgment of a Division Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X
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