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PETITIONER: SOVRIN KNIT WORKS ETC.

       Vs.

RESPONDENT: EMPLOYEES’ STATE INSURANCE CORPN.& ANR. ETC.

DATE OF JUDGMENT:       28/11/1996

BENCH: K. RAMASWAMY, G.T. NANAVATI

ACT:

HEADNOTE:

JUDGMENT:                             WITH      CIVIL APPEAL NOS.403(NL)/86, 2057-58/81/3257 & 3258/82                          O R D E R      These appeals by special leave arise from the orders of the E.S.I.  Court, Faridabad,  Harayana. The facts in CA No. 402/86 are  sufficient for  disposal of all the appeals. The appellants are  establishments covered  under the provisions of the  Employees’ State Insurance Act, 1948 (for short, the ‘Act’). They did not pay the contribution for the year 1980- 81. Therefore,  the Corporation  had served  the  notice  on December 31,  1982 calling  upon the  appellants to  pay the damages on delayed payment with interest. The appellants had objected to  it by the petition dated February 14, 1983. The Corporation, over-ruling the objections, passed the order on February 18, 1983 imposing the damages in a sum of Rs.8843/- The appellants  challenged it  by filing  application  under Section 75(2)  of the  Act before  the Insurance  Court. The Insurance Court  by its  order dated  August  14,  1985  has upheld the  damages. Since  the CA  Nos.2057 &  2058 of 1981 were pending  in this  Court,  they  filed  the  appeals  by special leave  without availing  the appellate remedy in the High Court.      The contentions  have been  raised by Sri S.K. Gambhir, learned counsel for the appellants. Firstly, it is contended that under  Section 94-A  of the  Act, Corporation  has been empowered to  delegate the  power to one of the officers but the officer-delegate  has not  power to  further delegate to any other  officer. Therefore,  exercise of the power by the officer is  bad in  law. when we requested Shri S.K. Gambhir to produce  the order  passed by the Corporation authorising the officer,  he is  unable to  place his hands on the order passed by  the Corporation. But he seeks to contend that the Regional Director, one Mr. G.R. Nair was a delegatee officer to whom  power was  delegated by the Corporation pursuant to its resolution.  Therefore, the  order is bad in law. Unless we look  into the  order passed  by the  Corporation, it  is difficult to  see whether  it is a further delegation. It is seen under  Section 95-A of the Act that the Corporation has been empowered  to authorise any of its officer. It would be obvious that the Regional Director is one of the officers in

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the region;  necessarily,  he  is  a  competent  officer  to exercise  the   power  under   the  Act  on  behalf  of  the Corporation. It  was conceded in the lower court that he was so authorised.  So, the  officer has power to pass the order imposing damages and interest thereon for delayed payment.      It is then contended that under Regulation 26 and 34 of the Regulation under the Act what is required is to purchase the contribution  stamps, affix  them and get them cancelled in time. If that is done by the employer then it can be said that the  employer has paid the contribution amount in time. Though Regulation  31-A which was brought in by Amendment of 1979, further requires the employer to submit the cards duly stamped  to  the  Corporation  that  is  a  mere  procedural formality for  showing that  the amount  has  been  paid  in respect of  the covered  employees. As  the cards  were duly stamped the  action taken  by the authority for imposing the penalty is bad in law. We find no force in the contention.      It is  seen that  under Regulation  31-A, as amended in 1979, not  only the card should be duly stamped but also the same should  be produced  indicating due  compliance of  the deposit of  the employer’s  and the  employee’s contribution with the  Corporation. That has not been done. The Insurance Court had  found as  a fact that the compliance has not been done. The appellants have failed to prove the compliance, in accordance with the provisions of the Act, of the deposit of the contribution  as required under Section 85-B of the Act. The appellants  committed breach of the provisions entailing imposition of damages and interest on delayed payment.      The appeals are accordingly dismissed. No costs.