SOVRIN KNIT WORKS ETC. versus EMPLOYEES STATE INSURANCE CORPN. AND ANR. ETC.

Citation: [1996] SUPP. 9 S.C.R. 345 · Decided: 28-11-1996 · Supreme Court of India · Bench: K. RAMASWAMY, G.T. NANAVATI · Disposal: Dismissed
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Judgment (excerpt)

SOVRIN KNIT WORKS ETC. 
v. 
EMPLOYEES' STATE INSURANCE CORPN. AND ANR. ETC. 
NOVEMBER 28, 1996 
[K. RAMASWAMY AND G.T. NANA VAT!, JJ.] 
Employees State Insurance Act, 1948: Sections 75(2), 85-B, 94-A and 
95-A and Regulations 26,. 31-A (As amended in 1979) and 34. 
A 
B 
Employees State Insuranc,,---Employer's contribufio,,_procedure for C 
paymem-Levy of damages and interest 011 delayed payment-Delay in con-
t1ibution by appellant- Establishment-Damages imposed for delay in pay-
ment-Damages upheld by Insurance Cowt-cAppeaf-He/d, Regulation 31-A 
requires that the employer should submit the cards duly stamped to the 
Corporation-Regulation 31-A requires that not only the card should be duly D 
'.stamped but also the same should be produced indicating due compliance of 
the deposit of the employer's and cite employee's contribution with the Cor-
porati01t-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 the Act-Imposition of damages and interest is villid: 
Employees State Insurance Corporation-Delegation of Powers to of-
ficers-Validity of 
. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 402 (NL) 
of 1986 Etc. 
From the Judgment and Order dated 14.8.85 of the Employees State 
Insurance Court, Faridabad in Case No. 6A of 1984. 
S.K. Gambhir for the Appellants. 
P.A. Choudhary, K.N. Nagpal and C.V.S. Rao for the Respondents. 
The following Order of the Court was delivered : 
These appeals by special leave arise from the orders of the E.S.I. 
E 
F 
G 
Court, Faridabad, Haryana. The facts in CA No. 402/86 are sufficient for H 
345 
346 
SUPREME COURT REPORTS [1996] SUPP. 9 S.C.R. 
A 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 
B interest. The appellants had objected to it by the petition dated February 
14, 1983. The Corporation, over-ruling the objectio.ns, 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 
C . 14, 1985 has upheld the damages. Since the CA Nos. 2057 & 2058 of 1981 
. were pending in this Court, they filed the appeal by special leave without 
availing the appellate remedy in the High Court. 
Two contentions have been raised by Sri S. K. Gambhir, learned 
counsel for the appellants. Firstly, it is contended that under Section 94-A 
D of the Act, Corporation has been empowered to delegate the power to one 
of the officers but the officer-delegatee has no 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 
E 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. There-
fore, 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 em-
F powered to authorise any of its officer. U would be obvious that the 
Regional Director is one of the officers in 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 
G thereon fur delayed payment. 
It is then contended that under Regulation 26 and 34 of the Regula-
tion 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 
H then it can be said that the employer has paid the contribution amount in 
• 
SOVRINKNITWORKSv. E.S.l.CORPN. 
347 
time. Though Regulation 31-A which was brought in by amendment of A 
1979, further requires the employer to submit the cards duly stamped
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