Hotel Oberoi Towers vs Regional Director, E.S.I.C. and Others

S.V. Gangapurwala, J.—Heard.

The present appellant had assailed the order passed by the respondent before the E.S.I. Court. The E.S.I. Court dismissed the application. Aggrieved thereby, the present Appeal.

Mr. Gehani, learned Counsel for the appellant strenuously contends that the Court has failed to consider the fact that the applicant-Oberoi Bombay is an independent undertaking. The order passed by the respondent No. 1 u/s 45A of the E.S.I. Act is illegal, null and void. It could not have clubbed the two establishments. According to the learned Counsel, the evidence in this regard has not been discussed by the Court in its correct perspective. The evidence has been led to show that the applicant is an independent establishment. According to the learned Counsel, the applicant has already deposited about Rs. 50 lac. The learned Counsel further submits that the claim is for a period from 1982 to 1986. At the relevant time, the Corporation was entitled for interest at the rate of 6% p.a. However, the Corporation has applied interest at the rate of 12% p.a., which is not permissible.

Mr. Palshikar, learned Counsel for the respondent No. 1-Corporation supports the order and submits that the applicant is not an independent entity for the purpose of the E.S.I. Act. Accounts of the applicant and Hotel Oberoi are common. The evidence in this regard has been discussed by the Court. The order was passed in the year 1992. At that time, the rate of interest applicable as per the Statute was 12% p.a. and the same has been rightly considered.

The Court on threadbare appreciation of evidence has come to the conclusion about financial integrality of the applicant establishment and M/s. Hotel Oberoi. The said finding is a finding of fact. This being an Appeal under the provisions of the E.S.I. Act, the same can be considered only on substantial question of law. A finding with regard to the functional integrality is a finding of fact. There is no perversity in the said finding.

As far as the rate of interest is concerned, prior to the amendment of 1989, the Corporation was entitled to levy interest at the rate of 6% p.a. The claim in the present matter is for the year 1982 to 1986. At the relevant time, the rate of interest was 6% p.a. Simply because the order has been passed subsequently, that would not entitle the Corporation to claim interest @ 12% p.a. The learned Single Judge of this Court in a case of Regional Director, E.S.I. Corporation v. Hotel Suresh, 2007 (112) FLR 43 (Bom.) has held that the relevant period for levying the interest would be the period for which the claim is due.

In light of the above, the order dated 10.8.1992 passed by the respondent Corporation is modified only to the extent of rate of interest. The Corporation would be entitled to claim the amount as adjudicated in the order dated 10.8.1992 with interest at the rate of 6% p.a. and not at the rate of 12% p.a.

First Appeal is accordingly disposed of. However, with no order as to costs. Civil Application also stands disposed of.