Mazagon Dock Ltd. vs The Regional Director, E.S.I. Corporation and Others

N.K. Patil, J—This appeal by the applicant is directed against the Order dated 19th September 2011, passed in E.S.I. Application No. 5/2008, by the Presiding Officer, Labour Court-cum-E.S.I. Court, Mangalore, D.K.,(hereinafter called "Labour Court -cum-ESI Court" for short), dismissing the application filed by applicant under Section 75 of E.S.I. Act.

Brief facts of the case in hand are, the applicant/appellant herein had filed the application under Section 75 of the ESI Act, 1948, questioning the correctness or otherwise of the determinations at Annexure C dated 30th November 2005 and Annexure D dated 25th/30th October 2006 and the consequential demand of damages and interest including the final demand under Annexure-E dated 10th August 2008 and for costs, on the file of the "Labour Court -cum-ESI Court". The said application was dismissed by the "Labour Court -cum-ESI Court". Being dissatisfied with the said order, the applicant/appellant herein has presented this appeal, seeking appropriate reliefs as stated supra.

Shri S. Ganesh Shenoy, learned counsel appearing for applicant/appellant herein submitted that in the light of the judgment of the Hon''ble Apex Court reported in The Managing Director, Hassan Co-operative Milk Producer''s Society Union Limited Vs. The Assistant Regional Director Employees State Insurance Corporation, (2010) 4 JT 240 : (2010) 2 LLJ 860 : (2010) 4 SCALE 337 : (2011) 1 SCC(L&S) 85 : (2010) 4 UJ 1986 , he would confine the present appeal only in so far as it relates to determination of contribution and levy of damages only, on the ground that at the time of levy of damages, the first respondent, by issuing notice only to the applicant/appellant, without hearing or without issuing any notice to respondents 2 to 20, has decided the matter. If an opportunity had been given to the appellant and respondents 2 to 20, regarding determination of damages, they would have defended their case under the statutory provisions of Section 85(b) read with Regulation 31(c). This aspect of the matter has not been looked into or considered or appreciated by the original authority, i.e. the first respondent nor by the "Labour Court -cum-ESI Court", while confirming the orders passed by the first respondent. Therefore, he vehemently submitted that the impugned order passed by the "Labour Court-cum-ESI Court" and also the orders passed by the first respondent are liable to be set aside, only insofar as it relates to determination of levy of damages.

Per contra, learned counsel appearing for first respondent, Shri. V. Narasimha Holla, inter alia contended and sought to substantiate the orders passed by the first respondent and confirmed by the "Labour Court-cum-ESI Court", stating that the same are just and proper. However, after going through the judgment passed by the Hon''ble Apex Court referred above and the provisions of Section 85(b) read with Regulation 31(c) of the ESI Act, he submitted that appropriate order may be passed, only insofar as it relates to determination of damages.

After careful consideration of the submission of the learned counsel appearing for the parties, after perusal of the orders passed by the first respondent and the order passed by the "Labour Court-cum-ESI Court", as rightly pointed by Shri. S. Ganesh Shenoy, learned counsel appearing for applicant/appellant, at the time of determination of levy of damages, no notice as such has been issued to respondents 2 to 20 to have their say in the matter. If at all any damages is to be levied, then, the appellant as well as the contractors are liable to pay equally. This aspect of the matter has not been properly looked into or considered either by the first respondent, while determining the levy of damages or by the "Labour Court-cum-ESI Court" while confirming the damages levied by the first respondent.

Therefore, without expressing any opinion on the merits or demerits of appellant''s case, in the light of the judgment of the Hon''ble Apex Court, referred above and also the relevant provisions of the ESI Act and its Regulations, it would suffice for this Court if appropriate direction is issued to the first respondent to reconsider the matter only insofar as it relates to levy of damages, and dispose of the same, after giving an opportunity of hearing to all the parties concerned, as expeditiously as possible, to meet the ends of justice.

In the light of the discussion made above, the appeal filed by the applicant/appellant is allowed.

"The orders dated 30th November 2005 and 25th/30th October 2006 at Annexures C and D, and the final demand under Annexure-E dated 10th August 2008 passed by first respondent and impugned Order dated 19th September 2011, passed in E.S.I. Application No. 5/2008, by the Presiding Officer, Labour Court-cum-E.S.I. Court, Mangalore, D.K., are hereby set aside, only insofar as it relates to levy of damages;

For this limited purpose, the matter stands remanded back to first respondent for reconsideration of the matter afresh and to pass appropriate order, in accordance with law, after affording reasonable opportunity of hearing to the appellant and also respondents 2 to 20, and any other person concerned, as expeditiously as possible, not later than ten months from the date of receipt of a copy of this judgment;"