ESIC
Dr.Gaurang N. Gandhi
(Querist) 31 December 2009
This query is : Resolved
Hi
on of my client is intimated by ESIC to pay arrears of interest amount of ESI for the period 2001-02.
the history is that ...
My client was not came in the provision of ESIC. As they have expanded business ESIC was affected unfortunately they were unaware regarding that.
As a notice issued by the said corporation after 3 years my client fully paid the noticed amount of ESI.
and till today they are regularly paying the contribution without fail.
now the problem is that the corporation had issued notice to pay interest @18% on the amount which they had paid late.
should the party pay that what they claimed?
Is the corporation has right to issue such notice??????
If they refuse to pay what are the provisions for punishment?
pl reply as soon as possible.
Raj Kumar Makkad
(Expert) 31 December 2009
Once your client accepted the date of coverage of his unit under ESIC from a particular date without any hue and cry then he loses his right to raise any objection to the interest as the payment has been made belatedly.
If your client has under objection has made the payment to avoid penal action on the part of ESIC organization then he can challenge both date of coverage as well as interest levied thereon but in the given facts, it seems that your client has accepted what ESIC sought so there is no any chance.
Arul Kumar
(Expert) 31 December 2009
Pls read the following excerpts.
Section 85B. Power to recover damages
(1) Where an employer fails to pay the amount due in respect of any contribution or any other amount payable under this Act, the Corporation may recover from the employer by way of penalty such damages not exceeding the amount of arrears as may be specified in the regulations:
PROVIDED that before recovering such damages, the employer shall be given a reasonable opportunity of being heard :
PROVIDED FURTHER that the Corporation may reduce or waive the damages recoverable under this section in relation to an establishment which is a sick industrial company in respect of which a scheme for rehabilitation has been sanctioned by the Board for Industrial and Financial Reconstruction established under section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985, subject to such terms and conditions as may be specified in regulations.
(2) Any damages recoverable under sub-section (1) may be recovered as an arrear of land revenue or under sections 45C to 45-I.
The Corporation where there is a default committed by the establishment that is covered by the Act. Section 85(B) of the Act enables the Corporation to levy damages in the nature of penalty subject to ceiling prescribed under the said section.
