Bombay HC – Section 85-B of the ESI Act, 1948 – Damages
By the order dated 10.1.2006, the appellant levied damages of Rs.27,849/- on the respondent.
However, by the order dated 22.2.2010, the ESI Court quashed the said order.
Section 85-B of the ESI Act provides that, where an employer fails to pay the amount due in respect of any contribution or any other amount payable under the Act, the Corporation may recover from the employer by way of penalty such damages.
HELD that in Form C-18 of the appellants, the respondent was informed that failure to pay contribution in time would attract the damages under Section 85B. Moreover, the respondent had not raised in its submission any of the factors such as number of default, extent of delay, frequency of defaults, etc for reducing ages.
Therefore, it would not be proper for the ESI Court to observe that these factors were not considered by the appellant.
Benjamin Franklin said that “laws too gentle are seldom obeyed; too severe, seldom executed”.
Thus, when a low penalty is prescribed it creates a perception that one can get away with anything and everything. Fear of law can be deterrent for immoral behaviour but true virtue involves obeying in law out of principle rather than just fear of punishment of law. A law is valuable not just because it is law, but because there is right in it.
Judgment dated 17.2.2026 of the High Court of Bombay in First Appeal No.756 of 2011 of the Deputy Regional Director and another Vs. M/s. Aashu Engineering Works
