E S I CORPORATION Vs. MEKCOS LTD

JUDGEMENT

(1.) S.85B of the Employees' State Insurance Act, 1948 empowers the Employees' State Insurance Corporation to recover from the employer such damages not exceeding the amount of arrears as it may think fit to impose. Is the damages that could be so imposed conceived as compensation for the actual loss caused to the Corporation That is the question that is posed before us by learned counsel for the Corporation, Sri. Sankaran Nair.

(2.) Four orders of imposition of damages under S.45B were challenged by the respondent before the Insurance Court, Alleppey and the court has chosen to accept the challenge on the only ground that the Corporation "has not adduced an iota of evidence in order to prove that inconvenience was caused either to the Corporation or to the beneficiaries because of the delay committed by the applicant in paying the amounts due to the Corporation." At the moment we are not at the question of quantum. There is no doubt a contention that the question whether quantum has been properly determined calls for consideration. In case we agree with the appellant's counsel that the court was wrong in holding that damages would be due only on account of actual loss we may have to remit the matter back to consider whether the quantum fixed is appropriate or it calls for interference by the court.

(3.) In the Law of Contracts the term "damages" is related to the loss incurred by reason of default of either party to the contract. Loss so occasioned by the conduct of the offending party is relevant in the determination of damages in the law of torts too. If this concept is applied in the context of S.85B as evidently the Employees' Insurance court has done proof of loss may be necessary to sustain a claim for damages.