85B. POWER TO RECOVER DAMAGES. –
1[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 2[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:
3[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 (1 of 1986), 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 4[or under section 45C to section 45-I].]
(i) Damages may be levied for delay in payment of contributions; Employees’ State Insurance Corporation v. Indoflex Pvt. Ltd., (1988) 56 FLR 109 (Raj).
(ii) Section 68 has no bearing on section 85B; Hind Art Press v. Employees’ State Insurance Corporation, (1989) 59 FLR 778 (Karn).
(iii) Levy of damages is penal in nature. Damages cannot, therefore, be levied in a cursory manner; Beama Mfg. (P.A.) Ltd. v. Regional Director, Employees’ State Insurance Corporation, (1990) 2 LLN 24 (Mad).
(iv) In recovering the damages as envisaged in section 85B, if at a given point of time it is found that the extent of damages claimed would exceed the ceiling of 100 per cent, such damages would get frozen and can not be recovered to the extent to which the ceiling prescribed by section 85B got exceeded; Employees’ State Insurance Corporation v. Nasniat Pharmaceuticals Chemicals Pvt. Ltd., (1998) 1 SCC 185.
1. Ins. by Act 38 of 1975, sec. 5 (w.e.f. 1-9-1975).
2. Subs. by Act 29 of 1989, sec. 35, for certain words (w.e.f. 1-1-1992)
3. Ins. by Act 29 of 1989, sec. 35 (w.e.f. 1-1-1992).
4. Added by Act 29 of 1989, sec. 35 (w.e.f. 1-1-1992).