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Penal Provisions |
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Section
-85-B: Provides that the corporation may recover
damages from the employer by way of penalty
under this section if any employer fails to pay
contribution payable under the Act within the
specified time-limit or pays contribution
belatedly provided that before recovering such
damages, the employer shall be given a
reasonable opportunity of being heard.
The amount of damages may not exceed the
amount of contribution paid / payable. |
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Any contribution due under the Act and not paid can be recovered under Section 45-B of the Act as an arrears of land revenue under Section 45-C to Section 45-I by the Revenue Recovery Officer of the ESI Corporation. The employer can raise any dispute for adjudication in the Employees Insurance Court of the area set up under section 74 of the Act. The limitation period as provided in section 77 of the Act is not applicable to revenue recovery action under Section 45-B to 45-I of the Act. |
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LEVY OF INTEREST AND DAMAGES: |
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Under Section 39(5)(a) of the ESI Act, read with Regulation 31 of the ESI (General) Regulation 1950‚ the employer is liable to pay simple interest at the rate of 12 per cent per annum in respect of each day of defult or delay in payment of contributions. In addition‚ under the provision of Regulation 31-C of ESI (General) Regulation‚ 1950‚ read with Section 85(B)(i) of the ESI Act‚ the Corporation is empowered to recover damages as under: |
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| SI.No. |
Period of delay in payment of contribution |
Rate of damages on the amount due |
| 1. |
Up to less than 2 months |
5% |
| 2. |
2 months and above but less than 4 months |
10% |
| 3. |
4 months and above but less than 6 months |
15% |
| 4. |
6 months and above |
25% |
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Interest and damages can also be recovered as an arrears of land revenue under Section 45(C) to Section 45(I) by the Recovery Officer of ESI Corporation. |
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