Allowed¶27

Employees State Insurance Corporation,Nashik v. Shri. Sudhakar B. Kotkar and Anr.

Bombay HC25 Feb 2025FA/1059/2024

Case brief

AI extract

What is this about?

Executing Court power to grant interest; ESI Court recovery proceedings; interest @6% p.a. quashed; disablement benefits; Employees State Insurance Corporation vs Sudhakar B. Kotkar; First Appeal No. 1059 of 2024; substantial question of law; release of original bank guarantee; ESI Application No.3 of 2014; judgment dated 26th October 2016 attained finality; Bombay High Court; Sharmila U. Deshmukh, J.

What did the court decide?

First Appeal allowed. Order dated 7th October 2023 modified: the original bank guarantee furnished by the Applicant, if not already released, to be released to the Applicant; clause (ii) of the operative part of the order granting interest is quashed. Pending civil/interim applications disposed of as nothing survives. ¶27

Employees State Insurance Corporation,Nashik vs Shri. Sudhakar B. Kotkar and Anr. — Bombay HC (2025) — LawSathi Research

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the ESI Court, while adjudicating recovery proceedings, could have granted interest @6% p.a. when the judgment rendered in the original application did not grant interest.

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Court's answer

An Executing Court (here, the ESI Court acting as the recovery court) is powerless to grant interest while executing a judgment and order that did not itself grant interest; the substantial question of law is answered accordingly, and the interest granted by the recovery court could not stand.

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Ratio / Principle

No statutory provision was demonstrated to show that any interest could have been granted by the ESI Court on the disablement benefits awarded by the 2016 judgment.

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Detailed headnote1 paragraphs

Bombay High Court (Sharmila U. Deshmukh, J.) allowed the Employees State Insurance Corporation's First Appeal No. 1059 of 2024 against the ESI Court's order dated 7th October 2023 in recovery proceedings arising from the judgment dated 26th October 2016 in ESI Application No.3 of 2014 (40% disablement benefits till 15th January 2010 and 100% thereafter), which had awarded no interest. Holding: an Executing/Recovery Court is powerless to grant interest while executing a judgment that did not award interest, and no statutory provision enabling the ESI Court to grant interest was demonstrated; the substantial question of law was answered accordingly. The impugned order was modified — the original bank guarantee furnished by the claimant is to be released, and clause (ii) granting interest @6% p.a. was quashed. The decretal amount of Rs.8,95,161/- had already been deposited and withdrawn against the bank guarantee.

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2025:BHC-AS:12681

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1 fa-1059-24.doc

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION

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FIRST APPEAL NO. 1059 OF 2024

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Employees State Insurance Corporation.

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...Appellant.

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Versus

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Sudhakar B. Kotkar and Another. ...Respondents.

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Mr. Shailesh S. Pathak for the Appellant. Mr. Sudhakar B. Kotkar Respondent in-person.

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——————

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Coram : Sharmila U. Deshmukh, J. Date : March 11, 2025.

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P. C. :

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1. First Appeal has been preferred against the judgment and order dated 7^th October 2023 passed by the Employees’ State Insurance Court [for short “ESI Court” ] directing payment of interest @ 6% p.a. and releasing the original bank guarantee.

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2. Learned Counsel appearing for the Appellant would submit that as the Application was one for the purpose of recovery as per the judgment and order dated 26^th October 2016 passed in ESI Application No.3 of 2014, which did not grant any interest, the Recovery Court which was in the nature of Executing Court could not have granted interest.

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Patil-SR

1 fa-1059-24.doc

3. The following substantial question of law would arise in the present case :

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Whether the ESI Court while adjudicating recovery proceedings could have granted interest @6% p.a. when in the judgment rendered in original Application did not grant interest.

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4. In the present case, by order of even date, the First Appeal which challenged the judgment and order dated 26^th October 2016 passed by the ESI Court directing 40% disablement benefits for the period till 15^th January 2010 and further 100% disablement benefits from 16^th January 2010 onwards came to be dismissed. Therefore, the judgment and order dated 26^th October 2016 has attained finality.

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5. Perusal of the said judgment and order dated 26^th October 2016 indicates that ESI Court had not granted any interest on the disablement benefits. The recovery Court was executing the impugned judgment and order of 2016 and being an Executing Court does not have power to grant interest on the said amount. Perusal of the said judgment and order dated 26^th October 2016 would indicate that the ESI Court has considered that when the claim is allowed, it has the effect of money decree and it is just and proper to award interest. The Executing Court failed to notice that firstly no statutory provision has been demonstrated to show that any interest could have been granted

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Patil-SR

1 fa-1059-24.doc

by ESI Court. Even if that be so, the Executing Court is powerless to grant any interest while executing the judgment and order dated 26^th October 2016. Substantial question of law is accordingly answered.

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6. This Court is informed that the amount of Rs.8,95,161/- was deposited and was permitted to be withdrawn and thus the Applicant has recovered the entire amount, however, upon furnishing original bank guarantee. Hence, the order of 7^th October 2023 is modified to read as under :

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Original bank guarantee furnished by the Applicant, if not already released, to be released to the Applicant. Clause (ii) of the operative part of the order granting interest is quashed.

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7. First Appeal is allowed in above terms.

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8. In view of the disposal of First Appeal, nothing survives for consideration in the pending civil/interim applications and the same stand disposed of.

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[Sharmila U. Deshmukh, J.]

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Patil-SR

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Signed by: Sachin R. Patil Designation: PS To Honourable Judge Date: 19/03/2025 13:52:16

Employees State Insurance Corporation,Nashik v. Shri. Sudhakar B. Kotkar and Anr.

Case brief

What is this about?

What did the court decide?

Employees State Insurance Corporation,Nashik v. Shri. Sudhakar B. Kotkar and Anr.

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Procedural history

Parties & counsel

Coram

Case details

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Employees State Insurance Corporation,Nashik vs Shri. Sudhakar B. Kotkar and Anr.