Company Directors Not Liable For Esi Default: Sc

The Supreme Court has rejected the appeal of the Employees State Insurance Corporation asserting that directors of a company would be liable for default in the payment of contributions to the ESI fund.

The court held that it was the company which was responsible for the breach and not directors individually or collectively. The division bench consisting of Chief Justice M M Punchhi and Justice Sujata Manohar upheld the view of the Calcutta high court.

In this case, Indo Japan Steel Ltd deducted the ESI contributions from its employees' wages but the amounts were not deposited in the statutory fund.