M/S.
Goodyear India Ltd. Vs. The Regional Director, Employees' State Insurance Corpn
[1996] INSC 1512 (27
November 1996)
K. Ramaswamy,
G.T. Nanavati
ACT:
HEAD NOTE:
O R D
E R
This
Appeal by special leave arises from the judgment of the Punjab and Haryana High Court, made on January 30, 1985 in FAO No.21/85 and C.M.
No.192-CII.
The
appellant-establishment was covered under the provision of the Employees' state
Insurance Act. 1940 (for short, the 'Act'). On December 1, 1982, a demand was made of the appellant to contribute the
amount under the Act to the fund of the Corporation for the period from
28.1.1968 to 31.10.1979 for the establishment at Bangalore and from 28.1.1968 to 31.8.1979 for the establishment at Indore.
Initially,
a contention had been raised by the appellant that these establishments are not
covered under the Act and there is no relationship of employer and employee
between the workmen and the appellant. This controversy was covered by a three
Judge Bench decision of this Court in Kirloskar Brothers Ltd. vs. Employees
State Insurance Corporation [(1966 (2) SCC 682] wherein this Court had held
that the appellant is covered by the provisions of the Act and is liable to
contribute the amount to the Fund of the Corporation to ensure insurance
coverage of the employees working under the appellant, In this appeal, the
controversy is as to the limitation and the period from which they are liable
to make the contribution.
The
appellants placing reliance on Section 77-A of the Act read with Regulation 26
of the Employees' State Insurance (General) Regulation 1950, as was in
operation at the relevant time, contended that the demands are barred by
limitation and, therefore, the appellants are not liable to make any
contribution for the period in question. With a view to appreciate the
contention, it is necessary to lock to the provisions of the Act.
Section
45-B provides for the procedure for recovery of contributions which says that
nay contribution payable under this Act may be recovered as arrears of land
revenue.
Section
75(2) provides that:
"the
claim shall be decided by the Employer' Insurance Court (subject to the provisions of sub-Section 2- A), namely:
"(a)
claim for the recovery of contributions from the principal employer;
(b) claim
by a principal employer to recover contributions from any immediate employer;
(c) omitted
(d) claim
against a principal employer under Section 68:
(e) claim
under Section 70 for the recovery of the value of amount of the benefits
received by a person when he is not lawfully entitled thereto; and
(f) any
claim for the recovery of any benefit admissible under this Act." Section
77 provides for that "commencement of proceedings". Sub-section (1)
provides that the proceedings before an Employees' Insurance Court shall be commenced by application.
Section
77(1-A) provides for the limitation and envisaged that "Every such
application shall be made within a period of three years from the date on which
the cause of action arose".
Explanation
(b) to Section 77(1-A) provides that "cause of action" in respect of
a claim by the corporation for recovering contributions from the principal
employer or a claim by the principal employer for recovering contributions from
an immediate employer shall be deemed to have arisen till the date by which the
evidence of contributions having been paid is due to be received by the
corporation under the regulations." Regulations 26(2) provides of the
limitation for payment and reads thus:
"For
purposes of section 77 of the Act the due date by which the evidence of
contributions having been paid must reach the Corporation shall be last of the
days respectively specified in clauses (a), (b), (c) and (d) of sub-regulation
(1)." Clause (a) to (b) of sub-regulation (1) read as under:
"(a)
within 7 days of the date on which he comes to know of the death of such
person;
(b) within
7 days of he date of receipt of a requisition in that behalf from the
appropriate office;
(c) within
42 days of the termination of the contribution period to which it relates;
(d) within
28 days of the date of permanent closure of the factory," It would thus be
seen that the cause of action for contribution would arise only after the
decision by the Insurance Court in the proceedings is laid under Section 75 of
the Act. Until then, the cause of action cannot be said to have arisen. In
other words, there is no bar of limitation. It is seen that the Act was
subsequently amended by Section 30 of the Amendment Act 28 of 1989 which came
into effect with effect from October 20, 1989. It provides application can be
made within three years from the date of arising of the cause of action. this
amendment has no application to the proceedings in this case since the cause of
action had arisen prior to the amendment. Under these circumstances, there is
no bar of limitation for the payment of the contribution as contended.
The
appeal is accordingly dismissed but, in the circumstances, without cost. We are
informed that the amount has already been deposited. If so, no further action
is needed.
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