Full Judgment Text
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PETITIONER:
M/S. GOODYEAR INDIA LTD.
Vs.
RESPONDENT:
THE REGIONAL DIRECTOR, EMPLOYEES’STATE INSURANCE CORPN. & OR
DATE OF JUDGMENT: 27/11/1996
BENCH:
K. RAMASWAMY, G.T. NANAVATI
ACT:
HEADNOTE:
JUDGMENT:
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:
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"(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
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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.