LAWS(KER)-2003-7-27

ESI CORPORATION Vs. EXCEL GLASSES LTD

Decided On July 09, 2003
ESI CORPORATION Appellant
V/S
EXCEL GLASSES LTD Respondents

JUDGEMENT

(1.) DOES the proviso to S. 77 (1a) (b) of the Employees' State Insurance Act, 1948 debar the Corporation from making any claim after five years from the date on which it had arisen? This question was answered in the negative by a Division Bench of this Court in Vijayan Pillai v. E. S. I. Corporation (1998 (1) KLT 373 ). It was held that "by a legal fiction contained in Cl. (b) the cause of action in respect of a claim by the Corporation from the principal employer arises on the date on which the Corporation makes the claim for the first time. The words 'five years of the period to which the claim relates' contained in the said proviso shall not be interpreted to mean that five years of the period in relation to which the amount of contribution is due. " The correctness of this view was doubted by a Division Bench. It was observed that "the proviso to Cl. (b) shows that no claim shall be made by the Corporation after five years of the period to which that claim relates". The Bench further observed that "the effect of the proviso is that no claim shall be made by the Corporation after five years of the period to which the claim relates. The period of limitation is not linked with the date on which the cause of action arises. . . . . It refers to the period to which the claim relates". Thus, the matter was referred to a Full Bench. The scope of the provision contained in the proviso to S. 77 (1a) (b) is the core of the controversy arising in this bunch of five appeals.

(2.) THE factual matrix of these cases may be briefly noticed. In MFA No. 1094 of 1991, the Corporation had passed an order on February 9, 1990. By this order, it had demanded arrears of contribution for the period from April 1, 1976 to March 31, 1979. In MFA No. 680 of 1992, the demand had been made by the Corporation on April 2, 1991 for contribution for the period from April 1, 1984 to September 30, 1985. In MFA No. 1285 of 1995, the demand was made vide notice dated December 28, 1993 for the period from December 1977 to 1990. In MFA No. 482 of 1996, the demand was raised on July 16, 1992 for the period from January 1, 1982 to January 31, 1990. Similarly, in MFA No. 965 of 1999, the respondent was called upon to make the deposit vide order dated November 23, 1992. It related to the period from March 28, 1983 to March 31, 1987. THE employers challenged the validity of the demand notices on various grounds. It was inter alia alleged that the claim of the Corporation was barred by limitation. Thus, the notices were challenged before the Insurance Court.

(3.) IT is in the background of the contentions as raised by the learned counsel for the parties that the question as noticed at the outset has to be considered. Inevitably a brief reference to the provisions of the Act, the subsequent amendments as well as the 'aims and objects' thereof, is essential.