EMPLOYEES STATE INSURANCE CORPORATION AND ANOTHER Vs. SWASTIKA ELECTRIC & SCIENTIFIC WORKS (R) AND ANOTHER

JUDGEMENT

(1.) Employees' State Insurance Corporation is in appeal against the impugned order passed by the Employees' Insurance court, Ambala, in a petition filed by the respondent under Section 75 of the Employees State Insurance Act, 1948 (for short, "œthe Act "). Considering the fact that learned counsel for the appellants has raised a very brief contention regarding the legal issue involved in the present appeal, I do not deem it to notice the facts of the case in detail. It is suffice to notice that in the petition filed by the respondents before the court below recovery notice dated 23.7.2000 and notices issued subsequent thereto were under challenge on various grounds raised therein including that the claim made by the appellants was time barred. The learned court below while referring to the provisions of Section 77 of the Act opined that no recovery could be effected after the same is beyond the period of five years and accordingly the impugned notices were set aside. Other issues on merits were not gone into.

(2.) Learned counsel for the appellants referred to a judgment of Hon'ble the Supreme Court in ESI Corpn. vs C C Santha Kumar, 2007 1 SCC 584, to submit that issue regarding limitation for effecting recovery under the Act was considered by Hon'ble the Supreme Court in the aforesaid judgment and it was opined that there is no period of limitation as such. In view of the aforesaid facts, the submission is that the order of the learned court below deserves to be set aside and the matter remitted back for fresh consideration on merits of the controversy which has not been dealt with. Learned counsel for the respondents could not dispute the proposition of law laid down by Hon'ble the Supreme Court in the aforesaid judgment and referred to by the learned counsel for the appellants. However, he submitted that if the matter is remitted back to the learned court below all the issues be left open.

(3.) Heard learned counsel for the parties and perused the paper-book. In ESI Corpn.'s case (supra), Hon'ble the Supreme Court considered two legal issues. The same have been extracted in paras 11 and 12 of the judgment which are as under:- "œ11. In the present case, the controversy centres on the proviso to clause (b) of Section 77 (1-A). The crucial question is, "œDoes the proviso to Clause (b) of Section 77 (1A) fix the limit of time, in which the Corporation can make a claim from the employer, on the basis of the orders passed under Section 45 - 12. Section 45-A is a part of Chapter IV. Section 77 (1-A) (b) proviso is contained in Chapter VI. The question is whether there is any connecting link between Chapter IV and Chapter VI. " The relevant paragraphs where the questions were considered are extracted below:- "œ26. On a plain reading of Sections 45A and 45B in Chapter IV and 75 and 77 in Chapter VI of the Act, as indicated above, there cannot be any doubt that the area and the scope and ambit of Sections 45A and 75 are quite different. 27. If the period of limitation, prescribed under proviso (b) of Section 77(1A) is read into the provisions of Section 45A, it would defeat the very purpose of enacting Sections 45A and 45B. The prescription of limitation under Section 77 (IA)(b) of the Act has not been made applicable to the adjudication proceedings under Section 45A by the legislature, since such a restriction would restrict the right of the Corporation to determine the claims under Section 45A and the right of recovery under Section 45B and, further, it would give a benefit to an unscrupulous employer. The period of five years, fixed under Regulation 32(2) of the Regulations, is with regard to maintenance of registers of workmen and the same cannot take away the right of the Corporation to adjudicate, determine and fix the liability of the employer under Section 45A of the Act, in respect of the claim other than those found in the register of workmen, maintained and filed in terms of the Regulations. 28. What Section 75(2) empowers is not only the recovery of the amounts due to the Corporation from the employer by recourse to the E.S.I. Court, but also the settlement of the dispute of a claim by the corporation against the employer. While this is so, there is no impediment for the Corporation also to apply to the E.S.I. Court to determine a dispute against an employer where it is satisfied that such a dispute exists. If there is no dispute in the determination either under Section 45A(1) or under Section 68, the Corporation can straightway go for recovery of the arrears. 29. Section 77 of the Act relates to commencement of proceedings before the E.S.I. Court. The proviso to subsection (1-A) (b) of Section 77 of the Act cannot independently give any meaning without reference to the main provision, namely, Section 77 of the Act. Therefore, the proviso to Clause (b) of Section 77(1A) of the Act, fixing the period of five years for the claim made by the Corporation, will apply only in respect of claim made by the Corporation before the E.S.I. Court and to no other proceedings. 30. The Legislature has provided for a special remedy to deal with special cases. The determination of the claim is left to the Corporation, which is based on the information available to it. It shows whether information is sufficient or not or the Corporation is able to get information from the employer or not, on the available records, the Corporation could determine the arrears. So, the non-availability of the records after five years, as per the Regulations, would not debar the Corporation to determine the amount of arrears.