Employees State Insurance Corporation v. Punjab Steel Rolling Mills
2008-11-26
T.P.S.MANN
body2008
DigiLaw.ai
Judgment T. P. S. MANN, J. 1. Petition filed by the respondent under sec. 75 of the Employees State Insurance act (hereinafter referred to as the the Act) was accepted by learned Sub Judge 1st Class, amloh vide order dated May 29, 1984 by holding that the appellant-Corporation could not recover the amount of employees contribution for the period 6/75 to 10/76,11/76 to 7/77 and 6/78 to -March, 1979 and it could recover the amount from April, 1979. Aggrieved of the same, the Corporation filed the present appeal under Sec.82 (2) of the act. 2. Vide notice dated May 6, 1982, the appellant-Corporation claimed an amount of rs.5121.86p. from the respondent firm as employees contribution, as the same had not been paid, whereas the inspection of the account books revealed that the contribution was due towards respondent-firm. While filing the petition under Sec.75 of the Act, the respondent-firm pleaded that it had paid all the contributions to the appellant-Corporation and nothing was due. The amount being claimed was in respect of the contract labour and also some other labour to which the Act did not apply. The building and furnace repairs were done by the masons or by the contract labour, who did not fall within the definition of industrial labour. As such, the Act or its scheme did not apply to such workers. This stand of the respondent-firm was denied by the appellant-Corporation. 3. On the basis of the pleadings and the evidence led by the parties, learned tral Court held that the respondent-firm was liable to pay the contribution demanded by the appellant-Corporation but the demand regarding the period from June, 1975 to october, 1976, November, 1976 to July, 1977 and June, 1978 to March, 1979 was barred by limitation, as the appellant-Corporation ought to have started proceedings for recovering the amount within three years from the date from. which the cause of action arose and not later. 4. I have heard learned counsel for the parties and perused the impugned order as well as the evidence brought on record. 5. Learned counsel for the appellant had submitted that no period of limitation had been prescribed for recovering the contributions. The only period of limitation prescribed under sec. 77 of the Act was for making an application to the Employees Insurance Court. Moreover, a debt did not become time barred, only the right to sue became barred.
5. Learned counsel for the appellant had submitted that no period of limitation had been prescribed for recovering the contributions. The only period of limitation prescribed under sec. 77 of the Act was for making an application to the Employees Insurance Court. Moreover, a debt did not become time barred, only the right to sue became barred. Therefore, learned trial Court was not justified in declining the recovery of the amount of employers, contribution for the period from June, 1975 to october, 1976, November, 1976 to July, 1977 and June, 1978 to March, 1979. Learned counsel for the appellant had also submitted that though under Sec.45-B of the Act, the: contribution payable can be recovered as arrears of land revenue but in the event of such contribution not being paid, the Corporation could claim the same within a period of five years of the period to which the claim related as provided by proviso to Explanation (b) of sec. 77 (1a) of the Act. Therefore, learned trial Court was not justified in disentitling the appellant-Corporation from recovering the amount for the period earlier to April, 1979 as the notice had been issued on May 6, 1982, i. e. within a period of five years thereof. Reliance in this regard has also been placed upon E. S. I. C. V/s. C. C. Santhakumar 2007-II-LLJ-3 (SC): (2006)10 SC 549. 6. Before proceeding any further, a few provisions from the Act may be noted, which are as follows: "45-B. Recovery of contributions. Any contribution payable under this Act may be recovered as an arrear of land revenue. " "77. Commencement of proceedings: (1) The proceedings before an Employees insurance Court shall be commenced by application. (1a) Every such application shall be made within a period of three years from the date from which the cause of action arose.
Any contribution payable under this Act may be recovered as an arrear of land revenue. " "77. Commencement of proceedings: (1) The proceedings before an Employees insurance Court shall be commenced by application. (1a) Every such application shall be made within a period of three years from the date from which the cause of action arose. Explanation - For the purpose of this sub-section,- (a) the cause of action in respect of the claim for benefit shall not be deemed to arise unless the insured person or in the case of dependents benefit, the dependents of the insured person claims or claim that benefit in accordance with the regulations made in that behalf within a period of twelve months after the claim became due or within such further period as the Employees Insurance court may allow on grounds which appear to it to be reasonable; (b) the cause of action in respect of a claim by the Corporation for recovering contributions (including interest and damages) from the principal employer shall be deemed to have arisen on the date on which such claim is made by the corporation for the first time; provided that no claim shall be made by the corporation after five years of the period to which the claim relates. " 7. It may, however, be noticed that proviso to Explanation (b) of Sec.77 (1-A) was introduced by Act 29 of 1989 with effect from october 20, 1989. Therefore, the period of five years allowed to the Corporation to claim the contributions, as asserted by learned counsel for the appellant, cannot be made applicable to the facts and circumstances of the present case and, that too, in respect of the period from June, 1975 to March, 1979. Moreover, in para 16 of the aforementioned judgment, it was clearly held that the order passed under Sec.45a of the act would require the employer and not the corporation to approach the Employees State insurance Court. Besides, the non-payment of contribution was declared a continuing cause in view of the provisions of Sec.39 (5) (a) of the act, which provision was also introduced by act 29 of 1989, i. e. much after the period in question in the present case and also as the order under appeal was also passed earlier to that. 8.
Besides, the non-payment of contribution was declared a continuing cause in view of the provisions of Sec.39 (5) (a) of the act, which provision was also introduced by act 29 of 1989, i. e. much after the period in question in the present case and also as the order under appeal was also passed earlier to that. 8. Learned counsel for the respondent had submitted that any recovery could be effected or asked for within a period of three years from the date of cause of action, which accrues after a period of 42 days from the termination of the contribution period to which it related and as the appellant-Corporation had not taken any steps to recover the amount relating to the aforementioned period within the prescribed time but only on May 6, 1982, learned trial court was justified in passing the impugned order. 9. Regulation 26 of the Employees State insurance Act (General Regulation), 1950 provides the time within which the contribution is required to be made by an employee. An employer is required to send the contribution in respect of its employees together with a return to the appropriate office within 42 days of the termination of the contribution period to which it relates. In the event of such a contribution not being sent, the cause of action accrues to the appellant-Corporation so as to recover the same by issuing appropriate notice/warrants. Cause of action would remain alive for a period of three years or else would become time barred. Admittedly, the notice was issued on May 6, 1982 by the appellant- Corporation so as to recover the amount relating to the period 6/75 to 10/76, 11/76 to 7/77 and 6/78 to 9/79. Out of the aforementioned period, the recovery could be made only in relation to the period from April, 1979 to September, 1979, as the same was within the prescribed period of limitation. For the earlier period, the payment had become time barred. Once the payment becomes time barred, the appellant-Corporation could neither enforce its notice nor recover the same as arrears of land revenue. 10. Under these circumstances, learned trial Court was justified in passing the impugned order and disentitling the appellant-Corporation from recovering the employers contribution upto March, 1979. Resultantly, there is no merit in the appeal, which is, accordingly, dismissed.