FAO No. 2486 of 2009 -1-
In the High Court of Punjab & Haryana at Chandigarh
FAO No. 2486 of 2009 (O&M)
Date of decision : 3.12.2009
Employees' State Insurance Corporation and another ..... Appellants
vs
Swastika Electric & Scientific Works (R) and another ..... Respondents
Coram: Hon'ble Mr. Justice Rajesh Bindal Present: Mr. Vikas Suri, Advocate, for the appellants.
Mr. R. K. Gupta, Advocate, for the respondents.
Rajesh Bindal J.
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, “the 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.
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 Supreme Court
Cases 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
FAO No. 2486 of 2009 -2-
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.
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:-
“11. In the present case, the controversy centres on
the proviso to clause (b) of Section 77 (1-A). The crucial
question is, “Does 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:-
“26. 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
FAO No. 2486 of 2009 -3-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 sub-
section (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.
Therefore, if the provisions of Section 45A are read with
Section 45B of the Act, then, the determination made by the
Corporation is concerned. It may not be final so far as the
employer is concerned, if he chooses to challenge it by filing
an application under Section 75 of the Act. If the employer
FAO No. 2486 of 2009 -4-fails to challenge the said determination under Section 75 of
the Act before the Court, then the determination under
Section 45A becomes final against the employer as well. As
such, there is no hurdle for recovery of the amount
determined under Section 45B of the Act, by invoking the
mode of recovery, as contemplated in Sections 45C to 45-I.
Considering the aforesaid authoritative annunciation of law wherein
view of Full Bench of Kerala High Court is not found correct and that of Madras
High Court was approved, I have no option but to set aside the impugned order
passed by the court below. Ordered accordingly. However, considering the fact
that claim made by the respondents has not been considered by the learned court
below on any of other grounds raised by them, I deem it appropriate to remit the
matter back for fresh consideration of the issues on merits except on the question
of limitation which stand settled by Hon’ble the Supreme Court.
The parties through their counsels are directed to appear before the
court below on 16.1.2010 for further proceedings.
3.12.2009 ( Rajesh Bindal) vs Judge