IMPORTANT POINT
When the employees denies the liability or applicability of the provisions of the Employees State Insurance Act or the Quantum of contribution to be deposited, it is for, him to approach the Insurance Court and seek adjudication and not for Corporation to approach the Court.

ORDER

This appeal by special leave arises from the judgment dated 20-2-1979 of the Division Bench of the Karnataka High Court which in turn had followed the ratio of judgment of the Full Bench in M.F.A.No. 147/74, dated 19-4-1978. The Full Bench had held as under :

"In the result, we answer the question referred to us as follows :

Where, in cases to which provisions of Section 45A of the Act are attracted, the Corporation by an order made in accordance with that section determines the amount of contributions payable and that claim is disputed by the employer, it would not be necessary for the Corporation to seek a resolution of that dispute before the Insurance Court. Such a claim is recoverable as arrears of land revenue. If the employer disputes the claim it is for him to move the Insurance Court for relief. In other cases-other than cases where determination of the amount of contributions under Section 45A is made the Corporation, if its claim is disputed by the employer, should seek an adjudication of the dispute before the Insurance Court, before enforcing recovery."

2. The question that arises for consideration is: whether the view taken by the Full Bench of the High Court is correct in law? Section 1(4) of the Employees State Insurance Act, 1948 (for short, the Act ) envisages that the Act shall apply, in the first instance, to all factories (including factories belonging to the Government) other than seasonal factories. Section 1(5) gives power to the appropriate Government after consultation with the Corporation, to notify in the official Gazette extending the provisions of the Act to any of other establishments or class of establishments, industrial, commercial, agricultural or otherwise. Section 1(6) envisages that a factory or an establishment to which this Act applies shall continue to be governed by the provisions of the Act notwithstanding that a number of persons employed therein at any time falls below the limit specified by or under the Act or the manufacturing process therein ceases to be carried on with the aid of power. After its application under Chapter IV, all employees in factories, or establishments to which the Act applies, shall be insured in the manner provided by this Act. Under Section 39(1), the contribution payable under the Act in respect of an employee, shall comprise contribution payable by the employer and contribution payable by the employee shall be paid to the Corporation; the manner and details of payment and interest for the delay in payment and the rate of interest and the procedure for recovery are not material for the purpose of this case. Hence, they are omitted. Section 40 envisages that the principal employer is enjoined to pay contribution in respect of every employee in the first instance whether he is employed directly by him or through an immediate employer, both the employer s and the employees contribution. Sub-section (2) thereof provides, with a non obstante clause, that subject to the provisions of the Act and the regulations, if any, made thereunder, the principal employer shall, in the case of an employee directly employed by him (not being an exempted employee), be entitled to recover from the employee the employee s contribution by deduction from his wages and not otherwise. The recovery has been provided in Section 41 of the Act. The method of payment of contribution has been adumbrated in Section 43 where the contribution has not been paid as envisaged in Section 42 of the Act. Section 44 deals with the obligation of the employer to furnish returns and maintain registers in certain cases. Section 45 gives power to the Inspectors appointed by the Corporation to inspect the premises etc., the details of which are not material. Section 45-A gives power to the Corporation to determine contribution in certain cases. It read as under:

"45-A. Determination of contribution in certain cases.-(1) Where in respect of a factory or establishment on returns, particulars, registe