The main legal point established in the judgment is that the amendment to Section 45A of the Employees State Insurance Act, 1948, limiting proceedings for determination of omitted contribution to five years, has retrospective effect and bars proceedings initiated after the five-year limit.

1. Employees State Insurance Corporation, hereinafter referred to as Corporation, is the appellant. Order passed by the Employees' Insurance Court, Palakkad (for short, 'E.I. Court') quashing the proceedings initiated against the respondent, a covered establishment, for determination of the sum, allegedly, due from it towards omitted contribution payable under Employees State Insurance Act, 1948 (for short, 'the Act') as barred by limitation, is challenged in the appeal.

2. Alleging that respondent had defaulted or omitted to pay contribution for the period from 01.04.1992 to 31.10.1992, Corporation initiated proceedings under Section 45A of the Act in 2003 imputing that registers and other records relating to the above period were not placed for verification. Such proceedings were challenged by respondent before the E. I. Court, and upholding its contentions the proceedings were quashed. That gave rise to an appeal before this Court, Insurance Appeal No.48/2009, at the instance of Corporation. Setting aside the order of E.I. Court the case was remanded by judgment dated 05.01.2010, by which the E.I. Court was directed to consider the question of limitation afresh taking note of the decision rendered in Employees' State Insurance Corporation v. Santha Kumar [2007(1) KLT 133(SC)]. On such remand, after reconsidering the issues involved in the proceedings, E.I. Court again set aside the demand notice issued by Corporation under the order challenged in this appeal.

3. I heard the counsel on both sides. Question involved in the proceedings whether steps taken by corporation issuing a demand notice to the respondent for determining the sums due towards omitted contribution for the period specified is barred by limitation or not, does not call for serious scrutiny in the light of amendment made to Section 45A of the Act, which has come into force with effect from 01.06.2010. Section 45A of the Act reads thus:

“45A. Determination of contributions in certain cases.-(1) Where in respect of a factory or establishment no returns, particulars, registers or records are submitted, furnished or maintained in accordance with the provisions of section 44 or any [Social Security Officer] or other official of the Corporation referred to in sub-section (2) of section 45 is [prevented in any manner] by the principal or immediate employer or any other person, in exercising his functions or discharging his duties under section 45, the Corporation may, on the basis of information available to it, by order, determine the amount of contributions payable in respect of the employees of that factory or establishment.

[Provided that no such order shall be passed by the Corporation unless the principal or immediate employer or the person in charge of the factory or establishment has been given a reasonable opportunity of being heard:]

[Provided further that no such order shall be passed by the Corporation in respect of the period beyond five years from the date on which the contribution shall become payable.]

(2) An order made by the Corporation under sub-section (1) shall be sufficient proof of the claim of the Corporation under section 75 or for recovery of the amount determined by such order as an arrear of land revenue under section 45B [or the recovery under sections 45C to 45-I].”

4. 2nd proviso added to the section spells out that no steps for determination of omitted contribution shall be made by Corporation in respect of a period beyond five years from the date on which the contribution become payable. In the present case the omitted contribution for the period involved became payable seven years before the commencement of proceedings under Section 45A of the Act. Order passed by this Court in the previous appeal of Corporation was rendered at a time when the decision of the apex court in Santhakumar's Case with respect to Section 45A of the Act, as it then stood, held that no period of limitation can be canvassed against proceedings over delaye