Back
High Court of Kerala
Jawahar Lal Gupta, R. Rajendra Babu, A.K. Basheer, JJ.
The Regional Director E S I Corporation - Appellant
Versus
Kerala Electrical & Allied Engg Co - Respondent
M.F.A. No. 1094 of 1991
Decided On : 09-07-2003
Employees' State Insurance Act - Interpretation of S.77(1A)(b) - The Court held that the proviso to S.77(1A)(b) debars the Corporation from making any claim after five years from the date on which it had arisen. The Court's decision was influenced by the plain words of the statute, the declared objective of the amendment made in 1989, and the Regulations, which indicated the true Legislative intent.
Fact of the Case:
The Employees' Insurance Court held that the claim for a period beyond five years preceding the date of the demand was not tenable under the provisions of S.77. The Corporation filed appeals challenging these orders.
Finding of the Court:
The Court found that the proviso to S.77(1A)(b) debars the Corporation from making any claim after five years from the date on which it had arisen. The Court's decision was influenced by the plain words of the statute, the declared objective of the amendment made in 1989, and the Regulations, which indicated the true Legislative intent.
Issues: The core issue was the interpretation of the proviso to S.77(1A)(b) and whether the claim of the Corporation was barred by limitation.
Ratio Decidendi: The Court held that the plain words of the statute, the declared objective of the amendment made in 1989, and the Regulations indicated the true Legislative intent, and therefore, the claim of the Corporation was debarred after five years from the date on which it had arisen.
Final Decision: The Appeals were dismissed, and the parties were left to bear their own costs.
Jawahar Lal Gupta, C.J.
1. Does the proviso to S.77(1A)(b) of the Employees' State Insurance Act, 1948 debar the Corporation from making any claim after five years from the date on which it had arisen? This question was answered in the negative by a Division Bench of this Court in Vijayan Pillai v. E.S.I. Corporation (1998 (1) KLT 373). It was held that "by a legal fiction contained in Cl.(b) the cause of action in respect of a claim by the Corporation from the principal employer arises on the date on which the Corporation makes the claim for the first time. The words 'five years of the period to which the claim relates' contained in the said proviso shall not be interpreted to mean that five years of the period in relation to which the amount of contribution is due." The correctness of this view was doubted by a Division Bench. It was observed that "the proviso to Cl.(b) shows that no claim shall be made by the Corporation after five years of the period to which that claim relates". The Bench further observed that "the effect of the proviso is that no claim shall be made by the Corporation after five years of the period to which the claim relates. The period of limitation is not linked with the date on which the cause of action arises..... It refers to the period to which the claim relates". Thus, the matter was referred to a Full Bench. The scope of the provision contained in the proviso to S.77(1A)(b) is the core of the controversy arising in this bunch of five appeals.
2. The factual matrix of these cases may be briefly noticed. In MFA No.1094 of 1991, the Corporation had passed an order on February 9, 1990. By this order, it had demanded arrears of contribution for the period from April 1, 1976 to March 31, 1979. In MFA No.680 of 1992, the demand had been made by the Corporation on April 2, 1991 for contribution for the period from April 1, 1984 to September 30, 1985. In MFA No.1285 of 1995, the demand was made vide notice dated December 28, 1993 for the period from December 1977 to 1990. In MFA No.482 of 1996, the demand was raised on July 16, 1992 for the period from January 1, 1982 to January 31, 1990. Similarly, in MFA No.965 of 1999, the respondent was called upon to make the deposit vide order dated November 23, 1992. It related to the period from March 28, 1983 to March 31, 1987. The employers challenged the validity of the demand notices on various grounds. It was inter alia alleged that the claim of the Corporation was barred by limitation. Thus, the notices were challenged before the Insurance Court.
3. The Employees' Insurance Court examined the matter. It was held that in view of the provisions of S.77, the claim for a period beyond five years preceding the date of the demand was not tenable. Aggrieved by the orders passed by the Court, the Corporation has filed these five appeals. Learned counsel for the parties have been heard. On behalf of the appellant Corporation, it was contended by Mr. Ajaya Kumar that the Act is a piece of beneficial legislation. Its provisions have to be liberally construed. Any interpretation, which is likely to defeat the objects of the enactment, should be avoided. The provisions of the Act apply automatically to every establishment or factory falling within the ambit of the Act. Under the provisions, the Corporation is entitled to determine the liability of the employer. It can order recovery by issue of a certificate to the Recovery Officer. The amount can be recovered as arrears of land revenue. If a limitation of time is imposed, the object of the enactment shall be defeated. Thus, it was contended that the view taken by the Division in Vijayan Pillai's case (supra) deserves to be sustained. These arguments were reiterated by Ms.T.D.Rajalakshmi who appeared for the appellant in some of these appeals.
4. The counsel for the respondents controverted the claim. Mr. Antony Dominic contended that the provisions of the statute have to be given their true and plain meaning. If so
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
