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1997 Supreme(Mad) 633
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE V. KANAGARAJ & THE HONOURABLE MR. JUSTICE S.M. ABDUL WAHAB
REGIONAL DIRECTOR, EMPLOYEES STATE INSURANCE
Versus
HENRY WOLSEY AND COMPANY
L.P.A.Appeal No.211 of 1994 & C.M.P.Appeal No.10016 of 1995
Decided On : 23-06-1997
The proviso to Sub-section (1a) of Section 77 of the Employees State Insurance Act, 1948 applies only in respect of a claim made by the Corporation before the Insurance Court.
Headnote:
EMPLOYEES STATE INSURANCE ACT, 1948 - SECTION 45A, 77 - LIMITATION - DELEGATION OF POWER - SALES OFFICES COVERED UNDER THE ACT - CONTRIBUTION PAYABLE BY THE RESPONDENT-COMPANY - NOTIFICATION ISSUED IN THE GAZETTE OF INDIA, DATED MAY 2, 1981 - RESOLUTION - DEPUTY REGIONAL DIRECTOR HAD POWER TO PASS AN ORDER UNDER SECTION 45-A OF THE ACT - PROVISO TO SUB-SECTION (1A) OF SECTION 77 OF THE ACT - APPLIES ONLY IN RESPECT OF A CLAIM MADE BY THE CORPORATION BEFORE THE INSURANCE COURT.
Fact of the Case:
The respondent-company, engaged in the preparation of bakery products, challenged the order of the appellant under Section 45A of the Employees State Insurance Act, 1948 (the Act), dated October 27, 1982, claiming that it did not fall within the purview of the Act and that the sales offices were not covered under the Act. The appellant contended that the sales offices were also covered under the Act and the respondent was required to pay the contribution in respect of such sales offices.
Finding of the Court:
The court found that the sales shops were engaged in the selling of the products produced by the factory and, therefore, the sale shops were also covered under the Act. The claim of contribution was, therefore, justified by the appellant Corporation. The court also found that the Deputy Regional Director had the necessary power to pass an order under Section 45-A of the Act and that the demand under Section 45A of the Act was not barred by limitation.
Issues: 1. Whether the sales offices were covered under the Employees State Insurance Act, 1948? 2. Whether the Deputy Regional Director had the power to pass an order under Section 45-A of the Act? 3. Whether the demand under Section 45A of the Act was barred by limitation?
Ratio Decidendi: 1. The court held that the sales shops were covered under the Act as they were engaged in the selling of the products produced by the factory. 2. The court held that the Deputy Regional Director had the power to pass an order under Section 45-A of the Act as per the resolution published in the Gazette of India, dated May 2, 1981. 3. The court held that the demand under Section 45A of the Act was not barred by limitation as the proviso to Sub-section (1a) of Section 77 of the Act applies only in respect of a claim made by the Corporation before the Insurance Court.
Final Decision: The court allowed the appeal, set aside the order of the learned Single Judge, and restored the order of the Insurance Court, dated April 19, 1984, dismissing the respondent's petition.
V. KANAGARAJ, J.
( 1 ) THE respondent before us had fifed a petition before the Employees State Insurance Court (in short, Insurance Court) seeking a declaration that the respondent company do not fall within the purview of the Employees State Insurance Act, 1948 (hereinafter referred to as the Act), and that the order of the appellant under Section 45A of the Act, dated October 27, 1982, cannot be enforced.
( 2 ) THE respondent-company is engaged in the preparation of bakery products. After
issuing notice to the respondent-company, the appellant had made an assessment under Section 45-A of the Act, on the basis of the verification made by the Inspector of the Department. The contention of the respondent-company before the Insurance Court was that the order, dated October 27, 1982, is illegal and unenforceable against the company. The appellant contended that for the period from March 31, 1968 to January 31, 1981, the sales offices are also covered under the Act and the respondent was required to pay the contribution in respect of such sales offices. The respondent-company was given full opportunity before passing the said order. It is significant to note that the appellant raised the contention that the application before the Insurance Court by the respondent-company was barred by limitation.
( 3 ) FOR the purpose of this appeal and to consider the arguments advanced by the learned counsel for the appellant and the respondent it is not necessary to go into the merits of the case. Suffice it to say that the records of the factory were scrutinized by the Inspector and the sales shops were only engaged in the selling of the products produced by the factory and, therefore, the sale shops were also covered under the Act. The claim of contribution was, therefore, justified by the appellant Corporation. The Court, therefore, found that the order under Section 45-A of the Act, dated October 27, 1982, was perfectly legal.
( 4 ) THE next contention which was examined by the Insurance Court, was whether the Deputy Regional Director, who had passed an order under Section 45-A of the Act had jurisdiction to do so. On this issue also, the Court found against the respondent-company, because it was found that the resolution produced by the appellant-Corporation had authorised the Deputy Regional Directors to exercise the power under Section 45-A of the Act. On the question whether the sales shops were covered under the Act, the Insurance Court gave a finding in favour of the appellant-Corporation. We are not going into that question because the finding on that issue is not canvassed before us.
( 5 ) IT was also found that the respondent-company had sufficient opportunity to putforth their case against the order under Section 45-A of the Act. It was found that the application filed under Section 77 (1a) of the Act by the respondent-company was well within the period of limitation. Against the said order, the respondent-company filed an
appeal before this Court in A. A. O. No. 91 of 1986. Learned Single Judge of this Court has allowed the appeal and reversed the finding of the Insurance Court on two crucial issues. It was, however, found that the sales shops were, in fact, covered by the Act and contribution was, in fact, payable by the respondent-company. Learned Singe Judge, however, held that the demand of the appellant-Corporation was barred by limitation. It was also held that the delegation in favour of the Deputy Regional Director had not been properly established.
( 6 ) SRI Desappan, learned counsel for the appellant, has produced before us the notification issued in the Gazette of India, dated May 2, 1981, wherein the following resolution is resolved:
"resolved that the powers of the Corporation under Section 45 a to determine by order the amount of contributions payable shall be exercised; (i) by the Director-General in respect factory/establishment situated anywhere in Indiaof. a (ii) by a Regional Director in respect f
