The determination of 'reasonable time' in the context of claims by ESI Corporation is fact-specific and not bound by a strict limitation period.

J U D G M E N T

This appeal is preferred against the judgment of the Employees Insurance Court, Idukki in I.C.8/04. The applicant before the said Court wanted the order of demand on interest as well as the damages to be quashed. The E.I. Court did not entertain levy of damages but held that as far as interest is concerned the demand made from 1.4.92 to 31.2.92 is not barred by limitation and further held that the demand made by the E.I. Corporation within a reasonable time.

2. The brief facts would reveal, by virtue of a notification, the coverage limit was enhanced from Rs.1600/- to Rs.3,000/- with effect from 1.4.92. An original petition was filed challenging the notification wherein a stay was granted and ultimately the O.P. was dismissed on 1.11.92. In the O.P. an observation was made that it will come into operation only from 1.11.92. In another matter the case was taken up to the Apex Court and and Apex Court held that the said notification will have effect from 1.4.92. The demand in this case was made only in the year 2002. There was contention that in the light of a Full Bench decision of this Court reported inESI Corporation v. Excel Glasses Ltd. ( 2003 (3) KLT 42 ) any claim made beyond a period of 5 years is barred by limitation. But inE.S.I. Corporation v. Santhakumar (2007 (1) KLT 133 (SC) the Apex Court held that S.45(A) and 7(1A)(b) does not prescribe any period of limitation for initiation of action by the Corporation against an establishment and it will have operation only when the ESI Corporation moves the E.I. Court for relief. The Apex Court also held that concept of reasonable time would have to be considered and it would depend upon the factual circumstances of the case concerned. The Apex Court observed that there cannot be any empirical formula to determine that question. The Court/authority considering the question whether the period is reasonable or not has to take into account the surrounding circumstances and relevant factors to decide that question. But unfortunately in the decision made by the E.I. Court I find only a solitary sentence, 'the applicant has not adduced any evidence to show that the opposite party had not demanded the E.S.I. contributions within a reasonable time.' Admittedly the demand is from 1.4.92 and the demand is made in the year 2002. So it is incumbent upon the person who makes the demand to show why there was delay. Those aspects have not been considered by the E.I. Court at all and therefore the order passed by the E.I. Court requires interference and it is set aside so far as it relates to the levying of interest is concerned and is remanded back to the said Court for fresh consideration in the light of the decision reported inE.S.I. Corporation v. Santhakumar (2007 (1) KLT 133 (SC) especially regarding the concept of 'reasonable time'. For the said purpose both parties are permitted to produce documentary as well as oral evidence in support of their respective contentions and the Court shall dispose of the matter in accordance with law. The E.I. Court shall issue notice to the parties intimating the date of appearance. From which period the coverage will start be decided on the basis of decisions referred to.

The Ins.Appeal is disposed of as above.

M.N. KRISHNAN, JUDGE.

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