Claims under Section 45A of the ESI Act are not subject to a five-year limitation period, protecting the Corporation's right to adjudicate on such claims.

J U D G M E N T

This appeal is preferred against the order of the Employees Insurance Court, Palakkad in I.C.12/04. A demand was made from 4/94 to 3/02 in four periods from the claimant and the E.I. Court held that since the claim under Ext.A1 is clearly beyond the period of 5 years it is barred by limitation. The Court held that in view of the legal position the claim of the opposite party in so far as it relates to the period from 4/94 to 3/8 is barred by limitation for the reason that the demand is made on 26.9.03, i.e. beyond the period of 5 years. The contention of the E.S.I Corporation now is that the said decision is erroneous. The E.I. Court took the decision in the light of the Full Bench decision of this Court reported inESI Corporation v. Excel Glasses Ltd. /b>. ( 2003 (3) KLT 42 ) that any claim made beyond the period of 5 years is barred by limitation. The said decision was taken up before the Apex Court and the Apex Court in the decision rendered inE.S.I. Corporation v. Santhakumar (2007 (1) KLT 133 (SC) held that there is no limitation and it is held as follows.

“If the period of limitation, prescribed under proviso (b) of S.77(1A) is read into the provisions of S.45A, it would defeat the very purpose of enacting Sections 45A and 45B. The prescription of limitation under S.77(1A)(b) of the Act has not been made applicable to the adjudication proceedings under S.45A by the legislature, since such a restriction would restrict the right of the Corporation to determine the claims under S.45A and the right of recovery under S.45B and, further, it would give a benefit to an unscrupulous employer. The period of five years, fixed under Regulation 32(2)of the Regulations, is with regard to maintenance of registers of workmen and the same cannot take away the right of the Corporation to adjudicate, determine and fix the liability of the employer under S.45A of the Act, in respect of the claim other than those found in the register of workmen, maintained and filed in terms of the Regulations. S.77 of the Act relates to commencement of proceedings before the E.S.I Court. The proviso to sub-s.77 of the Act cannot independently give any meaning without reference to the main provision, namely, S.77 of the Act. Therefore, the proviso to Clause (b) of S.77(1A) of the Act, fixing the period of five years for the claim made by the Corporation, will apply only in respect of claim made by the Corporation before the E.S.I. Court and to no other proceedings.”

2. In the light of the said finding of the Apex Court by reversing the finding of this Court it has to be held that there is no limitation. Therefore the finding of the Court below is set aside and it is held that the claim is perfectly entertainable and it is not barred by limitation. Therefore, the E.S.I Corporation is directed to give notice to hear the establishment and then fix the amount and dispose of the matter in accordance with law. As stated in the decision the delay may be taken into consideration while quantifying the amount.

M.N. KRISHNAN, JUDGE.

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