J U D G M E N T

The appeal is against the order of the Employees State Insurane Court (Labour Court), Trichirapalli, modifying the order passed by the respondent claiming contribution under section 45A of the Employees’ State Insurance Act, 1948 to the tune of Rs.1,71,646/- for the period from April 2006 to April 2008.

2. The appeal arises under the following circumstances:

a. The appellant was doing the business of manufacturing boilers and spare parts of boilers and had employed workmen under him.

b. The respondent issued a show cause notice on 22.02.2012 calling upon the appellant as to why the contribution for the assessment years

2006-07 and 2007-08 cannot be demanded.

c. An enquiry was conducted and the appellant appeared before the respondent and gave its explanation.

d. Not satisfied with the explanation offered by the appellant, the respondent passed an order under Section 45A of the Employees’ State Insurance Act, 1948, claiming a sum of Rs.2,13,082/- as contribution payable by the appellant for the period from April 2006 to April 2008.

e. By the order dated 25.07.2017, the Employees State Insurane Court (Labour Court), Trichirapalli, had reduced the contribution payable to Rs.1,71,646/- after deducting a sum of Rs.41,436/-, which according to the Labour Court was not payable by the appellant. The instant appeal, challenges the said order.

3. The learned counsel for the appellant submitted that the impugned order passed under Section 45A of the Employees’ State Insurance Act, 1948, is unsustainable, as it is contrary to the second proviso to Section 45A of the Employees’ State Insurance Act, 1948, which prohibits the order being passed beyond the period of five years from the date on which the contribution became payable. The learned counsel also challenged the finding of the Labour Court on merits and stated that the appellant is not liable to pay any contribution.

4. The learned counsel for the respondent, per contra, submitted that the delay in passing of the order was due to the process of the show cause notice and the enquiry conducted by the respondent and therefore, the second proviso to Section 45A of the Employees’ State Insurance Act, 1948, cannot be said to be a bar for passing an order and that the claim made by the ESI Corporation is in accordance with law and no interference is called for.

5. This Court, while admitting the appeal on 13.12.2017, had framed the following substantial questions of law:

“1. Whether the respondent can pass orders beyond the period of limitation prescribed under the proviso clause to Section 45A of the ESI Act?

2. Whether the respondent can claim contribution which is not defined as wages as per Section 2(22) of EST Act?

3. When no contribution remitted and the employees not availed benefits and when there is no quid-pro-quo, contribution could be claimed contrary to the principles of law laid down by the Hon’ble Supreme Court?”

6. As regards the first question of law, it is seen that the claim made by the respondent is for the period from April 2006 to April 2008. The said contribution became payable in May 2008. The impugned order was passed on 07.05.2013, which is beyond the period of 5 years. The second proviso to Section 45A of the Employees’ State Insurance Act, 1948, reads as follows:

“45A. Determination of contributions in certain cases.-

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(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 section 45C to section 45-I].”

7. The respondent ought to have passed an order under Section 45A within the period of five years from the date on which the contribution became payable. Since the orders were not passed within the said period, the impugned order cannot be sustained, in the eye of law.

8. In a recent decision in the case of Employees’ State Insurance Corporation vs. M/s.Sree Visa