M/S GOODYEAR INDIA LTD.versusTHE REGIONAL DIRECTOR, EMPLOYEES STATE INSURANCE CORPN. AND ORS.

A                         MIS GOODYEAR INDIA LTD.
                                 v.
              THE REGIONAL DIRECTOR, EMPLOYEES' STATE
                     INSURANCE CORPN. AND ORS.

                                NOVEMBER 27, 1996
B
                 (K. RAMASWAMY AND G.T. NANAVATI, JJ.)

          Employees State bmira11ce Act, 1948: Sections 45-B, 77( I-A) Explana·
    tion (CJ and 77-A.
c           Employees State l11surance (Ge11eral) Regulation, 1950: Regulation 26.

          Employees State lnsura11ce Fu11d-Demand for contribution-Limita·
  tio11 period fo,-Dema11d made on 1st December, 1982 from appellant Com-
  pa11y for co11tributio11 towards Fu11d-Demand pel'tai11ing to period from
D 28.1.68 to 30.10. 79 i11 respect of establishmellt at Ba11galore and from
  28.1.1968 to 31.8.1979 for establishment at Indore-Appellant's contention
  that demands are bamd by limitation-Held, The cause of action for con-
  tributio11 would arise 011/y after the decision by the Insurance Court in the
  proceedi11gs it laid under Sectio11 75 of the Act-The Act was subsequently
  aniended by Section 30 of the Amendment Act 28 of 1989 which came into
E effect from October 20, 1989-lt provides that application can be made within
  three years from the date of arising of the cause of action-This amendment
  has no application to the proceedings in this case since the cause of action
  had arisen prior to the amendment-Under these circumstances, there is no
  bar of limitation for the payment of the contribution as contended.
F
         Kirloskar Brothers Ltd. v. Employees State Insurance Corporation,
    (1966] 2 sec 682, referred to.

            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1152 of
    1985.
G
         From the Judgment and Order dated 30.1.85 of the Punjab &
    Haryana High Court in F.A. O.No. 21 of 1985.

            Krishan Mahajan, Amit Dhingra and P.H. Parekh for the Appellants.

H           T.C. Sharma for Mrs. Anil Katiyar for the Respondents.
                                       254
      GOODYEAR INDIA LTD. v. REGNL. DIRECTQR, E.S.I. CORPN.            255
      The following Order of the Court was delivered :                        A
     This appeal by special leave arises from the judgment of the Punjab
and Haryana High Court, made on January 30, 1985 in FAO No. 21/85 and
C.M. No. 192-CII.

       The appellant-establishment was covered under the provisions of the B
 Employees' State Insurance Act, 1943 (for short, the 'Act'). On December
 1, 1982, a demand was made of the appellant to contribute the amount
 under the Act to the fund of the Corporation for the period from 28.1.1968
to 31.10.1979 for the establishment at Bangalore and from 28.1.1968 to
31.8.1979 for the establishment at Indore. Initially, a contention had been C
raised by the appeliant that these establishments are not covered under the
Act and there is no relationsb,ip of employer and employee between• the
workmen and the appellant. This controversy was covered by a three Judge
Bench decision of this Court in Kir/oskar Brothers Ltd. v. Employees State
l11sura11ce Corporation (1966] 2 SCC 682; wherein this Court had held that
the appellant i8 covered by the provisions of the Act and is liable to D
contribute the amount to the Fund of the Corporation to ensure insurance
coverage of the employees working under the appellant. In this appeal, the
controversy is as to the limitation and the period from which they are liable
to make the contribution. ·

      The appellants placing reliance on Section 77-A of the Act read with E
Regulation 26 of the Employees' State Insurance (General) Regulation
1950, as was in operation at the relevant time, contended that the demands
are barred by limitation and, therefore, the appellants are not liable to
make any contribution for the period in question. With a view to appreciate
the contention, it is necessary to look to the provisions of the Act.       F
      Section 45-B provides for the procedure for recovery of contributions
which says that any contribution payable under this Act may be recovered
as an arrears of land revenue. Section 75(2) provides that :

        "the claim shall be decided by the Employees' Insurance Court G
        (subject to the provisions of sub-Section 2-A), namely:

        "(a) claim for the recovery of contributions froni the principal
        employer;

        (b) claim by a principal employer to recover contributions from       H
    256                     SUPREME COURT REPORTS [1996] SUPP. 9 S.C.R.

A             any immediate employer;

              (c) omitted

              (d) claim against a principal employer under Section 68;

B             (e) claim under Section 70 for the recovery of the value of amount
              of the benefits received by a person when he is not lawfully entitled
              thereto; and

              (t) any claim for the recovery of any benefit admissible under ti\is
              Act. 11
c
          Section 77 provides for that "commencement of proceedings''. Sub-
    section (1) provides that the proceedings before an Employees' Insurance
    Court shall be commenced by application.

          Section 77(1-A) provides for the limitation and envisaged that "Every
D   such application shall be made within a period of three years from the date
    on which the cause of action arose."

          Explanation (c) to Section 77(1-A) provides that "cause of action in
    respect of a claim by the principal employer for recovering contributions
E   from an immediate employer shall not be deemed to arise till the date by
    which the evidence of contributions having been paid is due to be received
    by the Corporation under the regulations."

            Regulations 26(2) provides for the limitation for payment and reads


F
    thus:
                                                                                      I
              "For purposes of Section 77 of the Act the due date by which the
              evidence of contributions having been paid must reach the Cor-
              poration shall be last of the days respectively specified in clauses
              (a), (b), (c) and (d) of sub-regulation (1).

G           Clause (a) to (d) of sub-regulation (1) read as under:

              "(a) within 7 days of the date on which he comes to know of the
              death ·of such person;

              (b) within 7 days of the date of receipt of a requisition in that
H             behalf from the appropriate office;
      GOODYEAR mDIALTD. v. REGNL DIRECTOR, E.S.I. CORPN.                  257

         (c) within 42 days of the termination of the contribution period to     A ·
         which it relates;

         (d) within 28 days of the date of permanent closure of the factory."

       It would thus be seen that the cause of action for contribution would
arise only after the decision by the Insurance Court in the proceedings is       B
laid under Section 75 of the Act. Until then, the cause of action cannot be
said to have arisen. In other words, there is no bar of limitation. It is seen
that the Act was subsequently amended by Section 30 of the Amendment
Act 28 of 1989 which came into effect with effect from October 20, 1989.
It provides application can be made within three years from the date of          C
arising of the cause of action. This amendment has no application to the
proceedings in this case since the cause of action had arisen prior to the
amendment. Under these circumstances, there is no bar of limitation for
the payment of the contribution as contended.

     The appeal is accordingly dismissed but, in the circumstances, D
without costs. We are informed that the amount has already been
deposited. If so, no further action is needed

T.N.A.                                                    Appeal dismissed.