Delhi High Court
Employees State Insurance ... vs Shri Girdhari Lal Batra on 14 December, 2009
Author: V.B.Gupta
* HIGH COURT OF DELHI : NEW DELHI
FAO. No.342/2009
% Judgment reserved on: 1st December, 2009
Judgment delivered on: 14th December, 2009
1. Employees State Insurance Corporation
New Delhi Through its Regional Director
2. Shri Y.S. Rathi, Deputy Regional Director
ESIC, New Delhi.
3. Shri H.C. Sharma,
Recovery Officer,
All of Regional Office, ESI Corporation
Rajindra Place
New Delhi ....Appellants
Through: Mr. K.P. Mavi, Adv.
Versus
Shri Girdhari Lal Batra
S/ Shri J.R. Batra
R/o. 43-A, Rajpur Road,
Delhi-110054
Proprietor of M/s. Bat Bro Engineering
& General Manufacturing
Badli Industrial Estate,
Delhi. Respondent.
Through: Nemo.
Coram:
HON'BLE MR. JUSTICE V.B. GUPTA
1. Whether the Reporters of local papers may
be allowed to see the judgment? Yes
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be reported
FAO No.342/2009 Page 1 of 6
in the Digest? Yes
V.B.Gupta, J.
In this appeal, appellants have raised following questions for
consideration;
(a) Whether the impugned judgment is contrary to the law laid down by
Supreme Court in ESIC Corporation v. C.C. Santa Kumar 2007 (1)
SCC (Labour & Service 413);
(b) Whether demand was time barred under Section 77-A Explanation (b)
of Employees State Insurance Corporation Act, 1948 (for short as
„Act‟).
2. Brief facts of this case are that respondent filed a petition under Section 75
of the Act, for declaring demand notice dated 7th June, 1995 as null and void. Plea
of the respondent was that demand is time barred and pertains to the period 1977-
78 and 1981-82.
3. Appellants in their written statement gave details of the demand and
corresponding period for which it was raised, which reads as under;
"Details of Rs.30582.64
1. Rs.29611.25- Regular Contribution for the period from
4/82 to 3/83
2. Rs.68.70- Short stamping for period 7/77, 9/77,
11/77, 1/78 and 5/78
3. Rs.17.25- Short stamping for period ending 1/81 to
3/81.
4. Rs.43.30- Short contribution for 6/81, 8/81, 10.81 and
3/82.
5. Rs.649.57- Adhoc contribution on Rs.9279.50 paid
during 1981-82.
6. Rs.192.37- Interest for late subms of contribution for
period ending 3/80 to 11/80, 1/81, 9/81 and
11/81".
4. It is contended by learned counsel for appellants that period of limitation
as envisaged under Section 77 of the Act is not applicable in the present case,
since no applications was filed by appellants before the ESI Court for
commencement of proceedings under Section 77 of the Act. Appellants‟ counsel
in support of its contention, relied upon decision of Santa Kumar (Supra).
5. Section 75 of the Act deals with matters to be decided by the Employees‟
Insurance court. Relevant Provision in this case is clause (1)(g) of this Section,
which reads as under;
"Section 75(1)- Matters to be decided by Employees'
Insurance Court- (1) If any question or dispute arises as to-
(a) to (ee) xxx xxx xxx xxx
(g) any other matter which is in dispute between a principal
employer and the Corporation, or between a principal
employer and an immediate employer or between a person
and the Corporation or between and employee and a
principal or immediate employer, in respect of any
contribution or benefit or other dues payable or recoverable
under this Act, [or any other matter required to be or which
may be decided by the Employees‟ Insurance Court under
this Act],
such question or dispute [subject to the provisions of sub-
section (2A)] shall be decided by the Employees‟ Insurance
Court in accordance with the provisions of this Act.
(2) xxx xxx xxx xxx"
6. According to this Section, if there is dispute between "a principal
employer and the Corporation", the same shall be decided by the Employees‟
Insurance Court, under the Act.
7. Section 77 of the Act provides the period during which proceedings can
commence before an Employees‟ Insurance Court. Relevant Provisions of this
Section reads as under;
"Section 77. Commencement of proceedings-(1) The
proceedings before an Employees‟ Insurance Court shall be
commenced by application.
(1A)- Every such application shall be made within a period
of three years from the date on which the cause of action
arose.
Explanation-For the purpose of this sub-section,-
(a) xxx xxx xxx
(b) the cause of action in respect of a claim by the
Corporation for recovering contributions (including interest
and damages) from the principal employer shall be deemed
to have arisen on the date on which such claim is made by
the Corporation for the first time:
Provided that no claim shall be made by the Corporation
after five years of the period to which the claim relates;
(c) xxx xxx xxx
(2) xxx xxx xxx"
8. In the present case, respondent received the impugned demand in the year
1995, for the period 1977-78 and 1981-82. On receipt of this demand, respondent
filed petition under Section 75 of the Act. Vide impugned judgment, trial court
decided the petition in favour of respondent, holding it time barred.
9. In Santa Kumar (Supra), Supreme Court observed;
"Section 77 of the Act relates to commencement of
proceedings before the ESI Court. The proviso to sub-
Section (1-A)(b) of Section 77 of the Act cannot
independently give any meaning without reference to the
main provision, namely, Section 77 of the Act. Therefore,
the proviso to clause (b) of Section 77(1-A) 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 ESI Court and to no other
proceedings."
10. It is true that proceedings in the present case commenced on the basis of
petition of the respondent. However, as per Section 77 (1-A)(b) of the Act, "the
cause of action in respect of a claim by the Corporation for recovering
contributions (including interest and damages) from the principal employer shall
be deemed to have arisen on the date of which such claim is made by the
Corporation for the first time".
11. Appellants by virtue of demand notice of Year 1995, is claiming
contributions (including interest) for the period 1977-78 and 1981-82. This
demand has been made by the appellants for the first time on 9th June, 1995. As
per proviso to Section 77(1-A) of the Act, "no claim shall be made by the
Corporation after five years of the period to which the claim relates." Since, claim
relates to the period 1977-78 and 1981-82 and same was made in the year 1995,
that is, more than eighteen years since the claim became due, the same is time
barred as per proviso to Section 77 (1-A) of the Act.
12. Under these circumstances, the impugned demand of the appellants is
hopelessly time barred. Hence, there is no infirmity or ambiguity in the impugned
judgment of the trial court.
13. Present appeal therefore, is not maintainable and same is dismissed.
14th December, 2009 V.B.GUPTA, J.
RB
