Case Note & Summary
The Employees' State Insurance Corporation (ESIC) filed an appeal under Section 82 of the Employees' State Insurance Act, 1948, challenging the judgment and order dated 10/09/2007 passed by the Employees' State Insurance Court (ESI Court) in ESIC Case No.7 of 2005. The ESI Court had allowed the application filed by the respondent, M/s. Chowgule & Company Limited, under Section 77 of the Act, holding that the respondent establishment was not liable to pay contribution and interest for the period from 02/07/1977 to 30/06/1996. The ESI Court applied the five-year limitation period under proviso to clause (b) of Section 77(1-A) of the Act and held that the claim beyond that period was not tenable. The ESIC appealed, and on 22/10/2008, the appeal was admitted on substantial questions of law regarding whether the limitation period applies only to claims made before the ESI Court and not to other proceedings. The High Court, relying on the Supreme Court decision in ESIC v. C.C. Santhjakumar (Civil Appeal No.4291/2000), held that the proviso to Section 77(1-A)(b) applies only to claims made before the ESI Court under Section 77, and not to recovery proceedings under Sections 45-B, 45-C, or 45-G of the Act. The High Court found that the ESI Court had erred in applying the limitation period to the claim, as the claim was made before the ESI Court itself. Consequently, the High Court allowed the appeal, set aside the impugned judgment, and remanded the matter to the ESI Court for fresh consideration on merits, directing the parties to appear on 10/08/2015.
Headnote
A) Employees' State Insurance - Limitation - Section 77(1-A) proviso (b) - Scope of limitation period - The five-year limitation period under proviso to Section 77(1-A)(b) of the Employees' State Insurance Act, 1948 applies only to claims made by the Corporation before the ESI Court under Section 77, and not to recovery proceedings under Sections 45-B, 45-C, or 45-G of the Act. The ESI Court erred in applying the limitation period to the Corporation's claim for contribution for the period 02/07/1977 to 30/06/1996, as the claim was made before the ESI Court and not in recovery proceedings. Held that the impugned judgment is set aside and the matter remanded for fresh consideration on merits (Paras 1-10).
Issue of Consideration
Whether the five-year limitation period under proviso to clause (b) of Section 77(1-A) of the Employees' State Insurance Act, 1948 applies to claims made by the Corporation before the ESI Court only, and not to other proceedings such as recovery proceedings.
Final Decision
The appeal is allowed. The impugned judgment and order dated 10/09/2007 passed by the ESI Court in ESIC Case No.7 of 2005 is set aside. The matter is remanded to the ESI Court for fresh consideration on merits. The parties are directed to appear before the ESI Court on 10/08/2015.
Law Points
- Limitation period under proviso to Section 77(1-A)(b) of ESI Act applies only to claims made before ESI Court
- not to recovery proceedings under Section 45-B
- Section 45-C
- or Section 45-G of the Act
- ESIC v. C.C. Santhjakumar followed
Case Details
2015 LawText (BOM) (07) 154
APPEAL UNDER E. S. I. NO. 4 of 2008
Smt. A. A. Agni, Senior Advocate with Ms. Kalpa Govekar, Advocate for the appellant; Mr. Girish Sardessai and Mr. Shannon Pereira, Advocates for the respondent
Employees State Insurance Corporation, Through its Deputy Regional Director, Panchadeep Bhavan, EDC Plot No.23, Patto, Panaji, Goa
M/s. Chowgule & Company Limited, Chowgule House, Mormugao Harbour, Vasco da Gama Goa
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Nature of Litigation
Appeal under Section 82 of the Employees' State Insurance Act, 1948 against the judgment of the ESI Court allowing the respondent's application under Section 77 of the Act.
Remedy Sought
The appellant (ESIC) sought to set aside the ESI Court's order holding that the respondent is not liable to pay contribution and interest for the period from 02/07/1977 to 30/06/1996.
Filing Reason
The ESI Court applied the five-year limitation period under proviso to Section 77(1-A)(b) of the Act to bar the claim for contribution, which the appellant contends is erroneous as the limitation applies only to claims before the ESI Court and not to recovery proceedings.
Previous Decisions
The ESI Court in ESIC Case No.7 of 2005 allowed the respondent's application under Section 77 of the Act, holding that the claim for contribution beyond five years is not tenable.
Issues
Whether the five-year limitation period under proviso to clause (b) of Section 77(1-A) of the ESI Act applies to claims made by the Corporation before the ESI Court only, and not to other proceedings such as recovery proceedings.
Submissions/Arguments
The appellant argued that the limitation period under proviso to Section 77(1-A)(b) applies only to claims made before the ESI Court under Section 77, and not to recovery proceedings under Sections 45-B, 45-C, or 45-G of the Act, relying on the Supreme Court decision in ESIC v. C.C. Santhjakumar.
The respondent argued that the ESI Court correctly applied the limitation period to bar the claim.
Ratio Decidendi
The proviso to clause (b) of Section 77(1-A) of the Employees' State Insurance Act, 1948, which prescribes a five-year limitation period, applies only to claims made by the Corporation before the ESI Court under Section 77 of the Act, and not to recovery proceedings under Sections 45-B, 45-C, or 45-G of the Act. The ESI Court erred in applying the limitation period to the claim for contribution for the period 02/07/1977 to 30/06/1996, as the claim was made before the ESI Court itself.
Judgment Excerpts
By this appeal under Section 82 of the Employees State Insurance Corporation Act, 1948 (the Act of 1948, for short), the Employees State Insurance Corporation (Corporation, for short) is challenging the judgment and order dated 10/09/2007 passed by the Employees' State Insurance Court (ESI Court) in ESIC Case No.7 of 2005.
Whether proviso to clause b of Section 77(1-A) of the Act fixing the period of 5 years for the claim made by the corporation will apply in respect of claim made by the Corporation before the ESI Court and no other proceedings as held by the Apex Court in Civil Appeal No.4291/2000, ESIC V/s C.C. Santhjakumar
Procedural History
The respondent filed an application under Section 77 of the Employees' State Insurance Act, 1948 before the ESI Court in ESIC Case No.7 of 2005, which was allowed on 10/09/2007, holding that the respondent is not liable to pay contribution and interest for the period from 02/07/1977 to 30/06/1996. The appellant filed an appeal under Section 82 of the Act before the High Court of Bombay at Goa, which was admitted on 22/10/2008 on substantial questions of law. The High Court heard the appeal and pronounced judgment on 15/07/2015.
Acts & Sections
- Employees' State Insurance Act, 1948: Section 77, Section 77(1-A), Section 82, Section 45-B, Section 45-C, Section 45-G
