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PETITIONER: M/S. GOODYEAR INDIA LTD.

       Vs.

RESPONDENT: THE REGIONAL DIRECTOR, EMPLOYEES’STATE INSURANCE CORPN. & OR

DATE OF JUDGMENT:       27/11/1996

BENCH: K. RAMASWAMY, G.T. NANAVATI

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      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 provision of  the Employees’  state Insurance Act. 1940 (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 raised  by the  appellant that these  establishments are not covered under the Act and there is  no relationship  of employer  and employee between the workmen and the appellant.  This controversy was covered by a  three Judge  Bench decision of this Court in Kirloskar Brothers Ltd.  vs.  Employees  State  Insurance  Corporation [(1966 (2)  SCC 682]  wherein this  Court had  held that the appellant   is covered  by the  provisions of the Act and is liable  to   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  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 lock to the provisions of the Act.      Section 45-B provides for the procedure for recovery of contributions which says that nay contribution payable under this Act  may be  recovered  as  arrears  of  land  revenue. Section 75(2) provides that:      "the claim  shall be decided by the      Employer’ Insurance  Court (subject      to the provisions of sub-Section 2-      A), namely:

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    "(a)  claim  for  the  recovery  of      contributions  from  the  principal      employer;      (b) claim  by a  principal employer      to recover  contributions from  any      immediate employer;      (c) omitted      (d)  claim   against  a   principal      employer under Section 68:      (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      (f) any  claim for  the recovery of      any benefit  admissible under  this      Act."      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 such application shall be made within a period  of three years from the date on which the cause of action arose".      Explanation (b) to Section 77(1-A) provides that "cause of action"  in respect  of a  claim by  the corporation  for recovering contributions  from the  principal employer  or a claim by the principal employer for recovering contributions from an  immediate employer  shall be  deemed to have arisen 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  of  the  limitation  for payment and reads thus:      "For purposes  of section 77 of the      Act  the  due  date  by  which  the      evidence  of  contributions  having      been   paid    must    reach    the      Corporation shall  be last  of  the      days  respectively   specified   in      clauses (a),  (b), (c)  and (d)  of      sub-regulation (1)."      Clause (a) to (b) 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 he  date  of      receipt   of a  requisition in that      behalf from the appropriate office;      (c)   within   42   days   of   the      termination  of   the  contribution      period to 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 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 arising of  the cause  of  action.  this  amendment  has  no

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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, without cost. We are informed that the amount has already  been deposited.  If so,  no further  action  is needed.