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Madras High CourtCMA/1476/2004dismissed

M/S.Aurdeleetomo v. M/S.Employees State Ins.Cor.

2016-12-01Honourable Mr Justice G. Chockalingam4 pages

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 01.12.2016

CORAM

THE HON'BLE MR.JUSTICE G.CHOCKALINGAM C.M.A.No.1476 of 2004 M/s.Auroelectronics, Rep. by its Managing Partner, Andre Viozat and Jayalakshmi Partner in Auroelectronics, A-2, Industrial Estate, Thattanchavady, Pondicherry - 605 009.

.. Appellants .. Vs ..

1. M/s. Employees State Insurance Corporation, Rep. by its Regional Director, Chennai.

2. The Recovery Officer, Office of the Recovery Officer, Employees State Insurance Corporation, Chennai.

.. Respondents Prayer: Civil Miscellaneous Appeal filed under Section 82 of the ESI Act, 1948, praying to set aside the order dated 24.08.2001 passed by the Presiding Officer, ESI Court, Pondicherry, in E.S.I.O.P.No.4 of 1998 and allow the above CMA.

For Appellants : Mr.R.Venkatesulu for M/s. G.R.Swaminathan For Respondents: Mrs.S.Jayakumari for ESI

JUDGMENT

The appellants have filed this civil miscellaneous appeal seeking to set aside the order dated 24.08.2001 passed by the Presiding Officer, ESI Court, Pondicherry, in E.S.I.O.P.No.4 of 1998 and allow the above CMA.

2. The learned counsel for the appellants would contend that even though the authority of ESI corporation inspected the records of the appellants as early as on 05.01.1987, they

did not notice any default or irregularity. It is further contended that the trial Court ought to have held that the notice issued by the ESI corporation is time barred under Section 77 (1-A) (b) of the Employees' State Insurance Act, 1948 (hereinafter referred to as the Act). It is further contended that the learned Presiding Officer wholly misdirected himself in law by focusing his attention on Section 77 (1-A) of the Act, which speaks of filing of application within a period of three years from the date on which the cause of action arose, completely ignoring the fact that the appellants have presented their case on the proviso No.2 Section 77 (1-A) (b) of the Act. The learned counsel also contended that the Presiding Officer had failed to appreciate the legal and factual aspects raised on the side of the appellants.

Further, it is contended that the respondents insurance corporation demanded contribution for the period from 1986 to 1988 by issuing C.18 notice in the year 1996. As per Section 77 (1-A) (b) of the Act, there is a bar of five years for demanding the contribution by the respondents. The learned counsel submitted that the respondents have not issued any prior notice for claiming arrears and without conducting enquiry and without giving opportunity, passed an order and hence, he prayed that the order passed by the Presiding Officer has to be set aside and the civil miscellaneous appeal has to be allowed.

3. The learned counsel for the respondents would mainly contend that during the course of inspection, the appellants have not produced any records before the inspecting authority. After that, C-18 notice was issued in the year 1996. But no response was forthcoming from the appellants and recovery notice also was issued. According to Section 77 (1-A) (b) of the Act, the cause of action will arose from the notice issued by the respondents corporation. In view of this, there is no bar for the respondents to claim the amount. It is further contended that the Presiding Officer, after appreciating the entire facts and circumstances of the case, passed appropriate order and hence, the learned counsel prayed that the appeal has to be dismissed.

4. It is useful to reproduce Section 77 (1-A) (a) and (b) of the Employees' State Insurance Act, 1948, which reads as follows:- "77. Commencement of proceedings. - (1) The proceeding before an Employees' Insurance Court shall be commenced by application.

[(1-A) 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 subsection, - (a) the cause of action in respect of a claim for benefit shall not be deemed to arise unless

the insured person or in the case of dependants' benefit, the dependants of the insured person claims or claim that benefit in accordance with the regulations made in that behalf within a period of twelve months after the claim became due or within such further period as the Employees' Insurance Court may allow on grounds which appear to it to be reasonable;

[(b) the cause of action in respect of a claim by the Corpo-ration 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;"

5. On perusal of the records, it is seen that the appellants have filed original petition under Section 75(1) of the ESI Act before the trial Court and on the side of the appellants, they have produced Exs.A.1 to A.11 and the respondents produced Exs.R.1 to R.6. The trial Court, after perusing the entire materials produced on the side of both parties, came to a conclusion that since the petitioners have filed a petition under Section 75 (1) of the ESI Act, the question of limitation for demanding the contribution by the respondents will not arise. Section 77(1)(b) of the Act only prescribed the period of limitation of three years for filing the application by the appellants alone. According to Section 77 (1-A) (b) of the Act, the ESI corporation cannot take any action to recover the subscription and contribution etc.

, within a period of five years from the date of cause of action arose. Hence, as per Section 77 (1-A) (b) of the Act, the limitation of five years only applicable only for recovery of subscription and contribution demanded by the ESI Corporation. The argument of the learned counsel for the appellants that the demand made by the ESI Corporation is barred by limitation is not at all acceptable. On perusal of the judgment of the trial Court, it is clearly seen that the present appellants have filed an application for declaration to declare the notices issued by the ESI corporation dated 05.09.1996 and 12.09.1996 as illegal and not enforceable and further, the claim filed by the appellants is time barred.

The trial Court, after appreciating the entire evidence adduced by both parties, came to a conclusion that the appellants are not entitled for the prayer as sought for and dismissed the petition filed by the appellants.

6. The arguments made by the learned counsel for the appellants that the claim is barred by limitation is not acceptable. In view of this, this Court is of the considered view that there is no illegality or infirmity in the order passed by the trial Court and this Court finds no reason to interfere with the order passed by the trial Court which does not warrant any interference by this Court and hence, the civil miscellaneous appeal deserves to be dismissed.

7. In the result, the civil miscellaneous appeal is dismissed by confirming the order dated 24.08.2001 passed by the Presiding Officer, ESI Court, Pondicherry, in E.S.I.O.P.No.4 of 1998. No costs.

Sd/- Asst.Registrar (CCC) /true copy/ Sub Asst. Registrar Jrl To

1. The Presiding Officer, ESI Court, Pondicherry.

2. The Regional Director, M/s. Employees State Insurance Corporation, Chennai.

3. The Recovery Officer, Office of the Recovery Officer, Employees State Insurance Corporation, Chennai.

1 cc to M/s. S. Jayakumari, Advocate, Sr. 70791 C.M.A.No.1476 of 2004 VD (CO) kk 6/1