9911796707
|
Home
Issues Involved:
1. Whether Rule 17 of the Employees' State Insurance Rules is ultra vires the rule-making power of the State Government under Section 96(1) of the Employees' State Insurance Act, 1948. Issue-Wise Detailed Analysis: 1. Ultra Vires Nature of Rule 17: The primary question was whether Rule 17, which prescribes a period of limitation for applications to the Employees' Insurance Court, is within the rule-making power of the State Government under Section 96(1) of the Employees' State Insurance Act, 1948. The Corporation argued that Rule 17 is ultra vires, while the Opponents and the State Government claimed its validity. The Court analyzed the scope of Section 96(1)(b), which allows the State Government to make rules regarding "the procedure to be followed in proceedings before such Courts." The Court held that "the procedure to be followed in proceedings" refers to the mode or manner in which proceedings are conducted and disposed of, and does not include rules that operate prior to the commencement of proceedings, such as limitation periods for filing applications. The Court reasoned that the term "procedure" in Section 96(1)(b) is clear and unambiguous, and does not extend to rules that bar the institution of proceedings. The impugned Rule 17, being a rule of limitation, operates at a stage antecedent to the commencement of proceedings and is thus outside the scope of Section 96(1)(b). The Court further noted that while the law of limitation is procedural, it does not fall within the ambit of "the procedure to be followed in proceedings" before the Court. The distinction was made between procedural rules that apply during the course of proceedings and those that bar the initiation of proceedings. 2. Legislative Intent and Scheme of the Act: The Court examined the legislative intent and the scheme of the Employees' State Insurance Act, 1948. The Act aims to provide benefits to employees in cases of sickness, maternity, and employment injury, and the success of the scheme depends largely on the collection of contributions from employers. The Court observed that the legislature intended the Employees' State Insurance Fund to grow rapidly to enhance benefits and cover more employees. The collection of contributions is vital, and it is unlikely that the legislature intended to subject the Corporation's right to recover contributions to varying periods of limitation prescribed by different State Governments. The Court highlighted provisions such as Section 94, which gives priority to contributions in insolvency and liquidation proceedings, and Section 40(4), which makes employers express trustees of deducted contributions. These provisions suggest that the legislature did not intend for the Corporation's right to recover contributions to be limited by State Government rules. 3. Period of Limitation for Applications: The second question addressed the period of limitation applicable to applications filed by the Corporation to the Employees' Insurance Court. The Court clarified that applications filed before 1st January 1964 were not subject to any period of limitation under the Indian Limitation Act, 1908. However, applications filed on or after 1st January 1964 are subject to the period prescribed in Article 137 of the Limitation Act, 1963, which provides a three-year limitation period from when the right to apply accrues. Conclusion: The Court concluded that Rule 17 is ultra vires the rule-making power of the State Government under Section 96(1) of the Employees' State Insurance Act, 1948. Applications filed by the Corporation before 1st January 1964 are not subject to any period of limitation, while those filed thereafter are subject to a three-year limitation period under Article 137 of the Limitation Act, 1963. The Court granted a certificate for appeal to the Supreme Court, acknowledging the differing views of High Courts on the issue and the significance of the question in pending cases.
|
