- (1.) In exercise of the powers under Section 96 (1) (b) of the Employees' State Insurance Act 1948 (hereinafter referred to as 'the Act') relating to "the procedure to be followed in proceedings before such Courts and the execution of orders made by such Courts". the Government of Bombay made the following Rule: "17. Limitation: (1) Every application to the Court shall be brought within twelve months from the date on which the cause of action arose or as the case may be the claim became due: Provided that the Court may entertain an application after the said period of twelve months if it is satisfied that the applicant had sufficient reasons for not making the application within the said period. (2) Subject as aforesaid the provisions of Parts II and III of the Indian Limitation Act 1908 (IX of 1908), shall so far as may be applied to every such application." The vires of this Rule was challenged by the Employee's State Insurance Corporation (hereinafter referred to as 'the Corporation') when it filed an application on 7th October 1963 against the Appellant in the Employees Insurance Court (hereinafter referred to as 'the Insurance court') claiming payment of the contributions due from it for the period 1st September 1957 to 31st July 1963. In those proceedings the Appellant had taken the plea that the application was barred under Rule 17 as it was not presented within twelve months from the date when the cause of action arose or as the case may be when the amount became due. As the plea raised before it was important the Insurance Court made a reference under Section 81 of the Act on the following question for the decision of the High Court of Bombay: 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 2) If yes, what, if any, limitation applies to applications filed by the Corporation to the Employees' Insurance Court .
(2.) The High Court of Bombay having considered the several cases and the contentions and submissions made before it held that the clear and unambiguous terms of S. 96 (1) (b) exclude the grant of the power to any State Govt. to make a rule prescribing a period of limitation on claims enumerated in Section 75 (2). It was further of the view that where two interpretations of the terms of Section 96 (1) (b) were possible that interpretation should be accepted which excludes the grant of such a power because it appeared to it clear from the scheme of the Act and the provisos thereof that the legislature did not intend to confer such power on the State Government. It therefore answered the first question in affirmative namely that rule 17 is ultra vires the rule making power of the State Government. under Section 96 (1) (b) of the Act. On the second question it held that that an application filed in a Court before 1-1-1964 for relief under Section 75 of the Act was not subject to any period of limitation, but an application filed on or after 1-1-1964 would, however, be covered by Article 137 of the Limitation Act of 1963 which provides a limitation of 3 years from the date when the right to apply accrues. This appeal has been filed against that decision by certificate under article 133 (1) (c) of the Constitution.
(3.) This question has been the subject matter of the decisions in Employees' State Insurance Corporation v. Madhya Pradesh Government AIR 1964 Madhya Pra., 75. M/s. Solar Works, Madras v. Employees' State Insurance Corporation. Madras,. AIR 1964 Madras 376: M/s. A. K. Brothers v. Employees' State Insurance Corporation, AIR 1965 All. 410: United India Timber Works, Yamunanagar v. Employees' State Insurance Corporation, Amritsar. AIR 1967 Punj 166 (FB). Roshan Industries Pvt. Ltd. Yamunanagar v. Employees' State Insurance Corporation. AIR 1968 Punjab 56: E. S. I. C. Hyderabad v. A. P. State Electricity Board., Hyderabad. 1970 Lab IC 921 (Andh Pra). All the High Courts in these cases except that of Allahabad held that the rule is ultra vires the powers conferred on the State Government under Section 96 (1) (b) inasmuch as it is not empowered to make rules prescribing periods of limitation for applications to be filed before the Court, though in Madhya Pradesh case it was also said that: "Even if it be taken that clause (b) of Section 96 (1) as it is worded, is wide enough to cover a rule limitation, that cannot authorise the Government to frame a rule regulating limitation for the recovery of contributions."........ because according to it the validity of the rule does not necessarily depend on the ascertainment of "whether it confers rights or merely regulates procedure, but by determining whether it is in conformity with the powers conferred by the statute and whether it is consistent with the provisions of the statute." These decisions also held that the scheme of the Act was such that the Legislature did not and could not have intended to confer any power upon the State Govt. to make rules prescribing a period of limitation for application under Section 75 (2).;