TMI Blog1971 (9) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... iod. (2)Subject as aforesaid the provisions of Part II and III of the Indian Limitation Act, 1908 (IX of (1908), shall so far as may be appli ed to very such application , The vires of this Rule was challenged by the Employees 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 Rule is ultra vires the rule making power of the State Government under Sec. 96(1) of the Employees State Insurance Act ? (2)If yes, what, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, is wide enough to cover a rule of limitation, that cannot authorize 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 Government to make rules prescribing a period of limitation for application under Sec. 75(2). The question which directly confronts us is whether the power to prescribe periods of limitation for initiating proceedings before the Court is a part of, and is included, in the power to prescribe the procedure to be followed in proceedings before such Courts . The answer to this question would involve the determination of the further question whether the law relating to limitation is pro- cedural or substantive or partly procedural and partly substantive. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity is a more important value (2 ) . Keeping these basic assumptions in view it will be appropriate to examine whether the topic of limitation belongs to the Branch of procedural law or is outside it. if it is a part of the procedure whether the entire topic is covered by it or only a part of it and if so what part of it and the tests for ascertaining them. The law of limitation appertains to remedies because the rule is that claims in respect of rights cannot be entertained if not commenced within the time prescribed by the statute in respect of that right. Apart from Legislative action prescribing the time, there is no period of limitation recognised under the general law and therefore any time fixed by the statute is necessarily to be arbitrary. A, statute prescribing limitation however does not confer a right of action nor speaking generally does it confer on a person a right to relief which has been barred by eflux of time prescribed by the law. The necessity for enacting periods of limitation is to ensure that actions are commenced within a particular period, firstly to assure the availability of evidence documentary as well as oral to enable the defendant to contest the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powers of evil and even in death they have not wholly ceased from troubling(2) . Oliver Wendal Holmes had however observed in The (1) Maine, Early Law and Custom 389. Common Law , wherever we trace a leading doctrine of sub stantive law far enough back, we are likely to find some forgotten circumstance of procedure at its source . It does not therefore appear that the statement that substantive law determ.nes rights and procedural law deals with remedies is wholly valid, for neither the entire law of remedies belongs to procedure nor are rights merely confined to substantive law, because as already noticed rights are hidden even in the interstices of procedure . There is therefore no clear cut division between the two. A large number of decisions have been referred before us both English and Indian some of antiquity in support of the proposition that the law prescribing the time within which an action can be commenced is purely procedural and therefore when a statute empowers the Govt. to make rules in respect of procedure it confers upon it also the rights to prescribe limitation. To this end have been cited the cases of Manoel Francisco Lopez Ors. v. Lieut. Godolnhon Jame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then was made this pertinent observation : Whatever may be the case of the statute prescribing say 3 years for an action to be brought I am quite clear that the Articles in the Act limiting applications of this nature which are almost entirely interlocutory deal clearly with matters of procedure............ This was also the view of the Full Bench in Krishnamachariar v. Srirangammal Ors.(2), which was followed by the Bombay High Court in Bandredas v. Thakurdev ( 3 ). It was contended in Velu Pillai v. Sevuga Perumal Pillai(4), that rule 41 (A) (2) of the Appellate side Rules of the Madras High Court providing for the presentation of a petition to the High Court within 90 days from the date of the order passed in an execution proceedings was ultra vires, because the High Courts were not entitled by rules to regulate or enlarge the periods in the Limitation Act in respect of the proceedings to which the Limitation, Act apply'This contention was negatived on the ground that such a powerwas inherent in Sec. 122 of the Civil Procedure Code. The argument of the petitioner that he had a vested right to go up in revision at any time and that the decision of the Full Bench in K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the High Court to regulate the procedure. It is therefore apparent that whether the fulfilment of a particular formality as a condition of enforceability of a particular right is procedural or substantive has not been, as we had already noticed free from difficulty. What appears to be a self- evident principle will not become so evident when we begin to devise tests for distinguishing procedural rule from substantive law. It appears to us that there is a difference between the manner in which the jurisprudential lawyers consider the question and the %way in which the Judges view the matter. The present tendency is that where a question of limitation arises, the distinction between so-called substantive and procedural statutes of limitation may not prove to be a determining factor but what has to be considered is whether the statute extinguishes merely the remedy or extinguishes the substantive right as well as the remedy. Instead of generalising on a principal the safest course would IV to' examine each case on its own facts and circumstances and determine for instance whether it affects substantive rights and extinguishes% them or whether it merely concerns a procedural rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporation to enforce the liability for contributions payable by the Appellant. An examination of the purpose and intendment of the Act and the scheme which it effectuates, leaves no doubt that it was enacted for the benefit of the employees and their dependents, in case of sickness, maternity and 'employment injury', as also to make provision for certain other matters. Sec. 40 makes the employer liable in the first instance to pay the contributions of the employer as well as the employee to the Corporation subject to the recovery from the employee of the. amount he is liable to contribute. This liability on the employer is categorial and mandatory. He is further required under Sec. 44 to submit to the Corporation returns as specified therein. Chapter V com- prised of Sections 46 to 73, deals with the benefits which includes among others, sickness and disablement benefit of the employee, his eligibility for receiving payments and. the compensation payable to his dependents. If the employee fails or neglects to pay the contributions as required, the Corporation has the right to recover from him under Sec. 68, the amounts specified in that Section as an arrear of land reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titled to recover from the principal employer either- (i) the difference between the amount of benefit which is paid by the Corporation to the said person and the amount of the benefit which would have been payable on the basis of the contributions which were in fact paid by the employer; or (ii) twice the amount of the contribution which the employer failed or neglected to pay; whichever is greater. (2)The amount recoverable under this Section may be recovered as if it were on arrear of land revenue. Sec.75 (2) The following claim shall be decided by the Employees' Insurance Court, namely (d)Claim against a principal employer under Section 68; It is contended by the learned Advocates for the Appellant that Sec. 68 is a crucial provision as it indicates that the right of the Corporation to enforce its claim for payment has been preserved subject to tile provision that the omission or neglect by the principal employer to make contribution deprives the employee of any benefit either totally or 'at a reduced scale. It is only in these circumstances he submits that the Corporation can recover the amount by coercive process but in any other case the Corporation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide a period of limitation in any of these provisions while providing for a limitation of a claim by an employee for the payment of any benefit under the regulations, shows clearly that the legis- lature did not intend to fetter the claim under Sec. 75(2)(d). It appears to us that where the legislature clearly intends to pro vide specifically the period of limitation in respect of claims arising thereunder it cannot be considered to have left such matters in respect of claims under some similar provisions to be provided for by the rules to be made by the Government under its delegated powers to prescribe the procedure to be. followed in proceedings before such Court. What is sought to be conferred is the power to make rules for regulating the procedure before the Insurance Court after an application has been filed and when it is seized of the matter. That apart the nature of the rule bars the claim itself and extinguishes the right which is not within the pale of procedure. Rule 17 is of such a nature and is similar in terms to Sec. 80. There is no gain-saying the fact that if an employee does not file an application before the Insurance Court within 12 months after the claim has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Employees State Insurance Corporation(1), but said that he, had no hesitation in agreeing with Dua J's view because he realised that his earlier view was based on an over-simplification. In the latest case the Andhra Pradesh High Court also following the earlier decision of Madhya Pradesh, Madras and Punjab held that the State Government had exceeded its powers to frame Rule 17 as no such power to prescribe limitation under the provisions ,of Sec. 96 (1 ) (b) or under Sec. 78 (2) can be said to have been delegated to the State Government. We, however, find that Sec. 78(2) does not delegate any power to the Government to make rules but only requires the Insurance Court to follow such pro- cedure as may be prescribed by rules made by the State Government which rules can only be made under Sec. 96 of the Act. In the view we have taken it is unnecessary to examine the question whether legislative practice also leads to the same conclusion though in the Madras and the Punjab decisions that was also one of the grounds given in support of their respective conclusions. The contrary view expressed by a Bench of the Allahabad High Court is in our opinion not good law. We may befo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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