LexBHARAT BARREL & DRUM MFG. CO. LTD. & ANR. versus EMPLOYEES STATE INSURANCE CORPORATION
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867 A BHARAT BARREL & DRUM MFG. CO. LTD. A ANR. B c D E F G H v. EMPLOYEES STATE INSURANCE CORPORATION September 23, 1971 [C. A. VAIDIAL!NGAM AND P. JAGANMOHAN REDDY, JJ.] Employees' Seate Insurance A.ct, 1948, s. 96(1) (b)-Power to pres- cribe by rules "the procedure to be followed in proceedings he/ore the court''-lf includes power to prescribe period of lin1itation fol claims under s. 75. Litnitation, Statutes of-Nature. In exercise of the power conferred bys. 96(1) (I>)· of the Employe"" State Insurance Act, 1948, to "Prescribe by rule the procedure to be followed in proceedings" before the Insurance Court, the State Govern- ment made r. 17 prescribing a period of limitation of twelve month.'\ for every application to the Court. The Employees' State Insurance Corpo- ration filed an application before the Court claimin11 payment of the con- tribution due from the appellant. The appellant took the plea that the application was barred as it was not presented within the period prescrib- ed. The High Court, on a reference, held thats. 96(1)(b) did not grail! power to Gov._,mment to make a rule prescribing a period of limitation o• claims enumerated in s. 75(2) and, therefore, r. 17 was ultra vires the rule making power under s. 96(1). On the question whether the power to prescribe a period of limitation 'for initiating proceedings before the court is a part of, and is included in, the power to prescribe "the proce- dure to be followed in proceedings" before such courts, HELD: The power under s. 96(1) (b) does not empower the govern- ment to prescribe by rule a period of limitation for claims under s. 75. (i) 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. The object of the statutes of limitation is to compel a person to exercise his right to take action \Vithin a reasonable time, as also, to discourage and suppress stale, fake and fraudulent claims. While this is .lo, there are two aspects of the statutes of limitation, the 0:1e concerns the extin&uishment of the right if a claim or action is not commenced \Vithin a particula~i time; the other merely hars the claim without affecting the right which either remains merely a moral obligation or can be availed of to furni~h the consideration for fresh enforceable obligation. \Vhere a statute pres- cribing limitation extinguishes the right it affects substantive rights, while, that which- purely pertains to the commencement of action without touch- ing the right is procedural. The statement that substantive Jaw determin~ rights and procedural law deals with remedies is not wholly valid, for, neither the entire Jaw of remedies belongs to procedure, because, rights arc hidden even in the "interstices of procedure". There is, therefore, no clear cut division between the two. [872 G, 873 C-E, 874 BJ (ii) There is difference between the manner in whiqh jurisprudential lawyers consider the question and the way in which judges view the matter. Where a question of limitation arises, the present tendency j5 towards the view that statutes of limitation may not prove to be a deter- mining factor. But, what has to be considered is whether the statute t 868 SUPREME COURT REPORTS [l 972 J 1 S.C.R. extinguishes merely the remedy, or extinguishes the substantiye right 'as well as the re·medy. The safest course would be to examine each case on its own facts and circumstances and determine, for iilstance, whethe'r it affects substantive tights and extinguishes them, whether it merely con- cerns a procedural rule only dealing with remedies, whether -the intend- ment to prescribe limitation is discernible in the scheme of the Act, or whether it is inconsistent with the rule-making power. [876 HJ ' (iii) Apart from· the implfcations inherent in the term "Procedure'' appearing in s .. 96( 1) the woTd' in furnishes a clue, to .the controversy, that the procedure must be in relation to the proceedings in court after it has ta~en seisin of ~he. ma~r. 1'hercfore, the application by which the court IS asked to ad1ud1cate a matter c9vered by s. 75(2) is outside the scope of the· rule-making power. [877 DJ (iv) ·The pro"isions ·of the Act clearly indi~atc that the whole -Scheme is dependent upon ,the contributions made by the employer not only in respect of the a
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