EMPLOYEES STATE INSURANCE CORPORATION versus DWARKA NATH BHARGWA

Citation: [1997] SUPP. 3 S.C.R. 513 · Decided: 21-08-1997 · Supreme Court of India · Bench: S.B. MAJMUDAR · Disposal: Appeal(s) allowed

Judgment (excerpt)

EMPLOYEES STATE INSURANCE CORPORATION 
A 
v. 
DWARKA NATH BHARGWA 
AUGUST 21, 1997 
[S.B. MAJMUDAR AND S. SAGHIR AHMAD, JJ.) 
B 
Labour Laws : 
Employees State Insurance Act, 1948-Section 45B-Recovery of un-
paid contribution as land revenue-Arrears of contribution prior to the section C 
coming into force-Remained payable throughout-Whetl;!er provision ap-
plicable retrospectively-Held, yes, since provision is purely procedural in 
nature, it is retrospective. 
The Appellant proceeded against respondent for recovery of unpaid 
contribution which became payable on 27.1.1967 and 24.1.1968, under D 
Section 458 of the ESI Act, 1948 which provides for recovery of unpaid 
contribution, as arrears of land revenue, after the section was brought into 
force on 28.1.1968. 
The appellant issued notices for effecting recoveries of the uiipaid 
amounts by resorting to Section 458. The respondent challenged the same E 
in the Employees Insurance Court and it was allowed. 
On first appeal the High Court held that provisions of Section 458 
of the Act of 1948 cannot be made applicable to the Respondent since the 
recoveries pertain to the period prior to the date on which the section was 
inserted in the statue book. 
In appeal to this court it was contended that as the Section was a 
procedural provision, it could obviously apply retrospectively to cover all 
contributions which had remained unpaid even prior to the date on which 
the section came into force. 
Allowing the appeal, the Court 
• 
HELD : 1. Section 458 of the ESI Act can be pressed into service to 
F 
G 
effect recovery of unpaid contributions when the contributions have 
remained unpaid since prior to the coming into force of Section 458 and H 
513 
514 
SUPREME COURT REPORTS [1997) SUPP. 3 S.C.R. 
A have throughout also remained unpaid. As the provision is purely proce-
dural in nature, it cannot be gainsaid that it could have retrospective · 
effect. The notices issued in the present case against the respondent could 
not be said to be unauthorised or incompetent. [515-E] 
Delhi Cloth and General Mills Co. Ltd. v. Income Tax Commr. Delhi, 
B AIR (1927) PC 242, relied on. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1618 of 
1981. 
C 
From the Judgment and Order dated 6.8.79 of the Allahabad High 
Court in F.A.F.O. No. 362 of 1972. 
Arvind Kr. Sharma and Ms. Anubha Jain for S.N. Terdol for the 
Appellant. 
D 
The Judgment of the Court was delivered by 
MAJMUDAR, J. The Employees State Insurance Corporation has 
brought in challenge the order passed by Allahabad High Court disposing 
of the first appeal from order No. 362 of 1972. By the impugned judgment, 
the High Court has taken the view that provisions of Section 45B of the 
E Employees State Insurance Act, 1948 (hereinafter referred to as 'the Act') 
enabling recovery of contribution payable under the Act as arrears of land 
revenue cannot be pressed into service by the appellant-Corporation in the 
present case. Reason given by the High Court for the said conclusion is to 
the effect that the recoveries pertain to the period prior to the date on 
F 
which Section 45B was inserted in the statute Book. The said section was· 
brought into force on 28.1.1968, while the amount sought to be recovered 
became payable on 27.1.1967 and 24.1.1968. It is of course true that these 
amounts were to be paid by the respondent employer on these relevant 
dates, but these contributions were not made by the respondent in time. 
Therefore, they remained in arrears. After Section 45B was brought on the 
G statute_ book, notices were is·med to the respondent on 24.4.1970 and 
9.9.1970 for effecting recoveries of these unpaid amounts of contributions 
by resort to Section 45B. Question, therefore is as to whether for the 
aforesaid contributions which remained unpaid resort to Section 45B could 
be effected on any day after the said section came on the statute book? 
H Now a mere look at the said section. shows that it is of procedural nature. 
-
E.S.I.C. v. D.N. BHARGWA [MAfMUDAR, J.) 
515 
It provides that any contribution payable under this Act may be recovered A 
as arrear of land revenue'. Consequently, on the date on which the recovery 
by way of arrears of land revenue is to be effected, the contribution in 
question should have remained unpaid. 
It is not in dispute and cannot be disputed that the contributions in B 
question had remained payable all throughout and were not paid by the 
respondent. The day on which reco

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