Tarkunde, J.:— This reference has been made under s. 81 of the Employees' State Insurance Act, 1948 by the Employees' Insurance Court, Bombay, for the decision of two questions of law. The questions submitted by the Employees' Insurance Court are:
(1) Whether rule 17 of the Employees' State Insurance Rules is ultra vires the rule making power of the State Government under s. 96(7) 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 circumstances which have led to these questions are very simple. The Employees' State Insurance Corporation (hereinafter referred to as the Corporation) filed an application in the Employees' Insurance Court. Bombay, against the opponents, who are a manufacturing company, for the recovery of the employees' contributions payable under the Employees' State Insurance Act, 1948 for the period from September 1, 1957 to July 31, 1963. The application was filed on October 7, 1963. Rule 17 of the Bombay Employees' Insurance Courts Rules, 1959 made by the Government of Bombay in exercise of the powers conferred by s. 96(1) of the said Act purports to prescribe a period of limitation for every application which may be filed in the Employees' Insurance Courts. Rule 17 is in these terms:
“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, apply to every such application.”
3. This rule barred the claim of the Corporation in respect of the contributions which became due more than 12 months before the date of the application, i.e prior to October 7, 1962. The Corporation, however, urged that rule 17 is ultra vires the rule making powers of the State Government under s. 96 of the Act. A rule similar to rule 17 quoted above has been made by other State Governments under s. 96(7) of the Act, and there is a conflict of decisions on the validity of that rule. In E.S.I Corporation v. M.P Govt. . [1964] A.I.R M.P 75., a Division Bench of the Madhya Pradesh High Court held that rule 17 of the Madhya Pradesh Rules was outside the rule making power conferred on the State Government by s. 96(7) and is inconsistent with the provisions of the Act. A corresponding rule made by the Madras Government was held invalid by a Division Bench of the Madras High Court in Solar Works v. Employees' S.I Corpn. . [1964] A.I.R Mad. 376.. In doing so the Division Bench overruled a previous decision to the contrary of a single Judge of that Court. The same question came up before a Division Bench of the Allahabad High Court in A.K Bros. v. E.S.I Corporation . [1965] A.I.R All. 410.. The Division Bench of the Allahabad High Court had before it the aforesaid decision of the Madhya Pradesh High Court, but not the one of the Madras High Court. The Allahabad High Court disagreed with the Madhya Pradesh view and held that rule 17 of the U.P Rules is covered by the rule making power of the State Government. At the time when the present reference was made to this Court by the Employees' Insurance Court, Bombay, a Division Bench of the Punjab High Court had held that the corresponding rule made by the Punjab Government was intra vires the Government's powers. Subsequently, however, that view was disapproved and the rule was held ultra vires4 by a Full Bench of that Court. The Full Bench of the Punjab High Court had before it the aforesaid decision of the Division Bench of the Allahabad High Court. The present position thus is that the Allahabad High Court has upheld the validity of the rule, whereas the Madhya Pradesh, Madras and Punjab High Courts have taken the contrary view. The Employees' Insurance Court, Bombay, has made the present reference in view of this conflict of decisions, and because the question has arisen in a great number of cases pending in that Court. In order to appreciate the arguments advanced before us it is necessary to notice some aspects of the scheme of the Employees' State Insurance Act, 1948 (hereinafter referred to as the Act). The object of the Act, as stated in its preamble, is “to provide for certain benefits to employees in case of sickness, maternity and employment injury.” It will be recalled that, much before this Act, provisions had been made for the protection of female employees in eases of maternity by the Maternity Benefits Acts passed by various Provincial Legislatures, and provisions had also been made for granting compensation for employment injury by the Workman's Compensation Act. The purpose of the present Act was to insure employees against sickness for the first time and to include in the same scheme appropriate provisions for insuring them in respect of maternity and employment injury. In the three contingencies covered by the Act—sickness, maternity and employment injury—the Act confers two benefits on the insured persons, one of periodical cash payments and the other of medical treatment. The periodical cash payments are described as sickness benefit, maternity benefit, disablement benefit and dependents' benefit, and the medical treatment is described as medical benefit (s. 46). Section 1(3) empowers the Central Government to bring into force different parts of the Act on different dates in different parts of the country. When brought into force the Act applies, in the first instance, to all factories other than seasonal factories, but the Act can be extended to other establishments, industrial, commercial, agricultural or otherwise (sub-ss. 4 and 5 of s. 1). Section 2(14) defines an “insured person” as “a person who is or was an employee in respect of whom contributions are or were payable under this Act and who is, by reason thereof, entitled to any of the benefits provided by this Act.” Section 3 provides for the establishment and incorporation of the Employees' State Insurance Corporation. Section 26(1) lays down that all contributions paid under the Act and all other moneys received on behalf of the Corporation shall be paid into a fund called the Employees' State Insurance Fund which shall be held and administered by the Corporation for the purposes of the Act. Contributions payable under the Act are the main source of the Fund, and these contributions are of the employers as well as the employees in certain proportions. No employee's contribution, however, is payable by or on behalf of an employee whose average daily wages are below one rupee [s. 42(1)]. Section 40 provides that the principal employer is to pay in respect of every employee, whether directly employed by him or by or through an immediate employer, both the employer's contribution as well as the employee's contribution. He is, however, entitled to deduct from the wages of an employee the amount of the employee's contribution payable in respect of the wage period. Sub-section (4) of s. 40 lays down that any sum deducted by the principal employer from wages under this Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted. Section 44 requires employers to furnish returns and maintain registers and s. 45 empowers the Corporation to appoint Inspectors for the purpose of inquiring into the correctness of particulars stated in any return referred to in s. 44 or for the purpose of ascertaining whether any of the provisions of the Act has not been complied with. Sections 46 to 59, read with schedules I and II, make elaborate provisions in respect of cash payments and medical treatment to which the insured persons are entitled. Chapter VI of the Act, which comprises ss. 74 to 83, deals with “Adjudication of Disputes and Claims”. Section 74 empowers State Governments to constitute Employees' Insurance Courts for different local areas. Sub-sections (1) and (2) of s. 75 enumerate the questions and claims which are to be decided by the Employees' Insurance Courts, and sub-s. (3) of that section lays down that no Civil Court shall have jurisdiction to decide or deal with any question or dispute or to adjudicate on any liability which by or under this Act is to be decided by an Employees' Insurance Court. Section 76 deals with the territorial jurisdiction of Employees' Insurance Courts. Sub-section (1) of s. 77 says that the proceedings before an Employees' Insurance Court shall be commenced by application, and sub-s. (2) of that section lays down that the form and particulars of such application and the fee to be paid therefor shall be such as may be prescribed by rules made by the State Governments. Section 78 deals with the powers of Employees' Insurance Courts, and in particular sub-s. (2) of that section says that the Court “shall follow such procedure as may be prescribed by rules made by the State Government.” Section 80 lays down that the Court shall not direct the payment of any benefit to a person “unless he has made a claim for such benefit in accordance with the regulations made in that behalf, within twelve months after the claim became due.” A proviso to that section, however, empowers the Court to condone in appropriate cases the delay in making a claim. Section 94 provides that the amount due in respect of any contribution or any other amount payable under the Act shall have priority over other debts in insolvency and liquidation proceedings. Sections 95 and 96 define the rule making powers of the Central Government and the State Governments respectively, while s. 97 specifies the power of the Corporation to make regulations under the Act. Sub-section (1) of s. 95 confers on the Central Government general powers to make rules for the purpose of giving effect to the provisions of the Act, and sub-s. (2) gives a list, without prejudice to the generality of the foregoing power, of the specific matters on which rules may be made by the Central Government. Under s. 96, however, the rule making powers of the State Government are not of a general nature. They are confined to the matters specified in cls. (a) to (h) of sub-s. (1) of s. 96. Clause (b) of s. 96(1) is material to the present Reference, for the impugned rule is claimed to be covered by the rule making power of the State Government under that clause. Clause (b) of s. 96(1) runs as follows:
“90. (1) The State Government may, subject to the condition of previous publication, make rules not inconsistent with this Act in regard to all or any of the following matters, namely:—
(b) the procedure to be followed in proceedings before such Courts (Employees' Insurance Courts) and the execution of orders made by such Courts.”
4. Clause (h) of s. 96 enables the State Government to make rules on “any other matter which is required or allowed by this Act to be prescribed by the State Government.” Sub-section (3) of s. 95 and sub-s. (2) of s. 96 provide that the rules made under ss. 95 and 96 by the Central Government and the State Governments respectively shall be published in the Official Gazettee and shall thereupon have effect as if enacted in the Act.
5. We have heard at length the arguments of Mr. Bhabha, who appeared for the Corporation and contended that rule 17 is ultra vires the rule making powers of the State Government, and Mr. Nariman for the opponents and the learned Government Pleader for the State of Maharashtra who claimed that the said rule is valid. The validity of the rule depends upon whether the power of the State Government to make rules under s. 96(1)(b) in regard to “the procedure to be followed in proceedings before such Courts” (Employees' Insurance Courts) covers the power to make a rule prescribing a period of limitation for application filed before an Employees' Insurance Court. The question must be decided on a proper construction of the terms of s. 96(1)(6). In case those terms are found to be ambiguous, the intention of the Legislature may be gathered from the other relevant provisions of the Act and the scheme of the Act as a whole.
6. In our view, the meaning of the terms of s. 96(1)(b) is clear and free from ambiguity. “The procedure to be followed in proceedings” comprises only those rules of procedure which specify the mode or manner in which the proceedings are to be conducted and disposed of. The power conferred on the State Government to make rules relating to “the procedure to be followed in proceedings” cannot cover any procedural rule which operates at a stage prior to the commencement of the proceeding, i.e prior to the filing of an application in an Employees' Insurance Court. This interpretation of the scope of s. 96(1)(6) is re-enforced if the earlier provisions of ss. 76 to 78 are taken into, consideration. The heading of s. 76 is “Institution of proceedings, etc.”, and its main purpose is to specify in which Employees' Insurance Court an application may be instituted. The heading of s. 77 is “Commencement of proceedings.” Sub-section (1) of that section, as stated above, provides that the proceedings before an Employees' Insurance Court shall be commenced by application, and sub-s. (2) says that the form of such application, the particulars it should contain and the fee payable therefor should be such as may be prescribed by rules by the State Governments. After providing for the institution of proceedings and the commencement of proceedings in ss. 76 and 77, the Legislature proceeded in s. 78 to specify the powers of the Employees' Insurance Court. Sub-section (1) of s. 78 describes the powers of the Court in such matters as summoning of witnesses, discovery and production of documents and recording of evidence. Then sub-s. (2) of s. 78 says “the Employees' Insurance Court shall follow such procedure as may be prescribed by rules made by the State Government.” Sub-section (3) says that the costs of the proceedings shall be in the discretion of the Court, and sub-s. (4) provides that an order of the Court shall be enforceable as if it were a decree passed in a suit by a Civil Court. These provisions read with the several clauses of s. 96(1) make it clear that cl. (b) of s. 96(1) is meant to cover the same topic as is mentioned in s. 78(2), viz. the procedure to be followed in proceedings before an Employees' Insurance Court. The procedure mentioned in s. 78(2) is clearly in respect of matters subsequent to the commencement of a proceeding, and it is on those matters that the State Governments are empowered to make rules by cl. (b) of s. 96(1). That is also the plain meaning of cl. (b) of s. 96(1), even if it is not read with s. 78(2). The impugned rule 17 relates to a stage anterior to the commencement of a proceeding. The rule cannot be held to pertain to the procedure to be followed in proceedings before the Court, and is thus outside the scope of s. 96(1)(b).
7. Mr. Nariman for the opponents and the learned Government Pleader for the State argued that the law of limitation is a procedural law, and that the impugned rule 17 must, therefore, be held to be a procedural rule which the State Government was empowered to make by the terms of s. 96(1)(b). There can be no dispute that the law of limitation is a procedural or adjectival law and is not a part of substantive law. It is procedural or adjectival, because it regulates the manner in which substantive rights can be enforced by judicial action. In that sense the impugned rule 17 is clearly a procedural rule. That does not, however, mean that the rule is a part of “the procedure to be followed in proceedings”, on which topic the State Governments have been empowered by s. 96(1)(b) to make rules. In deciding a case a Court has to apply procedural law as well as substantive law. But it is clear that the whole of the procedural law is not on that account a part of the procedure “followed” by a Court. An illustration may help in making this distinction clear. In this very Act there is s. 80 which lays down that an Employees' Insurance Court shall not direct the payment of any benefit to a person unless he has made a claim for such benefit in accordance with the regulations made in that behalf, within twelve months after the claim became due. Mr. Nariman referred in this connection to the regulation making powers of the Corporation under s. 97(2)(vii) and argued, quite rightly, that s. 80 requires an employee to make a claim within twelve months to the Corporation for any benefit which is receivable by him under the Act, and that the making of such a claim to the Corporation is a condition of the maintainability of his application in an Employees' Insurance Court. Now, s. 80 is clearly a procedural section, for it regulates the manner in which a person should proceed to secure the payment of any benefit to which he may be entitled under the Act. It cannot, however, be claimed that because s. 80 is procedural in character it is a part of “the procedure to be followed in proceedings” before an Employees' Insurance Court. Another instance is of s. 80 of the Code of Civil Procedure which requires a notice to be given to the Government or a public officer before filing a suit against them. That section is also procedural, but it cannot be held to be a part of the procedure to be followed in a proceeding, before a Court. The mere fact that the impugned rule 17 is procedural in nature cannot bring it within the ambit of s. 96(1)(b) of the Act.
8. Mr. Nariman argued that rule 17 can be regarded as a part of “the procedure to be followed in proceedings” because it tells the Court in effect that the Court shall not entertain a claim more than 12 months after the date on which the cause of action arose or the claim became due. We cannot accept this argument, for it is clear that a rule of law does not become a part of procedure to be “followed” by a Court merely because it tells the Court of how a certain case should be decided. Rules of substantive law also serve the same purpose. One such rule, for instance, tells the Court (to use Mr. Nariman's language) that a claim for damages for breach of contract should not be awarded against a party unless the party is proved to have committed the breach. The rule obviously is not a procedural rule, much less a part of the procedure to be followed by the Court. The decision of a case may involve the application of procedural as well as substantive law. In deciding a case the Court may have to decide such “procedural” issues as jurisdiction, limitation and res judicata and also substantive issues of various kinds. The procedure followed by the Court in deciding such issues comprises such matters as the hearing of parties, recording of evidence and the giving of judgment; it does not comprise the legal principles, whether procedural or substantive, which determine what the decision shall be. It follows that if an Employees' Insurance Court were to dismiss an application on the ground that it is barred by the impugned rule 17, the provision contained in that rule is not a part of the procedure followed by the Court, although that provision may result in the dismissal of the application.
9. It was further argued by Mr. Nariman that the expression “the procedure to be followed in proceedings before such Courts” in s. 96(1)(b) should be read as “the procedure to be followed in relation to proceedings before such Courts”, and that if this is done rule 17 will be found to be covered by s. 19(1)(b), since it relates to proceedings before an Employees' Insurance Court. In our view, this argument merely begs the question and proves nothing. If the Legislature wanted to confer on State Governments the power to make rules on the procedure “in relation to” the proceedings in Employees' Insurance Courts, the Legislature would have said so. Moreover, the words “to be followed” occurring in s. 96(1)(b) make it clear that the Legislature intended the State Government to make rules with regard to proceedings after they have been instituted, and not generally in relation to proceedings in Employees' Insurance Courts.
10. What we have stated above does not mean that an authority which has been empowered to make rules with regard to the procedure to be followed in Court proceedings cannot make any rules prescribing periods of limitations. There are several stages in the course of a proceeding and the rules made by such an authority may well provide periods of limitation in respect of those stages. To take a simple illustration, a rule-making authority, which provides that a written defence should be filed by the opponent in any application, may also provide that the written defence must be filed within a certain time after the service of notice. Again, the rule making authority may provide that if an ex-parte order is made by the Court granting or rejecting an application, the aggrieved party may apply for setting aside the order within a certain time. Such rules of limitation may come within the ambit of the procedure to be followed by a Court in a proceeding, but not a rule of limitation whose operation is antecedent to the proceeding and which bars the institution of the proceeding itself.
11. This distinction is illustrated by the authorities on which reliance was placed by Mr. Nariman. In Velu v. Sevuga Perumal . [1958] A.I.R Mad. 392. it was held that the rule making powers of the High Court under ss. 122 and 128 of the Civil Procedure Code enable the High Court to make a valid rule providing a period within which a party shall file an application in revision. Sections 122 and 128 enable the High Court to make rules, not inconsistent with the provisions in the body of the Code, regulating its own procedure and the procedure of Civil Courts subject to its superintendence. In upholding the rule the learned Judge who decided the case relied upon an earlier decision and observed (p. 393):
“The decision shows that the court has power by rules framed by it to regulate or enlarge the time relating to procedural matters.”
12. One of the earlier cases referred by the learned Judge was Sennimalai v. Palani . [1917] A.I.R Mad. 957.. In that case Coutts-Trotter, J. held that a High Court acting under s. 122 of the Civil Procedure Code can frame a valid rule making the provisions of s. 5 of the Indian Limitation Act of 1908 applicable to the period of limitation prescribed by that Act for presenting an application under O. IX, r. 13 of the Civil Procedure Code to set aside an ex-parte decree. In his judgment Coutts-Trotter, J. made a distinction between articles of the limitation act which prescribe periods of limitation for filing suits and articles which limit the time within which interlocutory and other applications should be lodged. The learned Judge went on to say (p. 957):
“…Whatever may be the case of the Statute prescribing say three 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; and therefore the High Court has jurisdiction under S. 122 to make the addition to O. 9, R. 13.”
13. Another case relied upon by Mr. Nariman was Mohd. Arab v. Abdul Waheed . [1953] A.I.R Pun. 76.. In that case the Court considered the validity of a rule of limitation which had been made by the Punjab High Court in the exercise of its powers under s. 14(2) of the Delhi and Ajmer Merwara Rent Control Act, 1947. Under that provision the High Court was authorised to make rules “to determine the classes of Courts which shall have power to hear and decide original cases, appeals and applications for revision and to deal with execution proceedings under this Act and the procedure to be followed by them.” The rule made by the High Court provided a period of 60 days for filing applications in revision. It was held that the law of limitation was a part of the law of procedure and that the rule was, therefore, valid.
14. Mr. Nariman also relied on the decision of the Supreme Court in The Union of India v. Ram Kanwar . [1962] 3 S.C.R 313.. In that case the Supreme Court was concerned with an apparent conflict between art. 151 of the Indian Limitation Act of 1908 which provided a period of 20 days for an appeal from a decree or order of a High Court in the exercise of its original jurisdiction and a rule made by the Punjab High Court which allowed a period of 30 days for a Letters Patent appeal from the judgment of a Single Judge on the Original Side of that Court to a Division Bench. The rule of the Punjab High Court was made under cl. 27 of its Letters Patent, under which the Court had the power “to make rules and orders for regulating the practice of the Court.” The Supreme Court observed that the Punjab High Court had the power under cl. 27 of the Letters Patent to make a rule prescribing a period of limitation in respect of appeals from orders made by that Court in the exercise of its original jurisdiction to a Division Bench, that the rule was “a special law” within the meaning of s. 29(2) of the Indian Limitation Act, 1908, and that an appeal filed within 30 days as provided by that rule was not time barred. This decision was cited by Mr. Nariman for the purpose of showing that a power to make a rule of limitation is covered by the general power to make rules and orders for regulating the practice of a Court.
15. It will be noticed that in each of these cases the rule of limitation which was held to be valid was in respect of a step which a party had to take after a proceeding had already commenced and during the course of that proceeding. No instance was cited by Mr. Nariman where an authority empowered to make rules regulating the procedure to be followed in Courts had made a valid rule prescribing a period of limitation for the institution of an original suit or proceeding. The most ample powers to make procedural rules are found in s. 129 of the Civil Procedure Code which empowers a High Court to make such rules, not inconsistent with the Letters Patent or any other law which established the High Court, “to regulate its own procedure in the exercise of its original civil jurisdiction.” The rules made by a High Court under s. 129 need not conform with anything provided in the Civil Procedure Code. Even with such wide powers no High Court would consider itself entitled to make rules prescribing periods of limitation for the filing of suits on its original side. It was this type of power which the State Government had arrogated to itself in making the impugned rule 17.
16. We have already pointed out that whereas the High Courts of Madhya Pradesh, Madras and Punjab have held the rule corresponding to the impugned rule 17 to be ultra vines the powers of the State Government, the Allahabad High Court took the contrary view in A.K Bros. v. E.S.I Corporation. The Allahabad High Court held the rule to be intra vires on the ground that “rules regarding limitation are largely a law of procedure.” We have already pointed out why, in our view, rule 17 although it is a procedural rule cannot be regarded as part of the procedure to be followed in proceedings before an Employees Insurance Court. A supplementary ground on which rule 17 was held to be valid by the Allahabad High Court was that rule 16 framed by the State Government was admitted before the Court to be on a matter of procedure. Rule 16 deals with the place of suing. The Court observed (p. 411):
“…If the place of suing is a matter of procedure, we find no difficulty in holding that the rule as regards limitation is also a matter of procedure.”
17. A similar rule (rule 16) is also found in the Bombay Employees' Insurance Court Rules, 1959 with which we are concerned. It appears to us, with respect, that the validity of rule 16 does not establish the validity of rule 17. Clause (h) of s. 96(1) empowers the State Government to make rules in regard to “any other matter which is required or allowed by this Act to be prescribed by the State Government.” Sub-section (2) of s. 76 allows the State Government to make rules with regard to the place of suing in certain circumstances. The validity of rule 16 was not canvassed before us, but it appears that the State Government could make such a rule under s. 96(1)(h) read with s. 76(2). The State Government's power under s. 96(1)(h) is not relevant in considering the validity of rule 17.
18. We are accordingly of the view that the terms of s. 96(1)(b) are unambiguous and that they do not confer any right on the State Government to prescribe a period of limitation for the filing of an application in an Employees' Insurance Court under s. 75 of the Act.
19. Supposing, however, that the terms of s. 96(1)(b) are ambiguous and capable of two interpretations, we find from the other provisions of the Act and from the scheme of the Act as a whole that the Legislature did not intend to confer on State Governments the power of prescribing a period of limitation for the filing of applications under s. 75 and that an interpretation of s. 96(1)(b) which excludes the grant of such a power accords with the intention of the Legislature.
20. An examination of the general scheme of the Act shows that the success of the scheme depended very largely on the collection of contributions from the whole body of employers covered by the Act. In this connection certain observations made in the aforesaid decision of the Madhya Pradesh High Court (E.S.I Corporation v. M.P Govt.) were shown by Mr. Nariman not to be strictly accurate. The Madhya Pradesh High Court observed that according to s. 46 of the Act an insured person and his dependents are entitled to get benefits mentioned therein, and that an insured person has been defined in s. 2(14) as a person in respect of whom “contributions are or were payable under this Act and who is, by reason thereof, entitled to any of the benefits provided by this Act.” From these provisions the learned Judges drew the conclusion that the benefits under the Act were not made dependent on the actual payment of a contribution in respect of any employee. The learned Judges observed (p. 76):
“…The ‘benefits’ spoken of in section 46 being available to the insured person irrespective of the fact of actual payment of the contribution, it would defeat altogether the purpose of the Act if the Corporation is required to give these benefits to the insured person, and the employer can escape his liability for payment of the contribution on the ground of limitation.”
21. Mr. Nariman took us through the second schedule of the Act and ss. 47 to 49 which deal with sickness benefit, s. 50 which deals with maternity benefit, ss. 51 and 52 which deal with disablement and dependents' benefits, and s. 56 which deals with medical benefit. These provisions show that as far as medical benefit (i.e medical treatment) is concerned, all the insured persons are entitled to receive the benefit even if the contributions payable for them are not paid. The annual report of the Corporation for the year 1964-1965 was produced before us, and it shows that out of the total expenditure of the Corporation on the benefits provided by the Act more than half the expenditure was in respect of medical treatment. As far as sickness benefit is concerned the relevant provisions show that a minimum of twelve weekly contributions in a contribution period of six months have to be paid in respect of an employee in order that he may be entitled to receive sickness benefit in the following benefit period. On the other hand, in cases of maternity benefit, disablement benefit and dependents' benefit, a payment of even one weekly contribution may suffice to enable the employee or the dependent concerned to get the whole benefit. It thus appears that although the payment of some contribution is necessary in order to entitle an insured person to the cash benefits (i.e benefits other than medical benefit), there is little proportion between the contributions actually paid in respect of a person and the amount of the benefit received by him. This must be so, for the scheme of the Act is after all a scheme of insurance. An employer who pays contributions in respect of his own employees does not pay merely for the insurance of those employees; the contributions paid by him go into a Fund which is designed to insure all the employees and their dependents covered by the Act for the contingencies of sickness, maternity and employment injury. Proper and full collection of contributions from all employers who are liable to pay them is thus necessary for the success of the scheme.
22. What is more, the scheme of the Act makes it clear that the Legislature intended that the Employees' State Insurance Fund should rapidly swell, so that the benefits under the Act can be enhanced and made available to larger categories of employees and their dependents. Sub-section (3) of s. 1 empowered the Central Government to bring different parts of the Act into force on different dates in different parts of the country. What was done by the Central Government under this provision is indicative of the intention of the Legislature. By successive Notifications Chapter IV of the Act, which relates to the payment of contributions, was brought into force in most parts of the country. This enabled contributions to be collected from factory owners all over the country without requiring the Corporation to grant any benefits to employees. Subsequently by a series of Notifications Chapter V of the Act, which deals with benefits, was gradually extended to various parts of the country in the course of over ten years from 1952. Obviously, the grant of benefits depended on the collection of an adequate amount in contributions. The intention of the Legislature to enhance the scope and the quantum of the benefits is borne out by several provisions of the Act. Sub-section (5) of s. 1 enables the appropriate Government to extend the Act to establishments other than factories. Sub-section (2) of s. 46 enables the medical benefit to be extended to the family of an insured person. Finally, s. 99 provides:
“At any time when its funds so permit, the Corporation may enhance the scale of and benefit admissible under this Act, and the period for which such benefit may be given, and provide or contribute towards the cost of medical care for the families of insured persons.”
23. The collection of contributions in adequate quantities being thus vital to the scheme of the Act, it is difficult to believe that the Legislature in enacting s. 96(1)(b) intended to confer on State Governments the power to prescribe, in their absolute discretion, a period of limitation on the Corporation's right to recover contributions. The difficulty in attributing such an intention to the Legislature is all the greater because the rule-making power in question was conferred on all the State Governments in the country. Supposing the power to prescribe a period of limitation was included in the rule-making power, there was nothing to prevent different State Governments prescribing different periods of limitation for the recovery of contributions. The Fund visualised by the Act is meant for the benefit of employees all over the country, and it is hardly possible that the Legislature intended that different State Governments may in their discretion prescribe such periods of limitation as they thought fit for the recovery of contributions.
24. Then there are some provisions in the Act which are inconsistent with the Legislature having intended to confer such a right on the State Governments. Section 94 provides that the amount due in respect of any contribution or any other amount payable under the Act shall be included in the category of priority debts under s. 49 of the Presidency-towns Insolvency Act, 1909, s. 61 of the Provincial Insolvency Act, 1920, and s. 230 of the Indian Companies Act, 1913. It does not seem likely that the Legislature, having thus placed the dues of the Corporation in a preferential position, intended that the right of the Corporation to recover them should be subject to such period of limitation as may be prescribed by the State Governments. The impugned rule 17 actually places the Corporation in a position of inferiority as compared to other creditors of an insolvent or a company in liquidation, because the dues of the Corporation become unpayable much sooner than the dues of other creditors.
25. Another relevant provision is cl. (4) of s. 40. It provides that any sum deducted by the principal employer from wages under this Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted. By the terms of this clause the principal employer has been made an express trustee of the amounts deducted by him from the wages of his employees for the purpose of paying their contributions to the Corporation. It appears highly unlikely that the legislature, having made this provision, intended that the Corporation's right to recover the trust amount from an employer should be liable to be limited by rules made by the State Governments.
26. A reference may then be made to cl. (3) of s. 82 and cl. (3) of s. 86. Clause (3) of s. 82 provides a period of limitation of sixty days for an appeal allowed under that section from an order of an Employees' Insurance Court to the High Court. clause (3) of s. 86 lays down that no Court shall take cognizance of any offence under the Act except on a complaint made within six months of the date of the alleged offence. These provisions suggest that if the Legislature had intended that the right to apply for the reliefs mentioned in s. 75 should be limited by time, the Legislature itself would have made a provision in that behalf and would not have left the matter to be decided by rules made by the State Governments.
27. Mr. Nariman argued that the claims which are to be adjudicated by an Employees' Insurance Court under s. 75(2) include other claims than those of the Corporation, and that it cannot be said to have been the intention of the Legislature that those claims also should be allowed to be adjudicated without any limitation of time. The list of claim included in s. 75(2) contains two such claims—a claim by a principal employer to recover contributions from any immediate employer [cl. (b)], and a claim by an employee or his dependents for the recovery of any benefit admissible under this Act [cl. (f)]. It appears to us that if the Legislature intended not to provide a period of limitation for the claims of the Corporation to recover contributions from principal employers, the Legislature could not have intended to provide a period of limitation for a claim made by a principal employer to recover contributions from an immediate employer. Regarding the claim of an employee or his dependents for the recovery of any benefit under the Act no period of limitation has been provided in the Act, but it has been laid down in s. 80 that an Employees' Insurance Court shall not direct the payment of any benefit to a person unless he has made to the Corporation a claim for such benefit within twelve months after the claim became due. A proviso to s. 80 enables the Court to condone the delay in making a claim in appropriate cases. It is possible that the Legislature did not think that any provision, besides the one contained in s. 80, was necessary for limiting the right of an employee or his dependent from applying under s. 75 for the recovery of any benefit admissible under the Act. A reference may be made in this connection to an observation of the Supreme Court in Bombay Gas Co. v. Gopal Bhiva . [1964] A.I.R S.C 752.. Commenting on the omission of the Legislature to provide a period of limitation for an application under s. 33C(2) of the Industrial Disputes Act, 1947 the Supreme Court said (p. 757):
“…The failure of the legislature to make any provision for limitation cannot, in our opinion, be deemed to be an accidental omission. In the circumstances, it would be legitimate to infer that legislature deliberately did not provide for any limitation under section 330(2).”
28. In the present case also it appears to us that the omission of the Legislature to provide for limitation for applications under s. 75(2) was deliberate. In any case, it seems clear that the Legislature did not intend that periods of limitation for applications under s. 75 should be prescribed by the various State Governments.
29. Mr. Nariman argued that some of the other rules made by the Government of Bombay under s. 96(1) of the Act, and included in the Bombay Employees' Insurance Courts Rules, 1959, should be taken into consideration in construing the scope of s. 96(1)(b). Mr. Nariman cited in support the following statement in Halsbury's Laws of England, Third edn., Vol. 36, p. 401 (para 606):
“Where a statute provides that subordinate legislation made under it is to have effect as if enacted in the statute, such legislation may be referred to for the purpose of construing a provision in the statute itself.”
30. Mr. Nariman pointed out that the rules made by a State Government under sub-s. (1) of s. 96 are to have effect as if enacted in the Act after they are published in the Official Gazette. He referred to two provisions in the Bombay Employees' Insurance Courts Rules which, according to him, would be of assistance in understanding the scope of s. 96(1)(b). Rule 13(3)(v) provides that every application to the Employees' Insurance Court shall state “the facts constituting the cause of action and the date when it arose”. Mr. Nariman argued that the purpose of this provision is to enable the Court to determine whether an application was filed in time. Mr. Nariman also relied on cls. (1) and (2) of rule 42 which provide that any person in whose favour an Employees' Insurance Court has made an order shall apply within one year from the date of the order for the execution thereof, and that on such application being made the Employees' Insurance Court shall send the necessary record to a Civil Court for the purpose of executing the order.
31. We do not find any substance in the above argument. When a rule is challenged on the ground that it is ultra vires the powers of the rule making authority, little assistance in deciding the scope of the rule-making powers can be derived by referring to other rules made by the same authority. The principle relied upon by Mr. Nariman has been thus stated in Craies on Statute Law, 6th edn. (p. 157):
“Where the language of an Act is ambiguous and difficult to construe the court may for assistance in its construction refer to rules made under the provisions of the Act, especially where such rules are by the statute authorising them directed to be read as part of the Act”.
32. The learned author then goes on to say (p. 158):
“…But too much stress cannot be rested upon rules, inasmuch as they may be questioned as being in excess of the powers of the subordinate body to which Parliament has delegated authority to make them.”
33. In the present case the Bombay Government made the impugned rule 17 because, according to that Government, the power to make such a rule was conferred upon it by s. 96(1)(b) of the Act. The question before us is whether that view of the Government was correct, and no assistance in deciding that question can be derived from other rules which might have been made by the same authority on the same understanding of the scope of its rule making powers.
34. We are accordingly of the view that the clear and unambiguous terms of s. 96(1)(b) exclude the grant of any power to the State Governments to make a rule prescribing a period of limitation on claims enumerated in s. 75(2). We are further of the view that supposing two interpretations were possible of the terms of s. 96(1)(b), that interpretation should be accepted which excludes the grant of such a power, because it is clear from the scheme of the Act and the provisions thereof that the Legislature did not intend to confer such power on the State Governments. Therefore, on the first question submitted to this Court by the Employees' Insurance Court, our reply is that rule 17 is ultra vires the rule making power of the State Government under s. 96(1) of the Act.
35. The second question submitted by the Employees' Insurance Court arises on the finding that rule 17 is ultra vires the State Government's rule making powers. The question is what period of limitation, if any, applies to applications filed by the Corporation to an Employees' Insurance Court. The answer depends upon whether the application of the Corporation was made before January 1, 1964 or thereafter. This is because the Limitation Act of 1963 came into force on January 1, 1964 and replaced the Indian Limitation Act of 1908. Under the Indian Limitation Act of 1908 no period of limitation was prescribed for an application like the one made to an Employees' Insurance Court. Section 2(10) of the Indian Limitation Act of 1908 defined a suit as not including an appeal or an application. No period of limitation prescribed for filing of a suit can, therefore, have any relevance to an application filed before an Employees' Insurance Court. The only article in the Act which might have applied to such an application was art. 181 which provided a period of limitation of three years. However, as pointed out by the Supreme Court in the aforesaid decision in Bombay Gas Co. v. Gopal Bhiva (p. 758):
“…It is well settled that Art. 181 applies only to applications which are made under the Code of Civil Procedure…”
36. Thus an application filed in an Employees' Insurance Court before January 1, 1964, for a relief under s. 75 of the Employees' State Insurance Act was not subject to any period of limitation. Applications filed on or after January 1, 1964, would, however, be covered by art. 137 of the Limitation Act of 1963 which provides a period of limitation of three years from the time when the right to apply accures. Section 2(b) of the Limitation Act of 1963 says that an “application” includes a petition. Article 137 of the new Act covers all applications for which no period of limitation is provided by other articles in the Act. Hence our reply to the second question submitted by the Bombay Employees' Insurance Court will be that applications filed by the Corporation before January 1, 1964, are not subject to any period of limitation, and that those filed thereafter are subject to the period prescribed in art. 137 of the Limitation Act of 1963.
37. Under the circumstances of the case there will be no order as to costs of this reference. Mr. Jani for the opponents applies for leave to appeal to the Supreme Court from this decision. Mr. Bhabha for the Corporation opposes the application. As stated above, High Courts have differed on the main point at issue. Moreover, the Employees' Insurance Court, Bombay, has stated in the reference that the questions submitted to us have arisen in a large number of pending cases. We are accordingly of the view that this case is a fit one for appeal to the Supreme Court. Certificate to issue under art. 133(1)(c) of the Constitution.
38. Answer accordingly.