The Judgment of the Court was delivered by
Subramonian Poti, J.:— The question raised before us in these appeals is one covered by the Division Bench decisions of this Court in Miscellaneous First Appeals Nos. 62 of 1978 and 378 of 1968. We would not have considered it necessary to go into the question over again had it not been for the fact that the question before us is an interesting one and learned counsel for the respondents in these cases attempted to throw fresh light on the question. In fairness to counsel Sri Krishnamoorthy, we felt we should discuss the matter again in these appeals.
2. The question is no doubt simple. It concerns the applicability of the period of limitation to claims enforceable under the provisions of the Employees' State Insurance Act. Applications were moved by the respondents in these cases before the Employees' Insurance Court challenging the orders of the Employees' State Insurance Corporation made under S. 45A of the Act in regard to liability for contribution under the Act for certain periods. One of the points urged in the applications was that the Corporation, in passing the orders under S. 45A, had acted erroneously in that those orders were passed in respect of contributions due for periods more than three years prior to the date of the orders themselves. Though this contention had not been raised as such in the petitions before the Insurance Court, it seems to have been urged at the bearing and has been dealt with by the Court. According to counsel, just as S. 77 (1A) of the Act provides for a period of three years for filing an application before the Insurance Court, such period to commence from the date when the cause of action arose, there should be read a period of three years within which alone the Corporation could pass an order under S. 45A. If it passes an order in respect of a period more than three years prior to the date of the order such order would be bad in that the amounts due as contribution would have become is recoverable by that time and for that reason would not be a contribution enforceable by passing an order under S. 45A.
3. It is not the contention of learned counsel for the respondents that there is any specific provision in the Act prescribing a period of time within which alone an order under S. 45A could be passed. It is also not his case that S. 77 (1A) in terms applies to the passing of an order under S. 45A.
4. The contention raised by the respondent on the question of limitation succeeded before the Insurance Court consequent upon which the Corporation is before us in these two cases as appellant.
5. It may be necessary to advert to the scheme of the relevant provisions of the Act to appreciate the contentions of the respondents here. Section 38 of the Act provides that all employees in factories or establishments to which the Act applies shall be insured in the manner provided by the Act. The provision for payment of contributions is made in S. 39 of the Act. Who should pay the contribution is specified in S. 40. The obligation to pay such contribution is imposed on the principal employer. How he is to recover the employees' contribution is also laid down in that section. The Corporation is empowered to make regulations in any matter relating or incidental to the payment and collection of contributions. The manner and time of payment, the date by which evidence of such payment is to be received by the Corporation and such other matters are to be prescribed by the abovesaid regulations. Section 44 of the Act obliges the employers to furnish returns and maintain registers in certain cases. Section 74 of the Act provides for constitution of Employees' Insurance Court by notification by the Government. Normally the question of contribution may become subject of controversy between the employer and the Corporation or the employee and the Corporation and possibly between the employer and the employee. Section 75 provides for determination of such disputes by the Court. The Act as it stood prior to amendment by Act 44 of 1966, by incorporation of S. 45A, therein conceived only of resort to S. 75 of the Act by the Corporation for recovery of contribution in the event there is no voluntary payment. Possibly finding that this may make this functioning of the Corporation cumbersome in that in every case of non-payment resort may have to be made to the Insurance Court, a special provision was envisaged whereunder adjudication is to be made by the Corporation, itself. Section 45A of the Act enabled the Corporation, on the basis of information available to it, to determine the question of payment of contribution by a factory or an establishment. By reason of incorporation of S. 45A with effect from 17 June 1967, it became possible for the Corporation to have determination of the question binding on the principal employer without resorting to the Insurance Court. When a decision is reached by the Court such decision is enforced as envisaged in Sub-sec. (4) of S. 78. That subsection provides that the order of the Insurance Court shall be enforceable as if it were a decree passed in a suit by a civil Court. But in regard to adjudications made under S. 45A provision had necessarily to be made for enforcement. Section 45B was simultaneously brought into the Act by the same amendment and that provided that any contribution payable under the Act may be recovered as arrear of land revenue.
6. It is, therefore, clear that under the scheme of the Act as it now stands an adjudication may be made as to the amount of contribution payable under the Act by the Corporation itself and that adjudication could be enforced by resort to recovery as arrear of land revenue. It is no doubt, open to a party who challenges the determination made under S. 45A to resort to the Court by an application made under S. 75 of the Act challenging such adjudication. The right of the Corporation to move under S. 75 for determination of an issue by the Insurance Court does not in any way abridge the right under S. 45 A. In practice there will be very little occasion for the Corporation to resort to S. 75, for, in the normal course, the Corporation may prefer to adjudicate under S. 45A and seek to recover under S. 45B rather than seek an adjudication under S. 75 of the Act. But that is not to say that the Corporation has no such power to seek adjudication under S. 75 of the Act. May be in a case where the Corporation genuinely feels difficulty in adjudicating on a question under S. 45A or determining a controversial point which may call for more expersize for a proper decision it may approach the Court seeking adjudication. We are only pointing out that there is nothing preventing the Corporation from doing so, though it is not obliged to do so. In these circumstances, it cannot be said that the adjudication under S. 45A is not final. It is final in the sense it can be enforced. But it may be said to be provisional in the sense that it is open to challenge at the instance of the aggrieved party who can resort to a petition under S. 75. In that sense it can be properly said that the order is provisionally final. That the order is of that character has been noticed by a learned Judge of this Court in Employees' Employees' State Insurance Corporation v. Sankaranarayana Transports [1979-I L.L.N 145].
7. Section 77 (1 A) prescribes a period of limitation. But that operates only to bar an application under S. 75 after the expiry of the period of three years from the date on which the cause of action arises. A cause of action would arise by reason of the demand by the Corporation. Where it is the order under S. 45A that is the cause of action naturally resort to the Court must be made within a period of three years of such order. There is no provision in the statute, as we have already pointed out, which deals with any period within which an order under S. 45A has necessarily to be passed. We must, therefore, necessarily reverse the decision of the Insurance Court.
8. Learned counsel for the respondents sought to sustain the decision on the question of limitation on a different approach. According to counsel, under the general law the contribution would cease to be recoverable on the expiry of a period of three years of the date on which the contribution becomes due and when once it ceases to be recoverable automatically the amount must be found to have ceased to be payable. It is said that consequently when adjudicating under S. 45A the Corporation must find that no amount is due. In other words, according to learned counsel for the respondents, any amount not recoverable under law must be found to be not due and if not due there cannot be any adjudication as if such amount is due. The basis of the decision under S. 45A must necessarily be the liability for payment of contribution and when once under law that liability is extinguished any adjudication as if such amount is due should be found to be bad. Evidently learned counsel derives inspiration for his contention from the decision of the Supreme Court in New Delhi Municipality v. Kalu Ram [(1976) 3 SCC 407 : A.I.R 1976 S.C 1637]. It may be helpful to advert to the facts of that care to understand the context in which the observation relied on by learned counsel here has been made by the Supreme Court in that case. The respondent in the appeal before the Supreme Court was a payment vendor in Connaught Place, New Delhi. A stall in the Irwin Road was allotted to him as a displaced person. When the allottee fell into heavy arrears of rent the New Delhi Municipal Committee proposed to take steps to recover the dues the Estate Officer under S. 3 of the Public Premises (Eviction of Unauthorized Occupants) Act, 1958, was asked to take steps to recover the amount in arrears under S. 7 of the abovesaid Act. The arrear claimed was for the period from May 1950 to April 195 7. Overruling the objection that the claim was barred by limitation, the Estate Officer passed an order. The civil Court was moved and ultimately the matter reached the Supreme Court. The New Delhi Municipality which was the appellant before the Supreme Court took up the stand that the High Court was wrong in holding that the amount of arrears could not be recovered under S. 7 of the Act because the time for instituting a suit to recover the same had expired. No doubt, no suit had been filed for recovering the arrears on the date the Estate Officer made his order under S. 7 of the Act. But the stand taken by the appellant before the Supreme Court was that though a suit would be barred, S. 3 of the Public Premises (Eviction of Unauthorized Occupants) Act having provided for a different and special mode of recovery, recovery pursuant to that mode was available. The Court noticed that the statute of limitation bars the remedy without affecting the right except in cases in which S. 28 of the Limitation Act applies. That evidently applies only to cases of recovery of possession of immovable property. This was not one such case. The Supreme Court further found that if the creditor had any other legal remedy permitting him to enforce his claim he would be free to avail of it. The Court further observed thus:
“But the question in every such case is whether the particular statute permits such a course.”
Reference was made to S. 7 which used the term “payable” in relation to the rent of any public premises. The Supreme Court was of the view that when once the amount could not be recovered through suit it ceased to be payable for that reason and, therefore, within the meaning of S. 7 of the Act it was not one of those claims for which an order under S. 7 could be passed. Evidently, the Supreme Court has used the term “payable” in the sense “recoverable.” We are not concerned with a similar case here. In the case before the Supreme Court the question was not whether any claim arising under a special statute would be barred by reason of the provisions of the Limitation Act. The claim sought to be enforced in that case by resort to the special Act was a claim arising not by reason of the provisions of that Act. The foundation for that claim could only be traced to the general law and, therefore, recovery would normally be only by an action in a Court. It is in that sense that the Court held that the amount ceased to be payable on the expiry on the period of limitation.
9. It is well settled, as observed by the Supreme Court, that the law of limitation bars only the remedy and does not extinguish the right of parties except to the extent the statute specifically chooses to say so. Had there been no law of limitation in our statute book all rights would have survived and a creditor would have been free to exercise his right to enforce recovery of the debt at any time. He would have been free to sue as he chose at any point of time or to appropriate amounts belonging to the debtor coming into his hands or to seek to hold it for appropriation towards the debt due to him. The law of limitation makes a difference and that is to the extent of barring the remedy that the creditor has by resort to a Court by way of a suit. The law of limitation is confined in its application to suits, appeals and applications and where a creditor does not seek to enforce a claim by resort to a suit the law of limitation has no part to play. In other words, his rights, if any, other than the right to take action in Court continues to be operative. Thus in a case where a right to enforce does not depend on resort to civil Court by a civil suit, the law of limitation will have no application at all. There are many statutes which create rights and obligations, as for example, many of the taxation statutes. Unless the statute itself limits the period for recovery by processes envisaged by the statute itself there would be no scope for applying the law of limitation. In other words, the law of limitation being confined to actions in Courts will have no application where a statute creates a right and does not envisage an action in Court for enforcing the right. That would be the position in a case such as the one arising under the Employees' State Insurance Act. The obligation to pay contribution imposed on the principal employers and the right of the Corporation to recover such contributions are creations of the statute and do not exist independent of the statute. The mode of recovery is prescribed in the statute itself. It is either by resort to S. 45 B or by resort to S. 75 read with S. 78 (4). It is evident, therefore, that the right to recover such contribution would not in any way be affected by any law of limitation otherwise than what is provided in the statute itself, if there be any. The law of limitation will have no scope for operation in respect of any claim arising under S. 45A of the Act. For that reason it must necessarily be said that the case before the Supreme Court in New Delhi Municipality v. Kalu Ram [(1976) 3 SCC 407 : A.I.R 1976 S.C 1637], is distinguishable. The right adjudicated here is a right created by the Employees' State Insurance Act. Therefore, there is no scope for the plea that the claim had become barred when the adjudications were made under S. 45 A. In this view, the appellant-Corporation must succeed on the question of limitation. We are called upon to reverse the decision of the Insurance Court.
10. There is another contention raised before us and that is relevant because we are reversing the decision of the Employees' Insurance Court. It is said that there are overlapping claims in the two cases. The contributions adjudicated in the two cases under S. 45A are said to cover contributions for the identical periods. No doubt, this contention was taken before the Insurance Court. But on that there was no adjudication. Therefore, it is said for the respondents that in the event this Court reverses the orders of the Insurance Court, that Court must be asked to look into this contention. This contention calls for consideration. But, in view of the undertaking by counsel for the Corporation that the Corporation is prepared to look into this question again, that if any contribution for the period is claimed in the two orders only one would be enforced and that this undertaking may be made a part of the order of this Court, we make it clear that in the event the respondent submits a statement to the Corporation within two months from today detailing what according to it is the duplication in the claim for contribution, the Corporation shall duly consider it, check it up with its own records, consider whether there has been duplication, pass an order on the question and communicate the same to the respondent. It is only after such communication giving the reasons for its decision that any further enforcement shall be made in accordance with law. The Corporation shall anxiously consider the plea of duplication with reference to the records before coming to a conclusion. If the respondent feels aggrieved then he may seek appropriate reliefs. The appeals are disposed of as above. No costs.
11. An oral application is made for leave to appeal to the Supreme Court under Art. 133 read with Art. 134 (a) of the Constitution of India. We do not find any substantial question of law of general importance which needs decision by the Supreme Court arising in the case. Hence the prayer for leave is rejected.