Employees' State Insurance Corporation v. National Printing Press, Jaipur, And Another

1. The Employees' State Insurance Corporation applied before the Employees' Insurance Court, Jaipur, against the National Printing Press and its partner Ayodhya Prasad Sharma to enforce its claim and obtained a decree for Rs. 918 and costs, on account of employee contribution which was due under the Employees' State Insurance Act. The decree was obtained on 29 April, 1961. The execution of the decree was sought on 12 July, 1962. An objection was raised by Ayodhya Prasad that the decree is not executable as it is barred by time. Reliance was placed on rule 42 of the Rajasthan State Employees' Insurance Court Rules, 1959, whereby the period of one year has been laid down during which a decree could be executed. However, a rejoinder was submitted on behalf of the decree-holder that rules 17(1) and 42 of the Rajasthan State Employees' Insurance Court Rules, 1959, were ultra vires. This decree was sent to the learned Munsiff for execution. The learned Munsiff before whom these objections were raised, referred the following question of law for adjudication:

“Whether the State of Rajasthan had framed rule 42(1) in the Rajasthan Employees' Insurance Court Rules, 1959, which is outside the strict terms of authority assigned to the State under S. 96(1)(b) of the Employees' State Insurance Act, 1948, and as such it is excessive delegated legislation and must need be declared to be invalid and of questionable vires?”

2. The learned counsel arguing on behalf of the Employees' State Insurance Corporation contended that rule 17 of the Bombay Employees' Insurance Rules has been declared to be ultra vires in the case of Bharat Barrel and Drum Manufacturing Company, Ltd. v. Employees' State Insurance Corporation [1972 L & I.C 753], and as such, following the same analogy rule 42 of the Rajasthan Employees' Insurance Rules, 1959 is also invalid.

3. While making the reference, the learned Munsiff relied on United India Timber Works v. Employees' State Insurance Corporation [A.I.R 1967 Punj. 166], Employees' State Insurance Corporation v. Madhya Pradesh Government [A.I.R 1964 Madh. Pra. 75], Employees' State Insurance Corporation v. Bharat Barrel and Drum Manufacturing Company (Private), Ltd., [A.I.R 1967 Bom. 472], Messrs. Solar Works v. Employees' State Insurance Corporation [A.I.R 1964 Mad. 376] and M/S. A.K Brothers… v. Employees State Insurance Corporation…. [A.I.R 1965 All. 410].

4. The learned counsel for Insurance Corporation also drew the attention of this Court to a decision by the learned Division Bench of this Court in the case of Employees' State Insurance Corporation v. Executive Engineer, Public Works Department (B & R), Workshop, Jaipur [1972 R.L.W 570], decided on 10 November, 1971. Attention was also drawn to the cases of Employees' State Insurance Corporation, Jaipur v. Executive Engineer, Public Works Department [A.I.R 1972 Raj. 317], decided on 8 March, 1972 and Regional Director, Employees' State Insurance Corporation v. Assistant Engineer, M.C [1972 L & I.C 970 : 1972 R.L.W 258], decided on 14 March, 1972. In the latter case, it was held that rule 17 of the Employees' Insurance Court Rules was ultra vires and invalid. As a matter of fact, the controversy about the validity of rule 17 of the Bombay Employees' State Insurance Court Rules, 1959, was set at rest by the decision of the Supreme Court in Bharat Barrel and Drum Manufacturing Company, Ltd. v. Employees' State Insurance Corporation [1972 L. & I. C. 753] (vide supra), wherein it was held that S. 96(1)(b) of the Employees' State Insurance Act, 1948, which enables the State Government to make rules not inconsistent with the Act in regard to the procedure to be followed in proceedings before Employees' Insurance Courts, deals with the procedure to be followed in relation to proceedings in the Court after it has seisin of the matter.

The State Government does not have power to make a rule under this section laying down the period of limitation for applications to the Court. Rule 17 of the Bombay Employees' Insurance Court Rules, which lays down a limitation of twelve months within which an application to the Court should be made, is, therefore, ultra vires of the powers of the State Government and invalid. Moreover, such a rule will have the effect of extinguishing the rights of parties if a claim is not made within the prescribed period and the Legislature does not part with the power to prescribe limitation which it retains to itself unless it intends to do so in clear and unambiguous terms or by necessary intendment.

5. The Employees' Insurance Court Rules made by the States of Bombay and Rajasthan are pari materia. Therefore, the decision of the Supreme Court on Rule 17 of the Bombay Employees' Insurance Court Rules, shall apply with full force to the rules framed by the State of Rajasthan.

6. The Rajasthan Employees' Insurance Court Rules, 1959, in Part II deals with the procedure and execution of orders. Rules 17 and 42 both fall in Part II of these rules. As has been held by the Supreme Court in Bharat Barrel and Drum Manufacturing Company, Ltd. v. Employees' State Insurance Corporation [1972 L. & I.C 753] (vide supra), rule 17 is invalid, and beyond the scope of the rule-making authority of the State. If rule 17 is held to be ultra vires, then the necessary corollary which follows is that rule 42 is also ultra vires of the rule-making authority of the State. In view of these circumstances narrated above, it must be held that rule 42 of the Rajasthan State Insurance Court Rules is invalid.

7. The reference made by the learned Munsiff is answered accordingly. The case be sent back to him for proceeding further in the matter according to law.