EMPLOYEES STATE INSURANCE CORPORATIONversusDWARKA NATH BHARGWA

         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
                                                                                 F
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.                                                     G
      Allowing the appeal, the Court
                                 •
      HELD : 1. Section 458 of the ESI Act can be pressed into service to
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 recovery by way of land revenue was sought
    to be made, section had already come into force. As it 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. In support of this contention, learned counsel for the C
    appellant rightly invited our attention to a decision of the Privy Council in
    Delhi Cloth and General Mills Co. Ltd. v. Income Tax Commissioner, Delhi
    and Another reported in AIR (1927) PC 242 wherein it has been laid down
    that 'while provisions of a statute dealing merely with matters of procedure
    may properly, unless that construction be textually inadmissible, have D
    retrospective effect attributed to them, provisions which touch a right in
    existence at the passing of the statute are not to be applied retrospectively
    in the absence of express enactment or necessary intendment'.

          As the aforesaid provision is purely procedural in nature, it cannot
    be gainsaid that it could have retrospective effect. Consequently, the con-   E
    tention of the learned counsel for the appellant in this connection is well
    made out and must be accepted. We, therefore, hold that Section 45B can
    be pressed in service to effect recovery of unpaid contributions when the
    contributions have remained unpaid since prior to the coming into force
    of Section 45B and have throughout also remained unpaid.                      F

          Consequently, notices issued in the present case against the respon-
    dent could not be said to be unauthorised or incompetent. The appeal is
    accordingly allowed. The judgment and order of the High Court as well as
    that of .the Employees Insurance Court, Allahabad are set aside. The
    respondent's application before the Employees Insurance Court is dis- G
    posed of in aforesaid terms. No costs.

    V.M.                                                      Appeal allowed.