1997 (8) TMI 541 - SC - Indian Laws

Supreme Court upholds validity of recovery notices under Section 45B

The Supreme Court allowed the appeal, setting aside the judgments of the High Court and the Employees Insurance Court in Allahabad. The Court found the ... - Issues:Challenge to order passed by Allahabad High Court regarding recovery of unpaid contributions under Section 45B of the Employees State Insurance Act, 1948.Analysis:The Supreme Court addressed the challenge brought by the Employees State Insurance Corporation against the order passed by the Allahabad High Court regarding the recovery of unpaid contributions under Section 45B of the Employees State Insurance Act, 1948. The High Court had held that Section 45B, enabling the recovery of contributions as arrears of land revenue, could not be applied in the present case as the contributions in question pertained to a period before the provision came into force. The amounts sought to be recovered were due on dates prior to the enactment of Section 45B, but the employer had not made the payments on time, resulting in arrears. However, the Supreme Court noted that the provision of Section 45B is procedural in nature, allowing the recovery of unpaid contributions retrospectively. Citing a Privy Council decision, the Court emphasized that procedural provisions can have retrospective effect unless textually inadmissible. Therefore, the Court concluded that Section 45B could be utilized to recover contributions that remained unpaid even before the provision came into force.The Court highlighted that the contributions in question had always been payable and were eventually paid by the respondent employer. When the recovery by way of land revenue was attempted, Section 45B was already in force. Given the procedural nature of the provision, it could be applied retrospectively to cover unpaid contributions existing before its enactment. Relying on the Privy Council's decision, the Court emphasized that procedural provisions can have retrospective application. Consequently, the Court held that Section 45B could be invoked to recover unpaid contributions that were outstanding before the provision's enactment and remained unpaid throughout.In conclusion, the Supreme Court allowed the appeal, setting aside the judgments of the High Court and the Employees Insurance Court in Allahabad. The Court found the notices issued against the respondent to be valid and authorized under Section 45B for the recovery of unpaid contributions. The respondent's application before the Employees Insurance Court was disposed of accordingly, with no costs awarded in the matter.