1. In this appeal under Clause 10 of the Letters Patent from a decision of Sharma J., the question for determination is as to the vires of Rule 17 of the Madhya Pradesh Employees' Insurance Courts Rules, 1953, prescribing the period of limitation for an application to the Employees' Insurance Court constituted under Section 74 of the Employees State Insurance Act, 1948, (hereinafter referred to as the Act).
2. The appellant, Employees' State Insurance Corporation, made an application under Section 75 of the Act for recovery of Rs. 11,712/-, with interest thereon, from the respondents on account of the contribution payable by them under Section 40 of the Act in respect of the employees of the Government Ayurvedic Pharmacy. The application was rejected by the Insurance Court on the ground that it had been filed more than twelve months after the accrual of the cause of action and was therefore, barred by time under Rule 17. TheCorporation then preferred an appeal in this Court. Sharma J., who heard the appeal, dismissed it heading that the application of the appellant had been filed beyond the limitation prescribed by Rule 17 and rejecting the appellant's contention that Rule 17 was itself ultra vires the powers of the State Government. In coming to this conclusion, the learned Judge relied on a decision of his own in Employees' State Insurance Corporation v. M. B. Roadways, Civ. Misc. Appeal No. 41 of 1961 D/- 5-10-1961, (M. P. -- Gwalior Bench). In that case he did not think it necessary to decide whether Rule 17 fell within the power conferred on the State Government under Section 96(1)(b) of the Act to frame rules in regard to the procedure to be followed in proceedings before the Insurance Courts, as in his view the rule was referable to the power of the Government under Clause (h) of Section 96(1) to frame rules with regard to
'any other matter which is required or allowed'
by the Act to be prescribed by the State Government. The learned Single Judge expressed his view thus:
'Section 76(1) of the Employees' Insurance Act runs as under:--
76(1) -- 'Subject to the provisions of this Act and any rules made by the State Government, all proceedings before the Employees' Insurance Court shall be instituted in the Court appointed for the local area in which the insured person was working at the time the question or dispute arose.'
4. It would follow from the provisions of Section 76(1) given above that the State Government is allowed to frame rules governing institution of proceedings before the Employees' State Insurance Courts. Obviously one of the conditions to the institution of an action may be that the action shall lie only within a period prescribed by law. The Rule 17 which deals with the question of limitation would, therefore, be covered by the power conferred on the State Government under Clause (h) of Section 96 when read along with Section 76(1) of the Act.'
3. It was argued by Shri Dabir, learned counsel appearing for the appellant, that the scheme of the Act and the provisions contained in Sections 40, 44, 46, 68, 80 and 82 plainly showed that the Legislature did not intend to prescribe any period of limitation for the making of an application to an Insurance Court for recovery of contributions payable by the employer, and an application for that purpose could be made at any time; and that none of the clauses of Section 96(1) empowered the Government to frame a rule prescribing a period of limitation for the recovery of such contributions.
4. In order to appreciate this contention, it is first necessary to refer to the scheme of the Act and the material provisions of it. The Act has been enacted for the purpose of providing
'certain benefits to employees in case of sickness, maternity and 'employment injury' and to make provision for certain other matters in relation thereto.'
According to Section 46 of the Act, an insured person and his dependant's are entitled to get the benefits mentioned therein. An 'insured person' has been defined in Section 2(14) 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.'
These benefits are not made dependant by the Act on the actual payment of contribution in respectot any employee. If the employee is a person in respect of whom contributions are or were payable under the Act, then the person is an insured person entitled to get the benefits mentioned in Section 46. Section 40 makes the employer liable in the first instance for payment of the contributions both of the employer and the employee, and imposes an obligation on the employer for that purpose in mandatory and categorical terms. An employer is also required under Section 44 to submit to the corporation returns in the prescribed form containing the prescribed particulars relating to the persons employed by him. In the event ot the principal employer failing or neglecting to pay any contribution, the corporation has under Section 68 the right to recover from him the amount specified in that section. The amount is recoverable from the employer as an arrear of land revenue. By Section 94, the contributions due to a Corporation are deemed to be included among the debts under the Presidency-Towns Insolvency Act, 1909, the Provincial Insolvency Act, 1920, and the Companies Act having priority over other debts in the distribution of the property of the insolvent or in the distribution of the assets of a company which is being wound up.
5. These provisions unmistakably indicate that it is not the intention of the Act that the Corporation must take steps under the Act for the recovery of contributions payable by the employer within a particular period. 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. The obligation to furnish returns and to pay contributions being on the employer, the Corporation cannot be in a position to enforce by appropriate proceedings its right to recover contributions from the employer unless the employer furnishes to the corporation the requisite information about his employees. It is easy to see that if a period of limitation were to be prescribed for the taking of such proceedings by the Corporation running from the date when contributions in relation to a certain period become due, the employer can defeat the right of action of the Corporation by his own inaction in not furnishing returns as required by Section 44. Section 68 of the Act, when it gives an unqualified right to the Corporation to recover the amount stated therein from the principal employer if he fails or neglects to pay any contribution also negatives an intention that the right of the Corporation to recover the amount of contribution should be put an end to after a lapse of certain time. That the Corporation's right to recover contribution is not affected or impaired by any lapse of time is made further clear by Section 94 which makes the amount of contribution recoverable as debt having priority over other debts in insolvency proceedings and proceeding for the winding up of a company. That provision, when it says that these contributions
'shall be deemed to be included among the debts',
necessarily implies that the recovery of the amount of contributions even at the stage of insolvency and winding up proceedings is not barred by time. The applicability of any rule of limitation or any of the provisions of the Limitation Act to proceedings before the Insurance Court is also ruled out by Section 78 which gives to the Insurance Court all the powers of a civil court for certain purposesand deems it to be a civil court within, the meaning of Section 195 and Chapter XXXV of the Code of Criminal Procedure, 1898. An Insurance Court is thus not a court for the purposes of the Limitation Act. When the Legislature has treated the Insurance Court as a civil court only for certain purposes and not for the purposes of the Limitation Act, it would not be legitimate to embody in the rules certain, principled of limitation and apply them to proceedings before the Insurance Court in the absence of an express power to frame rules prescribing limitation. It is significant that sections 80 and 82 both specifically prescribe a period of limitation for making a claim for a benefit under the Act and for filing an appeal in the High Court against an order of Employees' Insurance Court Thus where the Legislature has thought it fit to terminate certain rights after a lapse of certain time, it has done so by making an express provision. The absence of any provision prescribing a period of limitation for the institution of proceedings in an Insurance Court for the recovery of contribution, amount only goes to show that the Legislature did not intend to prescribe any period of limitation for the recovery of contribution amounts.
6. It will be evident from the above discussion that the Act does not contemplate that the Corporation's right to recover contributions should be extinguished by lapse of time. On the other hand, it negatives such an intention. Now, it is firmly settled that when an authority is given the power to frame rules under an Act for the purpose of giving effect to the provisions of that Act and for certain other matters, then the rule-making authority cannot exceed the powers conferred on it by the Act and frame rules inconsistent with the provisions of the Act or rules neutralising or contradicting the provisions or abridging a right conferred by the statute itself. No authority is needed for this well established proposition. The provisions dealing with the framing of rules are contained in Sections 95 and 96 of the Act. Section 95 is concerned with the power of the Central Government to make rules. Section 96, so far as it is material here, runs as follows--
'96. (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 and the execution of orders made by such Courts;
** ** **(h) any other matter which is required or allowed by this Act to be prescribed by the State Government.** ** **'
It will be noticed that while the Central Government has the power to frame rules for the purposes of giving effect to the provisions of the Act, and has, without prejudice to the generality of this power, also the power to frame rules for all or any of the matters enumerated in Sub-section (2) of Section 95, the State Government's power to frame rules is limited specifically to the matters mentioned in Section 96(1). As Section 96(1) itself says, the rules framed in regard to those matters must be consistent with the Act. By virtue of Clause (b) to Section 96(1) the State Government has no doubt the power to frame rules consistent with the Act in regard to the procedure to be followed in proceedings before an Employees' Insurance Court. Now. in some cases while dealing with the questionwhether the Limitation Act, 1908, has or has not retrospective effect, it has no doubt been held that 'limitation' is a branch of the law of procedure. But in those cases a new! rule of limitation was held to be retrospective, not because the law of limitation is merely a law of procedure in no way affecting the right of any kind of any party but because the law was intended to be retrospective. it cannot be denied that if a party's right of action, is by a statutory provision terminated after a lapse of certain time, it does not affect his right. It is, therefore, not correct to say that the rule of limitation which enjoins a party to bring an action within a particular period is nothing but a matter of procedure simpliciter. In the present case, it is really not necessary to consider whether in the wide connotation of the word 'procedure' a rule of limitation is included. Even if it is assumed that limitation is merely a matter of procedure, the wording of Clause (b) of Section 96(1) does not authorize the framing of a rule prescribing limitation. It only permits the State Government to frame rules in regard to 'the procedure to be followed', that is to say, in regard to steps which the Court has to take after proceedings have been initiated and not the steps which a party has to take outside the court in order to enable him to initiate proceedings in the court. When a rule of limitation for any proceeding or action is prescribed, it only annexes a condition to the enforcement of a right. It does not in any way regulate the procedure which the court has to follow in proceedings before it. Even if it be taken that Clause (b) of Section 96(1), as it is worded, is wide enough to cover a rule of limitation, that cannot authorize the Government to frame a rule regulating limitation for the recovery of contributions for the simple reason that so to do would be manifesily inconsistent with the provisions of the Act referred to earlier which negative the prescription of any such rule of limitation. The validity of the rule is to be determined not so much by ascertaining whether it confers rights or merely regulates procedure, but by determining whether it is in confirmity with the powers conferred by the statute and whether it is consistent with the provisions of the statute.
7. The other clause, namely, Clause (h) of Section 96(1), also does not empower the Government to frame a rule prescribing a period of limitation for applications to an Insurance Court. This Clause enables the Government to frame a rule with regard to a matter which is required or allowed by the Act to be prescribed by rules framed by the Government. Some of the provisions of the Act enjoin the Central Government to frame rules in regard to certain matters. With regard to other matters, the Central Government has been given a discretion to frame rules. So also, there are in the Act certain provisions which cast a similar duty and give discretion to the State Government to frame rules in regard to certain matters. Clause (h), therefore, enables the State Government to frame those rules which it is bound to frame as enjoined by any provision in the Act and those rules, the framing of which is left by any provision to the discretion of the Government, There is no provision in the Act casting an obligation on the State Government to frame a rule with regard to limitation or permitting it to do so. In the absence of any such provision, Clause (h) cannot be relied upon for supporting the validity of Rule 17.
8. For all these reasons, we are of the opinion that Rule 17 of the M. P. Employees' Insurance Courts Rules, 1953, is outside the scope of the rule-making power conferred on the State Government under Section 96(1) and is inconsistent with the provisions of the Act and consequently it isultra vires. The result is that this appeal is allowed, the decision of the learned Single Judge is setaside, and the Employees' Insurance Court is directed to entertain the appellant's petition under Section 75of the Act and to dispose of it in accordance withlaw. In the circumstances of the case, we leavethe parties to bear their own costs of this appealand of the appeal before the learned Single Judge.