THE EMPLOYEE STATE INSURANCE ACT,1948
CHAPTER-IV
CONTRIBUTIONS
CHAPTER IV
CONTRIBUTIONS
All employees, to be insured. -Subject
to the provisions of this Act, all employees in factories, or establishments
to which this Act applies shall be insured in the manner provided by
this Act.
39. Contributions. –
(l)The contribution payable under this Act in respect
of an employee shall comprise contribution payable by the employer
(hereinafter referred to as the employer's contribution) and contribution
payable by the employee (hereinafter referred to as the employee's
contribution) and shall be paid to the Corporation.
1[(2)The contributions shall be paid at
such rates as may be prescribed by the Central Government:
Provided that the rates so prescribed shall not
be more than the rates, which were in force immediately before the
commencement of the Employees' State Insurance (Amendment) Act.
1989.]
2[(3)The wage period in relation to an employee
shall be the unit in respect of which all contributions shall be
payable under this Act.]
(4)The contributions payable in respect of each
3[wage period] shall ordinarily fall due on the last day
of the 3[wage period], and where an employee is employed
for part of the 3[wage period], or is employed under two
or more employers during the same 3[wage period], the contributions
shall fall due on such days as may be specified in the regulations.
4[(5) (a) If any contribution payable
under this Act is not paid by the principal employer on the date
on which such contribution has become due, he shall be liable to
pay simple interest at the rate of twelve percent. per annum or
at such higher rate as may be specified in the regulations till
the date of its actual payment:
Provided that higher interest specified in the
regulations shall not exceed the lending rate of interest charged
by any scheduled bank.
(b)Any interest recoverable under clause (a) may be recovered as
an arrear of land revenue or under section 45C to section 451.
Explanation. -In this sub-section, “scheduled bank” means
a bank for the time being included in the Second Schedule to the
Reserve Bank of India Act, 1934 (2 of 1934)].
1.Subs. for sub-section (2) by Act No. 29 of 1989, s. 12 (i),
(w.e.f. 1-2-1991).
2.Subs. by Act No. 45 of 1984, s. 4, for sub-section (3)
(w.e.f. 27-1-1985).
3.Subs by Act No. 45 of 1984, for “week” (w.e.f. 27-1-1985).
4.Ins. by Act No. 29 of 1989, s. 12 (ii), (w.e.f. 20-10-1989).
40.Principal employer to pay contribution in the
first instance. -
(1)The principal employer shall pay in respect
of every employee, whether directly employed by him or by or through
an immediate employer, both the employer's contribution and the
employee's contribution.
(2)Notwithstanding anything contained in any other
enactment but subject to the provisions of this Act and the regulations,
ff any, made thereunder, the principal employer shall, in the case
of an employee directly employed by him (not being an exempted employee),
be entitled to recover from the employee the employee's contribution
by deduction from his wages and not otherwise:
Provided that no such deduction shall be made from
any wages other than such as relate to the period or part of the
period in respect of which the contribution is payable, or in excess
of the sum representing the employee's contribution for the period.
(3)Notwithstanding any contract to the contrary,
neither the principal employer nor the immediate employer shall
be entitled to deduct the employer's contribution from any wages
payable to an employee or otherwise to recover it from him.
(4)Any sum deducted by the principal employer from
wages under this Act shall be deemed to have been entrusted to him
by the employee for the purpose of paying the contribution in respect
of which it was deducted.
(5)The principal employer shall bear the expenses
of remitting the contributions to the Corporation.
41.Recovery of contribution from immediate
employer. –
(l)A principal employer, who has paid contribution
in respect of an employee employed by or through an immediate employer,
shall be entitled to recover the amount of the contribution so paid
(that is to say the employer's contribution, as well as the employee's
contribution, if any) from the immediate employer, either by deduction
from any amount payable to him by the principal employer under any
contract, or as a debt payable by the immediate employer.
1[(lA) The immediate employer shall maintain
a register of employees employed by or through him as provided in
the regulations and submit the same to the principal employer before
the settlement of any amount payable under sub-section (1).]
(2)In the case referred to in sub-section (1),
the immediate employer shall be entitled to recover the employer's
contribution from the employee employed by or through him by deduction
from wages and not otherwise, subject to the conditions specified
in the proviso to sub-section (2) of section 40.
2* * * * *
*
1.Ins. by Act No. 29 of 1989, s. 13, (w.e.f. 1-2-1991).
2.Explanation omitted by Act No 44 of 1966, s.
14 (w.e.f. 28-1-1968).
(l)No employee's contribution shall be payable
by or on behalf of an employee whose average daily wages are below
1[during a wage period are below 2[such wages as may
be prescribed by the Central Government]].
Explanation. -The average daily wages of
an employee shall be calculated 3[in such manner as may be
prescribed by the Central Government].
(2)Contribution (both the employer's contribution
and the employee's contribution) shall be payable by the principal
employer for each 4[wage period] 5[in respect of the
whole or part of which wages are payable to the employee and not
otherwise].
6* * * * *
* * *
7* * * * *
* * *
1.Subs. by Act No. 45 of 1984, s. 5., for “are
below one rupee and fifty paise” (w.e.f. 271-1985).
2.Subs. for “six rupees” by Act No. 29 of 1989,
s. 14 (i), (w.e.f. 1-2-1991).
3.Subs. for “in the manner specified in the First
Schedule” by Act No. 29 of 1989, s. 14 (ii), (w.e.f. 1-2-1991).
4.Subs. by Act No. 45 of 1984, s. 5, for “week”
(w.e.f. 27-1-1985).
5.Subs. by Act No. 44 of 1966, s. 15, for “during
the whole or part of which an employee is employed” (w.e.f. 28-1-1968).
6.Sub-section (3) omitted by Act No. 45 of 1984,
s. 5 (w.e.f. 27-1-1985).
8.Sub-sections (4) and (5) omitted by Act. No.
44 of 1966, s. 15 (w.e.f. 28-1-1968).
43.Method of payment of contribution. -Subject
to the provisions of this Act, the Corporation may make regulations
for any matter relating or incidental to the payment and collection
of contributions payable under this Act and without prejudice to the
generality of the foregoing power such regulations may provide for-
(a)The manner and time of payment of contributions;
(b)The payment of contributions by means of adhesive
or other stamps affixed to or impressed upon books, cards or otherwise
and regulating the manner, times and conditions, in, at and under
which, such stamps are to be affixed or impressed;
1[(bb)The date of which evidence of contributions
have been paid is to be received by the Corporation;]
(c)The entry in or upon books or cards of particulars
of contributions paid and benefits distributed in the case of the
insured persons to whom such books or cards relate; and
1.Ins. by Act No. 44 of 1966, s. 16, (w.e.f.
28-1-1968).
(d)The issue, sale, custody, production, inspection
and delivery of books or cards and the replacement of books or cards,
which have been lost, destroyed or defaced.
g1[44.Employers to furnish returns
and maintain registers in certain cases. –
(1)Every principal and immediate employer shall
submit to the Corporation or to such officer of the Corporation
as it may direct such returns in such form and containing such particulars
relating to persons employed by him or to any factory or establishment
in respect of which he is the principal or immediate employer as
may be specified in regulations made in this behalf.
(2)Where in respect of any factory or establishment
the Corporation has reason to believe that a return should have
been submitted under sub-section (1) but has not been so submitted,
the Corporation may require any person in charge of the factory
or establishment to furnish such particulars as it may consider
necessary for the purpose of enabling the Corporation to decide
whether the factory or establishment is a factory or establishment
to which this Act applies.
(3)Every principal and immediate employer shall
maintain such registers or records in respect of his factory or
establishment as may be required by regulations made in this behalf.]
1.Subs. by Act No. 53 of 1951, s. 12, for s. 44.
45.Inspectors, their functions and duties. -
(1)The Corporation may appoint such persons as
Inspectors, as it thinks fit, for the purposes of this Act, within
such local limits as it may assign to them.
(2)Any Inspector appointed by the Corporation under
sub-section (1) (hereinafter referred to as Inspector), or other
official of the Corporation authorised in this behalf by it may,
for the purposes of enquiring into the correctness of any of the
particulars stated in any return referred to in section 44 or for
the purpose of ascertaining whether any of the provisions of this
Act has been complied with-
(a)Require any principal or immediate employer to furnish to him
such information as he may consider necessary for the purposes of
this Act; or
(b)At any reasonable time enter any office, establishment, factory
or other premises occupied by such principal or immediate employer
and require any person found in charge thereof to produce to such
Inspector or other official and allow him to examine such accounts,
books and other documents relating to the employment of persons
and payment of wages or to furnish to him such information as he
may consider necessary; or
(c)Examine, with respect to any matter relevant to the purposes
aforesaid the principal or immediate employer, his agent or servant,
or any person found in such factory, establishment, office or other
premises, or any person whom the said Inspector or other official
has reasonable cause to believe to be or to have been an employee;
1[(d)Make copies of, or take extracts from, any register,
account book or other document maintained in such factory, establishment,
office or other premises;
(e)Exercise such other powers as may be prescribed.]
(3)An Inspector shall exercise such functions and
perform such duties as may be authorised by the Corporation or as
may be specified in the regulations.
1.Ins. by Act No. 53 of 1951, s. 13.
1[45A.Determination of contributions
in certain cases. –
(1)Where in respect of a factory or establishment no returns, particulars,
registers or records are submitted, furnished or maintained in accordance
with the provisions of section 44 or any Inspector or other official
of the Corporation referred to in sub-section (2) of section 45 is
2[prevented in any manner] by the principal or immediate employer
or any other person, in exercising his functions or discharging his
duties under section 45, the Corporation may, on the basis of information
available to it, by order, determine the amount of contributions payable
in respect of the employees of that factory or establishment.
3[Provided that no such order shall be passed by the Corporation
unless the principal or immediate employer or the person in charge
of the factory or establishment has been given a reasonable opportunity
of being heard.]
(2)An order made by the Corporation under sub-section (1) shall be
sufficient proof of the claim of the Corporation under section 75
or for recovery of the amount determined by such order as an arrears
of land revenue under section 45B 4[or the recovery under section
45C to 45].
1.Ins. by Act No. 44 of 1966, s. 17 (w.e.f. 17-6-1967).
2.Subs. for “obstructed” by Act No. 29 of 1989, s. 15(i)(a), (w.e.f.
20-10-1989).
3.Ins. by Act No. 29 of 1989, s. 15(i)(b), (w.e.f. 20-10-1989.
4.Added by Act No. 29 of 1989, s. 15(ii), (w.e.f. 20-10-1989).
45B. Recovery of contributions. -Any contribution payable under this
Act may be recovered as an arrear of land revenue.
1[45C. Issue of certificate to the Recovery
Officer. –
(1)Where any amount is in arrears under this Act,
the authorised officer may issue, to the Recovery Officer, a certificate
under his signature specifying the amount of arrears and the Recovery
Officer, on receipt of such certificate, shall proceed to recover
the amount specified therein from the factory or establishment or,
as the case may be, the principal or immediate employer by one or
more of the modes mentioned below:
(a)Attachment and sale of the movable or immovable property of the
factory or establishment or, as the case may by, the principal,
or immediate employer;
(b)Arrest of the employer and his detention in prison;
(c)Appointing a receiver for the management of the movable or immovable
properties of the factory or establishment or, as the case may be,
the employer:
Provided that the attachment and sale of any property
under this section shall first be effected against the properties
of the factory or establishment and where such attachment and sale
is insufficient for recovering the whole of the amount of arrears
specified in the certificate, the Recovery Officer may take such
proceedings against the property of the employer for recovery of
the whole or any part of such arrears.
(2)The authorised officer may issue a certificate
under sub-section (1) notwithstanding that proceedings for recovery
of the arrears by any other mode have been taken.
1.Ins. by Act No. 29 of 1989, s. 16, (w.e.f.
1-9-1991).
45D.Recovery Officer to who certificate is
to be forwarded. –
(1)The authorised officer may forward the certificate
referred to in section 45C to the Recovery Officer within whose
jurisdiction the employer-
(a)Carries on his business or profession or within
whose jurisdiction the principal place of his factory or establishment
is situate; or
(b)Resides or any movable or immovable property
of the factory or establishment or the principal or immediate employer
is situate.
(2)Where a factory or an establishment or the principal
or immediate employer has property within the jurisdiction of more
than one Recovery Officers and the Recovery Officer to whom a certificate
is sent by the authorised officer-
(a)Is not able to recover the entire amount by
the sale of the property, movable or immovable, within his jurisdiction;
or
(b)Is of the opinion that, for the purpose of expediting
or securing the recovery of the whole or any part of the amount,
it is necessary so to do,
He may send the certificate or, where only a part
of the amount is to be recovered, a copy of the certificate certified
in the manner prescribed by the Central Government and specifying
the amount to be recovered to the Recovery Officer within whose
jurisdiction the factory or establishment or the principal or immediate
employer has property or the employer resides, and thereupon that
Recovery Officer shall also proceed to recover the amount due under
this section as if the certificate or the copy thereof had been
the certificate sent to him by the authorised officer.
45E. Validity of certificate and amendment thereof.
–
(l)When the authorised officer issues a certificate
to a Recovery Officer under section 45C, it shall not be open to
the factory or establishment or the principal or immediate employer
to dispute before the Recovery Officer the correctness of the amount,
and no objection to the certificate on any other ground shall also
be entertained by the Recovery Officer.
(2)Notwithstanding the issue of a certificate to
a Recovery Officer, the authorised officer shall have power to withdraw
the certificate or correct any clerical or arithmetical mistake
in the certificate by sending an intimation to the Recovery Officer.
(3)The authorised officer shall intimate to the
Recovery Officer any orders withdrawing or cancelling a certificate
or any correction made by him under sub-section (2) or any amendment
made under sub-section (4) of section 45F.
45F. Stay of proceedings under certificate and amendment
or withdrawal thereof-
(l)Notwithstanding that a certificate has been
issued to the Recovery Officer for the recovery of any amount, the
authorised officer may grant time for the payment of the amount,
and thereupon the Recovery Officer shall stay the proceedings until
the expiry of the time so granted.
(2)Where a certificate for the recovery of amount
has been issued, the authorised officer shall keep the Recovery
Officer informed of any amount paid or time granted for payment,
subsequent to the issue of such certificate.
(3)Where the order giving rise to a demand of amount
for which a certificate for recovery has been issued has been modified
in appeal or other proceedings under this Act, and, as a consequence
thereof, the demand is reduced but the order is the subject-matter
of a further proceeding under this Act, the authorised officer shall
stay the recovery of such part of the amount of the certificate
as pertains to the said reduction for the period for which the appeal
or other proceeding remains pending.
(4)Where a certificate for the recovery of amount
has been issued and subsequently the amount of the outstanding demand
is reduced as a result of an appeal or other proceeding under this
Act, the authorised officer shall, when the order which was the
subject-matter of such appeal or other proceeding has become final
and conclusive, amend the certificate or withdraw it, as the case
may be.
45G. Other modes of recovery. –
(l)Notwithstanding the issue of a certificate to the Recovery Officer
under section 45C, the Director General or any other officer authorised
by the Corporation may recover the amount by any one or more of the
modes provided in this section.
(2)If any amount is due from any person to any factory or establishment
or, as the case may be, the principal or immediate employer who is
in arrears, the Director General or any other officer authorised by
the Corporation in this behalf may require such person to deduct from
the said amount the arrears due from such factor or establishment
or, as the case may be, the principal or immediate employer under
this Act and such person shall comply with any such requisition and
shall pay the sum so deducted to the credit of the Corporation:
Provided that nothing in this sub-section shall apply to any part
of the amount exempt from attachment in execution of a decree of a
civil court under section 60 of the Code of Civil Procedure, 1908
(5 of 1908).
(3)(i)The Director General or any other officer authorised by the
Corporation in this behalf may, at any time or from time to time,
by notice in writing require any person from whom money is due or
may become due to the factory or establishment or, as the case may
be, the principal or immediate employer or any person who holds or
may subsequently hold money for or on account of the factory or establishment
or, as the case may be, the principal or immediate employer, to pay
to the Director General either forthwith upon the money becoming due
or being held or at or within the time specified in the notice (not
being before the money becomes due or is held) so much of the money
as is sufficient to pay the amount due from the factory or establishment
or, as the case may be, the principal or immediate employer in respect
of arrears or the whole of the money when it is equal to or less than
that amount.
(ii)A notice under this sub-section may be issued to any person who
holds or may subsequently hold any money for or on account of the
principal or immediate employer jointly with any other person and
for the purposes of this sub-section, the shares of the joint-holders
in such account shall be presumed, until the contrary is proved, to
be equal.
(iii)A copy of the notice shall be forwarded to the principal or
immediate employer at his last address known to the Director General
or, as the case may be, the officer so authorised and in the case
of a joint account to all the joint-holders at their last addresses,
known to the Director General or the officer so authorised.
(iv)Save as otherwise provided in this sub-section, every person
to whom a notice is issued under this sub-section shall be bound to
comply with such notice, and, in particular, where any such notice
is issued to a post office, bank or an insurer, it shall not be necessary
for any pass book, deposit receipt, policy or any other document to
be produced for the purpose of any entry, endorsement or the like
being made before payment is made notwithstanding any rule, practice
or requirement to the contrary.
(v)Any claim respecting any property in relation to which a notice
under this sub-section has been issued arising after the date of the
notice shall be void as against any demand contained in the notice.
(vi)Where a person to whom a notice under this sub-section is sent
objects to it by a statement on oath that the sum demanded or any
part thereof is not due to the principal or immediate employer or
that he does not hold any money for or on account of the principal
or immediate employer, then, nothing contained in this sub-section
shall be deemed to require such person to pay any such sum or part
thereof, as the case may be, but if it is discovered that such statement
was false in any material particular, such person shall be personally
liable to the Director General or the officer so authorised to the
extent of his own liability to the principal or immediate employer
on the date of the notice, or to the extent of the principal or immediate
employer's liability for any sum due under this Act, whichever is
less.
(vii)The Director General or the officer so authorised may, at any
time or from time to time, amend or revoke any notice issued under
this sub-section or extend the time for making any payment in pursuance
of such notice.
(viii)The Director General or the officer so authorised shall grant
a receipt for any amount paid in compliance with a notice issued under
this sub-section and the person so paying shall be fully discharged
from his liability to the principal or immediate employer to the extent
of the amount so paid.
(ix)Any person discharging any liability to the principal or immediate
employer after the receipt of a notice under this subsection shall
be personally liable to the Director General or the officer so authorised
to the extent of his own liability to the principal or immediate employer
so discharged or to the extent of the principal or immediate employer's
liability for any sum due under this Act, whichever is less.
(x)If the person to whom a notice under this sub-section is sent
fails to make payment in pursuance thereof to the Director General
or the officer so authorised, he shall be deemed to be a principal
or immediate employer in default in respect of the amount specified
in the notice and further proceedings may be taken against him for
the realisation of the amount as if it were an arrear due from him,
in the manner provided in sections 45C to 45F and the notice shall
have the same effect is an attachment of a debt by the Recovery Officer
in exercise of his powers under section 45C.
(4)The Director General or the officer authorised by the Corporation
in this behalf may apply to the court in whose custody there is money
belonging to the principal or immediate employer for payment to him
of the entire amount of such money, or if it is more than the amount
due, an amount sufficient to discharge the amount due.
(5)The Director General or any officer of the Corporation may, if
so authorised by the Central Government by general or special order,
recover any arrears of amount due from a factory or an establishment
or, as the case may be, from the principal or immediate employer by
distraint and sale of its or his movable property in the manner laid
down in the Third Schedule to the Income-tax Act, 1961 (43 of 1961).
45H. Application of certain provisions of the Income-tax
Act. -The provisions of the Second the Third Schedules to
the Income-tax Act, 1961 (43 of 1961) and the Income-tax (Certificate
Proceedings) Rules, 1962, as in force from time to time, shall apply
with necessary modifications as if the said provisions and the rules
referred to the arrears of the amount of contributions, interests
or damages under this Act instead of to the income-tax:
Provided that any reference in the said provisions and the rules
to the “assessee” shall be construed as a reference to a factory or
an establishment or the principal or immediate employer under this
Act.
45I. Definitions. -For the purposes of sections 45C to 45H-
(a)"Authorised officer” means the Director General, Insurance
Commissioner, joint Insurance Commissioner, Regional Director or such
other officer as may be authorised by the Central Government, by notification
in the Official Gazette;
(b)“Recovery Officer” means any officer of the Central Government,
State Government or the Corporation, who may be authorised by the
Central Government, by notification in the Official Gazette, to exercise
the powers of a Recovery Officer under this Act.]
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