Dismissed

Esi Corporation Rep by Its I/C Director v. Suresh S Gaikwad

Karnataka HC8 Dec 2022CRL.A/100173/2015

Case brief

AI extract

What is this about?

In this criminal appeal under Section 378 CrPC, the High Court dismissed the appeal filed by ESI Corporation challenging the acquittal of a principal employer for failure to pay ESI contributions. The court held that the complainant failed to prove the exact amount due in the absence of an order under Section 45-A ESI Act determining payable contributions.

What did the court decide?

Criminal appeal dismissed; acquittal dated 30.05.2015 confirmed.

Esi Corporation Rep by Its I/C Director Vs Suresh S Gaikwad — Cheque Dishonour | Karnataka HC (2022)

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CRL.A No. 100173 OF 2015

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH

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DATED THIS THE 8^TH DAY OF DECEMBER, 2022

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BEFORE

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THE HON'BLE MR JUSTICE S.RACHAIAH

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CRIMINAL APPEAL NO. 100173 OF 2015

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BETWEEN:

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ESI CORPORATION REP BY ITS I/C DIRECTOR ESI CORPORATION SUB-REGIONAL OFFICE, NO.H-42, DOLLARS COLONY, ADJ. NEW CENTRAL BUS-STAND, HUBBALLI-580030

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..... APPELLANT

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(BY SRI.M.L.VANTI, ADV. FOR SRI. V.M. SHEELVANT & SRI.S.H.MITTALKOD, ADVS.)

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AND

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1 . SURESH S GAIKWAD M.D. M/S TECHNO MECH VALVES (P) LTD., NO.C.355 INDUSTRIAL ESTATE, GOKUL ROAD, HUBBALLI.

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2 . M/S TECHNO MECH VALVES (P) LTD., NO.C.355 INDUSTRIAL ESTATE, GOKUL ROAD, HUBBALLI …RESPONDENTS

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(BY SRI. GANESH R RAIBAGI, ADV. & SRI BASAVARAJ S. BYAKOD, ADV.)

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THIS CRIMINAL APPEAL IS FILED U/SEC.378(4) OF CR.P.C., PRAYING TO CALL FOR THE RECORDS, ALLOW THE APPEAL AND SET ASIDE THE JUDGEMENT AND ORDER OF ACQUITTAL DATED 30/5/2015 PASSED BY THE J.M.F.C. 1ST COURT HUBBALLI IN C.C. NO.31/2003 AND CONVICT THE ACCUSED UNDER SECTION 85(a) (I) OF ESI ACT.

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CRL.A No. 100173 OF 2015

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THIS CRIMINAL REVISION PETITION COMING ON FOR FURTHER HEARING, THIS DAY, THE COURT MADE THE FOLLOWING:

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JUDGMENT

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This appeal is filed by the complainant, being aggrieved by the judgment of acquittal dated 30.05.2015 in C.C.No.31/2003 on the file of learned JMFC -I, Hubli.

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For the sake of convenience, the parties would

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be referred to as per their rankings before the Trial Court.

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Brief facts of the case are that:

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The accused is the principal employer of M/s. Techno Mech Valves Ltd., which is covered under the ESI Act. The allotted code is numbered as No.53-14287-66. The accused being the principal employer, has failed to pay the contribution in terms of ESI Act for the period from April 2001 to March 2002, thereby has violated provision under Section 40 of the ESI Act r/w. Regulations 29 and 31 of the (General) Regulations 1950. The demand notice in form-C-18 was issued on 22.01.2002 and 29.07.2002 to the factory and the same is received by the factory and the show cause notice was issued on 05.08.2002 under

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CRL.A No. 100173 OF 2015

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Section 85 of the ESI Act for non-payment of contribution

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of Rs.89,232/-.

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The complainant obtained sanction in terms of Sanction 86(i) of the ESI Act and lodged a complaint against the principal employer for the offence under Section 85 of the ESI Act.

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In order to prove its case, the complainant

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examined as PW1 and got marked Exs.P-1 to Ex.P-18. The accused has not chosen to led any evidence nor produced any documents.

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Heard Sri M.L.Vanti, learned counsel for Sri V.M. Sheelavant, learned counsel for appellant and Sri Ganesh R.Raibagi, learned counsel for respondents.

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It is the submission of the learned counsel for the complainant that the Trial Court has committed grave error in acquitting the principal employer. He being principal employer of M/s Techno Mech Valves Ltd., has failed to pay the contribution towards ESI for a sum of Rs.89,232/-.

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CRL.A No. 100173 OF 2015

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It is further submitted that the Trial Court ought

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to have considered the principles of provisions under Section 40 of the ESI Act read with regulations 29 and 31 of the General regulations. Having not considered the said regulations, there is injustice caused to the corporation/complainant. Having submitted thus, the learned counsel prays to allow the appeal.

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Per contra , learned counsel for the respondents

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submits that, the Trial Court after appreciating the documents and also evidence on record, passed the order appropriately.

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It is further submitted that, the complainant has failed to show as to how the amount has been determined in the absence of employees muster roll.

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It is submitted that, no material are produced by the complainant to show as to what is the amount due from the accused and in the absence of muster roll or any register to show that how many employees are working in the company, it cannot be arrived at a conclusion mere

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CRL.A No. 100173 OF 2015

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suspicion or assumption. Even the notice under Section 45-A of the ESI Act is not in accordance with law. Therefore, contribution claimed by the complainant is not in consonance with the facts of the case.

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It is further submitted that the copy of the amount or contribution paid by the employer is marked as Ex.P14 which discloses that from 01.10.2001 to 31.03.2002 the amount of Rs.44,616/- was paid as contribution towards the employees by calculating Rs.3,175/- p.m. in respect of 32 employees. Such being fact, demanding amount of Rs.89,232/- is arbitrary and it is accountable.

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After having carefully considered the submissions made by learned counsel for the parties and perused the records, the points that arise for my consideration are:

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(i) Whether the judgment and order of acquittal passed by the Trial Court is justified?

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(ii) Whether the respondents/accused made out grounds to interfere with the

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CRL.A No. 100173 OF 2015

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impugned judgment and order of acquittal?

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Before adverting to the facts of the case, it is necessary to refer Section 45-A of the ESI Act. The same reads thus:

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“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 45 is 80 [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:

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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.

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CRL.A No. 100173 OF 2015

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(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 arrear of land revenue under section 45B [or the recovery under section 45C to section 45-I].

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On careful reading of the above provision makes it clear that in the absence of an order determining the amount payable under Section 45-A of the ESI Act, recovery proceedings under Section 45-B of the Act could not be initiated.

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Now it is necessary to refer the matters for consideration. PW1 has produced Ex.P-1 to Ex.P-18 to show that the principal employer failed to contribute his part of the amount towards ESI for the period from April 2001 to March 2002 and thereby violated Regulation 29 and 31 of General Regulations read with Sections 39 and 40 of ESI Act which is punishable under Section 85(a)(i) of ESI Act. Ex.P-1 is the sanction memorandum issued by the complainant asking the principal employer as to why

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CRL.A No. 100173 OF 2015

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the action should not be initiated against them under Section 85 of the ESI Act. Ex.P-16 is the order Section 45-A of the ESI Act wherein it says M/s Techno Mech Valves Limited is a factory or establishment and the said unit was inspected by the statutory inspector on 01.04.1996 when it was found that the employer has employed 10 persons on 24.08.1996 and power was used for manufacturing process. Hence, establishment attracted coverage from 01.04.1996 in code No.5314287/1996.

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On careful perusal of Ex.P-18 complaint lodged by the complainant, it discloses that the complainant filed against the M/s Techno Mech Valves Ltd., Hubballi and demanding the principal employer to pay the contribution of a sum of Rs.89,232/- for the wage period from April 2001 to March 2002. Further PW1 admitted in the crossexamination that he could not say what was the wage for the employees for the period from 01.04.2001 to 31.03.2002. When the specific question was put to PW1 regarding Ex.P12 and Ex.P14, he stated that he could say

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CRL.A No. 100173 OF 2015

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the calculation by seeing the record. Even after seeing the record he did not say the total amount of wages be payable to the authority. PW1 failed to prove that how the principal employer is payable a sum of Rs.89,232/-. Therefore, unless the complainant is proved the amount due by the principal employer, Section 85 of the ESI Act cannot be invoked. Therefore, the Trial Court rightly arrived at a conclusion that the complainant has failed to prove the case beyond all reasonable doubt regarding contribution payable by the accused.

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In the light of the observations made above, the points which arose for my consideration are answered

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as:

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Point No.1 in the affirmative

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Point No.2 in the negative

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Hence, I proceed to pass the following:

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ORDER

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The criminal appeal filed by the appellant stands dismissed.

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10 -

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CRL.A No. 100173 OF 2015

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The judgment of acquittal dated 30.05.2015 passed

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in C.C.No.31/2003 on the file of learned JMFC -I, Hubballi

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stands confirmed.

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Sd/JUDGE

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NAA

Esi Corporation Rep by Its I/C Director v. Suresh S Gaikwad

Case brief

What is this about?

What did the court decide?

Esi Corporation Rep by Its I/C Director v. Suresh S Gaikwad

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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