Dismissed

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

Karnataka HC8 Dec 2022CRL.A/100175/2015

Case brief

AI extract

What is this about?

High Court dismissed criminal appeal by ESI Corporation challenging acquittal of principal employer. Court held appeal liable to be dismissed as complainant failed to comply mandatory Section 45-A of ESI Act before initiating criminal proceedings for failure to pay contributions.

What did the court decide?

The criminal appeal stands dismissed; the judgment of acquittal dated 30.05.2015 is confirmed.

Esi Corporation Rep by Its I/C Director Vs Suresh S… — Service and Employment | Karnataka HC (2022)

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CRL.A No. 100175 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. 100175 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 (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.343/2002 AND CONVICT THE ACCUSED.

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CRL.A No. 100175 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.343/2002 on the file of learned JMFC -I, Hubli.

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For the sake of convenience, the parties would be

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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 Pvt. Ltd., Hubballi 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 01.08.2000 to 31.03.2001, thereby has violated provision under Section 40 of the ESI Act r/w. Regulations 29 and 31 of the (General) Regulations 1950. The complainant filed a complaint under Section 200 of Cr.P.C. and sought for suitable action against the accused.

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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-8. The

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CRL.A No. 100175 OF 2015

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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 Pvt. Ltd., has failed to pay the contribution towards ESI for a sum of Rs.59,488/-.

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It is further submitted that the Trial Court ought 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 submits that, the Trial Court after appreciating the documents and also evidence on record, passed the order appropriately.

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CRL.A No. 100175 OF 2015

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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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10.It is submitted that, before initiating the proceedings, the complainant should have exhausted or complied Section 45-A of the ESI Act. Violation thereof amounts to illegality, thereby the complaint filed by the complainant does not survive for consideration. Having submitted thus, learned counsel for respondents prays to dismiss the appeal.

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11.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 impugned judgment and order of acquittal?

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12.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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CRL.A No. 100175 OF 2015

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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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(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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13.On careful reading of the above provision makes it clear that before initiating action against the principal employer in terms of Section 85(a) and (i) of ESI Act, the authority has

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CRL.A No. 100175 OF 2015

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to exhaust the remedy available under Section 45-A of the ESI

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Act.

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Now it is necessary to refer the matters for consideration. PW1 has produced Ex.P-1 to Ex.P-8 to show that the principal employer failed to contribute his part of the amount towards ESI for the period from 01.08.2000 to 31.03.2001 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 the action should not be initiated against them under Section 85 of the ESI Act. Ex.P-2 is the employer’s registration form wherein column 11(a) indicates that the total number of employees are 10, out of which, 9 are male and 1 female. Sub clause (b) stipulated that in case of a factory, the maximum number of persons that can be employed on any one day in the factory, as stated in the license is 10. The said license was issued on 14.08.1996. The complainant has produced the copy of the form ‘A’ of Karnataka Shops and Commercial Establishment Act, 1961 and also the attendance register for the period April 1996 which indicates there are 10 employees working in the said company. Ex.P-3 is

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7 - CRL.A No. 100175 OF 2015

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the information given by the Director of the accused company that since the said company employed more than 10 workers, their Unit is covered under the ESI Act. Ex.P-4 is another letter issued to the complainant dated 23.09.1996 where it states about employment position since inception.

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On careful perusal of Ex.P-11 complaint, it appears that the complainant has stated that since no amount of contribution for the period from 01.08.2000 to 31.03.2001 was paid, the complaint has been lodged to recover the amount for a sum of Rs.59,488/-. Unless the amount due in respect of the contribution is proved by the complainant, punishment for failure to pay contribution due under the Act would not arise.

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It is also noticed that the complainant has failed to comply Section 45-A of the Act which is mandatory before initiating the proceedings against the principal employer. As such, the complainant has, not only, failed to determine the amount, but also, failed to comply the provision under Section 45-A of the Act, thereby the finding of acquittal recorded by the Trial Court does not call for interference. Therefore, I am of the considered opinion that the appeal filed by the appellant deserves to be dismissed.

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CRL.A No. 100175 OF 2015

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In the light of the observations made above, the

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points which arose for my consideration are answered 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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The judgment of acquittal dated 30.05.2015 in C.C.No.343/2002 on the file of learned JMFC -I, Hubli 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

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

Case brief

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