Case Note & Summary
The Employees State Insurance Corporation (ESIC) filed a complaint under Section 85(a) of the Employees State Insurance Act, 1948 against M/s. Cortalim Shipyard & Engineers Pvt. Ltd. (accused No.1) and its Director, Shri Anil Salgaonkar (accused No.2), for failure to pay ESI contributions for wage periods from October 1992 to May 1993. The complaint was filed after obtaining sanction from the Regional Director. However, the trial court framed charge only against accused No.2 as Director and occupier, and subsequently acquitted both accused. The ESIC appealed against the acquittal. The High Court considered the scope of interference in appeals against acquittal, noting that if two reasonable conclusions are possible, the appellate court should not disturb the trial court's finding unless it is perverse. The court observed that the complainant examined Prakash Mazumdar, who was conversant with the case records, but failed to adduce evidence that accused No.2 was in charge of and responsible for the day-to-day business of the company. The court held that mere status as a director or occupier is not sufficient to fasten liability under Section 85(a) of the Act. The trial court's finding was not perverse, and the appeal was dismissed.
Headnote
A) Criminal Law - Appeal against acquittal - Scope of interference - In an appeal against acquittal, if two reasonable conclusions are possible, the appellate court should not disturb the finding of the trial court unless it is perverse or contrary to material on record - Held that the trial court's finding was not perverse (Paras 8-9). B) Employees State Insurance Act, 1948 - Section 85(a) - Liability of director - To prosecute a director for non-payment of contributions, it must be shown that the director was in charge of and responsible for the day-to-day business of the company - Mere status as director or occupier is insufficient - Held that the complainant failed to prove that the accused director was in charge of the conduct of business (Paras 10-11).
Issue of Consideration
Whether the acquittal of the accused director under Section 85(a) of the Employees State Insurance Act, 1948 was perverse or contrary to evidence, and whether the complainant proved that the director was in charge of and responsible for the conduct of the business of the company.
Final Decision
The appeal is dismissed. The acquittal of the respondents is upheld.
Law Points
- Appeal against acquittal
- Scope of interference in acquittal appeals
- Liability of director under ESI Act
- Requirement to prove director in charge of day-to-day business
- Sanction for prosecution
- Charge framing
