Case Note & Summary
The Employees' State Insurance Corporation (appellant) filed two criminal appeals against the acquittal of the respondents (M/s Universal Engineering and Shri Amascuo Fernandes) by the Judicial Magistrate First Class, Margao, in Labour Cases No.188/L/96/I and 189/L/96/I. The complaints alleged that the respondents failed to pay contributions under Section 39 of the Employees' State Insurance Act, 1948 (punishable under Section 85(a)) and failed to submit returns under Regulation 26 of the ESI (General) Regulations, 1950 (punishable under Section 85(e)). The contributions were payable for wage periods from 26.2.94 to March 1995, and returns were due by 13.5.1995 for the period ending 31.3.1995. The trial court acquitted accused No.2 (Shri Amascuo Fernandes) on two grounds: first, that the complainant failed to prove that he was the proprietor and occupier of the establishment M/s Universal Engineering, and second, that the sanction for prosecution was vitiated by non-application of mind as it was granted in a routine fashion. The High Court, in a common judgment, allowed both appeals. It held that the trial court erred in its findings. Regarding the status of accused No.2, the court noted that the Manager of ESI Corporation (PW1) testified that accused No.2 was the proprietor and occupier, and accused No.2 did not cross-examine the witness on this point or deny the allegation. The court held that this was sufficient to establish that accused No.2 was the principal employer under Section 2(17) of the Act, which includes the owner or occupier of the factory. As for the sanction, the court examined the sanction order and found that it showed application of mind, as it referred to the complaint and documents. The trial court's conclusion that the sanction was routine was not supported by evidence. Consequently, the High Court set aside the acquittal and convicted accused No.2 for the offences under Section 85(a) and 85(e) of the Act. The court sentenced him to pay a fine of Rs. 5,000 for each offence, with default simple imprisonment for one month. The appeals were allowed accordingly.
Headnote
A) Employees' State Insurance - Principal Employer - Section 2(17) ESI Act - Occupier/Owner - The court considered whether accused No.2 was the principal employer of M/s Universal Engineering. The trial court acquitted on ground that complainant failed to prove accused No.2 as proprietor/occupier. The High Court held that the definition of principal employer under Section 2(17) includes the owner or occupier of the factory, and the evidence of the Manager (PW1) that accused No.2 was the proprietor and occupier, coupled with the fact that accused No.2 did not deny the same, was sufficient to establish his status. The acquittal was set aside. (Paras 3-8) B) Employees' State Insurance - Sanction for Prosecution - Validity - The trial court held that the sanction was vitiated by non-application of mind as it was granted in a routine fashion. The High Court found that the sanction order showed application of mind, as it referred to the complaint and documents, and the sanctioning authority had perused the same. The trial court's conclusion was erroneous. (Paras 9-10)
Issue of Consideration
Whether the accused No.2 was the owner or occupier and thus principal employer under Section 2(17) of the Employees' State Insurance Act, 1948, and whether the sanction for prosecution was vitiated by non-application of mind.
Final Decision
Both appeals allowed. The acquittal of accused No.2 is set aside. Accused No.2 is convicted for offences under Section 85(a) and 85(e) of the Employees' State Insurance Act, 1948. He is sentenced to pay a fine of Rs. 5,000 for each offence, in default simple imprisonment for one month.
Law Points
- Principal employer
- occupier
- owner
- Section 2(17) ESI Act
- sanction validity
- non-application of mind
- routine sanction
- burden of proof
- acquittal reversal
