IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTY SECOND DAY OF DECEMBER TWO THOUSAND AND NINE PRESENT HON’BLE SRI JUSTICE K.C.BHANU CRIMINAL APPEAL No.946 OF 2004 Between: M. Satyanarayana ..... Appellant/Accused AND Employees State Insurance Corporation Hill Fort Road, Hyderabad, Rep. through Public Prosecutor, High Court of A.P., Hyderabad. ..... Respondent/Complainant The Court made the following: THE HON’BLE SRI JUSTICE K.C.BHANU CRIMINAL APPEAL No.946 OF 2004 JUDGMENT: The Criminal Appeal, under Section 374 (2) of the Code of Criminal Procedure, 1973 (for short, “Cr.P.C.”), is directed against the judgment, dated 29.03.2004, in P.C.No.52 of 2002, on the file of the learned Judicial Magistrate of First Class to try Offences under the Employees’ State Insurance Act, 1948 and Chairman, Industrial Tribunal-I, Hyderabad, whereunder and whereby the appellant/accused was found guilty of the offences punishable under Sections 85 (a) and (e) of the Employees’ State Insurance Act, 1948 (for short, “the Act”), and accordingly convicted and sentenced to undergo simple imprisonment for a period of six months and to pay a fine of Rs.1,000/- in default to undergo simple imprisonment for 15 days for the offence under Section 85(a) of the Act, and to pay a fine of Rs.1,000/- in default to suffer simple imprisonment for one week for the offence punishable under Section 85(e) of the Act, and out of the fine amount, Rs.1,000/- was ordered to be paid as compensation to the complainant under Section 357 Cr.P.C. 2. The brief facts, that are necessary for the disposal of the present Criminal Appeal, may be stated as follows: The accused is the Proprietor and the Principal employer of M/s.Sri Shankar Sweet Bandar, Old Bus Stand Road, Mahaboobnagar, which was brought under the coverage of the Act and a Code No.52-6787-09 was allotted to the said establishment to facilitate the compliance under the provisions of the Act. The accused, being the principal employer, failed to pay the balance of contributions towards employer’s share and employees' share amounting to Rs.44,616/- covering the period from 10/1998 to 9/1999 and 4/2000 to 3/2001, within the stipulated time and he failed to submit the return of contribution for the period ended on 31.03.2001, within the specified time. Therefore, the accused is liable for punishment under Sections 85 (a) & (e) of the Act. 3. When the charges under Sections 85 (a) & (2) of the Act were framed, read over and explained to the accused, he pleaded not guilty and claimed to be tried. 4. To substantiate the charges, the prosecution examined P.W.1 and got marked Exs.P1 to P11. 5. After closure of the prosecution evidence, the accused was examined under Section 313 Cr.P.C. with reference to the incriminating circumstances found against him in the evidence of prosecution witnesses. He stated that as his shop was a small one and it was being run only by family members, they need not pay contribution under the Act, however, they were paying the contributions on demand made by the ESI corporation. On behalf of the accused, D.W.1 was examined and Exs.D1 to D10 were marked. 6. The trial Court, after considering the evidence on record, came to the conclusion that the accused totally failed to pay the contributions and submit returns of contributions and thereby he committed the offences punishable under Sections 85(a) and 85 (e) of the Act and accordingly convicted and sentenced him as stated above. Challenging the same, the present Criminal Appeal is filed. 7. Now the point for determination is whether the complainant proved its case beyond all reasonable doubt against the accused for the offences punishable under Sections 85(a) and 85 (e) of the Act and whether the judgment of the trial Court is correct, legal and proper? 8. Learned counsel appearing for the appellant/accused contended that the originals of Exs.P1 to P5 have not been served on the accused and no opportunity was given; that no other evidence was adduced on behalf of the complainant with regard to the determination of the issue, and therefore, he prays to set aside the impugned judgment. 9. On the other hand, the learned counsel for the respondent contended that accused failed to pay the contributions as required under the Act; that the evidence of P.W.1 is very clear that accused failed to pay the contributions, and he prays to dismiss the Criminal Appeal. 10. The first charge levelled against the accused is that he failed to pay the contributions towards the employer’s share of contribution amounting to Rs.44,616/- covering the period from 10/1998 to 9/1999 and 4/2000 to 3/2001, within the stipulated time as required under Section 40 of the Act, and thereby, the accused committed the offence punishable under Section 85 (e) of the Act. The second charge is that the accused failed to submit returns of contribution for the period ended on 31.03.2001 as required under Section 44 of the Act and thereby committed the offence punishable under Section 85(a) of the Act. 11. Section 40 of the Act reads as follows: “Principal employer to pay contributions 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, if 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 such 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.” If anybody contravenes the above provision, it is an offence punishable under Section 85 (a) of the Act. 12. Section 44 of the Act reads as follows: “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.” If anybody contravenes the above provision, it is an offence punishable under Section 85 (e) of the Act. 13. The evidence of P.W.1 would go to show that as the accused has not complied with the provisions of the Act, Exs.P1 to P3-notices in Form C-18 were issued demanding the accused to pay the contributions to a tune of Rs.44,616/- for the relevant period, but the accused did not pay that amount. No doubt, there is no evidence to show that Exs.P1 to P3 were served on the accused, but, at the same time, simply because P.W.1 failed to show that Exs.P1 to P3 notices were served on the accused, it does not mean that the accused was absolved from paying the statutory contributions. It is the statutory duty of the accused to pay the amounts every month. Irrespective of the fact whether the notices are issued or not, the accused is bound to pay the contributions. If the accused contravenes Sections 40 and 44 of the Act, then it is an offence punishable under Sections 85(a) and 85 (e) of the Act. Even the accused himself, who was examined as D.W.1., he categorically admitted that he paid the contributions for the relevant periods subsequent to filing of the complaint. Therefore, from the evidence on record, it is clearly established that the accused has not paid the contributions within the time prescribed period under law and therefore, the trial Court rightly convicted him. The said order does not call for any interference by this Court. The Criminal Appeal is devoid of merit and is liable to be dismissed. 14. Accordingly, the Criminal Appeal is dismissed, confirming the judgment, dated 29.03.2004, in P.C.No.52 of 2002, on the file of the learned Judicial Magistrate of First Class to try offences under the Employees’ State Insurance Act, 1948and Chairman, Industrial Tribunal-I, Hyderabad. ______________ (K.C.BHANU, J) Date: 22nd December, 2009. KL