IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE M.SASIDHARAN NAMBIAR TUESDAY, THE 27TH OCTOBER 2009 / 5TH KARTHIKA 1931 Crl.MC.No. 248 of 2005 ------------------------------------- CC.391/2002 of CHIEF JUDICIAL MAGISTRATE COURT, THRISSUR .......... PETITIONER/ACCUSED: K.K. ANWAR, ASST.MANAGER-IN-CHARGE, KERALA ELECTRICAL AND ALLILED ENGINEERING COMPANY LTD. (KEL), EDARIKODE UNIT, MALAPPURAM DIST.-676 501, (EX-MANAGING DIRECTOR OF THE CANNANORE CO-OPERATRIVE SPINNING MILLS LTD., KANNUR). BY ADV. SRI.M.A.FAYAZ RESPONDENT/STATE & COMPLAINANT: 1. STATE OF KERALA, REP. BY THE PUBLIC PROSECUTOR, HIGH COURT OF KERALA, ERNAKULAM. 2. E S I CORPORATION, REP. BY THE INSPECTOR, THRISSUR. BY PUBLIC PROSECUTOR SRI.AMJAD ALI FOR R1 ADV. SRI.T.V.AJAYAKUMAR FOR R2 THIS CRIMINAL MISC. CASE HAVING BEEN FINALLY HEARD ON 27/10/2009, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: M.Sasidharan Nambiar, J. -------------------------- Crl.M.C.No.248 of 2005 -------------------------- ORDER Petitioner was appointed as the Managing Director, on deputation, of Kannur Co-operative Spinning Mills Ltd. while working as Executive (Finance) in Kerala Electrical & Allied Engineering Company Ltd. (KEL) as per G.O.(Rt)No.860/2001/ID dated 20.9.2001. Petitioner took charge as Managing Director of the Company on 1.10.2001. By Annexure-A2 order dated 18.10.2002 Sri.Abdul Hakkim Shareef, the Marketing Manager of Kerala State Handloom Development Corporation, was put in full additional charge of the post of Managing Director of Kannur Co-operative Spinning Mills Ltd. until further orders, after reverting petitioner to KEL. Pursuant to Annexure-A2 order, petitioner relinquished the charge of Managing Director on 1.11.2002. Alleging that Rs.2,08,051/- due for the period from 1.4.2002 to 31.5.2002 towards the contribution of employer's share under the Employees State Insurance Act was not paid and thus, petitioner, CRMC 248/05 2 in his capacity as the Managing Director of the Company, committed offence under Section 85 (a) of ESI Act, Annexure-A3 complaint was filed before Chief Judicial Magistrate's Court, Thrissur. It was taken cognizance by the learned Magistrate as C.C.No. 391/2002. This petition is filed under Section 482 of Code of Criminal Procedure to quash the proceedings contending that petitioner was working on deputation as Managing Director of the Company for the period from 1.10.2001 to 1.11.2002 and though there was default in payment of the contributions for two months, from 1.4.2002 to 31.5.2002, it was not due to any wilful negligence or laches on the part of the petitioner, but because of the financial conditions of the Company and later, evidenced by Annexure-A4 letter, Rs.8,01,701/-, including arrears of contribution and its interest and damages, was remitted vide Demand Draft dated 26.12.2003 and therefore, continuation of the proceedings is not in the interest of justice and is to be quashed. 3. Learned counsel appearing for the petitioner and learned standing counsel appearing for the second CRMC 248/05 3 respondent were heard. Second respondent filed a counter affidavit controverting the claim and justifying the criminal prosecution. 4. Though it is admitted case that petitioner was the Managing Director of the Company and there was default in payment of the E.S.I. contribution for the period from 1.4.2002 to 31.5.2002, entire amount due with interest and damages was subsequently paid on 26.12.2003. Annexure-A6 letter shows that Kannur Co- operative Spinning Mills Ltd. was under layoff from 1.4.2002 to 31.5.2002 due to financial crisis and also due to the power cut. It is clear that failure of the petitioner to pay the contribution for the period from 1.4.2002 to 31.5.2002 was not due to any negligence or laches on the part of the petitioner but was due to the financial condition of the Company. When the financial position of the Company improved, entire amount with interest and damages was paid. It is also clear that due to the financial condition of the company, even the salary of the employees could not be disbursed and consequently, the contributions payable by the employees could not be deducted or could be paid to the CRMC 248/05 4 Corporation. Taking into consideration all these facts, it is not in the interest of justice to continue the prosecution. Hence, the proceedings is liable to be quashed. It is made clear that the proceedings is quashed, taking into consideration the peculiar facts and circumstances circumstances of the case and this order shall not be taken as a precedent. Petition is allowed. C.C.No.391/2002 on the file of Chief Judicial Magistrate's Court, Thrissur is quashed. 27th October, 2009 (M.Sasidharan Nambiar, Judge) tkv