THE HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION No.7719 of 2007 AND CRIMINAL PETITION No.415 of 2007 Dated: 28th January, 2010 Criminal Petition No.7719 of 2007 Between: M/s.Yenkey Drugs and Pharmaceuticals And another …Petitioners AND Employees’ State Insurance Corporation Having its registered office at Hyderabad And another. …Respondents Criminal Petition No.415 of 2007 Between: M/s.Yenkey Drugs and Pharmaceuticals And another …Petitioners AND Employees’ State Insurance Corporation Having its registered office at Hyderabad And another. …Respondents THE HON’BLE SRI JUSTICE SAMUDRALA GOVINDARAJULU CRIMINAL PETITION No.7719 of 2007 AND CRIMINAL PETITION No.415 of 2007 COMMON ORDER: These two criminal petitions are filed by the accused Nos.1 and 2 for staying proceedings in P.C.No.80 of 2004 and P.C.No.58 of 2006 on the file of Judicial Magistrate of the First Class to try offences under the ESI Act – cum – Chairman, Industrial Tribunal – I, Hyderabad, pending finalization of proceedings in case No.116 of 2004 on the file of BIFR, New Delhi. The first respondent, namely, Employees’ State Insurance Corporation filed two complaints against the petitioners 1 and 2 before the Magistrate for offences punishable under Section 85(a) and 85(e) of the Employees’ State Insurance Act, 1948 (in short, the Act’ for non payment of contribution as assessed under Section 45A of the Act for two different periods respectfully. It is contention of the petitioner that the first petitioner company was declared as sick industry by the Board for Industrial and Financial Reconstruction (in short, BIFR) under the Sick Industrial Companies (Special Provisions) Act, 1985 by its order dated 24.01.2006 in case No.116 of 2004. The claim of the first respondent corporation as against the first petitioner towards ESI contribution etc. is Rs18.13 lakhs. According to the petitioners, their liability is only Rs.30,000/-. A draft scheme is prepared and there was meeting of all the parties concerned by BIFR on 15.11.2006 and proceedings therein were recorded. As per para 5 of the proceedings, the first petitioner company would reconcile the dues position in consultation with ESI Corporation. It is complaint of the petitioners that the first respondent is not coming forward for reconciliation of figures relating to dues and that therefore, the scheme could not be finalized. In those circumstances, the petitioners seek stay of criminal cases till disposal of BIFR proceedings. Giving of blanket stay as prayed for by the petitioners would only amount to abuse of process, because keeping the stay order in hand, the petitioners may prolong proceedings before BIFR to disadvantage of the first respondent. On the other hand, it is contended by the first respondent’s counsel in both the cases that ESI Corporation has no jurisdiction to waive any interest or penalty and that there is no scope for any settlement of figures other than those amounts for which the Corporation had assessed liability and demanded payment from the 1st petitioner – company. In the circumstances, I do not find any valid and legal reasons to stay criminal cases pending BIFR proceedings. At the same time, the petitioners are entitled to question their liability for contribution, interest and penalty, in the pending criminal cases before the lower Court to the extent allowable by law. Subject to above observations, both the criminal petitions are dismissed. ___________________________________ SAMUDRALA GOVINDARAJULU, J January 28, 2010 Bvv