Judgment 1. The Employees State Insurance Corporation has filed an appeal aggrieved against the order of acquittal passed by the learned Judicial Magistrate No.VII, Trichirapalli, in C.C.No.1214 of 1991, 30.3.1992. 2. The case in brief is as follows: E.S.I. Corporation filed a complaint against the respondents/ accused that they have committed an offence under Sec.85(a) punishable under Sec.85(1) of the Employees’ State Insurance Act (hereinafter referred to as ‘E.S.I. Act’), The first accused is the company, the 2nd accused is the Managing partner of the company and the 3rd accused is the Manager. They have collected the contribution amount from the employees working in the company for the period October, 1989 to December, 1989 amounting to Rs.895.90, and they have not remitted the same in accordance with the rules, P.W.1 Varadharajan was then working as E.S.I. Inspector and he inspected the first accused company on 30.8.1990 in the presence of the 3rd accused. He also perused the records for the period 1.2.1988 to 31.7.1990 and on inspection, came to know that the company was covered under E.S.I. Act since October, 1989 as the persons employed was more than 10. They have failed to remit the contribution amount and E.S.I. Code number was also allotted to them. The accused are principal employers, liable to pay contribution under Sec.40 of E.S.I. Act. 3. P.W.2 was then working as a superintendent in the Regional Office of E.S.I. Corporation and he was examined to prove that there was no entry in the ledgers showing the deposit of contribution by the accused. He further stated that the amount recovered from the employees on a particulars month has to be remitted in the succeeding month before 21st day. If the amounts are remitted, the receipt of the challan entries will be made in the register and so far as the accused are concerned, the amounts were not remitted by them. P.W.3 Balakirshnan was examined to show that the Regional Director gave the necessary authorisation to prosecute the accused concerned in the case for the aforesaid offences, He had also produced the letter said to have been given by the 3rd accused dated 11.10.1991 admitting the coverage and they also pleaded ignorance. 4. The accused were examined under Sec.313 of the Code of Criminal Procedure and they denied the offence. On behalf of the complainant, P.Ws.1 to 3 were examined and Exs.A-1 to A-4 were marked. 4. The accused were examined under Sec.313 of the Code of Criminal Procedure and they denied the offence. On behalf of the complainant, P.Ws.1 to 3 were examined and Exs.A-1 to A-4 were marked. On the side of the defence, Ex.D-1 alone was marked. The trial court found the respondent not guilty for the offence under Sec.85(a) read with 85(1) of E.S.I. Act and acquitted them under Sec.255(1) of the Code of Criminal Procedure and aggrieved against this, the complainant has come forward with the present appeal. 5. The learned counsel for the appellant contended that the court below was not justified in acquitting the respondents. The respondents being the principal employers are liable to pay contribution in terms of Sub-sec.(1) of Sec.40 of E.S.I. Act. Notification dated 20.10.1989 was published in the Gazette and ignorance of the same cannot be an excuse for non-payment of the statutory contribution. It is the duty of the respondents to calculate and pay the contribution as defined under Sec.39 of the Act. The wages for each month is bound to differ as the same depends upon the number of persons employed for wages and amount of wages paid by the respondents. Failure to make payment within the time stipulated, results in default of payment of contribution and, as such, they should be found guilty and punished according to law. 6. The learned counsel for the respondents contended that no communication was sent to the company before inspection and the copy of the report was also not given to them. They were aware of the coverage only in the year 1991 and thereafter they have remitted the contribution amount. Natural justice was not given to the respondents and reasonable opportunity was also not given to enable them to pay the contribution and the launching of prosecution was not proper and correct. Under the circumstances, the court below was justified in passing an order of acquittal. 7. The points that arise for consideration are: (1) Whether the accused have committed an offence under Sec.85(a) read with Sec.85(1) of E.S.I. Acte and (2) Whether there are any valid and justifiable cause to interfere in the order of the trial court. 8. Points:It is admitted that he first respondent is an Engineering Company and the 2nd respondent is the Managing partner and the 3rd respondent is the Manager of the Company. 8. Points:It is admitted that he first respondent is an Engineering Company and the 2nd respondent is the Managing partner and the 3rd respondent is the Manager of the Company. P.W.1 E.S.I. Inspector had visited the company on 30.8.1990 and perused the records relating to the period 1.2.1988 to 31.7.1990. He came to know that the company is covered under the provisions of the E.S.I. Act since October, 1989 as the number of employees was more than 10. They have not paid the contribution for the period October, 1989 to December, 1989. E.S.I. Code number was also allotted to them. 9. The evidence of P.W.2 disclosed that no amount has been remitted by way of contribution in accordance with the provisions of E.S.I. Act. P.W.3 categorically stated that the Regional Director had authorised the filing of a complaint against the accused. The learned counsel for the respondents mainly contended that no notice was served at the time of the inspection of a company and thereafter also, the inspection report was not given to them. They were not called upon to pay any particular amount by way of contribution and reasonable opportunity was also not given to them. They came to know about the coverage only in October, 1991 and thereafter they have remitted the amount. The letter Ex.A-3, dated 11.10.1991 is admitted by them. They have also furnished the names of 11 employees with the nature of work and also the salary received by them. The trial court unfortunately misdirected itself and passed an order of acquittal. There is a statutory duty on the part of the principal employer to pay the contribution as and when there is coverage is there. Secs.39 and 40 of E.S.I. Act have been lost right of by the trial court. The finding of the trial court that burden is upon the Corporation to show that the company is covered under the E.S.I. Act is not proper and correct. Moreover, the company has not chosen to dispute the number of employees and the coverage is also not disputed. It is only when there is a dispute about the coverage or the quantum of amount, then only it has to be decided, and thereafter only, the employer can be called upon to pay the amount. Moreover, the company has not chosen to dispute the number of employees and the coverage is also not disputed. It is only when there is a dispute about the coverage or the quantum of amount, then only it has to be decided, and thereafter only, the employer can be called upon to pay the amount. In the present case, when once the coverage is admitted and as there is no dispute about the number of employees as well as wages aid to them, there is a statutory duty on their part to remit the same and they cannot remit the amount as and when they deem it necessary. 10. Sec.39 of E.S.I. Act relates to contributions. Sec.39(4) of the Act reads as follows: “The contributions payable in respect of each (wage period) shall ordinarily fall due on the last day of the wage period, and where an employee is employed for part of the wage period, or is employed under two or more employers during the same wage period, the contributions shall fall due on such days as may be specified in the regulations.” 11. Sec.39(5) of the Act reads as follows: “If any contribution payable under this Act is not paid by the principal employer on the date on which such contribution has become due, he shall be liable to pay simple interest at the rate of 12% per annum or at such higher rate as may be specified in the regulations till the dated of its actual payment.” 12. Sec.40 discloses that principal employer to pay contributions in the first instance. Sec.40(2) reads as follows: “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 employed), be entitled to recover from the employee the employees contribution by reduction from his wages and not otherwise”. Sec.40(4) reads as follows: “Any sum 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.” 13. Sec.40(4) reads as follows: “Any sum 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.” 13. Regulation 31 reads as follows: “Time for payment of contribution:An employer who is liable to pay contributions in respect of any employee shall pay those contributions within 21 days of the last day of the calendar month in which the contributions fall due.” 14. Sec.85 of the Act deals with punishment for failure to pay contributions and Sub-sec.(a) deals with, failure to pay contribution, he is liable to pay. The punishment is provided under Sec.85(1) of the said Act. In the present case also, the respondents are liable to pay contribution since there is no dispute about the coverage as well the number of persons employed and their wages. The reasoning given by the trial court that they should be informed of the amount payable is not the correct approach. The learned counsel for the respondents also relied on the decision in Free India (P) Ltd. v. Regional Director, E.S.I.C Free India (P) Ltd. v. Regional Director, E.S.I.C , (1973)2 L.L.J. 584 and this decision has no application to the facts on hand for thesimple reason, that revenue recovery proceedings were taken in a case where the quantum of amount was in dispute. When once there is material to come to the conclusions that the coverage is not disputed and the contribution was also paid in accordance with the regulation 31 and under Sec.40 of E.S.I. Act, failure to pay the contribution is an act punishable under Sec.85 of the E.S.I. Act. The complainant has positively established that the respondents have committed the offence under Sec.85-A of the E.S.I. Act and they are found guilty and convicted on 14.12.1998. The second respondent, Managing Partner is present today and heard about the sentence. The 3rd respondent is absent. The first respondent is represented by the second respondent. The second respondent stated that he is an aged person and he has recently undergone operation for brain tumour and still taking treatment from the doctor. Considering these aspects, the 2nd respondent is sentenced to suffer imprisonment till arising of court and to pay a fine of Rs. The first respondent is represented by the second respondent. The second respondent stated that he is an aged person and he has recently undergone operation for brain tumour and still taking treatment from the doctor. Considering these aspects, the 2nd respondent is sentenced to suffer imprisonment till arising of court and to pay a fine of Rs. 1,500 (one thousand five hundred only) in default, to suffer rigorous imprisonment for three months, so for as the first respondent is concerned, a fine of Rs.1,000 (one thousand only) is imposed, in respect of the 3rd respondent, he is sentenced to suffer rigorous imprisonment for one month and to pay a fine of Rs. 1,000 (one thousand only) in default, to suffer rigorous imprisonment for three months.