EMPLOYEES STATE INSURANCE CORPORATION, BANGALORE v. DR. V. VIJAYAKUMAR
1999-07-13
S.R.BANNURMATH
body1999
DigiLaw.ai
( 1 ) THIS petition is filed by the Employees' State Insurance Corporation (the original complainant) challenging the order of discharge dated 4-8-1998 passed by the Special Court for Economic offences, Bangalore, in C. C. No. 70 of 1998. ( 2 ) THE brief facts are as follows: The petitioner has filed a complaint against the respondents herein for the contravention of the provisions of the Employees' State Insurance Act, 1948 (for short, the 'act') punishable, under Section 85 (a) of the Act. After filing of the complaint the parties were heard on the charges. The Special Court placing reliance on the decision of this court in the case of M/s. Aravinda Parimala Works, Mysore and Others v Employees' State insurance Corporation, Binnypet, Bangalore, held that Section 85 (a) of the Act is applicable to a ease where there is non-payment of the total contribution and it is not applicable where part payment of the contribution is made by the accused. Accordingly, by the impugned order, exercising the jurisdiction under Section 245 (1) of the Cr. P. C. the Special Court discharged the accused. Hence, the present revision petition. ( 3 ) SMT. Geetha, learned Counsel for the petitioner, vehemently contended that there is no distinction made under Section 85 (a) of the Act as to whether the accused does not make payment in full or in part. According to her, failure to pay the contribution as is mandatorily required under the law within the due date constitutes the offence. Relying upon the observation of the Apex Court in the case of Bhagirath Kanoria and Others v State of Madhya Pradesh, she contended that, since the offence under Section 85 (a) of the Act is held to be a continuing offence as long as the accused fails to pay the contribution required under the law within the time prescribed, the offence is complete and every day of such failure continues the cause of action. As in the present case, it is stated, by making part payment of the contribution due within the time prescribed, the accused cannot escape the liability under Section 85 (a) of the Act. As such, the Special Court, according to her, has committed an error in discharging the respondents/accused.
As in the present case, it is stated, by making part payment of the contribution due within the time prescribed, the accused cannot escape the liability under Section 85 (a) of the Act. As such, the Special Court, according to her, has committed an error in discharging the respondents/accused. In this regard, she relied upon a decision of the Kerala High Court in P. Renuka v Employees' State Insurance Corporation, Trissur and Another, wherein it is held that belated payment with interest and damages does not absolve the original guilt under Section 85 of the Act. ( 4 ) ON the other hand, learned Counsel for the respondents, vehemently argued in support of the findings of the Special Court to contend that what the law requires under Section 85 of the Act is payment of full contribution and, if the accused, has made part payment, the accused cannot be brought within the penal offence under Section 85 (a) of the Act as held by this Court in the aravinda Parimala Works' case, supra. ( 5 ) PERUSED the judgment of the Special Court. ( 6 ) BY looking into the aims and objects of the Act one cannot dispute that it is a beneficial legislation and the same is in the interest of the welfare of the employees. Under the Act it is made mandatory for the employer to make his contribution towards the Employees' Insurance within the time prescribed and failure of complying with the same has been made an offence with penal consequences which may extend to three years' imprisonment and in a given case the minimum being 6 months or one year and fine up to Rs. 10,000/ -. ( 7 ) INTERPRETING the nature of the offence the Hon'ble Supreme Court considering its earlier pronouncement in Gokak Patel Volkart Limited v Balu Jeevappa Upparatti and Another, held in the Bkagi'rath Kanoria's case, supra, that the offence under the Act is continuing in nature and the employer is unquestionably liable to pay his contribution before the due date and the late payment cannot absolve him of his original guilt but it would have snapped the recurrence and each day he failed to comply with the obligation to pay his contribution he committed a fresh offence.
Though the said decision is in respect of the Provident Fund Act, the principle laid down is applicable to the offence under the Act (ESI Act ). In fact, this Court in the case of employees' State Insurance Corporation, Bangalore v M. P. Mohammed All , applying the said dictum of the Apex Court has held that the offences under the Act are continuing in nature. In my view the words "fails to pay any contribution which under this Act he is liable to pay" do not make any distinction as to the quantity or quantum of contribution. As is seen from the aims and objects, the employer is mandatorily required to pay the entire contribution under the Act. He cannot escape his penal liability by making part payment. Since this is a continuing offence, as long as he does not make payment of the entire amount, the offence continues to be committed by him. ( 8 ) IN the present case, the allegations are that the accused have not paid the contribution for the period from January 1997 to March 1997 till the filing of the complaint on 27-2-1998. Learned counsel for the respondents fairly does not dispute this position. He only contends that after filing of the complaint the respondents have made part payment. By harmonious construction of the provisions coupled with the dicta laid down by the Apex Court in the Bhagirath Kanoria's case, supra, and by this Court in Mohammed Ali's case, supra, my considered view is that as long as the employer fails to pay the entire contribution required to be paid by him within the due date, the offence is complete and in respect of part payments as long as it is not paid completely till the filing of the complaint he is liable for penal consequences. In the Aravinda parimala Works' case, supra, the decision in Bhagirath Kanoria's case, supra, has not been taken into consideration. ( 9 ) IN view of what is stated above, the order dated 4-8-1998 passed by the Special Court for economic Offences, Bangalore, in C. C. No. 70 of 1998 is liable to be set aside. Accordingly, this revision petition is allowed and the impugned order of discharge is set aside and the matter is remitted back to the Special Court to consider afresh keeping in view the observations made above.
Accordingly, this revision petition is allowed and the impugned order of discharge is set aside and the matter is remitted back to the Special Court to consider afresh keeping in view the observations made above. Insofar as the contention of the learned Counsel for the petitioner regarding whether all the accused are liable, the question is to be left open to be agitated at the proper stage. ( 10 ) THE parties or their Counsel are directed to appear before the Special Court for Economic offences, Bangalore, on 2-8-1998 for fixing further date. ( 11 ) OFFICE is directed to send back the records forthwith.