JUDGMENT B.V. PINTO, J.-This appeal is filed by the accused in C.C. No. 605/02 on the file of Special Court for Economic Offences, Bangalore, challenging the judgment dated 10.01.2004 convicting him of the offences under Section 85(i)(b) of the ESI Act, 1948 and sentencing him to undergo imprisonment for a period of six months and to pay a fine of Rs. 5,000/-. In default, to undergo SI for a further period of three months and further directing that out of the fine amount realized, 50% to be paid to the complainant as compensation and also further directing the appellant to pay the contributions and file returns for the relevant period within one month from the date of the said order. 2. The Employees' State Insurance Corporation- ESIC filed a complaint against the appellant alleging that the appellant was the principal employer of a factory by name M/s. Best Industries which was a factory in terms of Section 2(12) of the ESI Act. The accused has submitted the details of ownership to the Insurance inspector at the time of inspection on 17.11.1995. It is alleged in the complaint that the accused being the principal employer of the said factory has failed to pay any contributions in accordance with the Section 39 of the ESI Act from 01.10.1999 to 30.09.2000 as required under Section 40 of the ESI Act read with Regulations 29 and 31 of General Regulations 1950. 3. It is further stated in the complaint that the accused has not paid the contribution in terms of Section 40 of the act for the aforesaid period and therefore notice was issued to the said accused calling upon him to pay the said amount by Registered Post vide Acknowledgement Due (RPAD). But the accused has not paid the said amount. Subsequently an opportunity was provided to him for a personal hearing on 09.10.2000. Further for a period from 01.04.2000 to 30.09.2000 another notice was issued on 17.01.2001 calling upon him to pay the contributions and a personal hearing was given to him on 22.02.2001. The notice issued by the department was not claimed by the appellant and the appellant has also not paid the amount to the ESI Corporation. It is stated in the complaint that the accused was due to a sum of Rs. 15,337/- for a period from 01.10.1999 to 30.09.2000 and a sum of Rs. The notice issued by the department was not claimed by the appellant and the appellant has also not paid the amount to the ESI Corporation. It is stated in the complaint that the accused was due to a sum of Rs. 15,337/- for a period from 01.10.1999 to 30.09.2000 and a sum of Rs. 7,404/- for a period from 10.04.2000 to 30.09.2000 thus in all a sum of Rs. 22,741/- was payable to the complainant. Hence a complaint was filed before the Court. 4. The accused appeared before the Court and pleaded not guilty to the charges framed against him. Thereafter one Srinivasa, Insurance Inspector (legal) was examined before the Court on behalf of the complainant as PW1. In his evidence before the CourtPW1 has stated that he knows the contents of the complaint, the accused as well as the company and that the said company is covered under the ESI Act with a code No. 53-4886-57. It is further stated that the appellant Thiruvengadam is the proprietor and the Principal employer having ultimate control over the day to day affairs of the factory. PW1 has further deposed that a sum of Rs. 22,741/- was due from the employer, namely the accused as on 30.09.2000 and that the said amount has not been paid despite notice issued to him. Documents as per Exs. P1 to P21 are marked though PW1. On 29.03.2004, PW1 was further examined before Court, whereas the cross-examination of the complainant was deferred till framing of charges. It is seen from the order sheet maintained by the trial Court that despite deferring the cross-examination of PW1, the appellant has not chosen to cross examine PW1 and therefore, the evidence of PW1 remained unchallenged before the Court. 5. The accused was thereafter questioned under Section 313 of CR.P.C. and he has denied the incriminating circumstances appearing against him, on 12.07.2004. In the said statement he has admitted that he is the principal employer and proprietor of M/s. Best industries by answering question No. 3 as true. However, he has denied his liability to pay Rs. 22,741/-to the complainant. 6. Thereafter the accused has examined himself as DW1. In his evidence he has stated that up to the year 1999 his factory was covered under the ESI Act and he had paid contribution regularly. However, he has denied his liability to pay Rs. 22,741/-to the complainant. 6. Thereafter the accused has examined himself as DW1. In his evidence he has stated that up to the year 1999 his factory was covered under the ESI Act and he had paid contribution regularly. During 1993-94, his factory was doing job work for TITAN Industries and out of the amount due from the TITAN Industries to his factory, the ESI has deducted a sum of Rs. 13,196/- and Rs. 16,225/-. It is his evidence that he has written a letter to the Accounts Manager, TITAN Watches Ltd., to furnish the details of the amount deducted by the ESI Corporation on his account. The said letter is marked as Ex. D1. 7. It is further deposed by the appellant that the TITAN Industries wrote a letter which furnished xerox copies of particulars and challan copy as per Exs. D2 and D3. The TITAN Industries has also sent a letter dated 28.12.1994 showing the copies of the statement regarding ESI remittances and xerox copies of the challan in respect of the payment made to the complainant on behalf of his factory. The said documents are marked as Exs. D4 to D6, subject to objections by the counsel for complainant. It is his evidence that a sum of Rs. 29,421/- is paid in excess to ESI on behalf of the factory and therefore, a letter has been written to the complainant the copy of which is at Ex. D7. He has also produced Exs. D8 to D10, the letters written by him to the TITAN Industries to claim refund of the said amount. He has also denied having received any notice from the complainant. He has stated that the amount standing to his credit paid by the TITAN Industries in the account of the complainant may be adjusted towards the dues payable by him in respect of the aforesaid orders. In the cross-examination, he has admitted that the documents submitted by him do not belong to the period from October 1999 to September 2000. He has further admitted that he has not made any correspondence with the ESI Corporation with reference to the period from OCT 1999 to September 2000. He has further admitted that excess payment made pertains to the year 1993-94. He has further admitted that he has not made any correspondence with the ESI Corporation with reference to the period from OCT 1999 to September 2000. He has further admitted that excess payment made pertains to the year 1993-94. He has categorically admitted that he has not paid contributions from the period from October 1999 to September 2000 and that he had paid the same for the earlier years. He has stated in his evidence that he has not challenged the 45 (A) orders passed by the ESI Court, Bangalore. 8. On considering the above evidence on record, the trial Court has found the accused guilty and convicted him as aforesaid. 9. Heard Sri. Shyam Koundinya, learned counsel for the appellant and Smt. M.P. Geetha Devi, learned counsel appearing for the respondent. Learned counsel for the appellant and respondent have submitted on the last date, i.e., on 13.06.2013 which is recorded in the order sheet of this Court as follows:- "Learned counsel for the appellant submits that he is prepared to pay the entire amount as directed by the trial Court and that he will not challenge the legality and correctness of the order passed by the trial Court. However he also submits that the sentence of imprisonment for six months imposed may be set aside and in its place the appellant is prepared to pay a fine in lieu of the imprisonment. Learned counsel for the respondent submits that the sentence of six months imprisonment is mandatory and it is only for adequate reasons the Court may reduce the sentence of imprisonment below the minimum period of six months. It is submitted by her that the defence taken by the appellant being that he is entitled to adjust the amount paid by him is not proved before the trial Court nor the appellant has produced any authenticated document in proof of excess payment and also proof of availability of said fund for adjustment by the ESI Corporation. It is also submitted that as per Exhibit P-15 the contentions raised by the appellant have been negatived by the ESI Court by its order dated 30.08.2001 passed in EI application No. 12/2000.Hence post this matter for dictating judgment on 18.06.2013". 10. The appellant has not challenged the evidence of PW 1 nor the case of the complainant. It is also submitted that as per Exhibit P-15 the contentions raised by the appellant have been negatived by the ESI Court by its order dated 30.08.2001 passed in EI application No. 12/2000.Hence post this matter for dictating judgment on 18.06.2013". 10. The appellant has not challenged the evidence of PW 1 nor the case of the complainant. In the cross-examination he has categorically admitted that for the period under reference he has not paid the contribution. Learned counsel has also admitted before this Court that there is no challenge regarding the finding. Under the circumstances, I am of the considered opinion that the order of conviction passed against the appellant is based on the evidence on record and is neither perverse nor against the settled principles of law. Hence the same needs to be confirmed. 11. So far as the sentence is concerned, the only prayer made by the learned counsel for the appellant is that the mandatory period of imprisonment as provided under Section 85(i)(b) may be set aside. Proviso to Sec.85 states that the Court can, for adequate and special reasons to be recorded in the judgment impose a sentence of imprisonment for a lesser term. It is submitted by the learned counsel for the appellant that more than 20 years passed from the date of occurrence of liability against the appellant and that he had a valid ground to withhold the payment, in that the payment due to the complainant was paid by M/s. TITAN Industries and that there was an excess payment made which he ought to have paid and he had claimed, set off for the dues payable to the company. 12. However, the provisions of law and the rules framed in the ESI Act, not provide for such an adjustment. A Principal employer has to claim refund of the amount. It is his further submission that he has filed an ESI Application bearing Nos. 9 to 12/2001 which is produced by the complainant as per Ex. D15 and therefore, he submits that the accused was genuinely asserting this position of adjustment of the amount though the ESI Court has rejected the said claim. It is seen that appellant has not filed any appeal against the said order dated 30.08.2001 passed by the ESI Court at Bangalore in ESI application No. 9 to 12/2011. 13. D15 and therefore, he submits that the accused was genuinely asserting this position of adjustment of the amount though the ESI Court has rejected the said claim. It is seen that appellant has not filed any appeal against the said order dated 30.08.2001 passed by the ESI Court at Bangalore in ESI application No. 9 to 12/2011. 13. Further having regard to the time lapse from the date of liability till today, I am of the considered opinion that it is not fair for the appellant to be sent to custody at this length of time, however the complainant should not suffer in this process. The amount of Rs. 22,741/- was due as on 30.09.2000. Even after the direction by the trial Court, accused has not deposited the amount till today. Hence necessarily complainant ESI Corporation stands to lose the amount, so also the interest thereon. It would be in the interest of justice to impose interest on, the said amount apart from the one which he is liable under the law. Therefore, in lieu of six months imprisonment the appellant is required to pay interest at least at the rate 6% P.A. from the date when it is due, i.e., from 01.10.2000 till date. It is for about 13 years and the amount comes to Rs. 17,738/-rounded off to Rs. 18,000/-. It is clear that the interest calculated above is only for providing fine in lieu of the sentence of imprisonment and not in lieu of the statutory interest and penalty leviable on the appellant. Hence the following order is passed: 1. The appeal filed by the appellant so far as order of conviction is concerned, is dismissed. 2. Sentence of imprisonment is modified and the appellant is directed to undergo imprisonment till the rising of the Court. 3. In view of the modified sentence of imprisonment the accused is directed to pay penalty of Rs. 18,000/-. In default of payment of fine, the accused shall undergo SI for a period of six months. 4. The aforesaid amount of Rs. 18,000/- shall be paid to the complainant on its recovery. 5. The order of sentence so far as payment of fine and payment of contribution shall remain intact. The appeal is disposed of accordingly.