[Cites 4, Cited by 0]
Bombay High Court
The Regional Director vs B.C. Chawla And Ors. on 6 March, 2026
Author: R.N. Laddha
Bench: R.N. Laddha
2026:BHC-AS:10983 Digitally
signed by
CHITRA
CHITRA SANJAY
SANJAY SONAWANE
SONAWANE Date:
2026.03.06
14:36:25
Chitra Sonawane. +0530
902-Apeal-937-2007.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION
Criminal Appeal No.937 of 2007
The Regional Director
Employees' State Insurance
Corporation, Panchdeep Bhavan,
NM Joshi Marg, Lower Parel,
Mumbai- 400 013. ... Appellant.
Versus
1. Mr BC Chawla
Chairman, National Sports
Club of India
Lala Lajpatrai Marg,
Worli, Mumbai-400 018.
2. The National Sports Club
of India,
Lala Lajpatrai Marg,
Worli, Mumbai-400 018.
3. State of Maharashtra ... Respondents.
----
Mr Anand Kulkarni, for the appellant.
Ms Priyanka H Chavan appointed Advocate (Legal Aid) for
respondents No.1 and 2.
Mr Arfan Sait, APP, for the respondent No.3/ State.
----
Page 1 of 6
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Chitra Sonawane. 902-Apeal-937-2007.docx
Coram: R.N. Laddha, J.
Date: 6 March 2026
Judgment :
The instant appeal arises from the judgment and order
passed by the learned Metropolitan Magistrate, 25 Court,
Mazgaon, Mumbai, in CC No.7/ESIC/2002, acquitting the
respondents/accused of the offence punishable under Section
85(g) read with Section 85(iii)(a) of the Employees' State
Insurance Act, 1948.
2. The case of the prosecution, in brief, is that respondent
No.1 is the principal employer of the establishment known as
National Sports Club of India, situated at Lala Lajpatrai Marg,
Worli, Mumbai, and the said establishment is covered under the
provisions of the ESI Act.
3. According to the prosecution, an insurance inspector of
the Employees' State Insurance Corporation visited the
establishment on 18 June 2001 for inspection under Section 45
of the Act and called upon the accused to produce records
relating to wages and accounts for the period April 1995 to
March 1998. It was alleged that the accused failed to produce
the said records for inspection. On this basis, after obtaining
sanction from the Joint Director, a complaint came to be filed
against the accused for the aforesaid offence.
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6 March 2026
Chitra Sonawane. 902-Apeal-937-2007.docx
4. The case was tried as a summons case. The particulars of
the offence were explained to the accused on 14 January 2003,
to which the accused pleaded not guilty and claimed to be tried.
In order to prove its case, the prosecution examined two
witnesses, namely, Madhukar Dudhaji Mhatre (P.W.1),
insurance inspector attached to the Legal Department of the
ESI Corporation and Kaldura Prakasam (PW2), insurance
inspector who allegedly visited the establishment.
5. The evidence of P.W.1 indicates that he had not personally
visited the establishment nor had he asked the accused to
produce the records. His role was limited to filing the
complaint based on the report submitted by P.W.2 and on the
sanction granted by the competent authority. P.W.2 deposed
that he visited the establishment of the accused for the
inspection of records and that the last visit was made on 18
June 2001. According to him, he had called upon the
establishment to produce the books of accounts for the period
1995-1998 for verification of wages, but the establishment
failed to produce the said records. He therefore submitted a
report to the Regional Director.
6. The learned counsel appearing for the accused contended
that the records had already been produced earlier before the
authorities and that the visit dated 18 June 2001 was only for
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Chitra Sonawane. 902-Apeal-937-2007.docx
re-verification of the records.
7. Upon perusal of the documentary evidence, particularly
the visit note produced at Exhibit P4, it is evident that the
inspection conducted on 18 June 2001 was for re-verification
of records i.e. books of accounts for the period from April
1995 to March 1998. This itself indicates that the records had
been verified earlier. The cross-examination of P.W.2 assumes
significance. He admitted that the word re-verification in his
visit report referred to verification of records that had already
been examined earlier by another Inspector. He further
admitted that upon earlier verification, the dues found payable
had already been deposited by the establishment. These
admissions clearly indicate that the relevant records had been
produced earlier and that the dues determined pursuant to such
verification had been paid by the establishment. In the absence
of any material showing the necessity for reopening the earlier
verification or assessment, the demand made by the inspector
for production of the same records again appears to have been
for the purpose of re-verification.
8. It is well settled that unless the statute specifically
provides for reopening an assessment or requiring repeated
production of records already verified, the employer cannot be
subjected to prosecution merely for failure to produce the same
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documents again. In the present case, the prosecution has
failed to establish any statutory provision under the Employees'
State Insurance Act, 1948 authorising such reopening or
repeated verification of records already examined. The
prosecution has also not examined the officer who had
allegedly conducted the earlier verification. No material has
been placed on record explaining the purpose or legal basis for
the alleged re-verification. In criminal proceedings, the burden
lies upon the prosecution to prove the offence beyond
reasonable doubt. The evidence on record, particularly the
admissions of P.W.2, creates a clear doubt as to whether the
accused had actually committed any default under Section 85(g)
of the Act. The learned Magistrate, after appreciating the
evidence on record, held that the prosecution had failed to
prove that the accused had deliberately failed to produce the
records as required under law. The Magistrate therefore
acquitted the accused.
9. It is well settled that an appellate court ordinarily does not
interfere with an order of acquittal unless the view taken by the
trial court is perverse or wholly unreasonable. In the present
case, the findings recorded by the learned Magistrate are based
on the evidence on record and do not suffer from any illegality.
This Court therefore finds no reason to interfere with the order
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Chitra Sonawane. 902-Apeal-937-2007.docx
of acquittal.
10. As a result, the present criminal appeal stands dismissed.
The judgment and order of acquittal passed by the learned
Metropolitan Magistrate in CC No.7/ESIC/2002, on 19
January 2004 is hereby confirmed.
[R.N. Laddha, J.]
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6 March 2026
