Karnataka High Court
Ajay Raj Shetty vs Director on 8 December, 2023
Author: Rajendra Badamikar
Bench: Rajendra Badamikar
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 8TH DAY OF DECEMBER, 2023
BEFORE
THE HON'BLE MR. JUSTICE RAJENDRA BADAMIKAR
CRIMINAL REVISION PETITION NO.164 OF 2015
BETWEEN:
1. AJAY RAJ SHETTY,
GENERAL MANAGER,
M/S. ELECTREX (I) LTD.
NO.21, D-1, 2ND PHASE,
PEENYA INDUSTRIAL AREA,
BENGALURU-560 058.
2. M/S. ELECTRIEX (I) LTD.
NO.21, D-1, 2ND PHASE,
PEENYA INDUSTRIAL AREA,
BENGALURU-560 058.
....PETITIONERS
(BY SRI. K.T. KUSHALAPPA, ADVOCATE)
AND:
DIRECTOR,
SUB REGIONAL OFFICE BENGALURU,
NORTH(PEENYS) HARINI TOWERS,
3RD CROSS, 3RD MAIN, OFF RING ROAD,
(NEAR F T I) IIND STAGE, INDUSTRIAL
SUBURB, YESHWANTPURA,
BENGALURU-22,
REPT. BY SOCIAL SECURITY OFFICER,
ESI CORPORATION, BENGALURU-23.
...RESPONDENT
(BY SRI. K. KRISHNAPPA, ADVOCATE)
2
THIS CRIMINAL REVISION PETITION IS FILED UNDER
SECTION 397 R/W 401 CR.P.C PRAYING TO SET ASIDE THE
JUDGMENT DATED 14.11.2014 PASSED BY PRESIDING OFFICER,
CITY FAST TRACK COURT, BENGALURU CITY(FTC-VI) IN
CRL.A.NO.553/2013 BY THE SPECIAL COURT FOR ECONOMICAL
OFFENCES BENGALURU IN C.C.NO.326/2011 AND ACQUIT THE
PETITIONER FROM THE CHARGES LEVELLED AGAINST HIM.
THIS CRIMINAL REVISION PETITION HAVING BEEN HEARD
AND RESERVED FOR ORDERS ON 20.11.2023, COMING ON FOR
'PRONOUNCEMENT OF ORDER' THIS DAY, THE COURT MADE
THE FOLLOWING:
ORDER
This revision is filed by the accused / revision
petitioners under Section 397 read with Section 401 of
Code of Criminal Procedure (hereinafter referred to as
'Cr.P.C' for short) challenging the judgment of conviction
and order of sentence passed by Special Court for Economic
offences, Bengaluru in C.C.No.326/2011 dated 28.09.2013
and confirmed by Sessions Judge/FTC-VI, Bengaluru City in
Crl.A.No.553/2013 dated 14.11.2014.
2. For the sake of convenience, the parties herein
are referred with original ranks occupied by them before
the trial Court.
3. The brief factual matrix leading to the case are
that the accused No.2 is covered under ESI Act and a code
number 49000055200000699 was allotted. That the
accused No.1 is the General Manager and Principal
employer of accused No.2 Factory in terms of Section 2(17)
of the Employees State Insurance Act (ESI Act for short)
and was in charge of factory as well as responsible for the
conduct of the business of the factory / company. It is
further alleged that accused have failed to pay contribution
amounting to Rs.8,26,696/- in accordance with Section 39
of ESI Act for the period from 01.2.2010 to 31.12.2010 as
required under Section 40 of ESI Act read with
corresponding Regulations.
4. A notice was issued on 22.03.2011 to both the
accused and a show cause notice was issued to accused
No.1 on 24.03.2011. Inspite of service of notice, the
accused failed to remit the contribution to the tune of
Rs.8,26,696/- deducted from the wages of the employees.
It is further alleged that they have also not shown any
reason for non payment of contribution and hence, a
complaint came to be lodged against the accused alleging
that accused have committed an offence under Section
85(a) of ESI Act.
5. Since, the complaint was lodged by a public
servant in his official capacity, the learned Magistrate has
taken cognizance of the matter and process came to be
issued. The accused have appeared through their counsel
and accused No.1 was enlarged on bail as accused No.2 is
the company. The charge was framed against accused and
same was read over and explained to the accused and they
pleaded not guilty.
6. The Security Officer of ESI Corporation was
examined as PW1 and Ex.P1 to Ex.P8 were marked.
Thereafter, statement of accused under Section 313 Cr.P.C
was recorded and the simple assertion of the accused No.1
is that he is not the Principal Employer. Later on, accused
No.1 was got examined as DW1. He has also placed
reliance on 4 documents marked at Ex.D1 to Ex.D4.
7. The learned Magistrate after hearing the
arguments and after appreciating the oral and documentary
evidence, convicted the accused by imposing a fine of
Rs.5,000/- and accused No.1 was also imposed sentence of
imprisonment for a period of 6 months with default clause
for the offence punishable under Section 85(a) read with
Section 85(i)(b) of the ESI Act.
8. Being aggrieved by this judgment of conviction
and order of sentence, both the accused filed Criminal
Appeal No.553/2013 on the file of Principal City Civil and
Sessions Judge, Bengaluru and later on, the matter was
transferred to FTC-VI. The learned Sessions Judge after re-
appreciating the oral and documentary evidence dismissed
the appeal by confirming the judgment of conviction and
order of sentence. Being aggrieved by these concurrent
findings, the accused are before this court by way of this
revision.
9. Heard the arguments advanced by the learned
counsel for the revision petitioner/ accused and learned
counsel for respondent / Corporation. Perused the records.
10. The learned counsel for the revision petitioner /
accused would contend that accused is not a principal
employer and he was working as a technical expert and he
never worked as a General Manager. He would dispute
contents of Ex.P1 asserting that somebody has given Ex.P1
disclosing the name of accused No.1 as General Manger,
but he never worked as a General Manager. He placed
reliance on number of citations regarding definition of
'Principal Employer'. Hence, he would contend that both the
courts below have committed an error in treating him as a
principal employer and convicting him. As such, he would
seek for allowing the revision by setting aside the impugned
judgments of conviction and orders of sentence passed by
both the courts below.
11. Per contra, the learned counsel for the
respondent / Corporation would support the judgment of
conviction and order of sentence passed by the trial court
and confirmed by the appellate court. He would contend
that both the courts concurrently held that accused is the
principal employer and Ex.P1 was never challenged,
wherein it is shown to be accused as the principal employer.
Further, he would also contend that accused has no where
disclosed who was the General Manager then and only he is
disputing his status against recitals of Ex.P1. Hence, he
would seek for dismissal of the revision.
12. Having heard the arguments and perusing the
oral and documentary evidence, now the following point
would arise for my consideration:
(i) Whether the judgment of
conviction and order of sentence passed by the
trial court and affirmed by the appellate court
are perverse, arbitrary and erroneous so as to
call for any interference by this court.
13. The main contention of the accused No.1 is that
he is not the General Manager of accused No.2.
Interestingly, before the lower appellate court and before
this court, the revision petitioners/accused are represented
by the same counsel. In the revision petition, the revision
petitioner No.2 was shown to be the Company, but again it
is represented by the same counsel who is representing
petitioner No.1. All along, there is absolutely no whisper
from accused No.1 or from accused No.2 as to who was the
General Manager of accused No.2 if accused No.1 was not
the General Manager as asserted by him.
14. The records clearly disclose that there is no
serious dispute of the fact that accused No.2 deducted a
sum of Rs.8,26,696/-from the employees for a period from
01.02.2010 to 31.12.2010 and the same was not remitted
to the Corporation. Though before the appellate court
arguments were advanced regarding deposit of Rs.1 Crore
before BIFR and proceedings before this court in writ
petition, but before this court no such arguments have been
advanced regarding adjustment and it is also not within the
jurisdiction of this court.
15. Apart from that, accused No.1 himself got
examined himself as DW1 and admitted that the accused
No.2 is covered under ESI Act. It is the specific assertion
that accused have submitted the report relating to
employees compensation deducted from 01.02.2010 till
31.12.2010 and same is amounting to Rs.8,26,696/-, but
the same was not remitted to the Corporation. Further,
accused No.1 admitted that Ex.P1 is issued on behalf of the
company / accused No.2 and admits the seal also. He also
admits that Ex.P1 is also filed by his company, but pleads
ignorance as to who has signed Ex.P1 as an authorized
signatory. He never disputed Ex.P1 at any point of time.
16. All along, it is asserted by accused No.1 that he
was not working as a General Manager in accused No.2 and
he was a technical coordinator between February 2010 to
December 2010. If he was not a General Manager and if he
is only a technical coordinator, then he must be having
knowledge of the fact as to who was the General Manager
then, but he did not assert or disclose as to who was the
General Manager then. He admits that in Ex.P1 his name is
shown as General Manager.
17. Apart from that, the accused No.1 should have
produced his wage slip / pay slip to show his status as a
technical coordinator. He has not even summoned any
relevant documents from accused No.2 or not made any
attempts though accused No.2 has appeared through same
counsel to disclose or produce records as to who is the
General Manager. Apart from that, a demand notice and
show cause notice were admittedly served on accused No.1
and he did not bother to respond. He admits that in Ex.P1
his name is shown as General Manger with a telephone
number including his residential address. He has never
challenged Ex.P1 and not placed any records to show that
he was only a technical coordinator, but not the General
Manager.
18. When Ex.P1 is not challenged, now it is not open
for accused No.1 to dispute his status when he has jointly
filed the appeal and contesting the matter through same
advocate without disclosing his real status by producing
material documents. As observed above, accused could
have summoned the pay roll of the company to disclose his
status or he could have produced his employment /
appointment letter to show that he was appointed as
technical coordinator. The show cause notice is served on
accused Nos.1 and 2 and there was no response.
19. The learned counsel for revision petitioner has
invited the attention of this court to Section 2(17) of ESI
Act regarding definition of 'Principal Employer', which
defines the principal employer as occupier of the factory
duly named, manager appointed, directors in-charge of the
company etc. including the owner of the factory. The
definition also includes the Managing Agent also and legal
representative of the deceased owner or occupier.
Admittedly, Managing Agent is the General Manager of the
company and he is responsible for all the administrative
control of the company and now it cannot lie in the mouth
of accused No.1 that he is not the principal employer.
20. The learned counsel for the revision petitioner
has placed reliance on a decision reported in EMPLOYEES
STATE INSURANCE CORPORATION, CHANDIGARH VS.
GURDIAL SINGH AND OTHERS', AIR 1991 SC 1741.
The said decision was already considered by the First
Appellate Court and there in the said decision, there is clear
reference that the company if had a Manager he comes
under the definition of 'principal employer'. Hence, the
principles enunciated in the above cited decision would not
come to the aid of revision petitioner in any way. He has
further placed reliance on a decision in 'J.K.INDUSTRIES
LTD. AND OTHERS VS. CHIEF INSPECTOR OF
FACTORIES AND BOILERS AND OTHERS', (1996) 6
SCC 665, but it is pertaining to labour law and Factories
Act and the said principles in no way assist the revision
petitioner/ accused.
21. The evidence on record clearly establish that the
accused No.1 was the principal employer being the General
Manager of accused No.2 and admittedly, the employees
contribution to the tune of Rs.8,26,696/- was deducted for
a period of 01.02.2010 to 31.12.2010, but not remitted to
the respondent / Corporation and it is an offence under
Section 85(a) of ESI Act. Further, it is in fact punishable
under Section 85(i)(a) of ESI Act, but the learned
Magistrate has convicted by imposing lesser sentence under
Section 85(i)(b) of ESI Act. In fact, when the offence is
committed under clause (a) of Section 85 of ESI Act
regarding non-remittance of employees contribution, which
has been deducted as in the present case, it shall be
punishable with imprisonment for not less than one year
and fine of Rs.10,000/-, but in the instant case, the accused
was sentenced to undergo imprisonment for a period of 6
months with fine of Rs.5,000/-. Hence, it is evident that in
fact, the sentence imposed is on the lower side. Though the
proviso to Section 85(i) of the Act gives power to the court
for adequate and special reasons court can impose sentence
of imprisonment for a lesser term, but no such case is made
out and no grounds are forthcoming for imposition of lesser
sentence.
22. Both the courts below have appreciated the oral
and documentary evidence in detail and have rightly
convicted the accused. In fact, they have imposed a lesser
sentence rather than the minimum statutory sentence
prescribed under the enactment. The respondent
/Corporation has not challenged the same. Considering
these facts and circumstances, the question of interference
in the sentence portion also does not arise at all. No
illegality or perversity is found in the judgment of conviction
and order of sentence so as to call for interference by this
court in this revision. As such, the point under consideration
is answered in the negative and as such, the revision being
devoid of any merits does not survive for any consideration
. Accordingly, I proceed to pass the following:
ORDER
(i) The revision petition stands dismissed.
Sd/-
JUDGE
SS
