IMPORTANT POINT
Courts have no discretion to reduce amount of fine of rupees five thousand.

JUDGMENT :

Shiva Kirti Singh, J.

1. The question of law deserving adjudication in these appeals arises out of Section 85(a)(i)(b) of the Employees’ State Insurance Corporation Act (for brevity, ‘the Act’). The aforesaid statutory provision prescribes punishment for a particular offence as imprisonment which shall not be less than six months and the convict shall also be liable to fine of five thousand rupees. The proviso however empowers the court that it may, “for any adequate and special reasons to be recorded in the judgment, impose a sentence of imprisonment for a lesser term;”. The question to be answered is whether the court has been given judicial discretion only to reduce the sentence of imprisonment for any term lesser than six months or whether it also has discretion to levy no fine or a fine of less than five thousand rupees.

2. The facts of the case lie in a very narrow compass. The case arises out of criminal proceedings initiated by the appellant Employees State Insurance Corporation under Section 85 of the Act for conviction and punishment of the respondents for failure to pay contributions required by the Act. Both the respondents faced trial before the Special Court for Economic Offences, Bangalore and were found guilty and were inflicted with imprisonment till rising of the Court and fine of Rs.1000/-. According to appellant, the fine amount could not have been reduced and ought to have been Rs.5000/-as per mandate of law. Hence the Corporation preferred Revision Petitions before the High Court of Karnataka at Bangalore. By the impugned judgment and order under appeal dated 09th January 2004, the Division Bench of the High Court dismissed Criminal Revision Petition Nos.1326 and 1327 of 2002 by placing reliance on judgments of Kerala High Court and Patna High Court respectively in the case of Sebastian @ Kunju v. State 1992 CriLJ 3642 and Tetar Gope v. Ganauri Gope AIR 1968 Pat 287 as well as two Supreme Court judgments in the case of Surinder Kumar v. State (1987) 1 SCC 467 and Palaniappa Gounder v. State of Tamil Nadu (1977) 2 SCC 634.

3. Before adverting to the submissions and the case law cited by the rival parties, it would be useful to notice relevant part of Section 85 which is as under :

“85. Punishment for failure to pay contributions, etc. –

If any person –

(a) fails to pay any contribution which under this Act he is liable to pay, or

(b) …. …. ….

(c) …. …. ….

(d) …. …. ….

(e) …. …. ….

(f) …. …. ….

(g) …. …. ….

he shall be punishable

(i) where he commits an offence under clause (a), with imprisonment for a term which may extend to three years but –

(a) which shall not be less than one year, in case of failure to pay the employee’s contribution which has been deducted by him from the employee’s wages and shall also be liable to fine of ten thousand rupees;

(b) which shall not be less than six months, in any other case and shall also be liable to fine of five thousand rupees:

Provided that the court may, for any adequate and special reason to be recorded in the judgment, impose a sentence of imprisonment for a lesser term;

(ii) …. …. ….”

4. Learned counsel for the appellant has relied upon judgment of this Court in the case of Zunjarrao Bhikaji Nagarkar v. Union of India (1999) 7 SCC 409. In that case not imposing appropriate penalty as required by law was one of the charges against the delinquent employee in a departmental proceeding. In the context of the charge, in paragraphs 37, 38 and 39 of the Report, the judgment of a Single Judge of Patna High Court in the case of Tetar Gope (supra) was noticed along with its view that expression “shall also be liable to fine” in Section 325 of the Indian Penal Code does not mean that a sentence of fine must be imposed in every case of conviction for that offence. That view of Patna High Court was noticed and then this Court over-ruled it as incorrect by holding that the language of the Section made the sentence of both, imprisonment and fine imperative and only the extent of fine