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2005 Supreme(Cal) 210

High Court Of Calcutta
S. K. GUPTA
R.K.AGARWAL - Appellant
Versus
STATE OF WEST BENGAL - Respondent
Cr. R. 510 Of 2004
Decided On : 03/28/2005

Advocates Appeared:
AMIT BHATTACHARJI, R.P.BHATTACHARJI, SANDIPAN GANGULY, SUBAL KR.MAITRA

Partners of a firm are jointly and severally liable for any act of the firm and can be held liable as principal employers under Section 2(17) of the ESI Act.

Headnote:

EMPLOYEES' STATE INSURANCE ACT, 1948 - SECTION 2 (17) - PRINCIPAL EMPLOYER - PARTNERS OF A FIRM ARE JOINTLY AND SEVERALLY LIABLE FOR ANY ACT OF THE FIRM AND CAN BE HELD LIABLE AS PRINCIPAL EMPLOYERS.

Fact of the Case:

The petitioner, one of the partners of a firm, was convicted under Section 85(a) of the ESI Act for failure to deposit the statutory contribution. The Appellate Court confirmed the conviction and sentence of the petitioner.

Finding of the Court:

The Court held that the petitioner, as a partner of the firm, was jointly and severally liable for any act of the firm and could be held liable as a principal employer under Section 2(17) of the ESI Act.

Issues: Whether the petitioner, as a partner of the firm, could be held liable as a principal employer under Section 2(17) of the ESI Act.

Ratio Decidendi: The Court relied on the definition of 'principal employer' in Section 2(17) of the ESI Act, which includes any person who has ultimate control over the affairs of the establishment or the management or control of the establishment is entrusted to him.

Final Decision: The Court modified the sentence imposed on the petitioner, directing him to pay a fine of Rs. 5,000/- and to suffer imprisonment for one day, i.e., till the rising of the Court.

S. K. GUPTA, J.

( 1 ) THIS revisional application has been filed under Sections 401 and 482 of the Cr. P. C. against the order dated November 29, 2003 passed by the learned Additional Sessions judge, 4th Fast Track Court, Calcutta in criminal Appeal No. 78 of 2003, arising out of judgment dated November 29, 2003 passed in Case No. C/ 73 of 2000 by the learned metropolitan Magistrate, 9th Court, Calcutta.

( 2 ) THE case of the petitioner is that, he is one of the partners of Ralia Ram Agarwal, a partnership firm situated at Liluah within the district of Howrah having a factory at the said place of business. On January 5, 2000, a petition of complaint was filed by the E. S. I. Corporation in the Court of the learned Chief metropolitan Magistrate, Calcutta against the said firm, the petitioner and another partner under Section 85 (a) of the E. S. I. Act, 1948 on the allegation that the accused persons being the principal employers of the said firm failed to deposit the contribution for the period in between October, 1997 to December, 1997. The learned Magistrate took cognizance of the offence and after trial he was pleased to convict the accused Nos. 2 and 3 and they were sentenced to suffer S. I. for 3 months. An appeal was preferred against the said order. The learned Appellate Court by his order dated november 29, 2003 was pleased to confirm the order of conviction and sentence as passed by the Court below against all the accused persons with the modification that the accused No. 2, who is the father of the present petitioner, to pay the fine amount only and to suffer S. I. only for a day i. e. till rising of the Court. Present petitioner has challenged the said finding of the learned Appellate Court and according to him, the learned Appellate Court was wrong in sentencing him as the principal employer of the said factory, as defined and explained under section 2 (17) of the Employees' State insurance Act, 1948. According to the petitioner, the factory/firm should be considered to be the 'principal employer' as provided in the definition of Section 2 (17) of the Act for all purposes and the petitioner and other partner cannot be held liable for the alleged offences. As the decisions of both the courts below in this respect suffer from material illegality, so the petitioner by filing this revisional application has prayed for setting aside the impugned judgment, as passed by the learned Appellate Court so far as the present petitioner is concerned.

( 3 ) I have heard the submissions of the learned advocates for both the sides. It is the admitted, position that the petitioner is one of the partners of the firm in question which violated the provisions of the Employees' State insurance Act, 1948. The allegations against the accused persons were that, they did not deposit the statutory contribution, as provided in the Act and as such are liable to be penalised. There is practically no dispute that there was non-payment of contribution as provided in the act. For that reason, proceeding was instituted. Learned advocate for the petitioner submitted that subsequent to the institution of the present proceeding, the amount which was in default, have been paid. Learned advocate, who represents the Employees' State Insurance also, admitted the position. But, at the same time, he submitted that this contribution was paid after the violation was made and after the criminal proceeding was started. Be that as it may, the fact remains that the offenders have now complied with the provisions of the Act, although belatedly. It appears that the learned courts below sentenced the 3 accused persons, viz. the firm, present petitioner and his father who are the partners of the firm in question to pay fine of Rs. 5,000/- each and also sentence of imprisonment was passed in respect of the present petitioner and his father. It is the admitted position that the father of the petitioner has paid the fine amount and he was directed to suffer imprisonme




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