A director of a company cannot be held liable as the principal employer under section 85(g) of the Employees' State Insurance Act, 1948, for non-submission of contribution cards, unless the director has ultimate control over the affairs of the factory.

A.K. Nayak, J.

1. THESE appeals by Special Leave under section 378(4) of the Code of Criminal Procedure, Heard analogously, are directed at the instance of Employees' State Insurance Corporation (represented by the Insurance Inspector) against the orders of acquittal dated 19th December, 1984, passed by learned Metropolitan Magistrate, 9th Court, Calcutta, acquitting the accused opposite party in cases brought under section 85(a) and (g) of the Employees' State Insurance Act, 1948.

2. THE aforesaid two cases were brought by the petitioner-Insurance Inspector, Employees' State Insurance Corporation, on two separate complaints before the learned Chief Metropolitan Magistrate, Calcutta, against the manager and the other directors of a factory namely M/s. Pradeep Automobiles (P) Ltd. 19, Goabagan Street, Calcutta-6, on the accusation that the manager and the directors of the said factory had failed to submit contribution cards in requisite form for the period expiring on 29.9.73 and 24.11.73 respectively, for which the said persons including the accused opposite party Smt. Ichraj Devi Chopra as the principal employers were liable to be prosecuted for commission of an offence punishable under section 85(g) of the said Act. THE learned Magistrate to whom the case was transferred, acquitted the accused opposite party under section 255(1) Cr. P. C. holding that the opposite party-respondent although a director of the said firm, she could not be deemed to be the principal employer as defined in section 2(17) of the said Act. Being aggrieved by the same orders of acquittal the petitioner has preferred these two appeals which are being heard analogously for convenience.

3. UNDISPUTEDLY, the accused-opposite party Smt. Ichraj Devi Chopra was one of the three directors of the factory namely M/s. Pradeep Automobiles (Pvt.) Ltd. of which Mr. T.K. Sanyal was the manager at the relevant time. It has not also been seriously disputed by defence that the contribution cards for the requisite period expiring on the aforesaid dates had also not been submitted by the employers of the said factory as required under the said Act. The specific defence of the accused-opposite party before the trial court was that she was not the principal employer within the meaning of section 2(17) of the E.S.I. Act and having nothing to do with the management of the said factory was not as such principally responsible for submission of the said contribution cards. Argument was also advanced on behalf of the accused-opposite party that she being a mere director having not in ultimate control over the affairs of the said factory and there having been no specific averment to that effect in the petition of complaint could not be the principal employer at the material time.

4. THE Metropolitan Magistrate accepted such argument advanced on behalf of the accused opposite party and thereby acquitted the accused of the offence under section 85(g) of the said Act. These orders of acquittal have been assailed mainly on the ground that the accused-opposite party being admittedly director at the mater time can be said to be the principal employer within the meaning of section 2(17) of the Act and that the learned Magistrate committed an error in holding otherwise.

5. IT is now a settled position of law that a person who can be prosecuted under section 85(g) of the E.S.I. Act, for non-submission of the contribution cards as required under section 40 of the said Act read with Regulation 26 of the Employees' State Insurance Regulations, 1950, is the principal employer as defined in section 2(17) of the E.S.I. Act.

6. PRINCIPAL employer in respect of a factory as defined in section 2(17) of the E.S.I. Act means the owner or occupier of the factory a includes the managing agent of such owner or occupier, the legal representative of a deceased owner or occupier, and where a person has be named as the manager of the factory under the Factories Act, 1948, the person so named. The who