High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE N. ARUMUGHAM
MEASUREALL ENGINEERING AND CO. (P)LTD.
Versus
EMPLOYEES STATE INSURANCE CORPORATION
C.R.C.Appeal No: 429 of 1995
Decided On : 19-02-1996
EMPLOYEES STATE INSURANCE ACT - PRINCIPAL EMPLOYER - SECTION 2(17) - DEFINITION - INTERPRETATION - COURT ANALYSIS - APPLICABILITY OF SECTION 245(2) OF THE CODE OF CRIMINAL PROCEDURE.
Fact of the Case:
The petitioners, who were directors of a company, were charged with offences under the Employees' State Insurance Act. They filed petitions seeking discharge from the proceedings, arguing that they were not the principal employers as defined under Section 2(17) of the Act.
Finding of the Court:
The court held that the petitioners were not entitled to discharge at this stage of the proceedings. It observed that the definition of 'principal employer' under Section 2(17) was wide enough to include the petitioners, who were in charge of the management of the company.
Issues: 1. Whether the petitioners were principal employers as defined under Section 2(17) of the Employees' State Insurance Act? 2. Whether the petitioners were entitled to discharge from the proceedings at this stage?
Ratio Decidendi: 1. The court interpreted Section 2(17) of the Employees' State Insurance Act and held that the definition of 'principal employer' was wide enough to include the petitioners, who were in charge of the management of the company. 2. The court held that the petitioners were not entitled to discharge at this stage of the proceedings. It observed that it was open for the petitioners to put forth their case before the Trial Court with regard to who was the proper person in charge of the company.
Final Decision: The court dismissed the revisions filed by the petitioners.
( 1 ) HEARD. The only contention that has been dwelt as main plank for the admission of the revisions by the Bar is that the petitioners herein are not the Managin Directors, nor the Managers of the company by name, Measuerall Engineering and Co. (P) Ltd. , Coimbatore, and that, therefore, they have not come under the definition of Section 2
(17) of the Employees State Insurance Act, which deals with "principal employer" and which aspect has not at all been considered by the learned Judicial Magistrate, while passing the impugned orders on the petitions seeking discharge of the petitioners and also for dropping further proceedings. The above plea was discountenanced by Mr. P.
Rajarnanickam, learned Counsel for the respondent, stating that the definition provided under Section 2 (17), for "principal employer" under the Act, is neither wider nor too narrow, but it has spelt out particularly, the persons who are put in charge of the entire administration of the company, viz. , the occupier or otherwise. If the definition section, as provided above, is understood properly, then the legal ratio decided by the Apex Court in Employees Slate Insurance Corporation v. Gurdial Singh, 1993 83 FJR 96 may not apply and for the said reason alone, the revision is not maintainable, added to which, learned Counsel has also referred to the factual aspects of the case that the learned Magistrate has taken cognizance of the offence under the Employees State Insurance Act and having identified the existence of the prima facie case, processes were issued and accordingly the petitioners entered appearance and charges ensued and it is, at this juncture, always open for the court to conduct the enquiry under Section 202 of the Code of Criminal Procedure or to record the evidence of the witnesses produced on behalf of the prosecution and for any reason or ground, if anything is to be interfered with or brought to the knowledge of the court, then the remedy open to the petitioners is only Section 245 of the Code of Civil Procedure and not otherwise. Urging so, the admission of these revisions was opposed.
( 2 ) IN the context of the above rival contentions, I have perused the impugned orders passed by the learned Judicial Magistrate No. II, Coimbatore, in C. M. P. No. 5272 of 1994 in S. T. C. No. 2139 of 1994 and Crl. M. P. No. 5271 of 1994 in 25 C. C. No. 150 of 1994 and looked into the case records with the nuggets of the charges and the complaint. In order to appreciate and to give an answer for the points raised by the Bar for the respective parties, it has become necessary for me to extract the observations made by the learned judicial magistrate in the following words :
"In this case, the fourth accused, the Manager of the company whether a Factory Manager under the Factories Act or not has not been stated by the complainant in the complaint. He was simply arrayed as Manager of the first accused company. The reason for not stating so can be traced from the records filed before this court which shows that the fourth accused refused to furnish the Directors list and also the persons who are responsible for supervision and control of the factory. Even to the show-cause notice, accused Nos. 2 to 4 never furnished who are the persons responsible for remitting the employers and employees share of contribution and to file returns. Hence, the fourth accused cannot be termed as Factory Manager until some evidences are let in or some documents are. Likewise, who is the occupier of the factory is not stated or furnished by both sides. The company who is the owner of the factory is arrayed as the first accused and is facing prosecution. Section 86a deals with every person who was in charge of and was responsible to the company in the conduct of the business of the company has to face prosecution. So, the complainant in his complaint to stated that accused. Nos. 2 to 4 are the persons who are in charge of and were responsible to the company for the c
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