The Criminal Appeal arises out of the judgment of acquittal, dated 10.9.2001 in C.C.No.66 of 1996 on the file of the Court of Judicial Magistrate No.II, Coimbatore, whereby, the first respondent-A.1 was acquitted of the offence under Section 86(a) read with Section 85(a) read with Section 85(i)(a)(b) of the Employees State Insurance Act and the second respondent-A.2 was acquitted of the offence under Section 85(a) read with Section 85(i)(a)(b) of the Employees State Insurance Act.

2. The case of the appellant-ESI-complainant is as follows:

(a) The first respondent-M/s.Vasam Spinning Mills P. Ltd., is a registered Company under the provisions of the Employees State Insurance Act (for short, the ESI Act). On 11.9.1992, P.W.2 Balasubramaniam, Manager of the ESI Corporation and ESI Inspector Krishnamurthy, inspected the first respondent-Mills and at that time, the Supervisor Shanmugham has given a written statement stating that 15 employees were working there with the help of electricity. Ex.P-1 survey report has been prepared by the ESI Inspector Krishnamurthy, which was signed by P.W.2 Manager of the ESI. P.W.1 another Manager of the ESI, stated that the ESI Code of the first respondent-Mills is Code No.56-60788-11.

(b) The first respondent is a Company and the second respondent is the Director of the first respondent-Mills. For the period September 1992 to September 1993, they have not paid the ESI contribution amount of the employees. Hence, on 14.9.1995, order under Section 45-A of the ESI Act was issued under Ex.P-2, demanding payment of Rs.12,612/-.

(c) Then, the appellant-ESI also issued Ex.P-3 show cause notice, directing them to pay the contributions under the relevant Forms and Ex.P-4 letter dated 13.2.1995 was also issued, which was also despatched to the respondents. The second respondent received the same and made his signature in local thapal register under Ex.P-5. P.W.3 Gurumahalisamy, the U.D.C. of the ESI, maintained the register and through him Exs.P-7 and P-8 have been marked to show that the respondents have not paid the ESI contribution amount of the employees.

(d) After the appellant-ESI obtained permission from the Regional Office under Ex.P-6, the appellant-ESI filed the complaint against the respondents-accused.

3. After examination of the witnesses P.Ws.1 to 3 and Exs.P-1 to P-9, since the respondents/A.1 and A.2 denied the charges, they have been permitted to cross examine the witnesses and questions were posed to them under Section 313 Cr.P.C. showing the incriminating materials available against them, to which, they denied. A.2 was examined as D.W.1. After considering the oral and documentary evidence, the trial Court came to the conclusion that the respondents-accused are not the "principal employers" as defined under Section 2(17) of the ESI Act and they were acquitted of the offences as indicated above. Against the same, the present Criminal Appeal has been preferred by the appellant-complainant-ESI.

4. Challenging the said judgment of acquittal passed by the trial Court, learned counsel appearing for the appellant-ESI would contend that as per Section 2(12) of the ESI Act, the first respondent is a factory and the second respondent is the Director of the first respondent-Mills, and they are the principal employers. The trial Court committed error in acquitting the respondents-accused. Learned counsel for the appellant-ESI further submitted that as per Section 45-A of the ESI Act, the inspection was made and the contribution amount has been determined after the inspection and notice was also issued, which was received and the respondents have not questioned the same by way of filing any Writ Petition and till date, the respondents have not paid the contribution amount of the employees. Hence, the respondents-accused are guilty of the offences under the provisions of the ESI Act, as indicated above. Learned counsel for the appellant-ESI relied upon the decision of the Supreme Court