S.K. Gupta, J.
1. All these four appeals involve the identical controversy and arising out of the same judgment shall be disposed of by common order.
2. Employees' State Insurance Corporation through its Insurance Inspector/ Manager preferred a complaint in File No. 22 against Raj Kumar Choudhary. Managing Partner, Principal Employer of K.C. Joinery Mills, Akhnoor Road, Jammu under Section 85(a) of the Employees' State Insurance Act, 1948 (hereinafter referred to as 'the' Act') and another complaint against Raj Kumar Choudhary in File No. 23 under Section 85(e) of the Act. These complaints were instituted somewhere in 1993.
3. First complaint forming File No. 22 titled Employees' State Insurance Corporation v. Raj Kumar Choudhary proceeds on the grounds recited in para 3 of the complaint that the accused Raj Kumar Choudhary in his capacity as a principal Employer of accused No. 2 K.C. Joinery Mills, Akhnoor Road, Jammu has failed to pay the Insurance Corporation the contribution as required under Sections 39, 40(1) and 43 of E.S.I. Act read with Regulation 31 of the Employees' State Insurance (General) Regulations, 1950 for the wage period from April, 1992 to March, 1993 due on 31st of each of the following month at a rate and manner prescribed in the Act and is punishable under Section 85(a) and 85(c) of the Act.
4. The Second complaint in File No. 23 against Raj Kumar Choudhary is that in his capacity as the principal employer of accused No. 2 K. C. Joinery Mills, Akhnoor, Jammu had failed to submit the return of contribution as required under Sections 39, 40(1), 43 and 44 of the Act read with Regulation 26 of the Employees' State Insurance (General) Regulations, 1950 for the contribution period ending September 1992 to March, 1993 specified under Schedule-I of the Act, which is an offence punishable under Section 85(e) of the Employees' State Insurance Act 1948.
5. Similarly, Employees' State Corporation through its Insurance Inspector, preferred a complaint in File No. 42 against S.R. Puri, Occupier Jatinder Auto Engineer Co. Vikrani Chowk, Jammu under Section 85(a) and 85(c) of the Act, in alleging that the accused has failed to pay to the Corporation the contribution as required under Sections 39, 40(1) and 43 of the Act read with Regulation 3 of the Employees' State Insurance (General) Regulations, 1950 for the period 10/1989 to 9/1994 due on 21st of each of the following month at a rate and manner prescribed in the Act, which is punishable under Section 85(a) and 85(c) of the Act. Second complaint in File No. 43 against the accused is that accused had failed to submit the return of the contribution for the period mentioned in the complaint, as required under Sections 39, 40(1) 43 and 44 of the Act read with Regulations 1950, which is punishable under Section 85(e) of the Employees' State Insurance Act, 1948.
6. During the currency of the proceedings applications came to be filed on behalf of the accused for dropping the proceedings. The trial Court after inviting objections from the Insurance Corporation and hearing the parties, relying upon the judgment of this Court in the case Employees' State Insurance Corporation v. Harjinder Singh Anand, Acquittal Appeal No. 38/1997 decided on July 31, 2002 wherein it was held that the complaint is vague as it neither indicated nor prescribed as to how the concern in question falls within the scope of the factory, formed an opinion that the case against the accused cannot continue and accordingly dropped the proceedings vide judgment dated April 30, 2001.
7. Mr. Harshwardhan Gupta, learned counsel appearing for the Corporation contended that the learned Magistrate has not afforded an opportunity of leading evidence to prove the allegations made in the complaint in order to hold the accused criminally liable under the Act. He has further submitted that the procedure provided under the Act and the Regulations made thereto have not been followed in the order dropping the criminal proceedings against the accused suffer from legal infirmity and deserves to be set aside.
8. I have heard the learned counsel Mr. Harshwardhan Gupta, appearing for appellant and also perused the record meticulously.
9. The Employees' State Insurance Act, 1948 is a legislation which aims at bringing about social justice to the poor labour class of the land. This legislation is first of its kind in India for it introduces the comprehensive insurance cover to provide certain benefits to the employees in case of sickness, maternity and employment injury and to make provisions for certain other matters in relation thereto. In terms of Section 1(4) of the Act it applies at first instance to all factories (including factories belonging to the Government), other than seasonal factories. Section 2(12) of the Act defines factories. For the purpose of coverage under the Act a factory is defined as any premises including the precincts thereof whereon ten or more persons are employed or were employed for wages on any day of the preceding 12 months and where any, manufacturing process is being carried on with the aid of power or is ordinarily carried. Whereon twenty or more persons are employed or were employed for wages on any day of the preceding twelve months, and in any part of which a manufacturing process is being carried on without the aid of power or is ordinarily so carried on.
10. Term 'principal employer' is defined in Section 2(17) of the Act and means, the owner or occupier of the factory and including the managing agent of such owner or occupier. It is to be noted in this connection that a principal employer occupies ultimate control. In the definition of principal employer given above, the word 'or' occurring after the word 'owner' and before the word 'occupier' denotes that 'principal employer' and 'occupier' are two separate identities. Principal employer includes owner though the owner is not taking part for the management of the factory. Therefore, a criminal liability is fastened under the Act only when it is established that the person proceeded against is principal employer having a management and control of the factory so as to fall squarely within the ambit of the principal employer and also factory as contemplated by Section 2(12) of the Act.
11. In the case S. Gurdial Singh v. Regional Director, Employees' State Insurance Corporation, AIR 1974 P&H; 33, it has been held as under:
'5. From these definitions, it is quite clear that the petitioners are not covered by the definitions of 'principal employer' or 'occupier'. The owner of the factory is the company, namely the Hindustan Embroidery Mills Private Ltd., Chheharta (Amritsar), Inder Singh was appointed as the Manager of the company for the purposes of the Factories Act and he was, therefore, the occupier of the factory for all purposes. The petitioners cannot be said to be the persons who have ultimate control over the affairs of the factory. That control vests in the Company. It has not been shown that the affairs of the factory had been or are entrusted to any of the petitioners. The liability for the payment of contributions to the Employees' State Insurance Corporation is that of the principal employer under Section 40 of the Act. As the petitioners cannot be termed as 'principal employer' no recovery can be made from them.'
12. There is not a whisper in the complaint that accused No. 1 had ultimate control over the affairs of the factory and is a principal employer so as to fall within the definition of a principal employer. It also does not indicate as to how the Unit in question falls within the definition of factory. It is also not gatherable from the complaint that accused No. 2 K.C. Joinery Mills is a factory within the definition of Section 2(12) of the Act and is carrying on its manufacturing business with the aid of power or that its employees are more than 10 or that it is carrying on its business without the aid of power whereon 20 or more persons are employed or were employed for wages on any day of the preceding 12 months. In the absence of explicit recitals of these particulars in the complaint, it is not understandable how respondent No. 1 could be termed as a 'principal employer' and respondent No. 2 as 'factory' within the purview of the Act.
13. The complaint has been filed against S.K. Puri as occupier and against Raj Kumar Choudhary as a Managing Partner, without there being any averment that the ultimate control over the affairs of the company rests with the accused. In case reported as Employees State Insurance Corporation, Bangalore v. Sri B.S. Narayana Rao 1993 Cri LJ 255 (Kant), there was a failure to file the return. The Judgment of acquittal was upheld by the High Court and it was held as under:
'9. The complainant, however laudable and beneficial the object of a statute be, cannot take shelter under it and abdicate his primary responsibility or proving all the ingredients of an offence to hold him guilty. The concept of judicial activism cannot be invoked to fill in the material lacunae in prosecution evidence to the prejudice of an accused person forgetting that it is the duty of the complainant to prove the guilt of an accused person beyond reasonable doubt whatever be the nature of the complaint.'
14. It has been stated in the complaint that there is a breach of Sections 39, 40(1), 43, 44 of the Act, A forum has been provided under Chapter VI of the Act for adjudication of the disputes and claims by Insurance Court constituted under Section 74 of the Act and the matters can be decided by the Insurance Court under Section 75 of the Act. A question as to whether a person who is or was a 'principal employer' in respect of an employee can be gone into under Section 75(d) of the Act, and in this manner other disputes can also be gone into. But that does not mean that criminal proceedings cannot be initiated because of a possibility of adjudication of disputes under Sections 74 and 75 of the Act. The question of liability has to be determined by the State as is held in (1964) 1 Cri LJ 612.
15. No other point was urged or debated by the appellant counsel during the arguments.
16. The net result deducible from the aforesaid facts and circumstances of the case are that the complaint(s) preferred is/are vague. It does not indicate as to how respondent No. 1 is a 'principal employer' and the concern in question falls within the definition of 'factory'. There does not appear, in my view, any infirmity in the order impugned formulated by the trial Court in dropping the proceedings against the accused.
17. For the reasons given above, the appeals do not possess any merit and are accordingly dismissed. The appellant-Corporation is however, left free to pursue its remedies in accordance with law.