The High Court · 2025

Counsel for the Appellant : SRl. PASHAM SRINIVASULU Counsel for the Respondents : PUBLIC PROSECUTOR The Court delivered the following: JUDGMENT THE HON'BLE SRI JUSTICE E.V.VENUGOT', !L CRIMINAL APPEAL No.489 of 2O13 JUDGMENT: This Criminal Appt irl rs lilecl Ix. tlrt appcllirnt,'/( ,)]-r )lirlf ilr)t rrlrdcr St'r--tions :378(4) ril' Cr.P.(1. assailins 1hc .lrtclgnrt'rtt ,1 rl C'8 02.110I3 p:rssed in P.C.No.38 o1- 2O l I o:r tl'rc filc ol tl'rr' 1, , rr.i(l ,lurlici:rl M:rgistratc ol the Irirst Cl.rss to Tr1, 6.11-1'.,'r,',,. Unclcr r r I'lSI Acr anrl Chairnr:rrr, Inchistrial Tribunal 1, HYcleral;ad, sht'r'r' rcspontlrnt No. i /accrrsccl u,as accluittcd lor thc ofli'ncc lrnclcl Scr n 8 o(rr) ol thc Iirnplot't'es'Statc I n slrrance Act, 19.18

2. For the sakc convcnienc(', th(' apyrclhr-rt hert'in r',' i )c [('li:rr( (l .ts complainant and rcsponde nt No.1 u.ill be relerrccl us t,c Lrsr-'cl, as tl)c\. ar-c arraigned belore thc trial Cotrrt.

3. 'l'he briel backdrop of the instant c:lrsc is :rs fc,llor,. , Accused lailed to pay contribr,rtions of t?s.1,.13,'r-l.' ' c.;vcrinrl lhc period from O1.11.2005 to 31.03.20 lO, zrs unclcr Sec,ir.r s 3() irncl -|0 ol the trSI Act read with Regulations 29 ancl 31 of tlrt IiSI (()enr:rarl) Rcgulations, 1950. As such Corporation issuecl C,1B(rL, Iroc) notict' on

13.09.201O lor Rs.1,58,730/- for thc pcriod lrom 04l0.. o 0.3/ 1O giving an opportunity o[ personal he:rring on 13.10.:2(rlJ rvhich \\,i]s acknorvle dged and acknowledgemc.t was rcceive d I r thr: .lficc or-r

19. 1 1.201O. Accused did not attend the personal ht i r.utg. An or.der .? -.-.. I I 1 \ \ I 2 under Section 45-A ol trSI Act, dated 29.ll.2OlO uas issued determrnirrg thc contributions ol Rs.1,43,7 L5/- for the pcriod lrom I 1 /05 to O3/ l0 Thc orck-r untler Scction 45 A n':ts passed as per ESIC Hqrs. Instruclions No.P l'2l1l.l lll38 l)O1O ltev II, clatcd 24.O6.2010 restricting Lhc claim lo Rs. 1 ,43.71.r/- krr thc penod 1 1/05 to 3/ t0. A show cause noticc datcd 1.5.03.2010 s'lrs issttcd rr ltich u'as tcturtrcd by postal authorities r,r,ith thr: crrrlorscrnetrt 'REF USED', I'-ACTORY CLOSED". Accordingly, tlrc a<'clLsccl corttmit(ccl t1r) oftbltcc punishable undcr section 85(a) ol thc ESI AcL

4. To provc lhc casc ol th(' conrlll:tin:trtt, it got cx:tlninccl PW. ] and marked Exs.P. L to P. 1 1. 'l'o clisprovt: the t:onte ntior.r of tl'rc colllplainal.rt, accused cxamincd hin'rse li as DW.1 :ittd qot tnzrrketl Exs.D.1 to D.4.

5. After follorving thc duc proccclltrr' :r-rcl on consideration of thc cntire evidence both oral :rncl tlocutrrenlrttl-, leerrucd tt'tal Court acquitted the accusr:d for tlre :rkrreslrid r.rl'letrct'

6. Fecling aggrievcd ancl dissatrsfied u'itir the f ir-rclings ol the learned trial Court, thc complainant has prcfct-rcd Lhe plcscltt appcal on the foiloq,ing ground thal thc ir-npugned ,Judgtlent is contraty to law, weight of evidence and probabilities of thc casc aucl thal the trial Court failed to apprcciate tl-rat Undcr Scctiou 4O of DSI AcL every principlc employer shalt pay both the shares of hts cotttributions and also erred in not considering that the accused has not cl'raller-rgccl Scction 45A '| ordcr u:hi.h dc.terntination has become fin:ri agirrnst lr.: l-t,:rrnr:d trirrl Court conrmitlcd g.tvc err-or in holding thilt th(. irccrrs,l is enritk:cl ro 'bencl'it i)l .loLll)t' anci Lhr.reby acqlritting Itinr. 'l'ht r.L I rL., ;rr.lrvs this Col-lrt to st'L itsidt ,lrrclgmcnt clated 08.O2..2013 passt r l_.r iltr- lt,a.tcil trinl Court anci Cortvict tlte irccuscd.

7. Hcarrl learncd counsel Ibr tl-re ap;tellanr arr,l Mr.[.].Grtncslt, Ir:ar-rrccl i\ssisL:rn( Ciovernmcnt Plcadcr appraring lor l.L,.i ),)lt(lint No.2 Stlrtc.

8. Irr c:rscs ot-ircquittal, the Hon'bk: Suprcme Cour.l r Rati Sharmct u. State (Goaernment of NCT oJ Delhi) and a-nother rt.lri lir:rr u.l,riir, dealine u rth an irppe:,rl against acqlrittal, the appellr r c()urt lri,LS 1() ccir-tsrclt'r r,.'hethcr rhe (rii1l court's view can bc ternrcd ir r .; P.ssible onL,, partic:trlarlv rvlrr'n er,,iclence on rccorcl has bcen zinill\rs( l 'l'irc reirsorr is thert an o.rler ol arccluittal aclds up to the presumpti., ,1 innor:r'rrcc jn l:rvotrr ol rhc accused. 'l'hus, the appellate cour-t hars to i,r r.,l.ttivcl\. <lo\\. in rerrt'rsing the order of the trial court rendcring acqniL,r I

9. ln Ghureg l,a.l a. State of uttq.r pradesht Lhc, It ,rr,l-rlc Suprernc CoLrrt afte r relcrri'rg to severaI JuclgmenLs regar, I r :] lhe scLlle(l principles of iaw ancl the powers of appellate Court I rcversitrg rht, order of acquittal, held at para 70, as follows: ' (2022) li Su plenre Cou r t Cascs 536 r (2008) l{) SLrpr crne ( otr r t Cascs ,l50 4 '70. In the ti-c1ht of the aboue. tlrc llirlh Courl ctncl other appe o.te Courls shottld Jbllotu the uell scttLecl pritciples crystaLlizcd by rrun ter of Judgments if it is goingl to ouenttle or olh.crtLtisc dislurb the ttial coutl's acquittol:

1. The oppclla.t.t coutl ntttg onlg ouartttlc or othenuisc dlsLurLt llte tial cotttl's uccytittttI i.l'it ltos "rr:n1 :;rtbslontial curcl cornpel[in91 reasons" for doirtq so. A nurnber orf irz.slarrcc.s arisa ir tLtlLic lt the ctpltt:llate ccturl tuoulcl httue "uery substantioL o.rtd cornpe:llingl rrrrr.son-s" to disca.rci llrc: trio.L court's decislon. "Very1 .sul]-slorrrra./ cuul t-ontpellirtgl rearso,rr,- " exr.st uthen.: i) The trictl court's conclu-sictrt tt;itlt r<:c1cu'd lo l/re -/Zrcf.s is palpably wron.g: kttu; niscariage of justice" ; ii) Thc tr-ictl courl's decisiotr rl,a.s ba.sr:r/ on an crroncous uetu of iii) Th.e trial coutl's jurlqtncnl is 1rl.r'fti Lo I esult ut "clnrue iu) The entire approach ol' Lhc triel coLtrl irt tlealitg rtttLt llrc euidence utas potentlq ilktqnL; u) Th.e trictl coutl s judtltrtenl LL(r-s tritrnrJt,stlg tutlust and unreason.able: ui) The trial couft hus itlttor<,tl titt currlent:e or tnisrctttl lhe ntaterial euidence or has ign.ored nutlL;r io.L docurnen ts [ikc dyitg declarations/ report of the bctllistic experl. ctc. uii)This List is interuied to bc L usLrotoc, tol exlvtusltue. 2. The ctppellatc coutl rnu.st aftuu.r7.s qiue ysroper ueiqht and consideratiott o the Jlndinqs of tlrc trlol cottrt.

3. If tuo re<tsonabte uietus cttrt l;e n:achcd ()ne that lcads to acquittaL the other to cotluictiotl tLtr: Hiclh (lutrls/ appt:llali: corirls ntust ntle in fauour oJ'tlta crccuse:tl. " I O. Be fore entering into thc mcrrts of ll.rr: casc, it is :rpt to r-totc thert the findings of the learned trial Courl whilc elcquitting accust'd and the same are extracted belo\,\': " 18. The main contention o[ thc Acc:t-tsecl is that thc Factorw was close w.e.f. October. 2005 ard therc is no dcfault of contributions at all The evidence oi DWI is that thc Factory was closed in the month of Octobcr, 2O05 and immediately intimated the same to the ESIC undcr Ex.D l. PWI during cross ex:rmination admitted that the Accused submitted Ex Di representation datcd 16.I1.2OOJ in their Branch officc at Kadapa, but the same is not misc:href by thc Authorised : i</ -1 5 reprcsellta ti() I Otllcer. 'lhc suggcstiot-r to DW1 by the trSIC rs rhirr r : .r e is rro crirlorsernenL sitlt siqnature on lix.DI of tlrc tr:i ( i,rrcl tlre s:ritl Er.Dl rs not sicnt to thc Regional Dircctor;rn:- rlra: l,lx D l is crt'a:t rl l)\, lor tlte purpose of this pctitior: r r rc:.,r of cle rrr adniission ol PW I that trr.D 1 ',v:rs sLrl;mir t,. I irr rht.rr l;r:rnch of[i<:c at I(adapa, there is r-ro force in tlrr. :.r -irlestiorr that E.x.il I wirs not submittecl to the Rcgional Dirc<. , r \\ lrcrr lhc ,\ccusr'<l sul)mittcd trx.I) I (lil(c(l I6. I 1 .2005 llt thc carliest point of time within l5 I r.. s liorn thc closrrrr: ()l' Lh(. Factory a1 the ESI nearesl offrr t, ir is 1]rc <lLrty of llrt. IISIC branch officc at l(ada])a to brorrLrl:t ir to tlrc, notice of Flcilional Director of ESIC. The statlltor\ i r,Ltr,. ot] the pzrrt of r hc trSI branch office at l(aclapa cannol I ri)lie 1lt(, ,.\ccrrscd r.) sulft.r. Accor-dingl_y tht: eviclent.L. rI DWI c,)rr-()borllteal lty:Ldmission of PWI during cross r,\,1 lin:rtrt;rr sttpl;orted bv trx.D I wcll cstal)lished that thc Ar.r.r r t.t1 soorr aftt'r closrtre of thc l.'actory in the month of Oc1 r r.r. 2O05 l;rought it to tlte notice of DSIC and requested to c: rccl ESI rcgistr:rtion o1- the Accused Factory_ Therefore, lhr .r- rs no Itrl;sc on tlle l).rrt o[ Lhe Accuscd itr blinging the clr sr, rr. ot llrc Factorv to the lcnor,,,ierlge of ESIC and the lapse is r r: r he liSI i;rarrr:h ofllce irt Kirrlap:r .*,hich received Ex.D I in n<.-: :;r rrr_girrr, the litct ol closurc ol'the Factory and thcre rcqll(.sl ) caltccl ESI RegisLration. For the lapse of ESR brant:lr )ll-irrc irr Iiaclapa the Accuscd cannot bc penalized.

19. 1'1're cviclcnce of DWI further establisher] I tirt tlt(. Comrnercirrl 'l' Depiirtment issued Ex.D2 certilir..r e ri ttccl 01.O2.201'2 ccrtlflring that the Factory filed VAT 2O( ( rctrLms disclosing NIL tum over from 01.04.2005 to 3l.Ol.:107 anrt thc ccrtificate is cancelled w.e.f. 3 I .0 1.2007.

20. The evidence of DWI supported by Ex.D3 goes l( suggesr that the Southern Power Distribution Company ol ,..p. l_t(l , 'l'irupathi ir.rlbrrnccl the Accused Factory that the or.t r r plrrct,,<l 6 is cancellecl and blacklistcd lor tll,.o,r'ear-s frorn Lhe datc ol the lctter. DW! in the cvidcnce clilrific(l thal in thc vcar- 2005 the Accused received rvork ordr:r from tl-re Southenr Pou'cr Distributron Comp:rnv of .,\.P Lt(1.. Tirupatlii and drrc 1r'r linancial problcm ar-rd rll hr:alth ol D\\t l , cotrlri not contpilc the work order as such thc F:rctory was put in lrlacl<lrst. 21 . Further the cvidence o[ DWI supPor-tcd l;r. F]x.D.l nor-r renewal certihcatc issucd bv Dv. Comrnissioncr- ol- Lalrour, Kadapa gocs to suggcst that the Labollr Departrnent ccrtificcl that thc Factory has not rcnerved from 22.1 1.2004 till dat('.

22. ln the lacts :rnd circurrrstarrccs <]iscr-rsstrl lrlrorc rrrrd [indings thcrein, I find that thc cviclcncc' ol'D\!l supportcrl l;r- Exs.D l to D4 alcl corroi;orated bl thc adnr "sions chrring cross examination of PWI rvclI estirlrlishcd thirt lhc AccLrsed f-actory was closed as carly as in thc month o[ Oclol><:r. 2005- T[-re Fact of closurc was intimzrted to the Regional Diler'lrrr, DSIC under Ex.D1 and submittcd thc sarnc cvtrr accorrling to PWI at their branch office, Kadapa.'l'hc l;r1;sc is on thc part of bralch officc, I(adapa in not hrnvarrling trr.D l to lhe Rcgional Director, which u,as adrlress<:d to rhc Iiegional Dircctor, trSIC, Flyderabad. Tl.re ccrti[ir:atc undcr Ex.D2 issued by Commercial Tax Olticcr- on r.uxler Er. t)2 established that there is no turnor,cr ltom 0104.2005 to 3l.O 1.2005. According to the Dx.D3 the fiactorr. rvirs kcpt in blacklist by Southern Porver Distriinlion Corrpan-y of A. P. Ltd., Tirupathi and the Labour Commissioner ccrtihcatron that the Factory has nor rcnewed from 22.11.2O04 rvcll established that there are no activities of thc Factory fr-orn October,2OO5 onwards. When the Factor_v was closcd thelc is no question of payment of wages to thc u'orkers a nd consequent deduction of Contributions from thc r.r'agcs ol llre workers towards their share arrd also rcrnittancc of cmployer share of contributions. When therc is no functioning of the "-zi@I I ! I l l ,! ! i I ! I I i1 n I'-actor1, thr' queslion of pal'ment oI contributions zrr , lialrihtY tr) th( prin('ipal cml)loyer .loes rlot arise. The is; tant e of [:]s.Pl Folnr C l8 noltce, 1;assirtg ol order ttudt'r iec. ]5 A Lrnclcl Er I)ll ancl cttt t seqttcnl ial shou' cause nott' e tttlrli:r Llr.P.5 arrri thr' 1tr,,sr-cuttrrtr srttrction urr(ler L.PS are uLcchirniclrllv c:tn-ie<l otr bv the trSIC.

13. in suclr cir<'tttnst:tt-t ccs u'hen thc Factory was , i)se(l :111d no activitit s at-< cat ried oll thc questiou of 1l;t rn('llt ol' contribrrtiorrs clocs Irot arises- The complainalr I lailccl to ( st:lbllshes thirl Lltt' Accusecl has not rctt t tccl tht: (ontrrllntions ol lls. t 1+3.7 151 during thc pt l otl fritnt o l. i 1.20(,:l to 3 1.0:].,1O 10 (hllrlR lt'ltich pcriod trr ' l:'ir''tort \\.:1s llol :rt rLli c:u ttrrl on actit.ities."

11. ll rvas :rpprri-cnt frorII thc rcc--ord that ctlmpl I nalll latlllchc(l pr()secution ilgain:it tl'rc accused \\ritil an allegation tlat he being a principle enrplolcr of M/s Ilharat Elcctricals, Kadal :, fatlcd trt pzrv contrilrulions <l1' lls.l ,13,7 151- lrom O1.1l.2005 1r 31.03.20 10 as re(luire(l Llnd('r Si( tior)s 30 lrnd .10 of DSI Act read wi1 I RegLllations 29 anrl 3 i oi' thc DSI llcgul:rtiorts, 1950- It is the spccifit: ( lnt( tltion ol lhc accLrsc(l that tl'r: said F actory was closed in the mc 'rth ol Octobcr, 2O05. ln sl.lpporl ol his conlention, he filecl Exs.D.1 t. D.4 During llrc cross-erarninatiorr oI l)W.1, he :idmitted that trSI(] Brirnch Olfir:c, I(adapa, ha.s rcccivecl tl'rc trx.D.1 representation r-l,r ed 16. I I .2005. According to Exs.t).1 to D.4 r,r.ould unfolds that durin! the periocl from

01. 1 1.2005 to 31.02.20 10, the Factory was closed anrl no rrctivitics are calried, therclbre, thc question of payment of contrit utions does not arises. 'lhe burcien lics on the complainant to prov(' the guilt ol tl-rc 8 ilccused bcyond rcasonable doubt. IJo$'evt:r, thc complaitlaltl lailecl to provc thc guilt oi thc accused be1'ond rcasotrable tl<tubt trnd he is entitleci for- the bcnefit ol doubt, as righth'obscrvcd by thc lcarned trial Cor-trt.

12. Aftcr rneticulous tinalysis o[ thc matt:rial firr-rnd itt Lirc t-t cord atld also vieu'cd froru any angle, this Courl is ol the t:ottsidcrcrl opinioll tlrirt the lindings of the learned tria] Court zrre vvcll t-citsonetl zrnd tl're Lntcrfcrcncc ol this Court is untvarrantcd. Thcrelorc, this irllpcal is liablc to Lrc clisrnissed.

13. In view ol the discussion m:rdc hereinbcforc, this :rppeal is cirsrnissccl trnd Lhc impugned Judgmcnt datccl 08.02.20 l3 ptrssecl bv thc learncd trial Court is l-rcreby conl-trmed. Misccllaneous petitions pending, i[ any, in this Crimirrrrl Appt'al sl rall startd d ismissed. SD/.N.CHANDRA SEKHAR RAO DEPUTY REGISTRAR 6 SECTION OFFICER //TRUE COPY// To, s

1. The Judicial [Vlagistrate of First Class-, Hyderabad 2 one CC to sntIpnsHAIvl SRINIVASULU Advocate [OPUC] 5. O; CC iO TTIE PUBLIC PROSECUTOR, HIGH COURT FOR THE STATE 4. Two CD CoPies OF TELANGANA (OUT) HIGH COURT DATED:2810712025 JUDGMENT CRLA.No.489 of 2013 i 1;ti[m6 ... ':a,:i\".. ,/ DISMISSING THE CRLA u v J *\