Bombay High Court
Sohanlal Awashthi And Anr. vs Employees State Insurance Corporation on 5 August, 1986
Equivalent citations: 1987(1)BOMCR92, [1987(54)FLR796]
JUDGMENT B.G. Deo, J.
1. "Which is the Court within whose local jurisdiction the offences of non-payment of contribution under section 85-A and the offence of non-submission of contribution cards under section 85(g) are committed under the Employees State Insurance Act, 1948, (for short the Act), when the Regional Office of the Corporation under the Act is situated at Nagpur and the employees governed by the said Act reside elsewhere beyond the local limits of the jurisdiction of Nagpur Court" is the common question of law of some importance which arises for decision in all the aforesaid six revision applications.
2. All these six Criminal Revision Applications are by employers from Nanded. Criminal Revision Applications Nos. 84/86 to 87/86 are by the Chairman, Nanded Central Co-operative Consumers Wholesale and Retail Society Ltd.; Nanded and the General Manager of the Nanded Central Co-operative Consumers Wholesale and Retail Society Ltd.; Nanded, Criminal Revision Application Nos. 88/86 and 89/86 are by the Chairman and Manager of the Nanded Zilla Krishi Audhyogic Servaseva Society Ltd.; Nanded.
3. All these six revision petitioners were prosecuted either under section 85-A for non-payment of contribution and or under section 85(g) for non-submission of cards at Nagpur by the Corporation. The revisional applicants contended before the learned Judicial Magistrate at Nagpur that it is the Court at Nanded where payment of contribution was to be made which could exercise jurisdiction in the matter. The learned Judicial Magistrate, Nagpur, by a common order dated 14-3-1986, which has been impugned in these revision applications negatived their contention and held that it is the Court at Nagpur which has jurisdiction over the matter. It is against this common order that the present revision applications have been directed.
4. Chapter 13 of the Code of Criminal Procedure relates to the jurisdiction of the Criminal courts in enquiries and trials. Under section 177 of the Code of Criminal Procedure, every offence shall ordinarily be enquired into and tried by the Court within whose local jurisdiction it was committed. The question involved in all the six revisions, therefore, is whether an offence of non-payment of contributions and non-submission of contribution cards under the Act arises within the local limits and jurisdiction of Nagpur Court where admittedly the Employees' State Insurance Corporation, has it's regional office and where account No. 1 under the Act has been opened by the Corporation in the State Bank of India, Nagpur.
5. Under section 179 of the Code of Criminal Procedure, when an act is an offence by reason of anything which has been done and of consequence which has ensure the offence may be enquired into and tried by a Court within whose local jurisdiction such thing has been done and such consequence has ensured. It has, therefore, to be seen as to where an act of non-payment of contributions and the act of non-submission of contribution cards have been committed by the employers governed by the Act when they are situated at Nanded. In other words, whether the act of non-payment of contributions and/or non-submission of contribution cards takes place at Nanded, or at Nagpur.
6. I have heard Shri C.G. Madkholkar the learned Counsel for the applicants in all the six revision applications and Shri Samel learned Counsel for respondent No. 1 the Employees State Insurance Corporation and the learned Assistant Government Pleader Shri Jaiswal for the State, at length.
7. The first submission of the learned Counsel for the applicants Shri C.G. Madkholkar was that as the State Bank of India at Nagpur has extended the facility to the employers at Nanded for accepting the payment of their contribution in its branch at Nanded, the offence of non-payment arises wholly at Nanded and the Nagpur Court has, therefore, no jurisdiction to try the offence. The second limb of the argument was that as the State bank of India Act, 1955, defines under Clause 2(g), the State Bank of India as "the State Bank of India constituted under this Act", all the branches of the State Bank of India together with its head office, constitute but one unit and the payment made to any of its branch and particularly in the instant case to Nanded branch of the State Bank of India would give valid discharge to the applicants-employers and as such the offence of non-payment of contribution takes place at Nanded only. Both these contentions can hardly be accepted for more reasons than one.
8. It is no doubt on admitted position that the State Bank of India, Nagpur, has extended the facility to all its branches including the one at Nanded for accepting the payment from the employers in question and for remitting the same to the account No. 1 of the Corporation maintained at the State Bank of India at Nagpur. It deserves, however, to be noted that no contract between the employers in question on one hand and the branch of the State Bank of India at Nanded and the corporation on the other hand had been arrived at in this respect. It is an arrangement between the Head Office of the State Bank of India at Nagpur with its branches at Nanded and at other places whereby the facility has been extended to the employers to remit the amount at Nagpur at their won expense and at their own risk. This extension of the facility by the State Bank of India, Nagpur, would hardly mean that the payment has to be made at Nanded alone. The overall impact of the Act, the Rules made thereunder and the regulations framed by the Corporation under the Act as would be seen presently, is undoubtedly to the effect that the payment of contributions has to be made at Nagpur only. Under Regulation 26, contribution cards have to be sent to the appropriate office which in the instant case is situated at Nagpur. They have to be sent by registered post or by a messenger together with a return in duplicate in Form 6 to be appropriate office i.e. at Nagpur, Regulation 31-A provides for interest of contribution due but not paid in time. Under Regulation 31 an employer who is liable to pay contribution in respect of any employee shall pay those contributions within twenty one days of the last day of the wage period in which the contribution fails due.
9. The proviso to Regulation 31-A clinches the matter under question. It runs as under:
"Provided that where the contribution is paid by affixing the contribution stamps, the employer shall be deemed to have not paid the contributions in time if he fails to submit the contribution cards within the time prescribed under Regulation 26,"
10. It is, therefore, abundantly clear that the payment of contribution is inextricably interlinked with submission of cards and, therefore, the payment contribution gets completed only on the submission of the contribution cards to the office at Nagpur in view of the proviso to Regulation 31-A, and that too within the time prescribed. The position, therefore, is that the contribution has to be paid and the cards have to be submitted so as to reach the office at Nagpur within the prescribed period and unless both these things take place there would be no payment under the law. It, therefore, follows that the offence of non-payment of contribution as well as non-submission of cards takes place at Nagpur and not at Nanded in any case.
11. The submission of the learned Counsel Shri C.G. Madkholkar for the applicants that the Breach of the State Bank of India at Nanded is part and parcel of the State Bank of India at Nagpur and the contribution being payable in the branch at Nanded the offence would be committed at Nanded is devoid of substance. It also does not take the matter any further since the non-payment would under the Rules relate to the main office of the State Bank of India at Nagpur ultimately and even if the head-office under the State Bank of India with its branches is considered as one unit it is the Nagpur Court which gets jurisdiction for entertaining the complaint.
12. As regards the consequences, sub-section (5) of section 40 of the Act provides that the liability to bear the expenses of remitting the contribution is cast on the principal employer. If the contention that Nanded Court had jurisdiction to entertain the complaint is accepted the offence would be incomplete unless the expenses of remittance of contribution to account No. 1 of the Corporation maintained at the State Bank of India at Nagpur are incurred and paid by the employer to the Corporation at Nagpur.
13. There is another dimension to the question. The common law rule is that a debtor must seek the creditor in which case the employers have to seek the creditor and make payment at Nagpur where the regional office of the Corporation is situate. In a somewhat similar case, M/s. Siku Industries and others v. Smt. D'Souza Inspector, Office of the Regional Provident Fund Commissioner and another, reported in 1971 Maharashtra Law Journal 173, the establishment was located at Nagpur. The employer and employee also resided at Nagpur. The provided Fund Account was opened at Nagpur and contributions had to be deposited in the State Bank of India at Nagpur. The petitioners who were in charge of the establishment were prosecuted for failure to deposit the contribution under paragraph 76(a) of the Provident Fund Scheme read with section 14-A and other sections of P.F. Act, not at Nagpur but in the Court of Presidency Magistrate, Bombay. The question that arose was which Court had jurisdiction to try the offence.
14. The following observations occurring in paragraph 13 made by the Division Bench of this Court in the aforesaid case are opposite on the question involved in this case and fruitfully be reproduced.
"Here a Provident Fund Account is maintained in the State Bank of India at Nagpur and the amount is required to be deposited in that account. Thus, the Provident Fund Commissioner can be said to have appointed the place expressly and in any case by implication for making payment....."
The situation is similar in the present case. With the opening of the account No. 1 in the State Bank of India at Nagpur by the Corporation the payment of contributions has to be made by implication at Nagpur. It has been further held in the aforesaid case as under :
"In fact so far as the payments of contributions are concerned, nothing had to be done at Bombay so far as the present petitioners are concerned assuming that they are liable for payment of contributions which the petitioners claim, they are not. Thus, the whole cause of action which gives rise to the prosecution against the petitioners arose at Nagpur, and, therefore, under section 177 of the Code of Criminal Procedure the prosecution if any ought to lie in Nagpur and not at Bombay."
15. In the instant case also the office of the Employees State Insurance Corporation is situate at Nagpur. Except for the fact that the revision applicants are residents of Nanded, there is not much of a difference in the facts of the above case and the cases in hand. Here also the fund is being operated at Nagpur where contributions have to be finally credited in account No. 1 of the Corporation in the State Bank of India at Nagpur. Besides, in the instant cases, as has already been observed the contributions are inextricably linked with the submission of the contribution cards. The proviso to Regulation 31-A shows that the payment would not be complete unless the contribution cards reach the office of the Corporation at Nagpur either by registered post or through a messenger. The payment of contributions therefore, of necessity has to follow suit and to be made at Nagpur.
16. The learned Counsel Shri Madkholkar also referred me to the Regional Director ESI v. S.C. Mallik, 1979 Vol. 48 C.L.T. 224. The case deals with payment of contribution under Regulation 31 and the method of computation. The Magistrate has made a mistake in observing 'wage period' and therefore, it was held that the respondents committed an offence under section 85(a) of the Act. This case has no bearing at all on the question involved in this case which is about the local jurisdiction of the Nagpur Court vis-a-vis the Court at Nanded under sections 177 of the Code of Criminal Procedure.
17. Even assuming for the sake of argument that the offence of non-payment arises at Nanded also, the Nagpur Court would also have the jurisdiction to entertain the complaint for the offence under section 85-A for non-payment of contribution and under section 85(g) for non-compliance with any of the requirements of the Employees State Insurance Act, for the simple reason that the common law asks the debtor to seek the creditor, and also because the implied and express provisions of the Act clothe the Nagpur Court with jurisdiction to entertain the complaint for the offences under sections 85-A for non-payment of contribution and under section 85(g) for non-compliance with any of the requirements of the Employees State Insurance Act. 1948.
18. The offences have, therefore, been committed within the local jurisdiction of Nagpur Court. The cognizance taken by the Judicial Magistrate, Nagpur, of the aforesaid offences does not, therefore, call for any interference in this revisional jurisdiction. The question involved is thus answered accordingly and all the six revisions are, therefore, hereby dismissed.