Gauhati High Court
Page No.# 1/ vs Employees State Insurance Corporation on 17 December, 2025
Page No.# 1/11
GAHC010210472014
2025:GAU-AS:17518
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : Crl.Pet./698/2014
HIMANGSHU RANJAN SAHA and ANR
PROPRIETOR/PRINCIPAL EMPLOYER M/S BHARATI INDUSTRIES AMTALI,
NEAR HIGH SCHOOL, AGARTALA- 799014, DIST. TRIPURA WEST, TRIPURA
2: M/S BHARATI INDUSTRIES
AMTALI
NEAR HIGH SCHOOL
AGARTALA- 799014
DIST. TRIPURA WEST
TRIPURA
VERSUS
EMPLOYEES STATE INSURANCE CORPORATION
HAVINT ITS REGIONAL OFFICE AT BAMUNIMAIDAN, GUWAHATI-21, REP.
BY SHRI P. GOWAMI, SOCIAL SECURITY OFFICER.
Advocate for the Petitioner : MR.A ROY, MR.D P BORAH,MR.S S DEY,MR.M NATH,MR.A
BHATTACHARJEE
Advocate for the Respondent : MR. M SMITH, SC, ESI, ,SC, ESIC,MR.K K NANDI,
Linked Case : Crl.Pet./699/2014
RAKHAL CHANDRA ROY and ANR
PROPRIETOR/PRINCIPAL EMPLOYER M/S ROY SAW MILL AMTALI
AGARTALA- 799014
DIST. TRIPURA WEST
TRIPURA
2: M/S ROY SAW MILL
AMTALI
Page No.# 2/11
AGARTLA- 799014.
VERSUS
EMPLOYEES STATE INSURANCE CORPORATION
HAVING ITS REGIONAL OFFICE AT BAMUNIMAIDAN
GUWAHATI-21
REP. BY SHRI P. GOSWAMI SOCIAL SECURITY OFFICER.
------------
Advocate for : MR.S S DEY
Advocate for : appearing for EMPLOYEES STATE INSURANCE CORPORATION
Linked Case : Crl.Pet./702/2014
ARUN KUMAR DEY and ANR
PROPRIETOR /PRINCIPAL EMPLOYER M/S MAA KALI SAW MILLS
AMTALI
AGARTALA- 799014 DIST. TRIPURA WEST
TRIPURA
2: M/S MAA KALI SAW MILLS
AMTALI
AGARTALA- 799014.
VERSUS
EMPLOYEES STATE INSURANCE CORPORATION
HAVING ITS REGIONAL OFFICE AT BAMUNIMAIDAN
GUWAHATI-21
REP. BY SHRI P. GOSWAMI S.S. OFFICER.
------------
Advocate for : MR.S S DEY
Advocate for : MRS.P GOGOI appearing for EMPLOYEES STATE INSURANCE
CORPORATION
BEFORE
HONOURABLE MRS. JUSTICE MITALI THAKURIA
JUDGMENT
Date : 17-12-2025 Heard Mr. A. Bhattacharjee, learned counsel for the petitioners in all the three Criminal Petitions. Also heard Mr. M. Smith, learned counsel for the respondent Employees State Insurance Corporation (in short 'the ESIC').
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2. The Criminal Petition No.698/2014 is filed under Section 482, read with Sections 401/397 of the CrPC, challenging the legality and validity and/or maintainability of the proceedings of Complaint Case No.18C/2013, under Section 85(a) of the Employees State Insurance Act, 1948 (in Short 'the Act of 1948'), pending in the Court of learned CJM, Kamrup (M) at Guwahati.
The Criminal Petition No.699/2014 is filed under Section 482, read with Sections 401/397 of the CrPC, challenging the legality and validity and/or maintainability of the proceedings of Complaint Case No.794 C/2013, under Section 85(a) of the Act of 1948, pending in the Court of learned CJM, Kamrup (M) at Guwahati.
The Criminal Petition No.702/2014 is filed under Section 482, read with Sections 401/397 of the CrPC, challenging the legality and validity and/or maintainability of the proceedings of Complaint Case No.1508 C/2013, under Section 85(a) of the Act of 1948, pending in the Court of learned CJM, Kamrup (M) at Guwahati.
3. The brief facts of the case of the petitioner No.1 in all the three petitions is the proprietor/Principal Employer who set up and run the saw mills i.e. petitioner No.2 in all the three Criminal Petitions, by using timber as raw material. All these petitioners are running their respective saw mill under the license, which were issued by the Divisional Forest Officer, Sadar Division, Agartala.
4. In Criminal Petition No.698/2014, as per the license, the number of employees was 9 (nine), Criminal Petition No.699/2014, as per the license, the number of employees was 7 (seven) and Criminal Petition No.702/2014, as per the license, the maximum number of employees was 6 to 9. The copy of the licenses are also annexed with the Criminal Petitions. The employees employed under the saw mills are also regularly paying their salary since the day of their joining or since the mill was set up by the petitioner No.1. But subsequently it has come to the knowledge of the petitioner No.1 of the respective saw mills about filing of the complaint by the respondent, under Section 85(a) of the Act of 1948, in the Court of learned CJM, Kamrup (M) at Guwahati, with some nonexistent and baseless allegations Page No.# 4/11 against the petitioners. In the said complaint, the respondent had alleged that the petitioner No.1 being the principal employer had failed to pay the employees' state insurance contribution within the stipulated time. All the complaint petitions are annexed with the preliminary survey report along with the observation slip, wherein it was shown that on the particular day of their inspection, there were 10 numbers of employees in the petitioner No.2 saw mill. The petitioner No.1 surprised to find in the observation slip wherein it was shown the number of employees as 10, though as per the license, the petitioner No.1 never employed 10 numbers of employees in their respective saw mills.
5. In Criminal Petition No.698/2014, the petitioner never employed more than 9 employees on any working day and it was never exceeded more than 9 employees in the saw mill of petitioner No.1. But surprisingly, the Employees State Insurance Corporation, Guwahati issued a show cause notice on 22.09.2012 to the petitioner No.1, followed by another show cause notice dated 23.11.2013 for non-compliance with the provisions of the Act of 1948 and further demanded certain amount to pay in connection with the employees' state insurance contribution in respect of the employees of the petitioner No.2 saw mill. In response to the same, the petitioner No.1 also submitted his reply, stating that he never employed more than 9 numbers of employees in any working day and as such, the saw mill does not come within the purview of the Act of 1948. After submission of the said show cause reply, the respondent again issued another show cause notice to the petitioners wherein also the petitioner No.1 submitted his show cause reply. But surprisingly, in the observation slip, the name of one Subhas Das was shown as a casual worker at Sl. No.10 of the said observation slip, where as no worker with the said name has ever worked in the mill of the petitioner No.1. But the said observation slip were said to have been signed by the employer i.e. the petitioner No.1, though he never signed in the said observation slip. With the ulterior motive, the Employees State Insurance Corporation had put the name of 10 numbers of workers in the observation slip only to implicate the petitioners with the offence alleged in the said complaint petition.
6. Similarly in Criminal Petition No.699/2014, the Inspector by obtaining the signature on the observation slip dated 18.12.2008, had shown the number of employees as 9, however Page No.# 5/11 subsequently the name of the son of the petitioner No.1 has been added by the said Inspector, though no copy of the observation slip was furnished to the petitioner No.1. It is submitted by Mr. A. Bhattacharjee, the learned counsel for the petitioners that the son of the petitioner No.1, namely, Mrinmoy Roy in Criminal Petition No.699/2014 cannot be a casual employee of the saw mill. In fact, said Mrinmoy Roy is the employer in respect of other employees of the saw mill.
7. With regard to the Criminal Petition No.702/2014, Mr. A. Bhattacharjee, the learned counsel for the petitioners submitted that the petitioner No.1 being the employer of the petitioner No.2 saw mill, never employed more than 9 numbers of employees. Rather, it comes down to 6, 7 or 8 but never exceeded 9 numbers of employees at any point of time. As the petitioner No.1 never employed more than 9 numbers of employees, hence it does not fall within the meaning of factory, as defined in Section 2(12) of the Act of 1948 and as such, it does not fall within the purview of the Act of 1948. Accordingly, the petitioner No.2 saw mill is not liable to pay the employees' state insurance contribution in respect of the employees to the Employees' State Insurance Corporation. But here in the instant case also surprisingly, the Assistant Director of the Employees' State Insurance Corporation had issued show cause notice to the petitioner No.1 on 25.09.2012, followed by another show cause notice on 24.04.2013. Further demanded certain amount to pay in connection with the employees' state insurance contribution. The petitioner No.1 accordingly furnished his reply to the show cause notice but in spite of that, the complaint was filed against the present petitioners under Section 85(a) of the Act of 1948. After filing of the complaint only, it is come to the knowledge of the petitioner No.1 that a preliminary survey report dated 18.12.2008, along with an observation slip was also furnished showing 10 numbers of employees in the petitioner No.2 saw mill. In the observation slip, the name of one Raju Debnath was shown as a casual worker at Sl. No.10 of the said observation slip, though there was no worker named as Raju Debnath. In fact, said Raju Debnath is the owner of a Tata Magic delivery van and he has no connection with the saw mill of the petitioner No.1. While the observation slip was signed by his manager, namely one Biswajit Dey, the number of workers was 9 in the observation slip but the Sl. No.10 is added subsequently by the Inspector.
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8. After lodging of all the complaints, the petitioners had received summons from the Court, as the cognizance had already been taken against the petitioners by the Court of learned CJM, Kamrup (M) at Guwahati.
9. In all the Criminal Petitions, the license(s) issued to the saw mills as well as the copies of the observations slips, show cause notices and replies are also annexed.
10. It is submitted by Mr. A. Bhattacharjee, the learned counsel for the petitioners that the Inspector of ESIC had made some false statement in their observations slip, showing the 10 numbers of employees though at any point of time, the petitioners in all the three cases, never employed more than 9 numbers of employees to come under the purview of the Act of 1948. Accordingly, it is submitted that it is a fit case, wherein by invoking the power under Section 482 of the CrPC, all the criminal proceedings initiated against the petitioners, in all the three Criminal Petitions, may be set aside and quashed.
11. Mr. M. Smith, the learned standing counsel for the respondent ESIC submitted that in all the cases, preliminary inquiry was made by the Inspector of the ESIC, wherein it was found that at the time of inquiry, 10 numbers of employees have been employed in all the saw mills by the petitioner No.1, without complying the provision under Section 40 of the Act of 1948, wherein all the principal employers are bound to pay both the contributions i.e. the employees' share of contribution and employers' share of contribution in respect of every employees in the first instance and the principal employers are entitled to recover the employees' share of contribution from their wages relating to the period in respect of which the contribution is paid. But all these petitioner No.1 of the respective saw mill, being the principal employer, failed to comply with the provisions of the Act of 1948 and Regulations and hence, after the preliminary inquiry, the observation slip was also furnished and thereafter, the complaint was filed by the Inspector of the ESIC before the learned Trial Court. Mr. Smith, the learned standing counsel for the respondent further submitted that in all the observation slips, the employers/the petitioners had put their signatures and after furnishing the copy of the observation slip, the complaint was lodged by the Inspector of the ESIC. Further, Mr. Smith submitted that it is all the disputed question of facts as to whether there Page No.# 7/11 was less than 10 numbers of employees or 10 or more than 10 numbers of employees on the day of inquiry report submitted by the Inspector of the ESIC, after making the preliminary inquiry.
12. Section 75(g) of the Act of 1948 reads as under:
"(g) any other matter which is in dispute between a principal employer and the Corporation, or between a principal employer and an immediate employer, or between a person and the Corporation or between an employee and a principal or immediate employer in respect of any contribution or benefit or other dues payable or recoverable under this Act [or any other matter required to be or which may be decided by the Employees' Insurance Court under this Act], such question or dispute [subject to the provisions of sub-section (2A)] shall be decided by the Employees' Insurance Court in accordance with the provisions of this Act.
(2) [Subject to the provisions of sub-section (2A), the following claims] shall be decided by the Employees' Insurance Court, namely:--
(a) claim for the recovery of contributions from the principal employer;
(b) claim by a principal employer to recover contributions from any immediate employer;
2* * * * *
(d) claim against a principal employer under section 68;
(e) claim under section 70 for the recovery of the value or amount of the benefits received by a person when he is not lawfully entitled thereto; and
(f) any claim for the recovery of any benefit admissible under this Act".
13. Thus all these questions are to be decided by the Employees' Insurance Court in accordance with the provisions of this Act. Further it is submitted by Mr. Smith, the learned standing counsel for the respondent that all the cases are at the very premature stage, wherein cognizance had been taken by the learned Court below and from the plain reading of all the complaints, there found a prima facie case against all the petitioners and thus, these are not at all fit cases to file any prayer for quashing of the criminal proceedings, where there are prima facie materials against all the petitioners.
14. Mr. Smith, the learned standing counsel for the respondent also submitted that the definition as per Section 2(9)(iii) of the Act of 1948, the services of any casual employee who has entered into contract of the service also includes as an employee under the said provision Page No.# 8/11 of law. Section 2(9)(iii) of the Act of 1948 reads as under:
"Section 2: Definitions.
In this Act, unless there is anything repugnant in the subject or context,-- .......................................
......................................
(9) "employee" means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and--
(i) .............................
(ii) ............................
(iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service;".
15. Mr. Smith, the learned standing counsel for the respondent relied on a decision of the Hon'ble Supreme Court passed in the case of State represented by the Inspector of Police vs. M. Maridoss and another, reported in MANU/SCOR/07063/2023, wherein it has been held that as per the settled position of law, it is the right conferred upon the Investigating Agency to conduct the Investigation and reasonable time should be given to the Investigating Agency to conduct the investigation unless it is found that the allegations in the FIR do not disclose any cognizable offence at all or the complaint is barred by any law. Under the circumstances also, the impugned judgment and order passed by the High Court quashing and setting aside the criminal proceedings deserves to be quashed and set aside. Accordingly it is submitted that these are not at all fit cases for quashing by invoking the power under Section 482 CrPC.
16. Hearing the submissions made by learned counsel for both sides, I have also perused all the Criminal Petitions and annexure filed along with the petitioners and the complaints filed by the Inspector of the ESIC.
17. It is the version of the petitioners that they being the employer/ principal employer of their respective saw mills, never employed more than 9 persons at any point of time in their respective saw mills and the licenses were also issued for appointment of less than 10 Page No.# 9/11 numbers of employees in their saw mills and hence, the petitioners cannot be prosecuted under the purview of Section 40 of the Act of 1948 and hence, the petitions are liable to be quashed and set aside. Further, it is also the case of the petitioners that at the time of preliminary inquiry or at any point of time, there were not more than 9 number of employees but, the observation slips are being furnished/ issued showing 10 numbers of employees by adding either the son of the petitioner No.1 or the name of any other person who never had any connection with the saw mill or name of any casual employee who never worked as permanent employee in the saw mills.
18. On the other hand, it is the case of the respondent that at the time of preliminary inquiry, it has been found that 10 numbers of employees were working and accordingly, it is also found that the petitioners did not comply with Section 40 of the Act of 1948, for which they are liable to be prosecuted under Section 85(g) of the said Act. At the same time, it is submitted by the learned counsel for the respondent that in all the observation slips, the principal employer put their signatures and the copy of the same were also furnished to them. From the annexure filed along with the petitions, it is seen that the licenses were issued for employment of 6 to 9 numbers of employees in their saw mills but the observation slips show that at the time of preliminary inquiry, there found 10 numbers of employees being employed or working in those saw mills.
19. As the issue raised by the petitioners that the names of 10 numbers of employees has been shown in the observation slip by adding name of those, who were never employed in their mills, are admittedly disputed question of fact and it is to be decided by the Court as to whether the names of those employees, who were shown to be working at the time of inquiry or at the time of filing their observation slips. But prima facie it is seen that all the complaints are being filed with the allegation of non-compliance of the provisions of the Act of 1948 and thus, it is seen that there is a prima facie case against all the petitioners. Further, from Section 2(9)(iii) of the Act of 1948, as discussed above, it is seen that the casual employee also can be considered as employee under the said Act and thus, it is seen that with regard to failure to comply with the provision of the Act of 1948, prima facie case has been established against the petitioners.
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20. The Hon'ble Apex Court in the case of State of Haryana and others vs. Bhajan Lal and others, reported in 1992 Supp (1) SCC 335, wherein in para 102 had discussed under which circumstances, the inherent power under Section 482 of the CrPC can be exercised. Para 102 of the said judgment reads as under:
"102. In the backdrop of the interpretation of the various relevant provisions of the Code under Chapter XIV and of the principles of law enunciated by this Court in a series of decisions relating to the exercise of the extraordinary power under Article 226 or the inherent powers under Section 482 of the Code which we have extracted and reproduced above, we give the following categories of cases by way of illustration wherein such power could be exercised either to prevent abuse of the process of any court or otherwise to secure the ends of justice, though it may not be possible to lay down any precise, clearly defined and sufficiently channelised and inflexible guidelines or rigid formulae and to give an exhaustive list of myriad kinds of cases wherein such power should be exercised.
(1) Where the allegations made in the first information report or the complaint, even if they are taken at their face value and accepted in their entirety do not prima facie constitute any offence or make out a case against the accused.
(2) Where the allegations in the first information report and other materials, if any, accompanying the FIR do not disclose a cognizable offence, justifying an investigation by police officers under Section 156(1) of the Code except under an order of a Magistrate within the purview of Section 155(2) of the Code.
(3) Where the uncontroverted allegations made in the FIR or com-plaint and the evidence collected in support of the same do not disclose the commission of any offence and make out a case against the accused.
(4) Where, the allegations in the FIR do not constitute a cognizable offence but constitute only a non-cognizable offence, no investigation is permitted by a police officer without an order of a Magistrate as contemplated under Section 155(2) of the Code. (5) Where the allegations made in the FIR or complaint are so absurd and inherently improbable on the basis of which no prudent person can ever reach a just conclusion that there is sufficient ground for proceeding against the accused.
(6) Where there is an express legal bar engrafted in any of the provisions of the Code or the concerned Act (under which a criminal proceeding is instituted) to the institution and continuance of the proceedings and/or where there is a specific provision in the Code or the concerned Act, providing efficacious redress for the grievance of the aggrieved party.
(7) Where a criminal proceeding is manifestly attended with mala fide and/or where the proceeding is maliciously instituted with an ulterior motive for wreaking vengeance on the accused and with a view to spite him due to private and personal grudge".
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21. But here in these cases, it is seen that even on plain reading of the complaint filed against all the petitioners reveal prima facie case against all the petitioners and the view expressed by the Hon'ble Supreme Court and all other aspects of cases, this Court is of the opinion that these are not fit cases to quashing the criminal proceeding against the petitioners, by invoking the extraordinary power under Section 482 CrPC and accordingly, all these three (3) petitions stand dismissed.
JUDGE
Comparing Assistant
Digitally signed by
Manoranja Manoranjan Barman
n Barman Date: 2025.12.18
13:46:58 +05'30'