Mohan Dass vs Regional Director, Employee's State Insurance Corporation

L.N. Chhangani, J.—This is a reference By the Additional sessions Judge No. 2, Jaipur City, recommending inlay proceedings in criminal base No. 310 of 19bl unttet section 85 of the tmpioyees'' state insurance Act inordinate referred to as the Act) pending before the him Magistrate, Jaipur, be stayed till the decision of miscellaneous proceedings u/s 75(2) of the am pending before the Employees'' Insurance Court of Jaipur City (hereinafter referred to as the insurance warn;. The learned Additional Sessions Judge turtner recommended that the Judge of the insurance Court be Directed to expedite the disposal of the proceedings pending perom It.

The relevant facts giving rise to the present reie-rence may be briefly stated as follows:�

The Employees'' . State Insurance Corporation through Its Regional Director filed a Complaint on 15/1961 against Mohan Dass Khandeiwai unaer section be we of the Act. It was stated that the firm M/s Jem uieiw cal and Pharmaceutical works Jaipur was a factory witmra the meaning of Sub-section (12) of section of the An and that Mohan Dass was Its Manager. The accuses was responsible for payment of the employer''s contrition to the Corporation and he having made a default for the quarter ending 31st December, 1960, was guilty u/s 85 of the Act

The accused denied the allegations made in the complaint and contended that the petitioner had severed air his connections with the said M/s Jem chemical arm Pharmaceutical Works on 18-9-1959 and was, therefore, not liable to pay any contribution and was not guilty to any of the contraventions or non-compliance with any of the requirements of the Act or the rules or regulations mane thereunder.

During the pendency of these criminal proceedings, the Regional Director filed yet another application Under Section. 75(2) of the Act for the recovery or mo employers'' contribution amounting to Rs. 906 for me period from 8-3-1960 to 29-7-1961 In the Insurance Court. The accused petitioner contested this petition as well of the same grounds on which he denied his amply u/s 85 of the Act. The insurance court warned" & number of issues out of which issues Nos. 4 and 5 peing relevant for purposes of the present case, may be reproduced here�-

Whether Monanaass Knandeiwai was the pniclpai Employer and Manager during the period unaer of pute as defined in Section 2 Sub-section (17) of the E.S.I Act?

Whether the opposite party Is liable to pay comrrbution from 8-3-60 to 29-7-61 and also submit contrmution cards In respect of the Employees of the said Tactory?

On 22nd March, 1963 the accused petitioner monanoass filed an application in the criminal case praying for quasn-Ing of the criminal proceedings. His contention was Xian the criminal proceedings were not maintainable winnow prior determination of the liability of the accused under the Act. The application was refected by the way Magistrate on 22-3-1963. The accused-petitioner went m revision to the court of session and the revision was ummaieij heard by the Additional Sessions Judge No. 2. The Additional Sessions Judge held that there was noting in the scheme of the Act to warrant an inference that no criminal proceedings can be Instituted u/s 85 of the Act without first getting the question of dispute regarding payment of contribution decided by the insurance Court u/s 75 of the Act. He, however, need that pending the proceedings before the insurance noun the criminal proceedings should be stayed.

Mr. Mardia appeared for the accused petitioner and supported the reference. Mr. Ugani Rai appeared on 14tft October, 1963 and opposed the reference, touay, however, he has failed to appear in spite of due notice.

While opposing the reference, Mr. ugam Kaj relied upon two cases of this Court, namely, Keshrimal Vs. The State, and Keshrimal Vs. The State, this Court considered the question wneffier a criminal case should be stayed because there is a cave suit pending about the same matter and adopted the to now-tog rule�

There is no invariable rule that a criminal proceed-Ing should be stayed pending the issue of a civil suit, dui that the matter was entirely one of discretion of the count to be exercised having regard to the merits of all tne circumstances of the case.

In Kalu''s case ILR (1953) Raj 697 the same principle wag stated In the following terms�

That there Is no invariable rule that a criminal proceeding should be stayed pending the decision of a cave stilt Involving the same or allied subject-matter, mat is a matter entirely one of discretion to be exercised having regard to the. merits and circumstances of each particular case.

It was further added�

It Is eminently desirable and that Is indeed the policy of the Legislature that a criminal proceeding should of decided as expeditiously as possible and it follows, therefore, that except for compelling reasons such a proceeding snoum not be allowed to hang on Indefinitely until the decision of a civil suit which may take years to decide.

There can be no quarrel with the principle of law tarn down in these cases. However, for the proper appecation Of the principle laid down in these cases it is necessary id Msr In tyind the relevant provisions of the Act which nave a considerable bearing on the controversy as to the desirability of staying a criminal proceeding pending the determination of the dispute relating to civil liability of the accused. It will be appropriate at this stage to read of relevant portion of section 85 of the Act:�

85, If any person�

(a) fails to pay any contribution which under this act he is liable to pay, or

(b) xxx

(c) xxx

(d) xxx

(e) xxx

(f) xxx

(g) xxx

he shall be punishable with imprisonment which may extend to three months or with fine which may extend to five hundred rupees, or with both.

The learned Counsel for the opposite party contended that on a literal construction of section 85 of the Act 8 criminal court should he held competent to aecia the controversy as to liability of the accused to pay a con unbutton under the Act. At first sight, an impression may likely be crested that a criminal court is competent to adjudicate upon the liability of an accused to pay a corwrrtion but a closer examination of the matter revests that the contention of the opposite party cannot Be'' accepted.

Section 85 of the Act cannot be construed in isolation and must be read in conjunction with the scheme of the mi and other relevant provisions of the Act. Section 4 of the Act empowers the state Government to constitute of means of a notification in the orticiai gazette tmptoy By insurance Courts for specified local areas for the pur poses of adjudicating disputes arising under me Act. Section 5 Sub-section (1) enumerates eight categories of questions or disputes and directs that they shan be decided by the Insurance Court in accordance with the provisions W the Act. Sub-section (2) furtner lists six Kinds w claims which shall be decided by the insurance cmiri. Sub-section (3) provides that no civil court shall have jurisdiction to decide or deal with any question or dispute as aforesaid or to adjudicate on any liability which by or under this Act Is to be decided by the employees ansurance Act. Section 15 evidently has created a specrai exclusive forum for determination of disputes and inarms specified therein and has ousted the jurisdiction of civil courts to determine such disputes and claims, it uremia so, it requires no serious argument to wer that corm courts also cannot entertain and adjudicate upon such disputes and claims. Surely, the Legislature while the jurisdiction of the civil courts to determine the said dispute or questions or claims cannot be expected W Intend that criminal courts should nevertheless be treat aim competent to determine such matters.

A contrary view must frustrate the very purpose of creating a special exclusive forum. It is in this background that section 85 of the Act must be interpreted.. Construing section 85 in the light of the considerations mutated above, I find no difficulty in concluding that section 85 cannot be taken to empower a criminal court . t. I entertain and determine questions or disputes or Claims'' specified in Section 75 of the Act. It conies into opera-1 tion and can be invoked only when Mere is no controversy over the questions or disputes or claims mentioned section 85 either the parties having joined no contre-versy over them or the controversies, if raised having been properly determined by the Insurance under mower section 75. The nature of inquiry u/s 85 rsretricted to the determination of limited questions such w whether the emoloyer being indisputably liable to make employer''s contribution has made a default in mawng contribution.

Reverting to the facts of the case in narra, ft citifies be stated that the accused petitioner has denied the that he was the Manager of M/s. Jem Chemical and Pharmaceutical Works and, therefore, could not "be treated as an emp over liable to make employers'' contrrtetion. The Corporation itself subsequent to the crmtthm case also filed a claim for contribution in the insurance Court in respect of such contributions, the question as w who Is or was the principal employer (which expression errors include a named manager vide Section 2(17)) in respect of any employes is one of the eight categories enumerated t Section 75 vide Section 75(1)(d). So also a claim for contribution Is Included in the claims listed In Section 15(2) that Clearly the questions raised in the criminal case fall within Section 75 of the Act and require to be flerer-mmed by the Insurance Court; besides the questions of actually in Issue before the insurance Court in cus Case No. 1 of 1962, In these circumstance I have no doubt that the City Magistrate is not competent undertake the determination of the above ''questions itseif and must await the determination of the questions by we Insurance Court and the Additional Sessions Judge is fully, Justified in recommending the stay of criminal case pending the determination of the claim case uetore the insurance Court.

I accordingly, accept the reference and direct that tie proceedings : in the Criminal Case No. 310 of 1952 landing, to before the City Magistratft shall be stayed ml me decision of the Miscellaneous Application No. 1 of Bending before the insurance Court, the insurance in further directed to expedite the disposal of the misaellaneous application.