AJAY RAJ SHETTY versus DIRECTOR & ANR.

AJAY RAJ SHETTY versus DIRECTOR & ANR.

The appellant was properly held to fall within Section 2(17) as a managing agent/principal employer because company records described him as General Manager and he was responsible for supervision and control; deductions totalling Rs.8,26,696 were made from employees' wages and not remitted to ESIC, constituting an offence under Section 85(a), and the conviction and sentence as recorded (under Section 85(i)(b) with the lesser sentence imposed by the Trial Court) did not merit interference; the fine as awarded is mandatory and upheld.

Parties
Appellant: Ajay Raj Shetty; Respondent: Director; Respondent: M/s Electriex (I) Ltd.
Jurisdiction
India
Judgment Date
17 April 2025
Procedural Posture
Criminal Appeal / Final Judgment on Appeal
Outcome
appeal dismissed
Legal Topics
Principal Employer, Managing Agent, Non Remittance of Contributions, Penology Under S.85
Employees' State Insurance Act, 1948 Criminal Law Labour Law Principal Employer Managing Agent Non Remittance of Contributions Penology Under S.85

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Parties

Ajay Raj Shetty

Appellant

Director

Respondent

M/s Electriex (I) Ltd.

Respondent

Procedural Posture

Criminal Appeal / Final Judgment on Appeal

Legal Issues

  1. 1 Whether the appellant fell within the definition of 'principal employer' under Section 2(17) of the Employees' State Insurance Act, 1948
  2. 2 Whether non-remittance of ESI contributions deducted from employees' wages constitutes an offence under Section 85(a) punishable under Section 85(i)(a) or (b)
  3. 3 Whether conviction under Section 85(i)(b) and the sentence imposed on the appellant were justified

Ratio Decidendi

The appellant was properly held to fall within Section 2(17) as a managing agent/principal employer because company records described him as General Manager and he was responsible for supervision and control; deductions totalling Rs.8,26,696 were made from employees' wages and not remitted to ESIC, constituting an offence under Section 85(a), and the conviction and sentence as recorded (under Section 85(i)(b) with the lesser sentence imposed by the Trial Court) did not merit interference; the fine as awarded is mandatory and upheld.

Court Disposition

appeal dismissed

Orders

  • Appeal dismissed
  • Appellant directed to undergo the sentence after setting off the period already undergone, if any