2003 (2) TMI 549 - HC - Indian Laws

Summary

Issues Involved:
1. Applicability of the term "factory" under the E.S.I. Act.
2. Sufficiency of evidence to establish the petitioner as the principal employer.
3. Legal implications of the Sessions Judge's order regarding the surrender of the petitioner.

Detailed Analysis:

1. Applicability of the term "factory" under the E.S.I. Act:
The primary issue was whether "Ajanta Hotel" qualifies as a "factory" under Section 2(12) of the Employees' State Insurance (E.S.I.) Act. The definition specifies that a "factory" must have ten or more persons employed with the aid of power, or twenty or more without the aid of power, on any day of the preceding twelve months. The complainant admitted seeing only two or three workers, which does not meet the statutory requirement. The Sessions Judge erroneously relied on the Factories Act, 1948, and Section 85 thereof, which allows the State Government to declare certain premises as factories irrespective of the number of employees. However, no such declaration was produced, and the E.S.I. Act does not incorporate this provision. Therefore, "Ajanta Hotel" does not qualify as a "factory" under the E.S.I. Act, negating the applicability of the Act.

2. Sufficiency of evidence to establish the petitioner as the principal employer:
The prosecution failed to provide sufficient evidence to prove that the petitioner was the principal employer of "Ajanta Hotel." The Sessions Judge presumed the petitioner to be the proprietor because he did not respond to a notice from the Joint Director. However, the complainant admitted that only the petitioner's son was present on two inspection occasions, and both were present on another occasion. The accused claimed his son ran the hotel, and no documents were produced to prove otherwise. The definition of "principal employer" under Section 2(17) of the E.S.I. Act includes the owner, occupier, or any person responsible for supervision and control. The complainant's statement, "I went to the hotel of accused," was insufficient to establish the petitioner's capacity as the principal employer beyond a reasonable doubt.

3. Legal implications of the Sessions Judge's order regarding the surrender of the petitioner:
The Sessions Judge's order directed the petitioner to surrender his bail bond before the Trial Court to undergo the remaining sentence, which effectively suspended the sentence. This was contrary to the judgment in *Dilip v. State of Maharashtra*, where it was held that the lower appellate court has no power to suspend the sentence after confirming the conviction. The appellate court becomes functus officio (having no further authority) upon confirming the conviction and cannot grant bail or suspend the sentence. The correct procedure would be for the accused to seek suspension of the sentence and bail from the High Court.

Conclusion:
The revision petition was allowed, and the conviction and sentence were quashed. The petitioner was acquitted and ordered to be released immediately if not required in any other case. The fine paid by the petitioner was to be refunded. The Sessions Judge's procedural error regarding the surrender order was noted for future rectification.