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TMI Blog1979 (7) TMI 257X X X X Extracts X X X X X X X X Extracts X X X X ..... arch 31, 1970. The respondent No. 2 is the Regional Director of the Employees' State Insurance Corporation with whom the amount of contribution both of the employees 'and the employer's were required to be deposited. It is not in dispute that the company did deduct the employees' contribution from the wages payable to the employees but failed to deposit the same with respondent No. 2. 3. The State of Maharashtra issued a Notification dated July 9, 1969 under S. 3 and sub-clause (iv) of clause (a) of sub-s. (1) and S.4 of the Bombay Relief Undertaking (Special Provisions) Act, 1958. Under the said Notification, the Government of Maharashtra provided a guarantee for a period of one year commencing from July 9, 1969 and the Mill was to be conducted as a measure of unemployment relief act. The Notification further provided that during the period of one year any right, privilege, obligation or liability accrued or was to be incurred and any remedy for the enforcement thereof shall remain suspended. It also provided that all proceedings relating to such undertaking pending before any Court, Tribunal or authority shall be stayed. The Government of Maharashtra from time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel appearing for respondent No. 2, on the decision of the Supreme Court in the case of Inderjit C. Parekh and others v. V. K. Bhatt and another, 1974CriLJ906 , is appropriate. The Supreme Court pointed out that the personal liability of the Directors arising under the provisions of the Act is not suspended in view of the Notification issued under S. 4(1)(a)(iv) of the Bombay Relief Undertakings (Special Provisions) Act, 1958. In view of this decision, the submission of Mr. Joshi that the obligations or the liabilities of the Directors of the company also stand suspended, must be turned down. 6. The principal contention raised by the learned counsel appearing in support of the petition is that the Directors are not the principal employers as contemplated under S. 2(17) of the Act and, therefore, there is no personal obligation or liability to contribute the amounts required under the Act. To appreciate the submission of the learned counsel, it is necessary first to find out the Scheme of the Act. The Act No. 34 of 1948 was enacted on April 19, 1948 to provide for certain benefits to employee in case of sickness, maternity and employment injury and to make provision for cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eads as follows : (a) 'occupier' of a factory means the person who has ultimate control over the affairs of the factory, and where the said affairs are entrusted to a managing agent, such agent shall be deemed to he the occupier of the factory. It is the case of the respondents that the petitioners are the occupiers of the factory as they are the persons who have ultimate control over the affairs of the company. It is the submission of Mr. Nain that under the provisions of S. 291 of the Companies Act, it has been provided that the Board of Directors of a company shall be entitled to exercise all such powers, and to do all such acts and things, as the company is authorised to exercise and do. This Section undoubtedly makes the petitioners-Directors as the persons having ultimate control over the affairs of the company. Mr. Joshi, on the other hand, submitted that the Directors have no ultimate control over the affairs of the company, but it is the general body of the Shareholders who have ultimate control. The proposition as stated by the learned counsel cannot be debated but equally it cannot be disputed that the Board of Directors has got the ultimate control over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well-known that the company functions through its directors and officers and even though the company can be termed as an occupier, still there is no prohibition to treat the directors as also occupiers in addition to the company. In my judgment. while construing the beneficial legislation as the Employees' State Insurance Act, it must be held that the Directors of the company are principal employers being the occupiers of the factory. 9. Certain decisions have been pointed out by Mr. Nain in support of his submission that the Directors of a company are the principal employers liable to pay the contribution amount under S. 40 of the Act. The first decision relied upon by Mr. Nain is in the case of B. M. Chatterjee v. The State of West Bengal and another, AIR1970Cal290 . The learned single Judge of the Calcutta High Court while considering whether a Director of the company convicted under S. 85(a) read with S. 73A of the Act can be treated as a principal employer to sustain the conviction. Only a stray observation is made in paragraph 7 of the judgment after quoting the provisions of S. 2(17) of the Act that the accused as a director of the limited company is the owner. I Pail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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