Bombay High Court

EMPLOYEES STATE INSURANCE CORPORATIONversusM/S. SAWANTWADI LUNCH HOME

Decided: 28 January 2026
Disposal: Dismissed
Bench: R N LADDHA

Holding

The prosecution failed to prove the employer relationship and the offence, so the acquittal stands.

Summary

The Employees' State Insurance Corporation (ESIC) filed a criminal revision against M/s Sawantwadi Lunch-Home for alleged non‑payment of statutory ESI contributions, seeking to overturn an acquittal granted by the Metropolitan Magistrate under Section 85(a) of the Employees' State Insurance Act, 1948. The prosecution alleged that the establishment, a factory under Section 2(12) of the Act, failed to remit contributions for July‑September 2001, violating Sections 39 and 40 of the Act and Regulation 31 of the ESI (General) Regulations, 1950. At trial only one prosecution witness, an insurance inspector, testified and no documentary evidence such as appointment letters or statutory filings was produced. The High Court examined whether the prosecution had discharged its burden of proving that the accused was the employer responsible for the contributions. Finding the witness lacked personal knowledge of the employer‑employee relationship and noting the complete absence of supporting documents, the Court concluded that the essential ingredients of the offence were not established. Consequently, the Court affirmed the trial court’s acquittal and dismissed the revision application.

Issues considered

Did the prosecution establish that the respondent was the employer liable for ESI contributions under the Employees' State Insurance Act?
Was the evidence sufficient to prove the offence punishable under Section 85(a) of the Act?
Can the trial court's acquittal be set aside on revision?

Legislation cited

Employees' State Insurance Act, 1948 — s. 2(12), 39, 40, 85(1)(b), 85(a)

Subjects

Employees' State Insurance Act
non‑payment of contributions
employer liability
criminal revision
burden of proof
acquittal
Section 85
statutory contributions

Judgment

Digitally
signed by
CHITRA
CHITRA SANJAY
SANJAY SONAWANE
SONAWANE Date:
2026.01.29
19:47:56
+0530

Chitra Sonawane. 24-CRA-47-2008.docx

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CRIMINAL APPELLATE JURISDICTION

Criminal Revision Application No.47 of 2008

Employees' State Insurance Corporation,
Panchdeep Bhavan,
NM Joshi Marg, Lower Parel,
Mumbai - 400 013 … Applicant
Versus
1. M/s Sawantwadi Lunch-Home,
6, Radha Niwas,
Kabootarkhana, Dadar (W),
Mumbai - 400 028
2. State of Maharashtra … Respondents
----
None for the applicant.
None for respondent No.1.
Ms RS Tendulkar, APP, for respondent No.2/ State.
----
Coram: R.N. Laddha, J.
Date: 28 January 2026.
P.C.:

The present revision application calls into question the
defensibility and legal sustainability of the judgment and order
dated 20 April 2007, passed by the learned Metropolitan
Magistrate, 25th Court, Mazgaon, Mumbai, in CC
No.99/E/2002, whereby the accused were acquitted of the
offence punishable under Section 85(a) of the Employees’ State
Insurance Act, 1948 (hereinafter referred to as ‘the ESI Act’).

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Chitra Sonawane. 24-CRA-47-2008.docx

2. When the matter was called out for hearing today, none
appeared on behalf of the applicant and respondent No.1. It is
a settled position in law that, notwithstanding the absence of a
party or his counsel, a criminal revision application cannot be
dismissed in default and must be disposed of upon
consideration of the merits. With the able assistance of the
learned APP representing respondent No.2/State, I have
perused the entire record and proceedings.

3. The case of the prosecution, as emerging from the
complaint, is that the applicant had filed Criminal Case No.
99/E/2002 before the learned Metropolitan Magistrate, 25th
Court, Mazgaon, Mumbai, against respondent No.1 and its
Manager (arrayed as original accused No.1, since deceased) for
alleged non-payment of statutory contributions payable to the
Employees’ State Insurance Corporation.

4. It is the prosecution’s contention that respondent No.1 is
a factory duly covered under Section 2(12) of the ESI Act and
was allotted Code No. 31-15403-112. It is further alleged that,
in terms of Section 40 of the ESI Act, respondent No.1 was
under a statutory obligation to pay contributions in respect of
every employee, whether employed directly or through an
immediate employer, comprising both the employees’
contribution and the employer’s contribution, at the rates

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Chitra Sonawane. 24-CRA-47-2008.docx

prescribed under Rule 31 of the ESI (Central) Rules, 1950.
Such contributions were required to be paid within the time
prescribed under Regulation 31 of the ESI (General)
Regulations, 1950.

5. According to the prosecution, respondent No.1 failed to
remit the requisite contributions for the wage periods ending
July 2001, August 2001 and September 2001, which were
payable on or before 21st August 2001, 21st September 2001
and 21st October 2001 respectively, aggregating to a sum of
Rs.6,971/-.

6. It is alleged that by failing to pay the said contributions
within the stipulated time, respondent No.1 violated the
provisions of Sections 39 and 40 of the ESI Act read with
Regulation 31 of the ESI (General) Regulations, 1950, thereby
committing an offence punishable under Section 85(a) read
with Section 85(1)(b) of the ESI Act.

7. It is further the case of the prosecution that, consequent
upon such default, the Joint Director of the Employees’ State
Insurance Corporation, Mumbai, accorded sanction to
prosecute respondent No.1, and pursuant to the said sanction,
the present complaint came to be filed before the learned
Magistrate.

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Chitra Sonawane. 24-CRA-47-2008.docx

8. During the trial, the prosecution examined only one
witness, namely PW-1, Shri SR Rane, the Insurance Inspector.
Except for the sanction order, no other documentary evidence
was produced. After considering the material on record, the
learned trial Court held that the prosecution failed to establish
the essential ingredients of the offence and acquitted the
accused. Dissatisfied, the applicant preferred the present
revision application.

9. Upon a careful and circumspect perusal of the oral and
documentary evidence on record, this Court finds that the
foundational burden cast upon the prosecution was to
conclusively establish that respondent No.1 (original accused
No.2) was the employer of accused No.1 during the relevant
and disputed period and that they were statutorily liable to
deposit the ESI contributions in accordance with law. It is
manifest from the testimony of the sole prosecution witness,
PW-1, that he admittedly did not conduct any personal
inspection of respondent No.1’s premises. It can be gathered
from the evidence of PW 1 that he neither verified the statutory
records of the establishment nor possessed any personal
knowledge regarding the management, control or operational
affairs of respondent No.1. PW-1 was unable to depose, from
his own knowledge, as to the precise role, designation, or legal

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Chitra Sonawane. 24-CRA-47-2008.docx

status of accused No.1 in relation to the said establishment.
More importantly, the prosecution has failed to place on record
any documentary evidence whatsoever; such as appointment
letters, partnership deed, ownership records, statutory filings,
or any other contemporaneous documents, to substantiate its
assertion that accused No.1 was managing or controlling the
day-to-day affairs of respondent No.1 or that he was the person
responsible for ensuring payment of ESI contributions during
the relevant period. In the absence of any cogent, credible, or
reliable oral testimony, coupled with a complete lack of
supporting documentary material, the prosecution has
conspicuously failed to discharge its burden of proving, beyond
a reasonable doubt, that respondent No.1 was the employer
with in the meaning of ESI Act or that he was legally
accountable for the alleged non-payment of statutory
contributions.

10. In such circumstances, this Court finds no infirmity or
perversity in the findings recorded by the learned trial Court.
The conclusion that the prosecution failed to establish the
essential ingredients of the offence alleged against the accused
is well reasoned, based on the evidence on record, and calls for
no interference.
[R.N. Laddha, J.]

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28 January 2026

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