Jagdeep Singh Rekhi vs Employee State Insurance Corporation

CRM-M-51080-2023 (O&M) -:1:-
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
( 114 )
CRM-M-51080-2023 (O&M)
Date of Decision: 08.09.2026
JAGDEEP SINGH REKHI
… Petitioner
Versus
EMPLOYEE STATE INSURANCE CORPORATION
... Respondent
-.-
CORAM: HON'BLE MR. JUSTICE VIRINDER AGGARWAL
Present:- Mr. Rohan Garg, Advocate
for the petitioner.
Mr. Anil Shukla, Advocate
for the respondent.
-.-
VIRINDER AGGARWAL , J . (Oral)
1. The present petition under Section 482 of the Code of
Criminal Procedure, 1973 has been preferred seeking quashing of the
complaint (Annexure P-1) bearing CNR No. CHCH030096542022, Filing
No. 9650/2022 in COMA No. 3905/2022, titled Employee State Insurance
Corporation vs. M/s Busicon, instituted under Section 85(g) of the
Employees’ State Insurance Act, 1948, and pending before the Chief
Judicial Magistrate, Chandigarh, along with the consequential summoning
order dated 22.08.2022 (Annexure P-6) passed by Dr. Aman Inder Singh,
Chief Judicial Magistrate, Chandigarh. The principal ground urged by the
petitioner is that the Trial Court failed to appreciate that the petitioner
neither is the proprietor/owner of M/s Busicon nor has any role or
responsibility in its day-to-day affairs and, consequently, no vicarious
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CRM-M-51080-2023 (O&M) -:2:-
liability can be fastened upon him merely on account of his association
with the said concern.
1.1. It is further prayed that the order dated 25.08.2023 (Annexure
P-7), whereby proceedings under Section 82 of the Code of Criminal
Procedure, 1973 were initiated against the petitioner, be also quashed and
set aside, as the statutory requirements governing issuance and publication
of proclamation have not been duly complied with and no valid or
effective service thereof was effected upon the petitioner. It is asserted that
the petitioner has no concern whatsoever with M/s Busicon, which was
admittedly a sole proprietorship concern of his father. The petitioner
accordingly seeks stay of further proceedings pending before the Trial
Court arising out of the aforesaid complaint, during the pendency of the
present petition.
2. Learned counsel for the petitioner submits that the
proceedings initiated against the petitioner are without jurisdiction, as the
alleged offence is triable by the Special Court constituted as the
Employees’ State Insurance Court under the ESI Act. It is contended that
M/s Busicon was the sole proprietorship concern of the petitioner’s father,
who expired on 05.02.2020, and the petitioner had neither any connection
with nor any role in the affairs of the said concern. It is submitted that
notices were thereafter issued through e-mail dated 07.12.2021 and
registered post on 06.12.2021 and 10.12.2021 to the residential address of
the petitioner, alleging failure to produce the records of the proprietorship
concern and calling upon him to show cause as to why proceedings for
commission of an offence under Section 85(g) of the ESI Act, 1948 be not
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CRM-M-51080-2023 (O&M) -:3:-
initiated against him on the premise that he was the legal representative of
the deceased proprietor. Learned counsel contends that the petitioner is
independently engaged in his own business and has never dealt with or
managed the affairs of his late father’s concern. It is further submitted that,
during the lifetime of the petitioner’s father, a letter of arrangement had
been executed whereby Harbachan Singh was appointed as General Power
of Attorney to manage the accounts and affairs of the firm. It is also
pointed out that the petitioner has two other siblings, yet the complaint has
selectively proceeded against the petitioner alone.
2.1. Learned counsel further submits that the petitioner does not
fall within the statutory definition of “principal employer” under Section
2(17) of the ESI Act. It is argued that Sections 75 and 76 of the ESI Act,
1948 constitute an express statutory framework governing the jurisdiction
and adjudication of disputes arising under the enactment and, being a
special legislation, the provisions of the ESI Act would prevail over the
general provisions of the Cr.P.C. It is, accordingly, contended that the
summoning order passed by the learned Chief Judicial Magistrate suffers
from non-application of mind and failure to examine the petitioner’s
foundational liability under the Act. Learned counsel further assails the
proceedings declaring the petitioner a proclaimed person, contending that
the mandatory preconditions of Section 82 Cr.P.C. were not satisfied,
inasmuch as no bailable or non-bailable warrants had been issued against
or duly executed upon the petitioner prior to initiation of proclamation
proceedings. On these premises, quashing of the impugned proceedings
has been prayed for.
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CRM-M-51080-2023 (O&M) -:4:-
3. Per contra, learned counsel appearing for the respondent has
vehemently opposed the present petition, submitting that the complaint
discloses sufficient prima facie material warranting continuation of
proceedings against the petitioner and that the defence sought to be
projected involves disputed questions of fact, which cannot be adjudicated
in exercise of the inherent jurisdiction of this Court. It is contended that
the petitioner’s pleas that M/s Busicon was exclusively the proprietorship
concern of his deceased father, that he had no role in its affairs, and that
Harbachan Singh had been appointed as General Power of Attorney are
matters requiring appreciation of evidence and cannot be conclusively
determined at this stage. The subsequent demise of the proprietor,
according to learned counsel, does not ipso facto absolve the petitioner of
the statutory obligations alleged against him, particularly when he was
proceeded against as the legal representative of the deceased proprietor.
3.1. Learned counsel further submits that the objection regarding
jurisdiction under Sections 75 and 76 of the ESI Act is misconceived and
that the petitioner has failed to demonstrate any express statutory bar
against prosecution before the competent criminal Court for the offence
alleged under Section 85(g) of the ESI Act. It is argued that the petitioner’s
status and liability under Section 2(17) of the ESI Act also involve mixed
questions of fact and law, incapable of determination merely on the basis
of the petitioner’s defence. As regards the proclamation proceedings, it is
submitted that the same were initiated upon the petitioner’s failure to
appear despite due process and that no patent illegality or jurisdictional
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CRM-M-51080-2023 (O&M) -:5:-
infirmity has been demonstrated. Dismissal of the present petition has
accordingly been prayed for.
4. Having heard learned counsel for the parties and upon
meticulous examination of the record with their able assistance, this Court
proceeds to consider the rival submissions in the light of the statutory
framework governing the controversy.
5. Learned counsel for the petitioner places reliance upon
Section 2(17) of the ESI Act, 1948, to contend that the petitioner does not
fall within the statutory definition of “principal employer” and,
consequently, cannot be fastened with the liability which, under the
scheme of the Act, attaches to the principal employer. In order to
appreciate the aforesaid contention, it would be apposite to advert to the
statutory definition contained in Section 2(17) of the ESI Act, 1948, which
reads as under:-
17) "principal employer" means:-
(i) in a factory, the owner or occupier of the factory and
includes the managing agent of such owner or occupier,
the legal representative of a deceased owner or occupier,
and where a person has been named as the manager of the
factory under the Factories Act, 1948 (63 of 1948), the
person so named;
ii) in any establishment under the control of any department
of any Government in India, the authority appointed by
such Government in this behalf or where no authority is
so appointed, the head of the department;
(iii) in any other establishment, any person responsible for the
supervision and control of the establishment;
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5.1. Learned counsel for the petitioner has also placed reliance
upon the judgment of the Rajasthan High Court in Mohan Dass vs.
Regional Director, Employees State Insurance Corporation, Jaipur,
1964 Cri.LJ 612 , wherein the petitioner therein was prosecuted for an
offence punishable under Section 85-A of the ESI Act on the allegation of
default in payment of employees’ contribution to the Corporation. The
petitioner had assailed the prosecution, inter alia , on the ground that,
having severed his association with the firm, he could not be treated as the
“principal employer” liable to discharge the employer’s contribution. The
Rajasthan High Court, in the factual context obtaining therein, held that
the question as to whether the petitioner was liable to pay the employer’s
contribution fell within the ambit of Section 75 of the ESI Act and,
therefore, was required to be adjudicated by the Employees’ Insurance
Court.
5.2. Reliance has further been placed upon Regional Director,
Employees State Insurance Corporation, Delhi vs. Ram Lakhan Pandey,
1960 PLR 517 , wherein the controversy related to the entitlement of the
petitioner to medical benefit, his medical certificate having been declined
by the Regional Director. The Circuit Bench of this Court held that the
discretion exercised by the Corporation had been exercised in an arbitrary
manner. It was further observed that there was no analogy between the
jurisdiction of the Employees’ Insurance Court to adjudicate matters
specifically enumerated under Section 75 of the ESI Act and the
jurisdiction of ordinary Civil Courts, whether original or appellate, to
review the exercise of discretion by a domestic tribunal. The Employees’
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CRM-M-51080-2023 (O&M) -:7:-
Insurance Court, being a special tribunal constituted for adjudication of
controversies falling within the ambit of Section 75, exercises jurisdiction
within the statutory field specifically assigned to it.
5.3. The reliance placed by learned counsel for the petitioner upon
the judgment of the Calcutta High Court in Biresh Bhattacharjeet and
Others vs. The Employees State Insurance Corporation, 2017(1) CLR
119 , however, does not advance the petitioner’s case, the said decision
being rendered in a materially different factual and legal context. In that
case, the Calcutta High Court was concerned with the maintainability of a
complaint against the Directors of a Private Limited Company without
impleading the company itself as an accused. The controversy herein is
fundamentally distinct and pertains to the statutory liability sought to be
fastened upon the petitioner in the context of the status attributed to him
under the ESI Act. It would, therefore, be apposite to notice the matters
specifically falling within the jurisdiction of the Employees’ Insurance
Court under Section 75(1) of the ESI Act, which reads as under:-
75. Matters to be decided by the Employees' Insurance Court.
(1) If any question or dispute arises as to
(a) whether any person is an employee within the meaning of
this Act or whether he is liable to pay the employee's
contribution, or
(b) the rate of wages or average daily wages of an employee
for the purposes of this Act, or
(c) the rate of contribution payable by a principal employer in
respect of any employee, or
(d) the person who is or was the principal employer in respect
of any employee, or
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CRM-M-51080-2023 (O&M) -:8:-
(e) the right of any person to any benefit and as to the amount
and duration thereof,
or
(ee) any direction issued by the Corporation under section 55-A
on a review of any payment of dependants' benefits, or
(f) Clause (f) omitted, ibid.
(g) any other matter which is in dispute between a principal
employer and the Corporation, or between a principal
employer and an immediate employer, or between a person
and the Corporation or between an employee and a
principal or immediate employer, in respect of any
contribution or benefit or other dues payable or recoverable
under this Act, or any other matter required to be or which
may be decided by the Employees' Insurance Court under
this Act,
such question or dispute subject to the provisions of sub-
section (2A) shall be decided by the Employees' Insurance
Court in accordance with the provisions of this Act.
6. The statutory scheme makes a clear distinction between the
adjudicatory jurisdiction of the Employees’ Insurance Court under Section
75 of the ESI Act and the criminal jurisdiction contemplated under Section
86(2) thereof. While matters falling within Section 75 are amenable to
adjudication by the Employees’ Insurance Court, offences punishable
under Section 85 of the ESI Act are expressly required, by virtue of
Section 86(2), to be tried by a Court of a Judicial Magistrate First Class.
The mere conferment of certain powers upon the Employees’ Insurance
Court under Section 78 of the ESI Act cannot, therefore, be construed as
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CRM-M-51080-2023 (O&M) -:9:-
conferring upon it jurisdiction to conduct a criminal trial for an offence
punishable under Section 85 of the Act.
6.1. In the present case, the foundational objection to the jurisdiction of
the criminal Court is wholly misconceived. The petitioner admittedly is
the son of the sole proprietor of M/s Busicon, who expired on 05.02.2020,
and his status as one of the legal representatives of the deceased proprietor
is not in dispute. The alleged General Power of Attorney executed by the
petitioner’s father in favour of Harbachan Singh cannot, after the demise
of the principal, be relied upon to perpetuate or establish any subsisting
authority on behalf of the deceased proprietor, the authority conferred
under a power of attorney ordinarily ceasing upon the death of the
principal. The petitioner’s contention that he has two other siblings also
does not, by itself, efface his status as a legal representative of the
deceased proprietor; nor does the alleged non-prosecution of his siblings
confer any immunity upon him from the statutory proceedings. The
liability of each person has necessarily to be assessed on the basis of the
material and circumstances pertaining to such person.
6.2. Consequently, the question arising before this Court is not
whether the Employees’ Insurance Court could adjudicate matters falling
within Section 75 of the ESI Act, but whether it possesses jurisdiction to
try the offence alleged against the petitioner under Section 85(g). Section
86(2) furnishes an explicit answer by conferring such criminal trial
jurisdiction upon a Court of the Judicial Magistrate First Class. Section 78,
which merely clothes the Employees’ Insurance Court with specified
powers akin to those of a Civil Court for purposes of summoning
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CRM-M-51080-2023 (O&M) -:10:-
witnesses and compelling discovery and production of documents, cannot
be elevated into a source of criminal trial jurisdiction which the statute
itself has expressly vested in the Judicial Magistrate First Class. The
complaint, therefore, has been instituted before the competent Court in
conformity with Section 86(2) of the ESI Act, and the authorities relied
upon by the petitioner, dealing with matters falling within the statutory
domain of Section 75, do not advance his case for quashing of the
complaint or the summoning order.
6.3. As regards the proceedings initiated by the learned Chief
Judicial Magistrate for declaring the petitioner a proclaimed offender and
the consequential order declaring him so, it would be apposite to examine
the order dated 25.08.2023 passed by the learned Chief Judicial
Magistrate, which reads as under:-
“Notice issued to the accused received back unexecuted. Ld. Counsel for
the complainant stated at bar that this is the last known correct address of
accused available with the complainant. Despite issuance of notice to the
said accused, his presence could not be secured nor he has himself
surrendered before the Court till now. In view of the report that notice
has been received back unexecuted and in view of the statement made by
Ld. Counsel for the complainant that this is the last known address of the
accused, this Court is satisfied that the presence of the said accused
cannot be secured through issuance of notice/summons. Therefore,
presence of the accused is ordered to be secured through proclamation
U/Sec. 82 Cr.P.C. for 11.10.2023. The executing official is also directed
to come present in person in the Court on the said date for recording his
statement regarding publication of proclamation against the accused.”
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CRM-M-51080-2023 (O&M) -:11:-
6.4. A perusal of the aforesaid order reveals that, upon the notice
issued to the petitioner having been returned unexecuted, the learned Chief
Judicial Magistrate proceeded to invoke Section 82 Cr.P.C. straightaway,
without there being any preceding issuance of bailable or non-bailable
warrants against the petitioner. Such a course of action is ex facie contrary
to the statutory scheme governing proclamation proceedings. Invocation of
Section 82 Cr.P.C. is not an automatic or mechanical consequence of non-
service or return of a notice; rather, the provision predicates the existence
of valid judicial process and a judicial satisfaction, founded upon material
circumstances, that the person against whom warrants have been issued
has either absconded or is concealing himself so as to evade execution
thereof. In the absence of any prior attempt to secure the petitioner’s
presence through issuance and execution of the requisite warrants, the
foundational jurisdictional condition for invoking Section 82 Cr.P.C.
cannot be said to have been satisfied. The learned Chief Judicial
Magistrate, therefore, appears to have proceeded in a manner not
sanctioned by the statutory framework, warranting interference with the
consequential proclamation proceedings. Section 82 Cr.P.C. reads as
under:-
Section 82 of the Code of Criminal Procedure, 1973 provides for
“Proclamation for person absconding.” The provision, in substance,
contemplates the following:-
1. Issuance of warrant is a prerequisite: Where a Court has
issued a warrant against a person, and the Court has reason to
believe that such person has absconded or is concealing himself
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CRM-M-51080-2023 (O&M) -:12:-
so that the warrant cannot be executed, the Court may issue a
written proclamation requiring him to appear.
2. Time for appearance: The proclamation must specify the place
and time of appearance, and the date fixed must be not less than
30 days from the date of publication of the proclamation.
3. Mode of publication: The proclamation is required to be
published by:-
i. publicly reading it in some conspicuous place of the town
or village where the person ordinarily resides;
ii. affixing it to some conspicuous part of the house or
homestead in which he ordinarily resides, or to some
conspicuous place of such town or village; and
iii. affixing a copy to some conspicuous part of the Court-
house.
4. Publication in newspaper: The Court may also direct
publication of the proclamation in a daily newspaper circulating
in the place where the person ordinarily resides.
5. Declaration as proclaimed offender: In cases where the person
is accused of an offence punishable with imprisonment for ten
years or more, imprisonment for life, or death, and fails to appear
in accordance with the proclamation, the Court may, after
following the statutory procedure, make a declaration that he is a
proclaimed offender.
6. Purpose of the provision: Section 82 Cr.P.C. is intended to
secure the appearance of an accused who is deliberately evading
the process of law by absconding or concealing himself.
7. A conjoint reading of the provisions contained in Section 82
Cr.P.C. leaves no manner of doubt that issuance of a warrant against the
person sought to be proceeded against is a sine qua non for assumption of
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CRM-M-51080-2023 (O&M) -:13:-
jurisdiction under the said provision. Section 82(1) Cr.P.C. expressly
contemplates that the Court must first form an opinion, upon the basis of
relevant material, that a person against whom a warrant has been issued
has absconded or is concealing himself so as to evade execution of such
warrant. The statutory scheme thus envisages a definite and sequential
progression: issuance of a valid warrant; failure of its execution
attributable to the person’s abscondence or concealment; and a judicial
satisfaction to that effect, whereafter proclamation proceedings may be
resorted to. Such preconditions are not matters of mere procedural
formality but constitute jurisdictional safeguards intended to ensure that
the coercive machinery under Section 82 Cr.P.C. is not invoked
mechanically or as a substitute for ordinary process.
7.1. In the present case, the aforesaid foundational requirement
stands conspicuously unfulfilled. Upon the notice issued to the petitioner
having been returned unexecuted, the learned Chief Judicial Magistrate
proceeded directly to initiate proceedings under Section 82 Cr.P.C.,
without there being any prior issuance of bailable or non-bailable warrants
against the petitioner and, consequently, without any legally sustainable
basis for recording the requisite satisfaction regarding his abscondence or
concealment. Mere non-service or return of a notice unexecuted, in the
absence of a preceding warrant and the requisite judicial satisfaction
contemplated under Section 82(1) Cr.P.C., could not have validly triggered
the proclamation jurisdiction. The proceedings initiated under Section 82
Cr.P.C. and the consequential order declaring the petitioner a proclaimed
person are, therefore, vitiated at their very inception and cannot be
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CRM-M-51080-2023 (O&M) -:14:-
sustained in law. Accordingly, the proceedings under Section 82 Cr.P.C.,
including the order declaring the petitioner a proclaimed person, are
hereby quashed and set aside.
7.2. The petitioner is, however, directed to surrender before the
Trial Court and file an application seeking regular bail. In the event of
such application being filed, the Trial Court shall consider and decide the
same, strictly in accordance with law, expeditiously and preferably within
a period of 07 days from the date of its filing.
8. In view of the foregoing discussion and the relief granted
here-in-above, the present petition stands partly allowed in the aforesaid
terms.
9. In view of the final adjudication of the principal proceedings,
all pending miscellaneous applications, if any, arising therefrom or
ancillary thereto, shall stand disposed of accordingly. No separate or
further orders are warranted in respect thereof, the reliefs sought therein
having consequently been rendered infructuous.

( VIRINDER AGGARWAL )
08.09.2026 JUDGE
Gaurav Sorot
Whether reasoned / speaking? Yes / No
Whether reportable? Yes / No
GAURAV SOROT
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