SURESH TULSIDAS KAILACHAND Vs. COLLECTOR OF BOMBAY

JUDGEMENT

(1.) This petition raises an interesting question as to whether the Directors of a Public Limited Company are principal employers within the meaning of S. 2 (17) of the Employees ' State Insurance Act, 1948 (hereinafter referred to as the "Act").

(2.) The facts which have given rise to this petition are not in dispute and are briefly as follows : The petitioners were Directors of Digvijay Spinning and Weaving Company Ltd., a company registered under the Indian Companies Act, 1913 (hereinafter referred to as the "company"). The petitioners ceased to be directors from July 9, 1969 onwards. The company owned a textile mill and as required by the Act, the company was required to contribute an amount of Rs. 3,95,112.53 towards the employees' contribution for the quarter ending June 30, 1968 and September 30, 1968. The company was also required to make contribution towards employer's contribution of an amount of Rs. 3,33,403 for the quarter ending December 31, 1968 to March 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 to time issued notifications extending the period fixed under the first Notification.