In ESI cases under Section 85(a) of the Employees’ State Insurance Act, 1948 stated that every Employers have to pay the contribution on time and if any employer deliberately or intentionally failed to pay any contribution under the Act. He or She will face the action under Section 85(a) of ESI Act 1948 which is a punishable offense, with penalties including a minimum of six months imprisonment or with fine upto Rs. 5,000/- as per court discretion.
Similarly there is separate section for Firms and Companies who have failed to pay the contribution or failed to provide the documents for purpose of inspection of unit.
The Concern official can sanction the Prosecution u/s 86 of ESI Act 1948 against the empower, Directors, Partners, Proprietor etc to initiate the proceeding before the Ld. Magistrate Court.
Section 85 in The Employees’ State Insurance Act, 1948
- Punishment for failure to pay contributions, etc.
(a)f If Any person fails to pay any contribution which under this Act he is liable to pay, or
(b) deducts or attempts to deduct from the wages of an employee the whole or any part of the employer’s contribution, or
(c)in contravention of section 72 reduces the wages or any privileges or benefits admissible to an employee, or
(d) in contravention of section 73 or any regulation dismisses, discharges, reduces or otherwise punishes an employee, or
(e) fails or refuses to submit any return required by the regulations, or makes a false return, or
(f) obstructs any Inspector or other official of the Corporation in the discharge of his duties, or
(g) is guilty of any contravention of or non-compliance with any of the requirements of this Act or the rules or the regulations in respect of which no special penalty is provided, he shall be punishable
(i) where he commits an offence under clause (a), with imprisonment for a term which may extend to three years but
(a) which shall not be less than one year, in case of failure to pay the employee’s contribution which has been deducted by him from the employee’s wages and shall also be liable to fine of ten thousand rupees;
(b) which shall not be less than six months, in any other case and shall also be liable to fine of five thousand rupees:
Provided that the court may, for any adequate and special reasons to be recorded in the judgment, impose a sentence of imprisonment for a lesser term;
(ii) where he commits an offence under any of the clauses (b) to (g) (both inclusive), with imprisonment for a term which may extend to one year or with fine which may extend to four thousand rupees, or with both.
