EMPLOYEES STATE INSURANCE CORPORATIONversusA. K. ABDUL SAMAD & ANR.

                              [2016] 2 S.C.R. J 50


A         EMPLOYEES STATE INSURANCE CORPORATION
                                       v.
                      A. K. ABDUL SAMAD & ANR.
                 (Criminal Appeal Nos. I 065-1066 OF 2005)
B                              MARCH 10, 2016
           [DIPAK MISRA AND SHIVA KIRTI SINGH, JJ.)
           Employees' State Insurance Corporation Act, 1948:
    s.85(a)(i){b) - Whether the court has been given judicial discretion
    only to reduce the sentence of imprisonment for any term lesser
c   than six months or whether it also has discretion to levy no fine or
    a fine of less than five thousand rupees - Held: The courts have no
    discretion to reduce the fine amount once the offence has been
    established- The discretion as per proviso is confined only in respect
    of term of imprisoninent .
D
           Interpretation of statutes: When the wordings of the Statute
    are clear, no interpretation is required unless there is a requirement
    of saving the provisions from vice of u11co11stitutionality or absurdity.
          Allowing the appeals, the Court
E       HELD: Section 85(a)(i)(b) prescribes punishment for a
  particular offence as imprisonment which shall not be less than
  six months and the convict shall also be liable to fine of five
  thousand rupees. The proviso however empowers the court that
  it may, "for any adequate and special reasons to be recorded in
  the judgment, impose a sentence of imprisonment for a lesser
F term". The object of creating offence and penalty under the Act
  of 1948 is clearly to create deterrenc'e against violation of
  provisions of the Act which are beneficial for the employees. Non-
  payment of contributions is an economic offence and therefore
  the Legislature has not only fixed a minimum term of
G imprisonment but also a fixed amount of fine of five thousand
  rupees under Section 85(a)(i)(b) of the Act. There is no discretion
  of awarding less than the specified fee, under the main provision.
  It is only the proviso which is in the nature of an exception
  whereunder the court is vested with discretion limited to
  imposition of imprisonment for a lesser term. Conspicuously, no
H
                                  150
 EMPLOYEES STATE INSURANCE CORPORATION v. A. K.                          151
                  ABDUL SAMAb

words are found in the proviso for imposing a lesser fine than A
that of five thousand rupees. In such a situation the intention of
the Legislature is clear and brooks no interpretation. The law is
well settled that when the wordings of the Statute are clear, no
interpretation is required unless there is a requirement of saving
the provisions from vice of unconstitutionality or absurdity. B
Neither of the twin situations is attracted herein. Hence the
amount of fine has to be Rupees five thousand and the courts
have no. discretion to reduce the same once the offence has been
established. [Paras 1, 8 and 9] (152-B-C; 156-C-F]
      Sebastian (ji) Kunju v. State 1992 ·cri LJ 3642; Tetar
      Gope v. Ganauri Gope AIR 1968 Pat 287;Surinder                      c
      Kumar v. State (1987) 1 SCC 467;Pa/aniappa
      Gounder v. State of Tamil Nadu (1977) 2 SCC 634:1977
      (3) SCR 132; Zunjarrao Bhikaji Nagarkar v. Union of
      India (1999) 7 SCC 409:1999 (1) Suppl. SCR 87;
      Rajasthan Pharmaceutical Laboratory v. State of                     D
      Karnataka (1981) 1 SCC 645: 1981 (2) SCR 604;
      Chern Taong Shang v. S.D. Ba/jal (1988) 1 SCC 507:
      1988 (2) SCR 641 - referred to.
                        Case Law Reference
      1992 Cri LJ 3642                  referred to.    Para2             E
      Am 1968 Pat 287                   referred to.    Para2
      (1987) 1 sec 467                  referred to.    Para2
      1977 (3) SCR 132                  referred to.    Para2
             '
      1999 (1) Suppl. SCR 87            referred to.    Para4
                                                                          F
      1981 (2) SCR 604                  referred to.    Para4
      1988 (2) SCR 641                  referred to.    Paras·
      CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
Nos. I 065-1066 of2005
      From the Judgment and Order dated 09.01.2004 of the High Court      G
ofKarnataka at Bangalore in Criminal Revision Petitions No. 1326 and
1327 of2002
      Mahesh Srivastava, Vaibhav M. Srivastava, P. N. Puri, Advs., for
the Appellant.
                                                                          H
152                SUPREME COURT REPORTS                        [2016] 2 S.C.R.


A            P. B. Suresh, Vi pin Nair, Udayaditya Banerjee, Prithu Garg, Mis.
        Temple Law Firm, Advs. for the Respondents.
              The Judgment of the Court was delivered by
              SHIVA KIRTI SINGH, J. I. The question of law deserving
        adjudication in these appeals arises out of Section 85(a)(i)(b) of the
B       Employees' State Insurance Corporation Act (for brevity, 'the Act').
        The aforesaid statutory provision prescribes punishment for a particular
        offence as imprisonment which shall not be less than six months and the
        convict shall also be liable to fine of five thousand rupees. The proviso
        however empowers the court that it may, "for any adequate and special
c       reasons to be recorded in the judgment, impose a sentence of
        imprisonment for a lesser term;". The question to be answered is whether
        the court has been given judicial discretion only to reduce the sentence
        of imprisonment for any term lesser than six months or whether it also
        has discretion to levy no fine or a fine of less than five thousand rupees.

 D        2. The facts of the case lie in a very narrow compass. The case
   arises out of criminal proceedings initiated by the appellant- Employees
   State Insurance Corporation -under Section 85 of the Act for conviction
   and punishment of the respondents for failure to pay contributions required
   by the Act. Both the respondents faced trial before the Special Court
   for Economic Offences, Bangalore and were found guilty and were
 E inflicted with imprisonment till rising of the Court and fine of Rs. I 000/-.
   According to appellant, the fine amount could not have been reduced
   and ought to have been Rs.5000/- as per mandate of law. Hence tlie
   Corporation preferred Revision Petitions before the High Court of
    Karnataka at Bangalore. By the impugned judgment and order under
 F appeal   dated 09'" January 2004, the Division Bench of the High Court
    dismissed Criminal Revision Petition Nos.1326 and 1327 of2002 by
    placing reliance on judgments of Kerala High Court and Patna High
    Court respectively in the case of Sebastian (ti) Kun.in v. State 1992 Cri
    LJ 3642 and Tctar Gope v. Gunauri Gope AIR 1968 Pat 287 as well
    as two Supreme Court judgments in the case of Surinder Kumar v.
 G State (1987) I SCC 467 and Paianiappa Gounder v. State of Tamil
    Nadu ( 1977) 2 SCC 634.
                3. Before adverting to the submissions and the case law cited by
         the rival parties, it would be useful to notice relevant part of Section 85
         which is as under:
    H
EMPLOYEES STATE INSURANCE CORPORATION v. A. K.                                153
      ABDUL SAMAD [SHIVA KIRT! SINGH, J.]

     "85. Punishment for failure to pay contributions, etc. - If any          A
     person -
     (a) fails to pay any contribution which under this Act he is liable to
     pay, or
     (b) ........... .
      (c) ........... .                                                        B
      (d) ........... .
      (e) .•..........
      (t) ........... .
      (g) ........... .
                                                                               c
      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 D
      the employee's wages and shall also be liable to fine often 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 reason
                                                                           E
      to be recorded in the judgment, impose a sentence of imprisonment
      for a lesser term;
       .
      ( II') • • • • • • • • • •. •"
       4. Learned counsel for the appellant has relied upon judgment of
this Court in the case of Zunjarrao Bhikaji Nagarkar v. Union of F
India (1999) 7 SCC 409. In that case not imposing appropriate penalty
as required by law was one of the charges against the delinquent employee
in a departmental proceeding. In the context of the charge, in paragraphs
37, 38 and 39 of the Report, the judgment of a Single Judge of Patna
High Court in the case of Tetar Gope (supra) was noticed along with
its view that expression "shall also be liable to fine" in Section 325 of the G
Indian Penal Code does not mean that a sentence of fine must be imposed
in .every case of conviction for that offence. That view of Patna High
Court was noticed and then this Court over-ruled it as incorrect by holding
that the language of the Section made the sentence of both, imprisonment
and fine imperative and only the extent of fine has been left to the H
154            SUPREME COURT REPORTS                       [2016) 2 S.C.R.


A discretion of the Court. Forth is view, strength was derived from judgment
  in the case of Rajasthan Pharmaceutical Laboratory v. State of
  Karnataka (1981) I SCC 645 wherein a similar expression- "shall also
  be liable to fine" used under Section 34 of the Drugs & Cosmetics Act,
  1940 was analysed in the light of Section 27 of the said Act, in paragraph
  38 of the Report which is as follows:
B
          "38.        We do not think that the view expressed by the Patna
           High Court is correct as it would appear from the language of the
           section that sentences of both imprisonment and fine are
           imperative. It is the extent of fine which has been left to the
           discretion of the court. In Rajasthan Pharmaceutical Laboratory
c          v. State of Karnataka, ( 1981) I SCC 645 : 1981 SCC (Cri) 244
           this Court has taken the view that imprisonment and fine both are
           imperative when the expression "shall also be liable to fine" was
           used under Section 34 of the Drugs and Cosmetics Act, 1940. In
           that case, this Court was considering Section 27 of the Drugs and
D          Cosmetics Act, 1940, which enumerates the penalities for illegal
           manufacture, sale, etc., of drugs and is as under:
              '27. Whoever himself or by any other person on his behalf
              manufactures for sale, sells, stocks or exhibits for sale or
              distributes-
E             (a) any drug-
                  (i).                        •                         •
                  (ii) without a valid licence as required under clause (c) of
                      Section 18,
 F            shall be punishable with imprisonment for a term which shall
              not be less than one year but which may extend to ten years
              and shall also be liable to fine:
              Provided that the court may, for any special reasons to be
              recorded in writing, impose a sentence of imprisonment ofless
G             than one year;
              •                       •                        ..
  In view of language of Section 27(a)(ii) it was held that award of
  imprisonment and fine, both are imperative. The proviso to aforesaid
  Section 27 is similar in tone and tenor as the proviso to Section 85(i)(b)
H of the Act. In both the provisos there is no discretion vested in the Court
 EMPLOYEES STATE INSURANCE CORPORATION v. A. K.                                 155
       ABDUL SAMAD [SHIVA KIRT! SINGH, J.]

to do away with the fine. Additionally, under the8.ct, a minimum fine is        A
mandated by an explicit and specific provision.
       5. In the-case of Chern Taong Shang v. S.D. Baijal ( 1988) I
SCC 507 this Court had the occasion to consider the meaning and
implication of a clause··- "shall also be liable to confiscation'', occurring
in Section 13 of Maritime Zones of India (Regulation of Fishing by               B
Foreign Vessels) Act, 11981. Looking at the legislative intent to provide
deterrent punishment with a view of prohibit illegal fishing in exclusive
economic zones of India,· Section 13 was held to be mandatory and
therefore conviction had to follow penalty of confiscation once the offence
was established.
                                                                                 c
       6. Per contra, learned counsel for the respondents has supported
the impugned judgment which has held in favour of availability ofjudicial
discretion to impose a fine of even less than Rupees five thousand in
view of several judg:ments dealing with cases under the Indian Penal
Code wherein the word "shall" has been interpreted as an equivalent of
the word "may". Th'e submission is that if"shall" is read as "may" then D
the clause "and shall also be liable to fine of five thousand rupees" will
evidently be directo1ry in nature and shall vest judicial discretion in the
court to levy or not 1to levy fine which at the maximum can be Rupees
five thousand. In support of this stand reliance has been placed upon
two judgments of this Court arising out of convictions under Section 302 E
of the !PC. In the case of Palaniappa Gounder (supra) the Court was
called upon to decide 1the propriety of a particular quantum of fine in the
context ofSection 357( I )(c) of the Code of Criminal Procedure providing
for compensation to the victim of a crime. In the case of Surinder
Kumar (supra) this Co1urt again had the occasion to consider the propriety
of imposition of fine in a case of conviction under Section 302 of the F
JPC. In the facts of tlliat case the Court affirmed the conviction and
imprisonment for life b'ut set aside the tine of Rs.500/;.
        7. As noticed earllier, the interpretation given by Patna High Court
in the case of Tetar Gope {supra), on which learned counsel for the
respondents has placed reliance has already been over-ruled by this G
Court in the case of Zuinjarrao Bhikaji Nagarkar (supra). The
remaining judgment ir1 the case of Sebastian (iiJ Kun.in (supra) also
arose out of conviction under Section 302 of the IPC. In paragraph I I
of that judgment, the K~:rala High Court has placed reliance upon judgment
of Patna High Court in the ,;ase of Tetar Gope (supra).                      H
156              SUPREME COURT REPORTS                          [2016] 2 S.C.R.



A            8. In our considered view, the clause '"shall also be liable to fine",
      in the context of Indian Penal Code may be capable of being treated as
      directory and thus conferring on the court a discretion to impose sentence
      of fine also in addition to imprisonment although such discretion stands
      somewhat impaired as per the view taken by this Court in the case of
      Zunjarrao Bhikaji Nagarkar (supra). But clearly no minimum fine is
B
      prescribed for the offences under the IPC nor that Act was enacted
      with the special purpose of preventing economic offences as was the
      case in Cheri! Taong Shang (supra). The object of creating offence
      and penalty under the Employees' State Insurance Act, I 948 is clearly
      to create deterrence against violation of provisions of the Act which are
c     beneficial for the employees. Non-payment of contributions is an
      economic offence and therefore the Legislature has not only fixed a
      minimum term of imprisonment but also a fixed amount of fine of five
      thousand rupees under Section 85(a)(i)(b) of the Act. There is no
      discretion of awarding less than the specified fee, under the main
      provision. It is only the proviso whicl1 is in the nature of an exception
D
      whereunder the court is vested with discretion limited to imposition of
      imprisonment for a lesser term. Conspicuously, no words are found in
      the proviso for imposing a lesser fine than that of five thousand rupees.
      In such a situation the intention of the Legislature is clear and brooks no
      interpretation. The law is well settled that when the wordings of the
 E    Stature are clear, no interpretation is required unless there is a requirement
      of saving the provisions from vice of unconstitutionality or absurdity.
      Neither of the twin situations is attracted herein.
              9. Hence the question is answered in favour of the appellant and
      it is held that the amount of fine has to be Rupees five thousand and the
 F    courts have no discretion to reduce the same once the offence has been
      established. The discretion as per proviso is confined only in respect of
      term of imprisonment.
            IO. Accordingly the appeals are allowed. The respondents shall
      now be required to pay a fine of Rupees five thousand. If they have
 G    already paid the earlier imposed fine of Rs. I 000/-, they shall pay the
      balance or otherwise the entire fine of Rs.5000/- within six weeks and in
      defaultthe fine shall be realised expeditiously in accordance with law by
      taking recourse to all the available machinery.
      Devika Gujral                                                 Appeals allowed.

 H