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Priyanka Gupta Vs. Employees State Insurance Corporation - (High Court of Delhi) (19 Sep 2022)

Prosecution cannot be instituted in absence of sanction of the Insurance Commissioner



The present petition is filed under section 482 of Code of Criminal procedure, 1973 (Cr.P.C.) for quashing of complaint filed by the Respondent for the offence punishable under section 85(g) read with sections 45(2) and 86 of the Employee State Insurance Act, 1948 and all proceedings arising therefrom including order of summoning of the Petitioner.

The perusal of the complaint under section 85(g) of the Employees' State Insurance Act, 1948 reflects that, the Petitioner was made one of the accused and the sanction was only accorded against the Anil Kumar Gupta and HMR Institute of Technology and Management vide letter but no sanction was granted against the Petitioner.

Section 86 of Act, 1948 provides that, (1) No prosecution under this Act shall be instituted except by or with the previous sanction of the Insurance Commissioner [or of such other officer of the Corporation as may be authorized in this behalf by the [Director General of the Corporation]. [(2) No court inferior to that of a Metropolitan Magistrate or Judicial Magistrate of the First Class shall try any offence under this Act.] (3) No Court shall take cognizance of any offence under this Act except on a complaint made in writing in respect thereof."

The Allahabad High Court in Vishwanidhi Dalmia (Raja) V. Director, Employees' State Insurance Corporation and Ors. vide judgment and order while dealing with similar proceedings under the Employees State Insurance Act, 1948, quashed the complaint as no sanction was obtained for prosecution of the petitioner/Director under section 86 of the Act. It was held that sanction being mandatory no prosecution can be instituted against the petitioner/director. Consequently complaint against the Director was quashed. The Patna High Court in of Raj Kumar Sodera V. Chief Commissioner of Income Tax & Ors. vide judgment and order also quashed the prosecution of the petitioner in absence of Sanction in similar matter dealing with prosecution under the Income Tax Act.

It is true that no sanction was granted against the Petitioner as per section 86 of the Act, as such the prosecution cannot be launched against the Petitioner. Accordingly, the summoning order against the Petitioner is bad in the eyes of law and hence set aside. However, the Respondent shall be at liberty to initiate appropriate prosecution after according the sanction in accordance with law. Petition allowed.


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