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1991 Supreme(Bom) 259
IN THE HIGH COURT OF BOMBAY
B.N. Srikrishna, J.
Transport Corporation of India Limited others.... Petitioners.
Versus
R.M. Gandhi others .... Respondents.
Criminal Writ Petition No. 27 of 1987, decided on 12-6-1991.
Advocates appeared :
Ashok Bhogani i/by Ashok Bhogani Co., for the petitioners.
B.R. Patil, A.P.P., for respondents 1 and 3.
The bald averments in the complaint that the petitioners were in charge of the establishment and responsible for the conduct of its business were insufficient to attract the provisions of section 14-A(2) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.
Headnote:
EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 - SECTION 14-A - PROCESS AGAINST DIRECTORS - QUASHING - LIMITATION - SECTION 468(2)(B) OF THE CODE OF CRIMINAL PROCEDURE, 1973 - CONTINUING OFFENCE - SECTION 472 OF THE CODE OF CRIMINAL PROCEDURE, 1973 - DISTINCTION BETWEEN FAILURE TO PAY RETURNS AND FAILURE TO PAY CONTRIBUTIONS - SECTION 2(E) OF THE ACT - DEFINITION OF 'EMPLOYER' - SECTION 2(K) OF THE ACT - DEFINITION OF 'OCCUPIER OF A FACTORY' - PARAGRAPH 36-A OF THE SCHEME - PARTICULARS OF OWNERS, OCCUPIER, DIRECTOR, PARTNER, MANAGER OR ANY OTHER PERSON OR PERSONS WHO HAVE THE ULTIMATE CONTROL OVER THE AFFAIRS OF THE FACTORY OR ESTABLISHMENT - PARAGRAPHS 38(2) AND 43 OF THE SCHEME - SUBMISSION OF CONTRIBUTION CARDS AND THE CONCERNED FORMS - SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE, 1973 - POWER TO QUASH PROCEEDINGS - NON-APPLICATION OF MIND.
Fact of the Case:
The petitioners, directors of a textile mill, challenged the process issued against them by the Metropolitan Magistrate for contravention of the provisions of the Employees' Provident Fund Scheme, 1952. The complaint alleged that the petitioners failed to submit monthly consolidated statements and contribution cards within the prescribed period, thereby committing offenses under section 14(2) and 14-A of the Act, read with paragraph 76(b) of the Scheme.
Finding of the Court:
The court held that the complaint against the petitioners was liable to be quashed as it did not disclose any offense against them. The court observed that the bald averments in the complaint that the petitioners were in charge of the establishment and responsible for the conduct of its business were insufficient to attract the provisions of section 14-A(2) of the Act. The court further held that the complaint was barred by limitation under section 468(2)(b) of the Code of Criminal Procedure, 1973, as far as the offense pertaining to the year 1981-82 was concerned.
Issues: 1. Whether the complaint disclosed any offense against the petitioners? 2. Whether the complaint was barred by limitation?
Ratio Decidendi: 1. The court held that the complaint did not disclose any offense against the petitioners because the bald averments that the petitioners were in charge of the establishment and responsible for the conduct of its business were insufficient to attract the provisions of section 14-A(2) of the Act. The court observed that the provisions of the Act and the Scheme required the employer to submit the necessary forms and contribution cards, and that the employer alone could be held responsible for failure to discharge this legal obligation. 2. The court held that the complaint was barred by limitation under section 468(2)(b) of the Code of Criminal Procedure, 1973, as far as the offense pertaining to the year 1981-82 was concerned. The court observed that the offense was punishable with imprisonment for a term not exceeding one year and, therefore, the period of limitation was one year. Since the complaint was filed more than one year after the alleged offense was committed, it was barred by limitation.
Final Decision: The court quashed the complaint against the petitioners. The complaint against petitioner No. 1 was quashed in so far as the offense pertaining to the year 1981-82 was concerned. The complaint was allowed to proceed against accused No. 1 only with regard to the other offense alleged, viz., the offense pertaining to the year 1982-83.
2. The first petitioner is a limited company, which owns a textile mill known as Mukesh Textile Mills covered by the provisions of the Act. Petitioners 2 to 8 and 10 to 13 are the directors of the first petitioner, while petitioner No. 9 is said to be an ex-director. Petitioner No. 14 is the President of the Textile Division of the first petitioner. Respondent No. 1 is the Regional Director appointed under the Act who is in charge of administration and implementation of the Act in the appropriate region.
3. A complaint, being Case No. 1189/PF/1983, was filed by one G.R. Waze, Provident Fund Inspector, against all the petitioners. It was alleged therein that accused No. 1 (the first respondent herein) was a company/firm and accused No. 2 (petitioner No. 3 herein) was its Chairman. Accused No. 3 (petitioner No. 4 herein) was its Managing Director and accused Nos. 4 to 13 (petitioners 2, 5, 6, 7, 12, 8, 13, 11, 10 and 9, respectively, herein) were the directors and accused No. 14 (petitioner No. 14 herein) its President. After having described the various offices alleged to have been held by the different accused, the complainant stated in paragraph 4 as under :---
"Accused Nos. 2 to 14 are the persons in charge of the said establishment and are responsible to it for the conduct of its business. They are thus required to comply with all the provisions of the said Act and said scheme framed thereunder in respect of the said establishment."
It was further alleged in the said complaint that the accused had failed to submit to the Regional Provident Fund Commissioner a monthly consolidated statement in Form 12-A every month within 25 days of the close of that month, as required under paragraph 38(2) of the Employees' Provident Fund Scheme, 1952, and the contribution cards in Form No. 3-A and Form No. 6-A, as required under paragraph 43 of the Scheme, within the prescribed period. Thus, it was alleged that the accused had committed offences under section 14(2) and 14-A of the Act, read with paragraph 76(b) of the scheme, on or after 30th April 1982 and 30th April 1983. On this complaint, the learned Metropolitan Magistrate issued process and summonses came to be issued to the present petitioners. By the present petition, the petitioners have challenged the legality and validity of the process issued against them and prayed for quashing and/or setting aside the initiation of criminal proceedings against them.
3A. Shri Bhogani, learned Counsel for the petitioners, raised two contentions in support of his case. He contended, firstly, that the process issued against the petitioners is liable to be quashed, as the complaint itself does not disclose any offence against the petitioners. Referring to the provisions of the Act, he pointed out that, under section 14-A(1), if the person committing an offence under the Act, or the Scheme is a company every person, who was, at the time of the offence, in charge of and was responsible for the conduct of the business of the company, as well as the company, was liable to be proceeded against and punished. Under the said section, all or any director of a company cannot be prosecuted unless it is at least shown, prima facie, that the director was in charge of and was responsible to the company for the conduct of the business of the company. His further contention is that the averments in the beginning portion of paragraph 4 of the complaint before the learned Magistrate were made baldly, without
