An employer's failure to deposit deducted contributions from employees' wages in accordance with the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, amounts to criminal breach of trust under sections 405 and 409 of the Indian Penal Code.

S. S. Sandhawalia, C. J.-These two connected writ petitions bring into the limelight a sad spectacle of a State Corporation flagrantly and glaringly violating the beneficent statutory provisions of the Employees' Provident' Funds and Miscellaneous Provisions Act; 1952 to the grave detriment of its own employees.

2. The facts which are hardly in dispute may be noticed from C.W.J.C. No. 1710 of 1984 Rajkiya Nalkup Karamchari Sangh v. The Bihar State Water Development Corporation Ltd. and others. Admittedly, the Bihar State Water Development Corporation Ltd. (hereinafter to be referred to as the 'Corporation') has been constituted as private limited company in pursuance of the Government resolution no. l216 dated the 31st of March, 1973 and further provision for its smooth function has been made by the ORDER :' of the State Government dated the 28th of February, 1974 (annexure 1). The respondent Corporation employed as many as 10,000 workers and has territorially divided its operations in two parts under two Chief Engineers, designated as Chief Engineer, South, and Chief Engineer North, and these zones are further divided into circles and divisions. The petitioner-Rajkiya Nalkup Karamchari Sangh-is a registered Union under the Trade Union Act and is working for the interest of the employees of the Irrigation Department and the Corporation with regard to its Muzaffarpur division which employs 739 officers and other staff. The respondent Corporation deducted the amounts from the emoluments of the aforesaid staff as the employees contribution to the contributory provident fund, general provident fund and group insurance even from November, 1973 onward till March, 1983. It has been categorically averred that these deductions were not deposited in accordance with law against the proper heads with the proper authorities nor any proper account thereof was maintained. The petitioner Union repeatedly raised this question before the respondent Corporation but was only given evasive assurance that the deductions from the salaries would be properly deposited. However, up till now the said amounts, though duly deducted from the salaries of the employees, have not been deposited in accordance with law by the respondent Corporation with the result that the said employees can't get any advance against the deposits and further due to the non deposit of the premium of insurance the families of several employees, (who have died), have been denied the benefit of the life insurance under the group insurance scheme.

3. The petitioner averred that the issue of the non-deposit of the employee's contribution was repeatedly raised before the respondent Corporation' and it then issued the Circular dated the 11th May, 1977 (annexure-2) to the respective divisions directing them to act in accordance with law. However, despite the issuance of this directive, respondents 2 and 3 paid no heed thereto which necessitated the issuance of another letter to all Superintending and Executive Engineers of the Corporation (annexure 3). Similar directives were later issued on the 18th of January, 1979 and 17th of September, 1982 (vide annexures 4 and 5 to the writ application). In express terms, it is averred that seven employees of the respondent Corporation in these divisions have died and their contributions were duly deducted against the group insurance scheme but were not deposited against the insurance heads resulting in total deprivation of their families of the benefit of the life group insurance scheme. With particularity it is averred that the following contributions have been deducted from the employees' wages but have not been deposited in the respective accounts by respondent no. 3;

"Contributory Provident

Fund (1973 to March, 1983) - Rs. 13,00,000/-

General Provident Fund - Rs. 30,000/-

Group Insurance - Rs. 3, 32,000/-

It is pointed out that the action of the respondents in failing to deposit is in clear violation of the provident Fund Act, the Bihar Co