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2013 Supreme(Cal) 157
IN THE HIGH COURT AT CALCUTTA
TOUFIQUE UDDIN, J.
In re : M/s. Jenson Nicholson (India) Limited & Anr. - Petitioner
CRR No. 128 of 2005
Decided On : 1.4.2013
For the petitioners: Mr. Sandipan Ganguly Mr. Shiladitya Banerjee
For the O.P. No. 2: Mr. Anil Kr. Gupta
For the State: Mr. Amartya Ghosh
A Director of a company who is in charge of and responsible for the conduct of the business of the company can be prosecuted under Section 14A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 for violation of the Provident Fund Scheme.
Headnote:
EMPLOYEES PROVIDENT FUND - QUASHING OF PROCEEDINGS - EMPLOYEES PROVIDENT FUND & MISCELLANEOUS PROVISIONS ACT, 1952 - SECTION 14A - SECTION 2(E) - SECTION 40 - SECTION 6 - CRIMINAL PROCEDURE CODE, 1973 - SECTION 482 - Whether a Director of a company can be prosecuted under Section 14A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 for violation of the Provident Fund Scheme when in Form 5A, Columns 8 and 11 the Director has declared himself as one of the persons in charge of and responsible for conduct of the business of the establishment or the factory. Whether subsequent deposit of the defaulted amount long after lapse of time absolves the defaulters for the prosecution and punishment.
Fact of the Case:
The petitioner, a Director of a company, was prosecuted under Section 14A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 for violation of the Provident Fund Scheme. The petitioner contended that he was not responsible for the day-to-day affairs of the company and that the proceedings against him should be quashed.
Finding of the Court:
The court held that the petitioner, as a Director of the company, was responsible for the day-to-day affairs of the company and that there was no evidence to show that there were other management officials who were at the helms of deducting the portion of the provident fund from the employees and the remittance of the same to the provident fund authority. The court further held that the subsequent deposit of the defaulted amount long after lapse of time did not absolve the defaulters for the prosecution and punishment.
Issues: 1. Whether a Director of a company can be prosecuted under Section 14A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 for violation of the Provident Fund Scheme when in Form 5A, Columns 8 and 11 the Director has declared himself as one of the persons in charge of and responsible for conduct of the business of the establishment or the factory. 2. Whether subsequent deposit of the defaulted amount long after lapse of time absolves the defaulters for the prosecution and punishment.
Ratio Decidendi: 1. The court held that the expression, ‘was in charge of and was responsible to the company for the conduct of the business’ are very wide in their import. It could not, therefore, be confirmed to employer only. 2. The court held that the subsequent payments even though accepted will not constitute condonation of the offence itself.
Final Decision: The court dismissed the revision petition.
This is an application under Section 482 of the Code of Criminal Procedure, 1973 for quashing of proceedings in G. R. No. 2131/04 pending before the learned Chief Metropolitan Magistrate, Calcutta arising out of Shakespeare Sarani P.S. Case no. 312 dated 19.8.2004 under Section 406/34 IPC.
2. In the background of this revision the fact in a nutshell is that the petitioner no. 1 is a public limited company having its registered office at 7B, Middleton Street, Calcutta-700 071. The petitioner no. 2 is a former Director in petitioner no. 1 company. At no material point of time, he was in-charge and responsible to the petitioner no. 1 company for running its day-to-day business. The O.P. no. 2 is the Enforcement Officer under the Employees Provident Fund Organisation, West Bengal. He lodged a written complaint to the Deputy Commissioner of Police, Calcutta, West Bengal alleging that during his inspection of the establishment of M/s. Jenson & Nicholson (India) Ltd. on 13.7.2004 it was noticed that the employer of the said company have deducted a sum of Rs. 9,17,883/- from the salary/wages of the employees as employees share of provident fund contribution for the period from September, 2003 to April, 2004 and have not yet deposited the amount with the statutory fund in violation of Section 6 of the Employees Provident Fund & Miscellaneous Provisions Act, 1952 read with para 38 of Employees Provident Fund Scheme. According to O.P. no. 2, non-remittance of the provident fund money after deducting the employees share from the salary tantamount to an offence of criminal breach of trust under Section 405 of (Explanation-1) of IPC. The O.P. no. 2 further alleged that the following persons are responsible for conduct of business of the establishment and have committed a cognizable offence under Section 405 of (Explanation)-1 IPC punishable under Section 406/409 IPC. The O.P. No. 2 as Chairman-cum-Managing Director sought his prosecution as well. In the written complaint, the O.P. no. 2 enclosed ‘P/1’ giving details of employees share deducted from the salary of employees amounting to Rs. 9,17,883/-.
3. On the basis of written complaint, a notice under Section 91 of the Code of Criminal Procedure was issued to the petitioner no. 1 company calling upon the petitioner no. 1 company to produce salary register of the employees and form no. 5A in respect of petitioner no. 1 company. On 10.9.2004, the Enforcement Officer seized from registered Office of the company i) form no. 5A in respect of M/s. Jenson Nicholson (India) Ltd. and ii) Bank deposit slip of Standard Chartered Bank in favour of the petitioner no. 1 company M/s. Jenson & Nicholson (India) Ltd. Employees Provident Fund of September, 2003 to October, 2003 amounting to Rs. 2,71,255/- towards the provident fund contribution alongwith the bank transaction statement. During that period the Office of the Regional Provident Fund Commissioner, West Bengal vide letter dated 16.9.2004 issued an order to the Branch Manager, UTI Bank, Gurgaon to pay the dues of the petitioner no. 1 company under Section 8F of the said Act. In the order dated 16.9.2004, the Office of the Regional Provident Fund Commissioner claimed a sum of Rs. 22,20,275/- for the period from July 2003 to April 2004. M/s. UTI Bank Ltd. complied with the order of the Regional Provident Fund Commissioner and paid Rs. 22,20,275/- vide two demand drafts no. 3526 dated 18.9.2004 for Rs. 14,98,618.69/- and no. 3563 dated 28.9.2004 for Rs. 7,21,676.31/- respectively. The UTI Bank vide letter dated 28.9.2004 addressed to the petitioner no. 1 company confirmed payment of the total of Rs. 22,20,275/- to the Employees Provident Fund Commissioner, Calcutta. By letter no. R-Ex-5143/WB/CA/1612(B)(i) dated 4.10.2004 Sri R. K. Sinha, Assistant Provident Fund Commissioner, W.B. informed the Branch Manager, UTI Bank, Gurgaon Branch about the revocation of the Bank attachment order under Section 8F of the said Act. So, the Employees Pr
