Directors of a company cannot be prosecuted for non-payment of employees' contributions under the EPF Act and are not liable to be charged under Sections 406 and 409 of the IPC for such non-payment.

JUDGMENT :

Bibhas Ranjan De, J.

1. Both the revision application are taken up together by this common judgement for the identical issue involved in both the cases.

2. Aforesaid two revision applications under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as CrPC) were filed with a prayer for quashing the proceeding in connection with Matelli Police Station Case no. 95 of 2018 dated 27.06.2018 and 70 of 2016 dated 04.05.2016 corresponding to GR Case No. 2478 of 2018 & GR Case No. 1650 2016 respectively, under Section 406/409/34 of the Indian penal Code (herein after referred to as IPC).

3. Complaints were lodged before the officer-in-charge Matelli Police Station by the Enforcement Officer, Regional Office, Jalpaiguri against the M/s Kilcott TG, Duncans Industries Limited, and other Directors of the Company including the petitioner for non-remitting of the employees contribution after deducting the same from their salary/wages. The said company lodged FIR before the Metalli Police Station as PS Case no. 95 of 2018 dated 27.06.2018 & 70 of 2016 dated 04.05.2016 respectively and after investigation charge sheet was submitted separately against M/s Kilcott TG (owners Duncans Industries Limited, Post Matialli, District Jalpaiguri), the petitioner of this case as well as one Gouri Prasad Goenka and Directors of the Company including petitioner of both the revisional application.

4. Ld. Advocate, Mr. Krishnendu Gooptu, appearing on behalf of the petitioner raised a question that whether Directors of a Company can be made answerable to the charge under Section 406/409 of the IPC. It is also submitted by Mr. Gooptu that Directors of the Company cannot be prosecuted for non-payment of employee’s contributions under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 (herein after referred to as Act). It is, next, submitted that the Director of the Company cannot be prosecuted in terms of settled principle reiterated by the Hon’ble Apex Court.

5. Mr. Gooptu, in support of his contention relied on the following cases:-

Employees State Insurance Corporation Vs. S.K. Aggarwal and others reported in (1998) 6 Supreme Court Cases 288,

Rajiv Jajodia & Anr. Vs The State of West Bengal & Anr. reported in 2017 SCC OnLine Cal 15563,

Prabhas Kumar Basu Vs. State of West Bengal reported in 2012 SCC OnLine Cal 4306,

Satish Kumar Jhunjhunwala Vs. The State of West Bengal reported in 2008 OnLine Cal 189.

6. In opposition to that, Ld. Advocate, Mr. Aditi Shankar Chakraborty, Ld. APP along with Mr. Kallol Acharjee, appearing on behalf of the State has contended that petitioner, Director of the Company, being in charge of the administration deducted the employee’s contribution but did not deposit the same to the Provident Fund Organization in violation of the Rules of the Act. Therefore, entrustment of money with the petitioner and misappropriation of the fund thereof cannot be disputed. According to Mr. Chakraborty, petitioner cannot be discharged from the proceeding which was ended in charge sheet.

7. In S.K. Aggarwal (supra) Hon’ble Apex Court ruled as under :-

“The respondents were, at the material time, Directors of a company M/s Indo-Japan Steel Ltd. The Company has a factory and Head Office at Calcutta. Under the provisions of Section 40 of the Employees' State Insurance Act, 1948, the “principal employer” is required to pay, in respect of every employee, whether directly employed by him or by or through an immediate employer, both the employer's contribution and the employee's contribution. Under sub-section (2) of Section 40, the principal employer, in the case of an employee directly employed by him, is entitled to recover from the employee the employee's contribution by deduction from his wages. Under sub-section (4), any sum deducted by the principal employer from wages under this Act shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it