1. This appeal is preferred by the complainant against the judgment of acquittal of the accused in C.C. No. 960/2001 of the Judicial First Class Magistrate Court, Chalakkudy under Section 406 r/w.34 IPC. The complainant's case is that he had worked as Assistant Personal Officer of Eddy Current Control Limited (hereinafter referred to as the 'Company') which is a company incorporated under the Companies Act. The 1st accused is the Managing Director and the 2nd accused the Executive Director of the Company, who are principal officers functioning under the terms of the Employees' State Insurance Act and liable to pay employees contribution towards the ESI scheme. The principal officers of the company had been making statutory deduction of the employees share contribution every month from the salary of the complainant and other employees of the Company. The respondents deducted money from the salary of the employees for the period from 1998 to 31.3.99 and remitted it on 11.8.99. The money deducted from 1.4.1999 to 30.9.1999 were remitted on 12.4.2003 and the period from 1.10.99 to 31.3.2000 remitted only on 26.12.2000. The respondents being the principal officers of the company deducted ESI subscription and used the amount for the expense of the company, thereby misappropriated the amount and committed criminal breach of trust and thereby committed offence u/s.406 r/w.34 IPC. Hence the complaint.

2. During trial, the complainant was examined as PW1 and documents were marked as Exts.P1 to P3. The incriminating circumstances brought out in evidence were denied by the accused while questioning him under Section 313 Cr.P.C. Exts.D1 and D2 were marked as defence evidence. The learned Magistrate, after considering the oral and documentary evidence, acquitted the accused. Being aggrieved by that, complainant preferred this appeal.

3. Heard both sides. The offence of criminal breach of trust is defined under Section 405 IPC, which reads as follows:-

“405. Criminal breach of trust.- Whoever being in any manner entrusted with property, or with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits, 'criminal breach of trust.' Explanation 1-A person, being an employer of an establishment whether exempted under section 17 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952),or not who deducts the employee's contribution from the wages payable to the employee for credit to a Provident Fund or Family Pension Fund established by any law for the time being in force, shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said law, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.

Explanation 2.- A person, being an employer who deducts the employee's contribution from the wages payable to the employee for credit to the Employee's State Insurance Fund held and administered by the Employee's State Insurance Corporation established under the Employees' State Insurance Act, 1948, shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said Fund in violation of the said Act, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.”

A reading of Explanation 2 to Section 405 of the IPC shows that “a person being an employer” means an employer who deducts the employee's contributio