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Navratan Pugalia and Others V/S Enforcement Officer, Employees Provident Fund Organization and Others.


    Crl. M.C. No. 5 of 2005

    Decided On, 27 September 2013

    At, High Court of Tripura

    By, THE HONORABLE JUSTICE: UTPALENDU BIKAS SAHA

    For Petitioner: Mr. A.K. Bhowmik, Sr. Advocate And For Respondents: Mr. A. Lodh and Mr. A. Ghosh, P.P.



Judgment Text


1. The instant application is filed by the petitioners who are proprietor and Manager of Ranibari Tea estate and Madhu Sudhan Tea estate under Section 482 of the Cr.P.C. read with Article 227 of the Constitution of India for quashing the criminal proceeding in G.R. case No. 219 of 2003 under Sections 406/409 IPC pending in the court of the Judicial Magistrate, 1st class, Dharmanagar, North Tripura. Heard Mr. A.K. Bhowmik, learned senior counsel assisted by Mr. R. Datta, learned counsel appearing for the petitioners on instructions of Mr. S. Ghosh, learned lawyer on record. Also heard Mr. A. Lodh, learned counsel appearing for the respondent No. 1 and Mr. A. Ghosh, learned P.P. appearing for the respondent-state

2. The prosecution case, in short, is as follows:

One S. Das, the Enforcement Officer, Employees Provident Fund Organisation, Sub-Regional Office, Agartala, the respondent No. 1 herein, lodged a complaint on 27.5.2003 to the Officer In-charge, Kadamtala Police Out Post under Churaibari police station against the accused petitioners alleging, inter alia, that during his inspection of Ranibari Tea Estate on 26.5.2003, it was noticed that the petitioners deducted a sum of Rs. 3,08,503/- from the salary/wages of the employees of the Tea garden as employees' share of provident fund contribution for the period from August, 2002 to April, 2003, but did not deposit the said amount to the provident fund authority and thus violated the provisions of Section 6 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for short, hereinafter referred to as 'the Act') read with Para-38 of the Employees Provident Fund Scheme thereto and thus committed offence under Section 405 IPC. On the basis of the said complaint, a specific police case was registered being Churaibari P.S. Case No. 30 of 2003 under Sections 406/409 IPC.

3. The learned Sub-Judicial Magistrate, 1st Class, Dharmanagar, upon receipt of the charge sheet took cognizance of the offence under Section 406/409 IPC against the three accused including the present petitioners and thereafter transfer the case to the Judicial Magistrate, 1st Class, Dharmanagar for disposal of the case in accordance with law. Appearing before the learned Magistrate, the petitioners made a prayer for discharging them. They have also raised question of maintainability of prosecution as the complainant did not obtain sanction as required under Section 14 of the Act. The learned Magistrate after hearing the parties on question of maintainability held that for prosecution under penal code, previous sanction of the Central Provident Fund Commissioner or any other officer as authorized by the Central Govt. is not necessary, such previous sanction is necessary only in case of prosecution under any provisions of the Act and finally rejected the prayer for discharging them from prosecution vide his order dated 2.8.2004 and directed the petitioners to appear on 6.10.2004 for framing of charge.

4. Being dissatisfied with the said order, the petitioners preferred a revision application under Section 397 of the Cr.P.C. before the learned Additional Sessions Judge, Dharmanagar, North Tripura which was registered as Criminal Revision No. 6 of 2004 and after hearing the parties, the revision petition was dismissed by the learned Addl. Sessions Judge holding that the revision did not lie against the order of decision of framing the charge being the same is interlocutory order.

5. Aggrieved by the said order of the learned Additional Sessions Judge, Dharmanagar, the present accused petitioners preferred the instant petition for quashing the entire criminal proceeding relating to the G.R. Case No. 219 of 2003 on the ground that before completion of the investigation and filing of the charge sheet, the present accused petitioners admittedly deposited the amount relating to provident fund as demanded by the provident fund authority, the respondent No. 1.

6. The petitioners have also contended in the instant petition that after being deposited the provident fund amount as demanded by the provident fund authority, it would not be proper to proceed with the aforesaid police case against the petitioners who are admittedly the senior citizens.

7. Mr. Bhowmik, learned senior counsel while urging for quashing the criminal proceeding being G.R. Case No. 219 of 2003 pending in the court of Judicial Magistrate, 1st Class, Dharmanagar would contend that the petitioners had no intention for defalcating/misappropriating the money collected from the employees as their share, rather they could not deposit the same within time due to certain problem. But admittedly they have deposited/paid the amount to the provident fund authority in respect of which the prosecution case was instituted before completion of investigation by the investigating authority. More so, the accused petitioners are also admittedly senior citizens. Thus, it would not be proper to proceed with the prosecution case in view of the decision of the Apex Court in Narendra Pratap Narain Singh & Anr. v. State of U.P. : AIR 1991 SC 1394.

8. In support of his aforesaid contention, he has also placed reliance on a decision of the Apex Court in Provident Fund Inspector, Faridabad v. M/s. Jaipur Textile, Faridabad & Anr : AIR 1987 SC 1738, wherein the Apex Court taking note of the fact that the respondents therein paid all the arrears of provident fund in respect of which the prosecution was instituted, directed not to proceed with the prosecution against the respondents.

9. He has also placed reliance on a decision in Adoni Cotton Mills Ltd. & Ors v. Regional Provident Fund Commissioner & Ors : 1995 Supp (4) SCC 580, wherein the Apex Court closed the proceeding of the prosecution initiated on the basis of the impugned notices as the appellants have deposited the amendment during pendency of the appeal.

10. In support of his contention as stated supra, he has also taken us to paragraph-3 of the said Report wherein the Apex Court noted, inter alia, that

......We are informed that two of the appellants have subsequently died. The offence alleged is the failure to deposit the amounts under the enactments for a short period of four months immediately following the discharge of the appellant- company from the receivership. During the pendency of these appeals, this Court granted stay of further proceedings by way of prosecution on condition that the appellants deposited an amount of Rs. 40,000/- and furnished a bank guarantee for a sum of Rs. 60,000/- to the satisfaction of the Registrar of the High Court within a period of six weeks. We are informed that the sum of Rs. 40,000 has been deposited and that the bank guarantee for Rs. 60,000 has also been furnished. We are also informed that the amount in respect of which there was default would also be in the region of about Rs. 90,000. Taking into account all these circumstances, we are of the opinion that this is a case in which the proceedings by way of prosecution need not be pursued provided the amounts deposited in Court and secured by the bank guarantee are paid over to the Regional Provident Fund Commissioner for credit to the appropriate accounts......
11. Mr. Lodh, learned counsel in his fairness submits that admittedly when the complaint was lodged by the respondent No. 1, the present accused petitioners committed offence and were liable to be prosecuted, but as during investigation period, the amount collected from the employees under the provident fund scheme has already been deposited, the court may pass appropriate order in the interest of justice.

12. Mr. Ghosh, learned P.P. also submits that in view of the decision of the Apex Court in Adoni Cotton Mills Ltd. & ors (supra), it would be proper to quash the prosecution case in G.R. case No. 219 of 2003 pending before the learned Judicial Magistrate, 1st Class, Dharmanagar as the allegations are mainly for non-compliance of the provision of the Act. There is no doubt that while the respondent No. 1 lodged the complaint, at that point of time, the present accused petitioners admittedly did not pay the provident fund amount collected from the employees with the provident fund authority and as such committed breach of Trust punishable under Section 405 IPC. Thus, lodging of a case against the present accused petitioners was not improper on the part of respondent-provident fund authority. But when during the investigation, admittedly, the present accused petitioners paid the provident fund amount for which complaint was lodged and consequent thereto a specific case was initiated, then the investigating authority could have submitted a final report taking note of the fact that the accused petitioners have already deposited/paid the required amount with the provident fund authority. The learned trial Court also could have considered the fact while passing the order of framing of charge taking note of the fact as stated supra which might have been indicated in the charge sheet itself that the accused petitioners deposited the amount of provident fund for which the instant complaint was lodged.

13. By way of lodging a complaint and consequent thereto, a prosecution ended in trial, normally would punish a person, but would not release the amount for which the complaint was lodged against the accused petitioners under the Penal Code though there are penal provisions available in the Act for recovery of the amount from the employer who after collecting the share of the provident fund of employees did not remit/deposit the same with the provident fund authority. In the instant case, the purpose of lodging the complaint is though to punish the accused petitioners who are proprietor and Manager, but the real purpose is to realize the amount collected from the employees as their share to be deposited against their provident fund with the authority so that the employees may not suffer.

14. A question also arises as to whether, when in a special statute for certain offence like non-deposit of the realized money, i.e., provident fund with the appropriate authority, penal provision prescribed in general statute like penal code would apply or not. It is a settled law that when a special statute is enacted for a specific purpose with a specific mechanism to achieve the object of the statute and when there is penal provision available for commission of offence committed under the provisions of that statute then the general penal provisions in penal code would not apply as that would frustrate the purpose of the statute and more so money which has realized from the employees as their provident fund share, that cannot be recovered from the employer except taking aid of Section 457 of the Cr.P.C or appropriate civil suit.

15. Admittedly, in Section 14 of the Act prescribed penalties for the offence like any payment to be made by the employer under the Act, scheme, pension scheme or the insurance scheme or of enabling any other person to avoid such payment, knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to one year or with fine of five thousand rupees or with both.

16. In Sub-Section (1A) of Section 14 of the Act also stated that an employer who contravenes, or makes default in complying with, the provisions of section 6 or clause (a) of Sub-section (3) of section 17 in so far as it relates to the payment of inspection charge, or paragraph 38 of the Scheme in so far as it relates to the payment of administrative charges, shall be punishable with imprisonment for a term which may extend to three years, but (a) which shall not be less than one year and fine of ten thousand rupees in case of default in payment of the employees' contribution which has been deducted by the employer from the employees' wages;

17. In clause (b) of sub-section (1A) of the aforesaid Section also stated that punishment shall not be less than six months and a fine of five thousand rupees, in any other case; provided that the court may, for any adequate and special reasons to be recorded in the judgment, impose a sentence of imprisonment for a lesser term.

18. Admittedly, the complainant/informant, the Enforcement Officer of Employees Provident Fund in his complaint stated that during his inspection of the said establishment on 6.5.2003, he had found that the employer Nav Ratan Pugalia and Rajendra Kumar Singh had deducted a sum of Rs. 3,08,500/- from the salary, wages of the employees as employees share of P.R. contribution for the period from 8/2002 to 04/2003 and have not deposited the amount with the statutory fund in violation of Section 6 of the Act read with Para 38 of the EPF Scheme and non-remittance of PF money after deducting the employees share from the salary/wages tantamount to an offence of Criminal breach of trust as defined under Section 405 of the IPC.

19. Now question is when the complaint was lodged relating to offence of non-deposit of the amount with the statutory fund in violation of Section-6 of the Act read with para 38 of the EPF scheme as to whether it would come within the purview of criminal breach of trust as defined in provision of Section 405 of the IPC.

20. In the instant case though the complainant in his complainant stated regarding the violation of provision of Section 6 of the Act read with para-38 of the EPF scheme, but admittedly no sanction was obtained under the provision of 14AC of the Act though in the said provisions, it is stated that no court shall take cognizance of any offence punishable under this Act, the Scheme or the pension scheme, or the Insurance Scheme except on a report in writing of the facts constituting such offence made with the previous sanction of the Central Provident Fund Commissioner or such other officer as may be authorized by the Central Government, by notification in the Official Gazette, in this behalf, by an Inspector appointed under section 13. Thus, it can be said that previous sanction of the Central Provident Fund Commissioner or any such other officer as may be authorized by the Central Govt. is sine qua non for taking cognizance of any offence punishable under the Act.

21. It also appears that the accused No. 1 and 2 are the Director and the Manager of the Ranibari Tea Company limited and the complaint has been filed against them for not remitting the amount deducted from the employees to the EPF account.

22. In Employees' State Insurance Corporation v. S.K. Agarwal, 1998 Cr. L.J. 4027, the Apex Court has made it clear once for all that the word 'employer' does not include the 'Director' for the purpose of prosecution. The Apex Court also took into consideration the definition of the word 'employer' as it occurs in section 2(17) of the ESI Act, 1948. According to the definition, 'principal employer' in a factory means 'owner' and/or 'occupier' of the factory and includes the managing agency of such owner or occupier or legal representative of declared owner or occupier and where the person as has been named as Manager of the factory persons so named. The Apex Court held that for the purpose of prosecution of employer under section 405 of IPC the definition of the word' employer' as it occurs in the ESI Act, 1948 cannot be borrowed simply because of the fact that such definition has got no manner of application to either of the explanation to section 405 of the IPC. Thus, in absence of any express provision in the Indian Penal Code incorporating the definition of 'Principal Employer' in Explanation 2 to Section 405 the definition in ESI Act cannot be held to apply to the term 'Employer' and Explanation 2.

23. In State of Haryana v. Bhajanlal : 1992 Supp (1) SCC 335 and R.P. Kapoor v. State of Punjab : AIR 1960 SC 866, the Apex Court laid down the guideline in the matter of quashing a criminal prosecution.

24. By this time it is settled that where a statute creates a new offence, which was not an offence at common law and imposes a penalty in respect of such offence like the offence under Section 14 of the Act, a person committing such an offence can only be proceeded against under the statute which creates such a new offence and cannot be indicted under the general law. The principle is stated with clearness and precision in Hawkins' Pleas of the Crown, Book II, Ch. 25, Section 4 and is as follows:--

Also where a Statute makes a new offence which was in no way prohibited by the Common law, and appoints a peculiar manner of proceeding against the offender as by commitment, or action of debt or information, etc., without mentioning an indictment, it seems to be settled to this day that it would not maintain an indictment, because mentioning the other methods of proceeding seem impliedly to exclude that of indictment.
25. There is no doubt that when the penal offence under the General law like the penal code is not in conflict with the penal provision of the special statute then both in general law and under special law, prosecution can be initiated against the person who committed offence punishable either under general law or special law but cannot be under the provisions of both the laws. In the instant case, the complaint is lodged for committing an offence under penal code, not for commission of penal offence under the special statute i.e. the Act. Thus, this court is unable to accept the contention of Mr. Bhowmik that previous sanction is necessary for filing complaint to initiate prosecution for alleged commission of offence of breach of trust against the petitioners as they are admittedly the Director owner of the tea garden and the Manager of the garden under whom the employees-workers are working and are also responsible for management of the garden as well as to deposit the share of the provident fund collected as employees share to the provident fund authority. Thus, it cannot be said that the accused petitioners were not responsible at all for non-deposit of money collected from the employee.

26. In the instant case, the learned trial Court has decided to frame the charge for committing offence punishable under Section 406 of the Indian Penal Code, i.e., punishable for criminal breach of trust. The criminal breach of trust is defined in Section 405 wherein it is stated that whoever being in any manner entrusted 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 willfully suffers any other person so to do, commits 'criminal breach of trust'.

27. In view of the Explanation 1 of the aforesaid provision, there is no doubt that the amount deducted from the employees in view of the Para-38 of the EPF Scheme, the employer was deemly entrusted for depositing the money (employees' contribution) with the provident fund authority, along with its own share. But the question is as to whether the amount deemly entrusted was dishonestly misappropriated or converted for the own use of the accused persons or they have dishonestly used or disposed of that entrusted property in violation of any direction of law. In complaint, there is no such specific allegation that the accused petitioner after deducting the share of employees provident fund, they have dishonestly misappropri

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ated or converted the entrusted amount for their own use. 28. In the instant case, admittedly, the money deducted from the employees as their share of provident fund has already been deposited while the investigation was going on and before filing the charge sheet as would be evident from charsheet. Thus, it would not be proper to proceed with the prosecution in view of the decision of the Apex Court in Provident Fund Inspector, Faridabad (supra) and Adoni Cotton Mills Ltd. & ors being in the complaint nowhere stated that the money which was deducted was either withheld or non-deposited with an intention to use those amount for their own purpose. 29. According to this court, after being deposited the amount with the provident fund, authority by the accused petitioners after lodging of the complaint and before filing the charge sheet, it would not be proper to allow the prosecution to proceed with the accusation against the present petitioners and more so, at the time of filing of this petition, the accused petitioner No. 2 was about 60 years, i.e., almost a senior citizen and by this time, another 8 years period completed as the instant criminal misc. application was filed in the year 2005 and the stay order was granted by this Court vide order dated 2.3.2005 in Crl. M. Application No.. 47 of 2005 arising out of the instant petition (Crl. M.C. 5 of 2005), when almost in a similar matter, the Apex Court also closed the proceeding for prosecution against the employer in the case of Adoni Cotton Mills Ltd. & ors. (supra). In the light of the aforesaid discussion, the proceeding relating to prosecution against the present petitioners in G.R. case No. 219 of 2003 pending in the court of the Judicial Magistrate, 1st class, Dharmanagar, North Tripura is hereby quashed. Consequently, the judgment dated 21.12.2004 passed by the learned Addl. Sessions Judge, North Tripura, Dharmanagar in Criminal revision 6(3) of 2004 is hereby quashed and consequent thereto, the order dated 2.8.2004 passed by the learned Judicial Magistrate in GR case No. 219 of 2003 for framing charge is also set aside and quashed. Crl. M. application is disposed of.
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