K. N. Genda v. State — 1982 DIGILAW 292 (CAL)

JUDGMENT N.C. Mukherji, J. These Rules were taken up together as same points of law and facts are involved in these cases. We first take up Criminal Revision No. 805 of 1982. This application under Ss. 401 and 482 of the Code of Criminal Procedure is for quashing the proceeding in Case 3264 of 1981 under S. 406 of the Indian Penal Code pending in the Court of the learned Metropolitan Magistrate, 4th Court at Calcutta. 2. One Sankar Bhattacherjee, alleged to be an Insurance Inspector of the Employees State Insurance Corporation, filed a petition of complaint before the learned Chief Metropolitan Magistrate, Calcutta. The learned Magistrate took cognizance and issued process against the petitioners and another in respect of an offence under S. 406 of the Indian Penal Code. The complainant's case is that the petitioners were the principal employers of Messes Calco Engineering Works, a factory which is covered under the Employers state Insurance Act. Under section 39 sub-s. (2) and S. 40 of the said Act, the principal employer shall deduct from the wages of every employee for every contribution period an amount of money in accordance with the First Schedule of the said Act and under Regulations 26 and 29 of the Employees State Insurance (General) Regulations, 1950 shall pay the employees share of contribution to the E.S.I. Corporation. It is alleged that the petitioners as principal employers of the said factory deducted a sum of Rs. 2206.75P as employees’ share of contribution from the wages of the employees for the period from June, 1980 to March, 1981. But failed to deposit the said amount to the Employees State Insurance Funds within the specified time. In such circumstances, it is alleged that the accused persons have committed criminal breach of trust in respect of the aforesaid months and have committed an offence punishable under S. 406 of the Indian Penal Code. Against the order taking cognizance and issuing process against the petitioners and another the petitioners have come up to this Court. 3. Mr. Pradip Ghosh, learned Advocate appearing on behalf of the petitioners, raises several points. Firstly, it has been contended that the complaint was defective because it was not filed by the proper person. Next, it is submitted averments are wanting in the petition of complaint. The averments as made in the petition of complaint do not connect the accused with the offence. Firstly, it has been contended that the complaint was defective because it was not filed by the proper person. Next, it is submitted averments are wanting in the petition of complaint. The averments as made in the petition of complaint do not connect the accused with the offence. Thirdly, it is contended that the Chief Metropolitan Magistrate has no jurisdiction to try the alleged offence. In this connection, it is stated that for the alleged violation of the provisions of the Act and Rules a case has already been started before the learned Magistrate at Sealdah. That being so, for the same offence another case under s. 406 I.P.C. before the Chief Metropolitan Magistrate is not maintainable. Lastly, it is submitted that unless it is proved that the elements to constitute an offence of criminal breach of trust have been fulfilled, there cannot he any offence under S. 406 I.P.C. simply because there has been some violation of the provisions and Rules under the Employees State Insurance Act. For such violation there may be prosecution according to the provisions of that Act. With regard to the first point that the complaint was not filed by the proper person Mr. Ghosh refers to a decision reported in 1980(1) CHN 388 (Union of India, on the complaint of Assistant Collector of Customs for Prevention(1) Calcutta v. Remo Morgani, Carlton Hotel). This was a case under the Customs Act. A petition of complaint was filed by one Shri A.N. Sinha, Assistant Collector of Customs. The accused was acquitted An appeal was filed by one Shri Jiban Krishna, the Customs Officer. It was contended that the appeal was not maintainable as the case having been instituted upon a complaint. It was only the actual complainant who had the right of appeal and none else could exercise the right of appeal under S. 417(4) of the Old Code, corresponding to S. 378(4) of the New Code. It was held that "the appeal not having been filed by the complainant and the complainant who filed the complaint having not been authorised by the Union of India to file the complaint, Sri Jivan Krishna, the Customs Officer who has filed [he appeal was not competent to file the same. There was nothing to show that Shri Krishna could represent the Union of India." This finding, in our opinion, does not help the petitioner in the present case. There was nothing to show that Shri Krishna could represent the Union of India." This finding, in our opinion, does not help the petitioner in the present case. In this case, the complainant is the Employees 'State Insurance Corporation and the complaint has been filed by Shri Sanker Bhattacharya, Inspector. I do not agree with the submission of Mr. Ghosh that the complaint was defective because it was not filed by the proper person. 4. Next, it has been contended by Mr. Ghosh that the Chief Metropolitan Magistrate has no jurisdiction to entertain the petition of complaint as the factory is situated within the local limits of Beliaghata police station. The allegation is that the principal employers did not pay the employees share of contribution to the E.S.I. Corporation. The office of the Corporation is situated within the jurisdiction of the Chief Metropolitan Magistrate. As such, the Chief Metropolitan Magistrate has jurisdiction to try the offence under S. 405 of the Indian Penal Code. 5. Next, it is contended by Mr. Ghosh that the instant prosecution has been launched mala fide only to harass the petitioners. For non-payment of the employees’ contribution for set A & B for the period expiring on 31st January, 1981 and March, 1981 a Case under S. 85(g) of the Employees State Insurance Act being Case C/1022 of 1981 has been filed and the same is pending before the learned Additional Chief Judicial Magistrate, Sealdah. In such circumstances for the same offence another case under S. 405 of the Indian Penal Code cannot be proceeded with. It appears that for the same offence two cases have been filed. But as the Chief Metropolitan Magistrate has jurisdiction to entertain a complaint under S. 405 of the Indian Penal Code, the proceeding cannot be quashed only on the ground that another case under S 85(g) is pending before the Additional Chief Judicial Magistrate, Sealdah. 6. Next, Mr. Ghosh with much emphasis submits that the elements required to constitute an offence under S. 405 of the Indian Penal Code are wanting in this case as will appear from the allegations made in the petition of complaint. In support of his contention Mr. Ghosh first relies on a decision reported in AIR 1971 Calcutta 93 (Nathmull Poddar v. Salil Kr. Chakraborty). This case was decided on 10.6.70. In support of his contention Mr. Ghosh first relies on a decision reported in AIR 1971 Calcutta 93 (Nathmull Poddar v. Salil Kr. Chakraborty). This case was decided on 10.6.70. It was held In this case that deduction by principal employer from wages under Employees' State Insurance Act does not amount to entrustment within S. 405 though it amounts to an offence under S. 85 read with S. 86 of the Act" Mr. Ghosh also refers to a decision reported in 1974 Labour & Industrial Cases 679 (Ranjit Kr. Chowdhury & Anr. V. The State & Anr.) In paragraph 7 of this decision it has been held "even if the fixation of an entrustment under paragraph 32(3) of the Employees' Provident Funds Scheme (1952) be deemed to apply to the facts of the case, the same will not constitute the "entrustment" within the purview of S. 405 I.P.C." In our opinion these decisions are of no help to the petitioners as the explanation to S. 405 of the Penal Code has been added by Amendment Act 40 of 1973 which came into effect from 1.11.73. Explanation 2 reads as follows: -"A person, being an employer, who deducts the employee's contribution from the wages payable to the employee for credit to the Employees' State Insurance Fund held and administered by the Employees' 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 an aforesaid" Mr. Ghosh contends that S. 405 does not apply automatically unless the ingredients of the offence are fulfilled. Fictional entrustment was already there before the addition of explanation 2 to S. 405 of the Indian Penal Code. The explanation, according to Mr. Ghosh, has not changed the position as it was. We held in a case reported in 1982(1) CHN 112 (Balgopal Goenka v. State of West Bengal & Ors.) the “The explanation to S. 405 is really not an explanation but some addition to the section and that addition has no retrospective operation”. We are, therefore, unable to accept the submission of Mr. We held in a case reported in 1982(1) CHN 112 (Balgopal Goenka v. State of West Bengal & Ors.) the “The explanation to S. 405 is really not an explanation but some addition to the section and that addition has no retrospective operation”. We are, therefore, unable to accept the submission of Mr. Ghosh and are of opinion that after the addition of explanation to S 405 for non payment of employees contribution a person can be held liable under S 405 of the Indian Penal Code. 7. Next, Mr. Ghosh places the petition of complaint before us and submits that in the petition of complaint, the averments which have been made are not at all sufficient to connect the accused with the offence. In paragraph 2 of the petition of complaint it has been stated that the above named persons (meaning the accused) are the principal employers of M/s. Calco Engineering Works. In paragraph 3, it has been stared that the principal employers are required to pay the employee's share of contribution. In paragraph 4 it has been stated that the accused persons have committed criminal breach of trust within the meaning of explanation 2 of S. 405 of the Indian Penal Code. In support of his contention, Mr. Ghosh relies on a decision reported in 1981(2) CHN 301 (Krishna Kr. Dalmia v. State). In this case, we held "Under S. 14A of the Act a Company is made primarily liable for an offence committed under the Act. The liability may extend to other persons vicariously only under the conditions laid down in the Act. In the instant case, there is no material to show that the Directors were in-charge of the business or in over all control of the day to day business of the Company. The petitioners, therefore, cannot be made vicariously liable for the offence alleged to have been committed by the Company. The statements in the petitions of complaint have not made out a case against the petitioner." Mr. Ghosh submits that the present case is strong because in the case, referred to above, there were averments that the accused persons during relevant period were in-charge of the establishment and were responsible to it for the conduct of its business. But in the present case, besides stating that the accused persons are principal employers of the establishment nothing more has been stated. But in the present case, besides stating that the accused persons are principal employers of the establishment nothing more has been stated. On behalf of the opposite parties in order to refute this contention, reliance has been placed on a decision reported in AIR 1970 SC 1153 (Bhimappa Bassappa Bhu Sannavar v. Laxman Shivarayanppa Samagouda & ors). In paragraph 11, it has been held “The word 'complaint' has a wide meaning since it includes even an oral allegation. It may, therefore, be assumed that no form is prescribed which the complainant must take. It may only be said that there must be an allegation which prima facie discloses the commission of an offence with necessary facts for the Magistrate to take action. Section 190(1)(a) makes it necessary that the alleged facts must disclose the, commission of an offence". It has been argued that it is not necessary to state in details as to how the accused are connected with the offence. That will be a matter for evidence. If there is allegation in the petition of complaint that the accused persons have committed some offence then the petition of complaint cannot be thrown out on the ground that the same is wanting in details. Reliance has also been placed on a decision reported in AIR 1971 SC 2162 (Girdhari Lal Gupta v. D.N. Mehta & anr). This case cannot help the opposite parties as in the facts of this case it was held that "A partner of the firm who himself stated that he alone looked after the affairs of the firm is liable for contravention of S 23C of the Foreign Exchange Regulation Act, 1947. He does not cease to be in-charge merely because he proceeds abroad unless there is evidence that he handed it over to another person." Observations made by their Lordships in paragraph 7 of this decision help the petitioner. As it has been held "it seems to us that in the context a person 'in-charge' must mean that the person should be in over all control to the day to day business of the Company or the firm. This inference follows from the wording of S. 23C(2)". In coming to this decision reported in 1981(2) CHN 301 (supra) we very much relied on these observations. This inference follows from the wording of S. 23C(2)". In coming to this decision reported in 1981(2) CHN 301 (supra) we very much relied on these observations. After hearing the learned Advocate at length and considering the decisions referred to above, we find no reason to differ from what we said in the case reported in 1981(2) CHN 301 (supra). That being so, we find that in the present case there is no sufficient averment to connect the accused with the alleged offence and on this ground the proceeding is liable to be quashed. 8. Now, we take up Criminal Revision Nos. 1822 to 1826 of 1980, These Rules arise for quashing five proceeding pending before the Metropolitan Magistrate, 9th Court Calcutta. under S. 14(1A), read with S. 14A (1), of the Employees Provident Fund & Miscellaneous Provisions Act, 1952. These complaints were filed by one Sri D.K. Bhattacharya Provident Fund Inspector for non-payment of employees contributions for the months of March 1978, April, 1978, May 1978, June 1978 and July, 1978. The learned Magistrate took cognizance and issued process against the petitioner in respect of offence under S. 406 of the Indian Penal Code. The complainant's case is that the petitioner was the principal employer of Indo American Electricals Limited, a factory which is covered under the Employee'; State Insurance Act. Under S, 39 sub-s. (2) of S. 40 of the said Act the principal employer shall deduct from the wages of every employee for every contribution period an amount of money in accordance with the First Schedule of the said Act and under Regulations 26 and 29 of the Employees' State Insurance (General) Regulations, 1950 shall pay the employees' share of contribution to the E.S.I. Corporation. Mr. Balai Ch. Roy, learned Advocate appearing on behalf of the petitioner, in the first place submits that the petitions of complaint have been filed much beyond the prescribed time and as such no cognizance ought to have been taken on these complaints. The allegation is that the employers failed to pay the contribution for the months of March, 1978 to July, 1978. The petitions of complaint were filed on 8.11.79. Section 468 of the Code of Criminal Procedure provides that "No' court shall take cognizance of an offence of the categories in sub-s (2) after the expiry of the period of limitation". The allegation is that the employers failed to pay the contribution for the months of March, 1978 to July, 1978. The petitions of complaint were filed on 8.11.79. Section 468 of the Code of Criminal Procedure provides that "No' court shall take cognizance of an offence of the categories in sub-s (2) after the expiry of the period of limitation". Sub-section (2) provides that the period of limitation shall be-a) six months, if the offence is punishable with fine only; b) one year, if the offence is punishable with imprisonment for a term not exceeding one year; c) three years, if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years. The complainant in the petitions of complaint have stated in paragraph 8 that sanction for the prosecution was granted by the Regional Provident Fund Commissioner, West Bengal. Andaman & Nicobar Islands on 12.9.79 on the report dated 30.4.78 of the Provident Fund Commissioner. This period is to be excluded under S. 473 of the Code of Criminal Procedure in computing the period of limitation under S 468 of the Code. Section 479(3) provides "Where notice of prosecution for an offence has been given, or where, under any we for the time being in force, the previous consent or sanction of the Government or any other authority is required for the institution of any prosecution for an offence then in computing the period of limitation, the period of such notice, or, as the case may be, the time required for obtaining such consent or sanction shall be excluded. Explanation : In computing the time required for obtaining the consent or sanction of the Government or any other authority, the date on which the application was made for obtaining the consent or sanction and the date or receipt of the order of the Government or other authority shall both be excluded." 9. Mr. Roy, with much emphasis, submits that the complainant is not entitled to get exclusion of the entire period from 30.4.78 to 12.9.79. It is never the intention of the Legislature that if a report is sent and if the sanctioning authority sits tight and accords sanction after a lapse of years then the entire period would be excluded for the purpose of computing limitation. That will be very much prejudicial to the accused. Referring to S. 470(3) Mr. It is never the intention of the Legislature that if a report is sent and if the sanctioning authority sits tight and accords sanction after a lapse of years then the entire period would be excluded for the purpose of computing limitation. That will be very much prejudicial to the accused. Referring to S. 470(3) Mr. Roy submits that only the date on which the application is made and the date when the sanction is received would be excluded for the purpose of calculating the period of limitation. The entire period cannot be excluded. Mr. Roy however, concedes that it must be said that sometime will be consumed after a report is received and a sanction is accorded. But that time should be time properly required and not as much time as is spent for according sanction since the report is received. In this connection, Mr. Roy further submits that it is for the complainant to explain why such a long time was spent for according sanction. Admittedly the report is dated April 30, 1978. There is nothing to show when the report was placed before the Commissioner. Mr. Roy submits that in order to get advantage of exclusion of the period of limitation, the complainant must be diligent. In support of his contention, Mr. Roy first refers to a decision reported in AIR 1975 SC 1089 (Lala Bal Mukand (Dead) by L. Rs. V. Lajwanti & Ors). In this case it was held with reference to S. 12(2) of the Limitation Act, 1908 that "The expression "time requisite" means all the time counted from the date of pronouncement of the judgment which would be properly required for getting a copy of the decree including the time which must ex necessitus elapse in the circumstances of the particular case before a decree is drawn up and signed." It was further held that "If any period of the delay in preparing the decree attributable to the default or negligence of the appellant the latter shall not be entitled to the exclusion of such period. Their Lordships however, did not express any opinion as to whether the law enunciated would hold good in cases governed by the new S 12 of 1963 Act." From this decision, Mr. Roy wants support to the effect that time required is proper time and the applicant should not be negligent. Mr. Their Lordships however, did not express any opinion as to whether the law enunciated would hold good in cases governed by the new S 12 of 1963 Act." From this decision, Mr. Roy wants support to the effect that time required is proper time and the applicant should not be negligent. Mr. Roy next refers to a decision reported in AIR 1975 SC 1290 (Gopal Krishna Das v. Sailendra Nath Biswas & Anr.). In this case, also it was held "The time requisite for obtaining certified copies undoubtedly means "the lime properly required" and an appellant cannot in the computation of the period of limitation for filing the appeal asks for exclusion of the time which was spent negligently". Mr. Roy wants to say that in this case also the time which was spent for according sanction was spent negligently. There was no diligence on the part of the complainant and as such the complainant is not entitled to get exclusion of the entire period from 30.4.78 to 12.9.79. The next case relied on by Mr. Roy has been reported in AIR 1952 Bombay 122 (Jayashankar Mulshankar & Anr. v. Mayabhai Lalbhai). In this case, it was held that "What has got to be excluded is the time which is properly required and the time which has got to be so excluded is the time which is necessary for obtaining a copy of the decree. The action on the part of the appellant in applying for a copy of the decree is not a decisive factor in considering whether time should be excluded under this sub-section or not." It was further held that "No time beyond the time actually required for the preparation of the decree can be excluded within the meaning of S. 12(2)". The next case relied on by Mr. Roy has been reported in AIR 1922 Privy Council 352 (Pramatha Nath Roy v. The Hon. William Arthur Lee). It was held by the Judicial Committee “No period can be regarded as requisite under the Act which need not have elapsed, if the appellant had taken reasonable and proper steps to obtain an order.” 10. Mr. Poddar, learned Advocate appearing on behalf of the Provident Fund Commissioner, submits that analogy of S. 12 is not applicable in the present case. Moreover, in the present case. Mr. Mr. Poddar, learned Advocate appearing on behalf of the Provident Fund Commissioner, submits that analogy of S. 12 is not applicable in the present case. Moreover, in the present case. Mr. Poddar submits that it cannot be said that the complainant was in any way negligent. Mr. Mukherji, learned Public Prosecutor agrees with the submission made by Mr. Poddar and submits that the entire period should be excluded. Both Mr. Poddar and Mr. Mukherji draws our attention to S. 470(3). It has been clearly provided in the said sub-section that in computing the period of limitation the period of such notice, or, as the case may be the time required for obtaining such consent or sanction shall he excluded. With regard to this provision, there is no restriction or limitation. It has been said that the time which is required for obtaining sanction shall be excluded. Admittedly, in the present case report is dated 30.4.78 and the sanction was accorded on 12.9.79. So, the period from 30.4.78 to 12.9.79 was the time which was required for obtaining sanction. Why sanction was not accorded early is not for the complainant to say and it cannot be said that the complainant was in any way, negligent and for that, the entire period will not be excluded. As there is special provision in S 470(3) for exclusion of the period required for obtaining sanction and as in the explanation it has been clearly stated that the date on which the application is made for obtaining consent or sanction and the date of receipt of the order of the Government or other authority shall both be excluded. If these two terminal dates are excluded then it can only mean that the entire period would be excluded. The contention raised by Mr. Roy that the petitions of complaint were filed beyond time is, therefore, negatived. 11. Mr. Roy next submits that in the petitions of complaint minimum statements have not been made so as to connect the accused person with the alleged offence. In support of his contention Mr. Roy refers to the decisions reported in AIR 1970 SC 1153 (supra) ; AIR 1971 SC 2162 (supra) ; 1981(2) CHN 301 (supra). Reference may be made to a Bench decision reported in 1978 CHN 336 (M/s. Mahalderam Tea Estate Private Ltd. & Ors. In support of his contention Mr. Roy refers to the decisions reported in AIR 1970 SC 1153 (supra) ; AIR 1971 SC 2162 (supra) ; 1981(2) CHN 301 (supra). Reference may be made to a Bench decision reported in 1978 CHN 336 (M/s. Mahalderam Tea Estate Private Ltd. & Ors. v. D.N. Prodhan & Anr.) In this case, it was held "A Director of a Company may be concerned only with the policy to be followed and might not have any hand in the management of its day to day affairs. Such person must necessarily be immune from such prosecution under S. 14A of the Act under which a Company is made primarily liable.” It was also held that "there was no material from which the learned Magistrate could satisfy himself that the petitioners took some part in the running of the business of the Company. In the absence of such averments in the petitions of complaint the cognizance taken is bad in law and must be quashed" Reference may also he made to another Bench Decision of this Court, reported in 1979 Cr. LJ. 86 (G Atherton & Co. (P) Ltd & Ors. v. Corporation of Calcutta). That was a case under Prevention of Food Adulteration Act. Under Section 17 of the Act a Company has been made primarily liable. It was held that "to make other persons vicariously liable it has to be shown that such persons were in charge of or were responsible to the company for the conduct of its day to day business. In the absence of any mentioning in the petition of complaint as to how the accused persons were concerned in the carrying on of the day to day business of the company, process could not have been issued against them." We had to consider all these decisions while deciding the case reported in 1981(2) CHN 301 (supra). In paragraph 3 of the petition of complaint it has simply been stated that accused nos. 2 to 5 at all material time were the persons in-charge of the establishment and were responsible to it for the conduct of its business. Same thing was stated in paragraph 5 also. In our opinion, these averments are not sufficient to connect the accused with the alleged offence. 2 to 5 at all material time were the persons in-charge of the establishment and were responsible to it for the conduct of its business. Same thing was stated in paragraph 5 also. In our opinion, these averments are not sufficient to connect the accused with the alleged offence. For the reasons elaborately stated by us while disposing of Criminal Revision No. 805 of 1982 we hold that in these cases also the petitions of complaint should be quashed. 12. In the result, the application in Criminal Revision Case No. 805 of 1982 succeeds and the proceeding is quashed Rules issued in Criminal Revision Case Nos. 1822 to 1826 of 1980 are made absolute and the proceedings are quashed. N.C. Chaudhuri, J. I agree. Application and Cr Revision Case No. 805 of 1982 allowed Rule in other case mades absolute.