JUDGMENT (ORAL) S.W. Puranik, J. - On 7.3.1990, upon hearing the learned Counsel of both the parties, the following order was passed: " For reasons stated in the accompanying judgment the Petition is allowed. RUle in terms of prayer (a)." However, the reasons were not delivered immediately as the learned Counsel for the Petitioners requested for further time to cite mere case law in support of her submissions. The same have not been submitted and hence the following reasons: 2. The Petitioners are invoking the inherent powers of this Court under Section 482 of the Code of Criminal Procedure to seek quashing of the process issued against them by the Metropalitan Magistrate's 7th Court at Dadar in Case No. 606/P of 1986. The learned Metropolitan Magistrate has issued, the process under Sections 405 and 406 of the Indian Penal Code against the Petitioners in a State prosecution filed by the Inspector of Police, N .M. Joshi Marg Police Station on the basis of a complaint lodged in' the Police Station by an Insurance Inspector appointed under section 45 of the Employees' State Insurance Act, 1948 by the Employees State Insurance Corporation, Maharashtra Region, Bombay. 3. It is the prosecution case that the present Petitioners are responsible for the conduct of business of an establishment, viz. M/s. Modem Fabrics, situate in the premises of M/s. Modem Textile Silk Mills Private Limited which is an establishment covered under the Employees' State Insurance Act. According to the prosecution, the said establishment has a joint Code No. 31-983-6-13 issued by the Regional Office of the Employees' State Insurance Corporation. It is further alleged that the employers have deducted the wages of its employees but have failed to deposit the same alongwith the employers' contribution with -the Employees' State Insurance Corporation. The prosecution, therefore, relies on the Explanation II to section 405 of the Indian Penal Code and he contends that the petitioners, being the persons responsible as employers, having deducted the employees' contribution from the wages payable to them towards the Employees' State Insurance Fund, are deemed to have been entrusted with the said amount of contribution so deducted by them and they have made default in payment of such contribution to the said Fund in violation of the Employees' State Insurance Act. They are also deemed to have dishonestly used this amount in violation of the provision of law as aforesaid. They are also deemed to have dishonestly used this amount in violation of the provision of law as aforesaid. It is in these circumstances that the 'present petitioners are alleged to have committed offences under sections 405,406 of the Indian Penal Code. The learned Metropolitan Magistrate has issued process against the petitioners under those provisions of the Indian Penal Code and feeling aggrieved by the issuance of the said process, they have approached this Court under section 482 of the Code of Criminal Procedure. (4) Smt. Lata Desai, Advocate for the petitioners contends that the filing of the charge-sheet by the Police on the basis of the complaint of the Inspector of Insurance is a total abuse of the process of law and the entire prosecution needs to be quashed and set aside. She further elucidated that all the facts which were in the knowledge of the Employees' State Insurance Corporation at the time its Inspector lodged the First Information Report at the Police Station, have been suppressed. It is not stated that the Modem Fabrics is a concern which was established in 1962, by the petitioners' predecessor late Shri A.C. Shah, who was its proprietor from 1962 till his death in 1982. For all purposes, therefore, late Shri A.C. Shah was the principal employer and the present successors could not be held vicariously liable for the offences, if any, committed by late Shri A.C. Shah. (5) Secondly, Smt. Desai contended that there has been a long standing dispute pending between late Shri A.C. Shah and the Employees' State Insurance Corporation as to whether the said concern - Modem Fabrics - is covered by the Employees' State Insurance Act. According to the petitioners, the Inspector was also aware of the fact that the Employees' State Insurance Corporation was claiming that various establishments in the same premises should be clubbed under one Code number for liability of contribution to the Employees' State Insurance Fund, whereas the late Shri A.C: Shah was claiming that the concern - Modern Fabrics - is an independent proprietary concern and could not be clubbed with the other concerns. 6. 6. Smt. Desai next submitted that even under the definition of "principal employer" under the Employees' Stale Insurance Act, the partners of a firm could not be made criminally liable for default in the contribution to the Fund in the absence of any specific provisions under the Employees' State Insurance Act. She relied, for this purpose, on the judgment of a Division Bench of this Court in Suresh Tulsidas Kalichand v. Collector of Bombay1 and a decision of the Calcutta High Court in S.K. Agarwala v. E.S.l. Corporation2. 7. With further reference to the case law cited above Smt. Desai submitted that the Complainant seeks to impute the vicarious liability under Sections 405 and 406 of the Indian Penal Code against the Directors or partners of the Company who are in fact the successors of the deceased proprietor A.C. Shah and that such a prosecution on saddling vicarious liability under the Indian Penal Code is not permissible. She, therefore, urged that the process issued be quashed. 8. Smt. Keluskar, learned Public Prosecutor supported the issue of process by the trial Court on the prima facie material placed before it. 9. On going through the facts as well as the legal submissions advanced before me, I am satisfied that this case can be disposed of on the legal submissions alone namely that in the absence of any specific provision under the Indian Penal Code, no vicarious liability can be imputed under the said Code to the accused. 10. Admittedly, prosecution is under Section 405 and 406 of the Indian Penal Code for alleged misappropriation during the life time of late A.C. Shah who died on .30th July 1982. After earlier Director Shri A.C. Shah expired, the present Petitioners stepped in as legal heirs and partners of M/s. Modem Fabrics. 11. Under the Criminal Jurisprudence the grave consequences of penal orders are that it is absolutely necessary that only the person who has himself acted contrary to the statute which provides for punishment, can be prosecuted for his wrongful act. It is only on limited cases where vicarious liability can be imputed under the Penal Code. 11. Under the Criminal Jurisprudence the grave consequences of penal orders are that it is absolutely necessary that only the person who has himself acted contrary to the statute which provides for punishment, can be prosecuted for his wrongful act. It is only on limited cases where vicarious liability can be imputed under the Penal Code. There are other statutes where there are penal provisions and where specific provisions have been made for vicarious liability which are to be found under the social welfare enactment like the Foreign Exchange Regulation Act, Employees' Provident Fund and Miscellaneous Provisions Act, 1952, Prevention of Food Adulteration Act etc. There are no such provisions under the Employees State Insurance Act, 1948. This was subsequently inserted by Act 29 of 1989. 12. The present case being under the Indian Penal Code is, therefore, on a stronger footing. There is no scope for applying principles of vicarious liability for the offence of criminal misappropriation. The Penal code does not provide for it. Even otherwise the complaint appears to be that the Director (Petitioner) in his capacity as Employer committed default in paying the contribution to the Employees' State Insurance Scheme which amount they are alleged to have deducted from the wages of the workers. Explanation 2 to Section 405 of the Indian Penal Code states that: “Explanation 2. A person, being an employer, who deducts the employees' 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 contribution so deducted by him and if he makes default in the payment of such contribution so deducted by him 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." 13. From a plain reading of the above Explanation it appears that this deeming provision applies to a 'employer'. The word 'employer' has not been defined in the Indian Penal Code and under the Employees' State Insurance Act, 1948 only 'immediate employer' and 'principal employer' have been defined. From a plain reading of the above Explanation it appears that this deeming provision applies to a 'employer'. The word 'employer' has not been defined in the Indian Penal Code and under the Employees' State Insurance Act, 1948 only 'immediate employer' and 'principal employer' have been defined. Merely by virtue of the fact that the person is a director of the company, he does not become a principal employer a5 contemplated under Section 2(17) of the Employees' State Insurance Act. This has been held by the Division Bench of our High Court in Suresh Tulsidas Kilachand v. Collector of Bombay cited supra. 14. Thus, considering from either angle, for the period when late A.C. Shah was the Proprietor or for the subsequent period the present Petitioners cannot be prosecuted for the offence punishable under Sections 405 and 406 of the Indian Penal Code. The prosecution is thus misconceived and if allowed to proceed, it would mean abuse of the process of the Court. 15. It may not be out of place to mention here that even in certain statutes there are special provisions for vicarious liabilities, for the Supreme Court has held that merely because a person is Director or Partner in charge of and responsible for the conduct and business of the company, it is not sufficient to hold the Director guilty to the charge. Referring to the case of Municipal Corporation of Delhi v. Ram Kishore Rohatagi3 which was a criminal complaint under the prevention of Food Adulteration Act and in which the Supreme Court quashed the process issued against the Director, it was observed that so far as the Directors are concerned, there is not even a whisper of shred of evidence, nor anything to show, apart from the presumption drawn by the complainant that there is any act committed by the Director from which a reasonable inference can be drawn that they could also be vicariously liable. As already stated above in the present case it need not be emphasised that the vicarious liability is said to be imposed against the Petitioners under the provisions of the Penal Code which does not provide for vicarious liability imposed at all. 16. In the light of all these circumstances as already pronounced on 7.3.1990, Rule is made absolute in terms of prayer (a) of the Petition. Petition allowed. 1. 1984 Mh. LJ. 117. 2. 1985 (2) S.L.R. 25. 16. In the light of all these circumstances as already pronounced on 7.3.1990, Rule is made absolute in terms of prayer (a) of the Petition. Petition allowed. 1. 1984 Mh. LJ. 117. 2. 1985 (2) S.L.R. 25. 3. A.I.R. 1983 S.C. 67.