JUDGMENT 1. - M/s. Roshan Lal Oil Mills was a private limited company incorporated and registered as such in the year 1974 under Indian Companies Act, 1956. This company was engaged in the manufacturing of refined oil, vegitable oil, vegitable ghee, etc. Sh. S.R. Singla (Application No. 1) and Sh. Girdhari Lal Gupta are stated to be the two promoters of the said company. The factory of the company was situated at Bhatinda. In the year 1990 this company was converted into a public limited company. In the year 1992 the aforesaid company established its yet another factory at Kanota. In the year 1995 the name of the aforesaid company was changed to ROM Industries limited. 2. It is alleged that the aforesaid company was also engaged in the export of deoiled cake. In the month of June, 1996, the consignment sent by the company to foreign country is stated to have been struck by a severe cyclone at Jamnagar Port and finished goods worth Rs. 30 Crores plus was allegedly washed away. The huge financial losses broke the financial back bone of the company and eventually the company had to be declared a sick industry under the Sick Industrial Companies (Special Provisions) Act, 1985 (for short the SICA). A reference under Section 15(1) of the SICA is reportedly pending before the authorities concerned. The BIFR has nominated IDBI as operating agency under Section 16(2) of SICA. The aforesaid company was, under the provisions of Employees Provident Fund Act, 1952, obliged to contribute to the Employees provident funds. At present Sh. S.R. Singhla, applicant No. 1, is stated to be working as the Chairman-cum-Managing Director and Sh. M.L. Gupta (applicant No. 2) as Joint Managing Director of the company. Due to the financial set back faced by the company during its business life, deposit of the contribution in the Employees Provident Fund could not be made. It was in this background that the Enforcement Officer appears to have submitted a report with P/s. Kanota regarding the non deposit and mis-appropriation of the contribution amount in the Employees Provident Fund. On the basis of the report so lodged by the Enforcement Officer, Crime No. 52/1999 Under section 406/409 IPC stands registered at P/s. Kanota against the present applicants. Apprehending their arrest in the said case the applicants have approached this court for bail under Section 438 Cr.P.C. 3. On the basis of the report so lodged by the Enforcement Officer, Crime No. 52/1999 Under section 406/409 IPC stands registered at P/s. Kanota against the present applicants. Apprehending their arrest in the said case the applicants have approached this court for bail under Section 438 Cr.P.C. 3. The learned counsel for the applicants advanced two fold arguments. In the first phase it was submitted that in the wake of a reference already pending before the authorities concerned Under section 15(1) of the SICA and the nomination of IDBI operating agency of the ROM Industries Ltd. Under section 16(2) of SICA and also appointment of Sh. ----------- as a Special Director as per the provisions of Section 16(4) of SICA, the applicants were not at all responsible for the failure of deposit of any contribution amount with the Provident Fund Commissioner. In the second phase it was submitted that as per provisions contained in Explanation-1 and Explanation-2 below Section 405 IPC, the present applicants cannot be held to be the employer of the Company. It was submitted that for the purposes of the Provident Funds Act as also other relevant Acts, the company itself is to be regarded as an employer; the present applicants simply being the Directors of the said company cannot be equated to the status of 'employer' for the purposes of application of the provisions of the Provident Funds Act. Such arguments were supported with the decision of the Supreme Court in the case of Employees State Insurance Corporation v. S.K. Agarwal & Ors. (JT 1995(5) SC 233 ) wherein it was held that Directors of Public Limited Company were not employer for the purposes of ESI Act of 1948 as the Public Limited Company itself is the principal employer for the purposes of the said Act. 4. As against the above arguments, advanced on behalf of the applicants, it was submitted that since the applicants were in-charge of and responsible to the company for the business of the company, they were in the position of the employer for the purposes of administration of Provident Funds Act. 5. I have gone through the relevant orders as made from time regarding the affairs of the company in question. 5. I have gone through the relevant orders as made from time regarding the affairs of the company in question. By its order made on 30.7.97 by the Board of Industrial and Financial Reconstruction (BIFR), IDBI was appointed as the operating agency of the aforesaid company under Section 16(2) of SICA. In the meeting of the Board of Directors held on 29.6.98 a resolution was adopted to the effect that the company was not in a position to deposit their contribution of provident funds due to company as having been declared as a sick industrial company vide BIFR order dated 30.7.97 aforesaid. It further appears to have been resolved that the company would be depositing their contribution of Provident Fund to the Department of Provident Funds, Jaipur, as soon as the financial position of the company was improved and funds were available for the purpose. It is stated at bar by the learned counsel for the company that in compliance of the aforesaid resolution the company has already deposited an amount of Rs. 1 lac plus towards his contribution to the Provident Fund of the employees. 6. Explanation-1 and Explanation-2 below section 405 IPC read as under: "Explanation 1 : A person, being an employer, who deducts the employee's contribution from the wages payable to the employees 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 for 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 persons, 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 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." 7. Looking to the above facts and circumstances of the case, I feel inclined to issue directions under Section 438 Cr.P.C. in favour of the applicants. It is accordingly directed that, in the event of their arrest, the applicants, namely S.R. Singla S/o. Late Shri Rohan Lal and M.L. Gupta son of Late Shri Chiranji Lal, shall be released on bail on their furnishing two sureties each in the amount of Rs. 25,000/- each with personal bond each in the amount of Rs. 50,000/- to the satisfaction of the officer arresting them and they shall observe the following conditions : (i) that the person (s) shall make himself/themselves available for interrogation by a police officer as and when required, (ii)that the person(s) shall not, directly or indirectly, make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him from disclosing such facts to the court or to any police officer; (iii) that the persons(s) shall not leave India without the previous permission of the court. 8. This order shall remain in force till the expiry of one month after the submission of the charge sheet, if any, against him/her/them during the meanwhile the applicant(s) may appear before the court concerned and pray for regular bail there. *******