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2001 DIGILAW 333 (CAL)

Pratul Chandra Dasgupta v. State of West Bengal

2001-06-18

JOYTOSH BANERJEE

body2001
JUDGMENT Joytosh Banerjee, J. 1. This revision is directed against chargesheet dated 19.1.89 and the orders including order dated 23.2.89 passed by the learned S.D.J.M, Chandernagore in the criminal proceeding. 2. Briefly stated the facts and circumstances leading to the present proceeding are as follows:- The petitioner is a retired service holder aged about 70 years and he at the material time was the Chief Executive of M/s. Victoria Jute Company Ltd., a company incorporated under the Companies Act, having its Head Office at 3-Clive Row, Calcutta. In 1986, the petitioner was directed by the Higher Authorities to act as the Managing Director of the Company on and form 5th June, 1986, but such appointment was not approved by the Central Government as per section 269(2) of the Companies Act and as such the status of the petitioner was the Chief Executive. It is further alleged that long after the resignation of the petitioner from the service of the Company, a complain was lodged against him and others for alleged non-payment of Provident Fund money deducted from the wages of the employees. In fact on or about 3.11.87 one N.C. Bhattacharjee, Provident Fund Inspector, West Bengal lodged a written complaint to the I.G. of Police (Special), Calcutta and the said I.G. sent such complaint to O.C., Bhadreswar P.S. and it was alleged in such complaint that there was non-payment of employee's share of contribution of Provident Fund money by or at the behest of one Harilal Mehta, Chairman of the Board of Directors of the Company and Shri S.Mondal, Manager of the Company for the period of July to December, 1986. On receipt of the said written complaint, Bhadreswar P.S. Case No.10 dated 8th of March, 1988 under sections 406/409 of the I.P.C. was started. On completion of the investigation, the Investigating Authority submitted the chargesheet being chargesheet No.7 dated 19.1.89 before the S.D.J.M. Chandernagore against all the accused persons including the petitioner under sections 406/409 of the Indian Penal Code and on the basis of the same S.D.J.M., Chandernagore took cognizance of the offence on 23rd February, 1989. On completion of the investigation, the Investigating Authority submitted the chargesheet being chargesheet No.7 dated 19.1.89 before the S.D.J.M. Chandernagore against all the accused persons including the petitioner under sections 406/409 of the Indian Penal Code and on the basis of the same S.D.J.M., Chandernagore took cognizance of the offence on 23rd February, 1989. It is further alleged that the petitioner filed an application under section 245(3) of the Code of Criminal Procedure alleging, inter alia, that the petitioner was not an 'Employer' within the meaning of the provisions of the Employees Provident Fund and Miscellaneous Provisions Act and therefore had no liability whatsoever in the matter of non-payment of the employees share of contribution and therefore the prosecution launched under sections 406/409 of the Indian Penal Code was not maintainable against him. The said application was heard by the learned Sub-divisional Magistrate on 15.3.89 and the same was rejected. Being aggrieved by such order, the petitioner has come up before this court alleging that the learned Magistrate erred in law in rejecting the application under section 245(3), that the entire proceeding including the order dated 23.2.89 were liable to be quashed in view of the fact that previous sanction as required under section 14AC of the Employees Provident Fund and Miscellaneous Provisions Act was not taken. The petitioner also wanted to challenge the launching of prosecution under the Indian Penal Code on the ground that for breach of any condition as envisaged under section 17 of the Employees Provident Fund and Miscellaneous Provisions Act, hereinafter referred to as the Act, no prosecution under the provisions of the Indian Penal Code is maintainable as the said Act is a Special Act and the same is exhaustive one. 3. I have heard the learned Advocate for the petitioner. None has appeared on behalf of the Opposite Party, State of West Bengal. The learned Advocate for the petitioner in his argument has wanted to challenge the cognizance of the offence on two fold grounds. Firstly, it is submitted that the Act in question enacted in 1952 is sufficient to deal with any allegation made in connection with non-payment of Provident Fund dues and other similar acts. In this respect my attention has been drawn to section 14(2A) of the Act. Firstly, it is submitted that the Act in question enacted in 1952 is sufficient to deal with any allegation made in connection with non-payment of Provident Fund dues and other similar acts. In this respect my attention has been drawn to section 14(2A) of the Act. It is contended here that the established principle of law is when there is a special Act, which provides for the procedure how an offence is to be dealt with, the case which falls under such Special Act has to be dealt with in accordance with the provisions of such Special Act. In the instant case, the allegation of non-payment of Provident Fund dues has to be initiated, continued and decided in terms of such provisions of the Special Act and here the provisions of the General Act, namely, Indian Penal Code, even if sufficient to cover such factual allegations, shall have no application. The learned Advocate has referred the case of Rabindra Chamaria vs. Registrar of Companies, W.B., reported in 1992 Cal. Crl. L.R. SC 59, and also the case of S.K. Agarwalla & Ors. vs. Employees State Insurance Corporation & Anr., reported in 1985(1) Cal. High Court Notes, 113 and also a decision of the Karnataka High Court in the case of Syed Kalum vs. M/s. Mysore Lakshmi Beedi Works & Anr., reported in 1993 Crl. Law Journal 232. Secondly, it is contended that section 14AC(1) of the Act clearly lays down that for taking cognizance of any offence punishable under the Act, there must be a previous sanction from an official authorised by the Central Government, namely, Central Provident Fund Commissioner or such other officer, empowered by him. But in the' instant case prosecution was launched without obtaining any sanction under the aforesaid provision. 4. Before I proceed to consider the matter, I should note the specific provision of section 14(2A) of the Act which provides penalty and it runs as follows:- "Whoever contravenes or makes default in complying with any provisions of this Act or of any condition subject to which exemption was granted under section 17 shall, if no other penalty is elsewhere provided by or under this Act for such contravention or non-compliance be punishable with imprisonment which may extend to 6 months, but which shall not be less than one month, and shall also be liable to fine which may extend to five thousand rupees." 5. From the aforesaid language of this penal section, it is evident that if a person is in any way responsible for the day to day business of the company and for non-payment of or failure to deposit the employees' share of contribution as deducted from their wages with the appropriate authority, such person is required to be dealt with under the provisions of the Act. In the case of Rabindra Chamaria vs. Registrar of Companies, W.B. (supra), the question for the decision of the Apex Court was whether a company, under the provisions of Companies Act, 1956 was entitle to any relief under section 633 of the Act for the offence committed under the Employees Provident Fund and Miscellaneous Provisions Act, 1952 and the Hon'ble Court clearly held that the expression 'any proceeding' occurring under section 633 could not be read out of context and treated in isolation. Otherwise what would happen was that the penal clauses under the various other acts would be rendered ineffective by the application of section 633. Again, if Parliament intended section 633 to have a coverage wider than the Act, it would have specifically provided for it as, otherwise it is a sound rule of construction to confine the provisions of a statute to itself. The case of S.K. Agarwalla & Ors. vs. State Insurance Corporation & Anr. is not relevant for the purpose of deciding this proceeding in view of the fact in that case, the accused raised the question that he was not the employer within the meaning of the definition clause of the Employees State Insurance Corporation & Anr. But in this case admittedly the petitioner was at the relevant point of time, the Chief Executive Officer and he was also appointed the Managing Director of the Company although in the instant proceeding he has claimed that ultimately he could not be appointed the Managing Director of the Company as the Central Government did not approved the appointment. There is no material before this court to come to a clear conclusion on this point touching the question of status of the petitioner. Suffice it to say that under section 14(2A) of the Act it is not necessary that the contravention must be by the employer. There is no material before this court to come to a clear conclusion on this point touching the question of status of the petitioner. Suffice it to say that under section 14(2A) of the Act it is not necessary that the contravention must be by the employer. The language of the section makes it clear that whoever responsible for such act can be prosecuted and it too early to decide that the Chief Executive Officer is not responsible for depositing the employees contribution of the Provident Fund with the proper authority. In the case of Syed Kalum vs. M/s. Misore Lakshmi Beedi Works (supra), the Karnataka High Court found that as per allegations raised, an offence punishable under sections 78 and 79 of the Trade and Merchandise Marks Act was committed. But in that case charge sheet was submitted and charge was framed under section 420 of the Indian Penal Code. The High Court in that background held that in view of sections 78 and 79 of the said Act providing penalty for applying false trade descriptions etc. and selling goods to which the false trade marks or trade descriptions was applied, a charge under section 420 I.P.C. became wholly inapt. In dealing with the matter, the said court observed as follows:- "Though there is an element of cheating in falsely applying to his goods the Trade Mark of another person or Company, it cannot be said that such an act by itself would attract section 420 I.P.C. When there are specific provisions in the Trade and Merchandise Marks Act which is a self contained Act to punish the persons committing offences under the said Act, it would be improper to resort to section 420 of I.P.C., altogether ignoring those provisions. It is not possible to make out from the impugned order how and on what material a charge was order to be framed against the accused for an offence under section 420 of I.P.C." 6. In the present case from the copy of the chargesheet I find that it recorded the simple fact that the accused persons noted in Column No.2 deducted the employees share of contribution from the wages/salary of the employees of Victoria Jute Company Ltd. from the period from July, 1986 to December, 1986 but the same was not transferred. In the present case from the copy of the chargesheet I find that it recorded the simple fact that the accused persons noted in Column No.2 deducted the employees share of contribution from the wages/salary of the employees of Victoria Jute Company Ltd. from the period from July, 1986 to December, 1986 but the same was not transferred. From such chargesheet it is not clear how the prosecuting Authority could satisfy itself that the accused/petitioner committed an offence punishable under sections 406/409 of the Indian Penal Code. So far as the offence punishable under section 406 is concerned, it provides punishment for criminal breach of trust and to establish the same it must be proved that the accused has dishonestly mis-appropriated or disposed of the property in violation of his duty. As to the proof of criminal mis-appropriation in cases money has been mis-appropriated, it will often be in the following manner: Either the offender has wilfully made false entries in his books or else he has denied or wilfully omitted to acknowledge the receipt of money but in the instant case the whole allegation is that the accused being responsible for day to day business of the company failed to deposit the amount realised towards employees contribution in the Provident Fund with the authority concerned. It is doubtful whether such allegation per se can give rise to an offence punishable under section 406 IPC as the same is not sufficient to establish mis-appropriation. For the said reason prosecution cannot also be launched under section 409 IPC. 7. Now I propose to deal with the second contention raised on behalf of the petitioner, it is contended that since no previous sanction of the Central Provident Fund Commissioner or such other officer as may be authorised by the Central Government by notification has been taken in this case, cognizance cannot be taken under the provisions of the Employees Provident Fund and Miscellaneous Provisions Act. In my considered opinion I need not enter into that question in the facts and circumstances of the present case. Here the Provident Fund Inspector lodged complaint before the police and thereafter police took up the investigation and on completion of the same submitted the chargesheet under some of provisions of the Indian Penal Code as stated above. In my considered opinion I need not enter into that question in the facts and circumstances of the present case. Here the Provident Fund Inspector lodged complaint before the police and thereafter police took up the investigation and on completion of the same submitted the chargesheet under some of provisions of the Indian Penal Code as stated above. At no point of time the authority concerned intended to launch prosecution under the provisions of the Act and therefore the question whether Prosecuting Authority had obtained pervious sanction of the Central Provident Fund Commissioner or any other persons before cognizance of the case was taken, has become redundant. It must be pointed out that such previous sanction of the Central Provident Fund Commissioner or any other persons before cognizance of the case was taken, has become redundant. It must be pointed out that such previous sanction is only necessary as per section 14AC of the Act while launching a prosecution under the provisions of that Act and not otherwise. 8. In the result, in view of my findings above it is evident that proceedings started against the accused/petitioner is bad in law. Therefore, the revision must succeed. Accordingly, the Criminal Revision is allowed. The proceedings against the accused/petitioner Pratul Chandra Dasgupta is hereby quashed. Let the copy of this order along with the L.C.R., if any, be returned to the Court below for information and necessary action. Revision application allowed.