Research › Search › Judgment

Karnataka High Court · body

2001 DIGILAW 409 (KAR)

H. v. THIMMEGOWDA VS STATE

2001-06-01

N.S.VEERABHADRAIAH

body2001
( 1 ) ALL these criminal petitions arise out of the similar orders passed by the learned Judicial Magistrate First Class, Hassan in C. C. Nos. 2512/92 to 2522/92 dismissing the applications filed under Section 239 of the Code of Criminal Procedure for discharge. ( 2 ) THE brief facts of the case are as follows : The Provident Fund Inspector, Employees' Provident Fund Organisation of Hassan Division filed complaints on 6-8-1991 for initiation of action under Sec. 14 (1) (1-A) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 against the accused persons who are the Directors of M/s. Hemavathi Coffee Curing Works (P) Ltd. , Hassan on account of the default in contributing to the Provident Fund of its employees as required under the Act and the Scheme. The petitioners are accused Nos. 2, 4 and 5. It appears one of the accused viz. , accused No. 6, G. M. Rajendra was found absconding. Therefore, the case against accused No. 6 came to be split up. When the matter was at the stage of recording plea, the petitioners filed an application under Section 239, Cr. P. C. for discharge in the light of the judgment rendered in the case of Common Cause, A Registered Society v. Union of India, reported in AIR 1996 SC 1619 : (1996) 4 JT (SC) 701. The learned Magistrate after hearing the prosecution as well as the learned counsel for the accused held that the petitioners are not entitled for discharge on the ground that the offence alleged is one of economic offences in nature and they cannot take shelter under the judgment supra. It is with the said reasoning the learned Magistrate dismissed all the applications filed under Section 239 of Cr. P. C. for discharge. As against the dismissal of the applications for discharge, the petitioners have now come up with the present criminal petitions praying for quashing of the proceedings of the trial Court. It is with the said reasoning the learned Magistrate dismissed all the applications filed under Section 239 of Cr. P. C. for discharge. As against the dismissal of the applications for discharge, the petitioners have now come up with the present criminal petitions praying for quashing of the proceedings of the trial Court. ( 3 ) THE main contention of the learned counsel for the petitioners Sri A. H. Bhagwan is that the Apex Court in the case of Common Cause, a Registered Society v. Union of India, reported in AIR 1996 SC 1619 , while dealing with the category of cases, under 2 (f) held that if the offence punishable is up to three years with or without fine or if the trial has not commenced for a period of two years from the date of appearance of the accused, the accused persons are entitled for an order of discharge. He has secondly contended that in the case of "common Cause," A Registered Society v. Union of India, reported in AIR 1997 SC 1539 , it is further clarified that the accused is entitled for a speedy trial. Even on this ground also, the accused persons are entitled for discharge. He, therefore, contended that the learned Magistrate has erred in not discharging the accused and prayed to quash the entire proceedings whether the offence falls within the definition of 'economic offence' or not. ( 4 ) ON the other hand, the learned High Court Government Pleader contended that the Inspector of Employees' Provident Fund Organisation filed the complaint under the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 read with Employees' Provident Funds Schemes, 1952 for initiation of criminal proceedings as required under S. 14 (1) (1-A) of the Act. The offence falls within the category of economic offences. Therefore, the trial Court has rightly rejected the contention of the accused persons holding that they are not entitled to take shelter under the judgment of the Apex Court reported supra. The learned Government Pleader also relied on the decision of the Supreme Court in the case of the Superintendent and Remembrancer of Legal Affairs v. Girish Kumar, reported in AIR 1975 SC 1030 , and contended that in respect of economic offences, the matter stands altogether on a different footing, Therefore, the accused are not entitled for an order of discharge. ( 5 ) IN the light of the submissions, it has to be examined as to whether the petitioners can take shelter under the judgment of the Apex Court rendered in the case of "common Cause", A Registered Society v. Union of India, reported in AIR 1996 SC 1619 , and thereby they are entitled for discharge. ( 6 ) ADMITTEDLY, the complaint is filed for initiating action under Section 14 (1) (1-A) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 which reads thus :"14. Penalties : (1) Whoever for the purpose of avoiding any payment to be made by himself under this Act, the Scheme, the Family 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. " (1-A) 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 charges, 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 a 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. (b) which 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. "a plain reading of the section makes it clear that if the employer contravenes or defaults in paying the contribution amount in respect of its employees as provided for in the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the accused persons are liable for punishment with imprisonment for a term which may extend to three years or otherwise. "a plain reading of the section makes it clear that if the employer contravenes or defaults in paying the contribution amount in respect of its employees as provided for in the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, the accused persons are liable for punishment with imprisonment for a term which may extend to three years or otherwise. In the case on hand, the accused persons are alleged to have committed the offence between 16-8-1990 and 16-11-1990, whereas the complaint came to be filed on 6-8-1991. ( 7 ) SECTION 468 of the Code of Criminal Procedure reads thus :"468. Bar to taking cognizance after lapse of the period of limitation : (1) Except as otherwise provided elsewhere in this Code, no Court shall take cognizance of an offence of the category specified in sub-section (2), after the expiry of the period of limitation, (2) 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. "section 468 (1) (c) of the Code of Criminal Procedure makes it clear that in case if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years, the period of limitation shall be three years. Therefore, the contention of the learned counsel that the complaints are all barred by limitation is without any force. That apart, under the Economic Offences (Inapplicability of Limitation) Act, 1974 (Central Act No. 12 of 1974), in respect of economic offences, the provisions of Chapter XXXVI of the Code of Criminal Procedure, 1973 do not apply to certain offences which are enumerated in the Schedule as follows :"the SCHEDULE 1. The Indian Income-tax Act, 1922 (11 of 1922 ). 1-A. Clause (a) of Section 63 of the Copyright Act, 1957 (14 of 1957 ). 2. The Income-tax Act, 1961 (43 of 1961 ). 2-A. The Interest Tax Act, 1974-vide Act 45 of 1974, S. 30. 2-B. The Hotel Receipts Tax Act, 1980-vide Act 54 of 1980, S. 37. 2-C. Expenditure Tax Act, 1987. 3. The Companies (Profits) Surtax Act, 1964 (7 of 1964 ). 4. The Wealth-tax Act 1957 (27 of 1957 ). 5. 2. The Income-tax Act, 1961 (43 of 1961 ). 2-A. The Interest Tax Act, 1974-vide Act 45 of 1974, S. 30. 2-B. The Hotel Receipts Tax Act, 1980-vide Act 54 of 1980, S. 37. 2-C. Expenditure Tax Act, 1987. 3. The Companies (Profits) Surtax Act, 1964 (7 of 1964 ). 4. The Wealth-tax Act 1957 (27 of 1957 ). 5. The Gift-tax Act, 1958 (18 of 1958 ). 6. The Central Sales Tax Act, 1956 (74 of 1956 ). 7. The Central Excises and Salt Act, 1944 (1 of 1944 ). 7-A. Chapter V of the Finance Act, 1994. 8. The Medicinal and Toilet Preparations (Excise Duties) Act, 1955 (16 of 1955 ). 9. The Customs Act, 1962 (52 of 1962 ). 10. The Gold (Control) Act 1968 (45 of 1968 ). 11. The Imports and Exports (Control) Act, 1947 (18 of 1947 ). 12. The Foreign Exchange Regulation Act, 1947 (7 of 1947 ). 13. The Foreign Exchange Regulation Act, 1973 (46 of 1973 ). 14. The Capital Issues (Control) Act, 1947 (29 of 1947 ). 15. The Indian Stamp Act, 1899 (2 of 1899 ). 16. The Emergency Risks (Goods) Insurance Act, 1962 (62 of 1962 ). 17. The Emergency Risks (Factories) Insurance Act, 1962 (63 of 1962 ). 18. The Emergency Risks (Goods) Insurance Act, 1971 (50 of 1971 ). 19. The Emergency Risks (Undertakings) Insurance Act, 1971 (51 of 1971 ). 20. The General Insurance Business (Nationalisation) Act, 1972 (57 of 1972 ). 21. The Industries (Development and Regulation) Act, 1951-vide Act 46 of 1981, S. 2" From 'the Economic Offences (Inapplicability of Limitation) Act, 1974,' it makes clear that if the offences alleged are in the nature of economic offences, in respect of such offences, the application of limitation does not arise. ( 8 ) IN the case on hand, we are dealing with the offence alleged under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. The preamble to the Act reads thus :"an Act to provide for the institution of provident funds, family pension fund and deposit-linked insurance fund for employees in factories and other establishments. " ( 9 ) SECTION 2 of the Act reads thus :"2. The preamble to the Act reads thus :"an Act to provide for the institution of provident funds, family pension fund and deposit-linked insurance fund for employees in factories and other establishments. " ( 9 ) SECTION 2 of the Act reads thus :"2. Definitions : In this Act, unless the context otherwise requires :- (a) "appropriate Government" means : (i) in relation to an establishment belonging to, or under the control of, the Central Government or in relation to an establishment connected with a railway company, a major port, a mine or an oilfield or a controlled industry or in relation to an establishment having departments or branches in more than one State, the Central Government, and (ii) in relation to any other establishment, the State Government, (aa) "authorised officer" means the Central Provident Fund Commissioner, Additional Central Provident Fund Commissioner, Deputy Provident Fund Commissioner, Regional Provident Fund Commissioner or such other officer as may be authorised by the Central Government, by notification in the Official Gazette, (b) "basic wages" means all emoluments which are earned by an employee while on duty or on leave or on holiday with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him, but does not include- (i) the cash value of any food concession. (ii) any dearness allowance that is to say, all cash payments by whatever name called paid to an employee on account of a rise in the cost of living, house rent allowance, overtime allowance, bonus, commission or any other similar allowance payable to the employee in respect of his employment or of work done in such employment; (iii) any presents made by the employer. (c) "contribution" means a contribution payable in respect of a member under a Scheme or the contribution payable in respect of an employee to whom the Insurance Scheme applies, (d) "controlled industry" means any industry the control of which by the Union has been declared by a Central Act to be expedient in the public interest. (c) "contribution" means a contribution payable in respect of a member under a Scheme or the contribution payable in respect of an employee to whom the Insurance Scheme applies, (d) "controlled industry" means any industry the control of which by the Union has been declared by a Central Act to be expedient in the public interest. (e) "employer" means- (i) in relation to an establishment, which is a factory, the owner or occupier of the factory including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and, where a person has been named as a manager of the factory under clause (f) of sub-section (1) of Section 7 of the Factories Act, 1948, the person so named, and (ii) in relation to any other establishment, the person who, or the authority which has the ultimate control over the affairs of the establishment, and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent. (f) "employee" means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment and who gets his wages directly or indirectly from the employer and includes any person- (i) employed by or through a contractor in or in connection with the work of the establishment. (ii) engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 or under the Standing orders of the establishment; (ff) "exempted employee" means an employee to whom a Scheme or the Insurance Scheme as the case may be would, but for the exemption granted under Section 17, have applied. (fff) "exempted establishment" means an establishment in respect of which an exemption has been granted under Section 17 from the operation of all or any of the provisions of any Scheme or the Insurance Scheme, as the case may be, whether such exemption has been granted to the establishment as such or to any person or class of persons employed therein. (g) "factory" means any premises including the precincts thereof, in any part ofwhich a manufacturing process is being carried on or is ordinarily so carried on, whether with the aid of power or without the aid of power. (gg) "family pension fund" means the Family Pension Fund established under the Family Pension Scheme. (g) "factory" means any premises including the precincts thereof, in any part ofwhich a manufacturing process is being carried on or is ordinarily so carried on, whether with the aid of power or without the aid of power. (gg) "family pension fund" means the Family Pension Fund established under the Family Pension Scheme. (ggg) "family Pension Scheme" means the Employees' Family Pension Scheme framed under Section 6-A. (h) "fund" means the provident fund established under a Scheme. (i) "industry" means any industry specified in Schedule I and includes any other industry added to the Schedule by notification under Section 4. (i-a) "insurance Fund" means the Deposit-linked Insurance Fund established under sub-section (2) of Section 6-C. (i-b) "insurance Scheme" means the Employees' Deposit-linked Insurance Scheme framed under sub-section (1) of Section 6-C, (i-c) "manufacture" or "manufacturing process" means any process for making, altering, repairing, ornamenting, finishing, packing, oiling, washing, cleaning, breaking up, demolishing or otherwise treating or adapting any article or substance with a view to its use, sale, transport, delivery or disposal. (j) "member" means a member of the Fund, (k) "occupier of a factory" means the person who has ultimate control over the affairs of the factory, and where the said affairs are entrusted to a managing agent, such agent shall be deemed to be the occupier of the factory. (ka) "prescribed" means prescribed by rules made under this Act. (kb) "recovery Officer" means any officer of the Central Government, State Government or the Board of Trustees constituted under Sections 5-A, who may be authorised by the Central Government by notification in the Official Gazette to exercise the powers of a Recovery Officer under this Act. (l) "scheme" means the Employees' Provident Funds Scheme framed under Section 5, (m) "tribunal" means the Employees' Provident Funds Appellate Tribunal constituted under Section 7-D. " ( 10 ) A reading of the entire provisions makes it clear the contribution that has to be paid is in respect of the workers employed in an industry or a Company etc. and if the contribution is not paid that is legally payable by the employer, then it is a clear contravention of the provisions of the Act and the Scheme and the same is also in the nature of an economic offence, for the simple reason that the workers are entitled for the provident fund benefit. and if the contribution is not paid that is legally payable by the employer, then it is a clear contravention of the provisions of the Act and the Scheme and the same is also in the nature of an economic offence, for the simple reason that the workers are entitled for the provident fund benefit. Even if the Company were to be closed, in respect of the earlier period, the Company is liable to pay the contribution. Non-payment of the contribution naturally is an economic offence punishable under the Act. Therefore, I am of the clear opinion though the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 is not included in the schedule of the Economic Offences (Inapplicability of Limitation) Act, 1974 the offences do come within the definition of economic offences. Therefore, even on this ground also the question of limitation does not arise. ( 11 ) NOW the next point that has to be considered is whether the petitioners are entitled for the benefit of the Apex Court's judgment referred to supra. ( 12 ) THE Apex Court in the case of "common Cause", A Registered Society v. Union of India, reported in AIR 1996 SC 1619 , at para 4 of its judgment issued the directions as follows :"4. Directions (1) and (2) made hereinabove shall not apply to cases of offences involving (a) corruption, misappropriation of public funds, cheating whether under the Indian Penal Code, Prevention of Corruption Act or any other statute, (b) smuggling, foreign exchange violation and offences under the Narcotic Drugs and Psychotropic Substances Act, (c) Essential Commodities Act, Food Adulteration Act, Acts dealing with Environment or any other economic offences, (d) offences under Arms Act, Explosive Substances Act, Terrorists and Disruptive Activities Act, (e) Offences relating to the Army, Navy and Air Force, (f) offences against public tranquillity, (g) offence relating to public servants, (h) offences relating to coins and Government stamp, (i) offences relating to election, (j) offences relating to giving false evidence and offences against public justice, (k) any other type of offences against the State, (l) offences under the Taxing Enactments, and (m) offences of defamation as defined in Section 499, IPC. "it is made clear that in respect of any other economic offences that the accused persons are not entitled for the benefit of discharge even though the matter is pending for more than two years where the trial has not commenced. Therefore, on this ground also the contention of the learned counsel that the proceedings have to be quashed is without any merits. ( 13 ) THE next question is whether the accused are entitled for a speedy trial in the light of the decision of the Supreme Court in the case of "common Cause", A Registered Society v. Union of India, reported in AIR 1997 SC 1539 . In this regard, the Apex Court clarified its earlier judgment, reported in AIR 1996 SC 1619 : (1996 AIR SCW 2279) as follows :"if the delay is only on account of the accused persons, they are not entitled to have the benefit of discharge or acquittal as per paras 2 (a) to 2 (f) of the earlier Judgment. " ( 14 ) HERE is a case that one of the accused was found absconding which gave rise for the delay in the proceedings. It is on account of the said fact, the Criminal Proceedings were pending for a very long period. Under such circumstances, the question of discharge, acquittal or quashing of the proceedings does not arise. ( 15 ) UNDER similar circumstances, in the matter of economic offences, the Apex Court while dealing with the provisions of Foreign Exchange Regulation Act, in the case of the Superintendent and Remembrancer of Legal Affairs v. Girish Kumar, reported in AIR 1975 SC 1030 at para 7 of its judgment observed thus :"7. The preamble provides the key to the general purpose of the Act. That purpose is the regulation of certain payments, dealings in foreign exchange and securities and the import and export of currency and bullion in the economic and financial interest of India. The general purpose or object of the Act given in the preamble may not show the specific purpose of the classification made in Section 23 (1) (a) and Section 23 (1a ). The Court has, therefore, to ascribe a purpose to the statutory classification and co-ordinate the purpose with the more general purpose of the Act and with other relevant Acts and public policies. The Court has, therefore, to ascribe a purpose to the statutory classification and co-ordinate the purpose with the more general purpose of the Act and with other relevant Acts and public policies. For achieving this, the Court may not only consider the language of Section 23 but also other public knowledge about the evil sought to be remedied, the prior law, the statement of the purpose of the change in the prior law and the internal legislative history. When the purpose of a challenged classification is in doubt, the Courts attribute to the classification, the purpose thought to be most probable. Instead of asking what purpose or purposes the statute and other materials reflect, the Court may ask what constitutionally permissive objective this statute and other relevant materials could plausibly be construed to reflect. The latter approach is the proper one in economic regulation cases. The decisions dealing with economic regulation indicate that Courts have used the concept of 'purpose' and 'similar situations' in a manner which give considerable lee-way to the Legislature. This approach of judicial restraint and presumption of constitutionality requires that the legislature is given the benefit of doubt about its purpose. How far a Court will go in attributing a purpose which though perhaps not the most probable is at least conceivable and which would allow the classification to stand depends to a certain extent upon its imaginative power and its devotion to the theory of judicial restraint. " ( 16 ) FURTHER, the Supreme Court in the case of the State of Gujarat v. Mohanlal, reported in AIR 1987 SC 1321 , while dealing with the provisions of Customs Act, in the middle of para 5 of its judgment observed thus :"the mere fact that six years had elapsed for which time lag the prosecution was in no way responsible, was no good ground for refusing to act in order to promote the interests of justice in an age when delays in the Court have become a part of life and the order of the day. " ( 17 ) KEEPING in mind, the ruling of the Apex Court, when the matter has to be investigated, the question of extending the benefit of "common Cause" case or quashing of the proceedings does not arise. " ( 17 ) KEEPING in mind, the ruling of the Apex Court, when the matter has to be investigated, the question of extending the benefit of "common Cause" case or quashing of the proceedings does not arise. In view of the fact that the matter is pending since last more than 10 years, it is appropriate to direct the learned Magistrate to complete the proceedings within a period of 6 months. ( 18 ) FOR the foregoing reasons, I do not find any merits in these Criminal Petitions. Accordingly, the petitions are dismissed. Petitions dismissed. --- *** --- .