Rayalaseema Re-rolling Mills Ltd. , Cuddapah v. Provident Fund Inspector, Cuddapah
2005-07-28
G.YETHIRAJULU
body2005
DigiLaw.ai
( 1 ) THESE revision cases are filed by A-1 and a-2 in C. C. Nos. 30, 159 and 169 of 2000 on the file of the Special Judicial Magistrate of first Class, Kadapa. The revision petitioners and the respondents 2 to 4 were prosecuted by the first respondent through a complaint filed for the offences punishable under sections 14 (2), 14-A (1) and 14-A (2) of the Employees Provident Fund and miscellaneous Provisions Act, 1952, (for short the Act ). The first petitioner is a company. The second petitioner is the Managing director and respondents 2 to 4 are the directors of the said company. After the court taking cognizance of the offences, the respondents 2 to 4 approached this Court to quash the proceedings against them in these cases and several other cases of similar nature filed by the first respondent. At the time of hearing of those cases, when the counsel for the first respondent was questioned as to whether the respondents 2 to 4 are liable for prosecution when they were not in-charge of the affairs of the company, he represented to this Court that the first respondent was contemplating to withdraw all cases against respondents 2 to 4 and on that submission, the matters were adjourned for further hearing. On the next date of adjournment, the learned counsel for the first respondent filed an affidavit mentioning that he filed petitions before the Lower Court seeking permission to withdraw the complaints against respondents 2 to 4. In view of the same, this Court, through the order dated 14-08-2001, disposed of all the criminal petitions and revision cases observing that in the light of the submission made on behalf of the first respondent, no further order need be passed. Subsequent to the said order, the Lower Court accorded permission to withdraw the cases against respondents 2 to 4 and accordingly they were discharged for the offences mentioned in the complaint. The revision petitioners, being aggrieved by the orders of discharge, dated 02-11 -2001, passed by the Lowercourt in C. F. R. Nos. 721, 722 and 723 of 2001, preferred these revision cases challenging the validity of the order of Lower Court according permission to withdraw the cases against respondents 2 to 4 and consequentially discharging those respondents for the offences mentioned in the complaints.
721, 722 and 723 of 2001, preferred these revision cases challenging the validity of the order of Lower Court according permission to withdraw the cases against respondents 2 to 4 and consequentially discharging those respondents for the offences mentioned in the complaints. ( 2 ) WHEN the mattercame up for admission, a question was posed to the counsel for the petitioners regarding the locus stand! of the petitioners to maintain the revision cases. ( 3 ) THE learned counsel for the petitioners submitted that since the respondents 2 to 4 are also the Directors of the company and as the first respondent obtained sanction to prosecute respondents 2 to 4 also, the first respondent cannot withdraw the cases against them while continuing the prosecution against the petitioners. He further submitted that the withdrawal of the cases against respondents 2 to 4 would cause any amount of prejudice to the second petitioner since the entire liability attributed by the first respondent would be thrusted on him. Therefore, the Lower Court ought to have passed the orders after applying mind and after considering as to whether there are grounds to accord permission to the complainant to withdraw the cases against the respondents 2 to 4. ( 4 ) THE Learned counsel for the first respondent submitted that in the body of the complaints filed against the petitioners and the respondents 2 to 4 there were specific allegations that the second petitioner was responsible for the conduct of the business of the company and that despite several requests and persuasions, second petitioner failed to pay the provident fund contribution for various months, contrary to the provisions of paras 3 and 4 of the Employees Pension scheme, 1995. Since there was no mention in the complaint that the respondents 2 to 4 were also responsible for the affairs of the company, the Lower Court was right in according permission to withdraw the cases against respondents 2 to 4. ( 5 ) THE Learned counsel for the respondents 2 to 4 submitted that the second petitioner has no locus standi to object the withdrawal of the prosecution against respondents 2 to 4 since they are co-accused and that when a prosecution was sought to be withdrawn, the co-accused (the petitioners) cannot have any objection for such withdrawal and if there is any objection, it should be only to the complainant and not to the co-accused.
( 6 ) THE Learned counsel for the revision petitioners tried to impress upon this Court, by relying on certain decisions of Supreme court, that the petitioners have locus standi to maintain the revision cases and are entitled to oppose the order of withdrawal passed by the Lower Court. He placed strong reliance on the following Judgments in support of his contention that the petitioners can maintain revision cases against the co-accused. ( 7 ) IN Rajender Kumar Jain v. State the supreme Court while dealing with Sec. 321 of the Criminal Procedure Code held that it shall be the duty of Public Prosecutor to inform the Court and it shall be the duty of the court to apprise itself of the reasons which permit the Public Prosecutor to withdraw from the prosecution. The Court has a responsibility and a stake in the administration of criminal justice and so has the Public prosecutor, its "minister of Justice". Both have a duty to protect the administration of criminal justice against possible abuse or misuse by the Executive by resort to the provisions of Section 321, Criminal, procedure Code. ( 8 ) THE Learned counsel for the revision petitioners drew the attention of this Court to the above decision by mentioning that the supreme Court entertained an appeal filed by an advocate, who has no direct nexus with the offences for which the accused in the above cases were prosecuted. ( 9 ) IN Dy. Accountant General v. State, a full Bench of Kerala High Court held that the power to withdraw under Section 494 of criminal Procedure Code, 1898, is conferred on the Public Prosecutor and no one else; and, although this is an executive power, it is a power which he must exercise in the light of his own judgment and not at the dictation of some other authority, however high they may be. The power of withdrawal conferred on the public prosecutor is not an absolute power. He could withdraw from the prosecution only with the consent of the Court and this Curb is placed on his power in order to ensure that the power is not abused, in other words, it is not exercised for improper reasons or to serve improper ends. Kerala High Court further held that in the circumstances of the case, the question of locus stand!
Kerala High Court further held that in the circumstances of the case, the question of locus stand! that was raised by the respondents is of no consequence in the said matter in which they would have felt bound to act irrespective of the locus standi of the petitioners. ( 10 ) IN M. N. Sankaranarayanan Nair v. P. V. Balakrishnan, the Supreme Court while dealing with Section 494 of Criminal procedure Code 1898, held that the Public prosecutor can be asked by the State governmenttoconsiderthe filing of a petition for obtaining permission of the court to withdraw form the prosecution. He can if he is of opinion that the prosecution ought not to proceed get the consent of the Government to file such a petition. The court further observed that it is the duty of the court also to see in furtherance of justice that the permission is not sought on grounds extraneous to the interest of justice or that offences which are offences against the State go unpunished merely because the government as a matter of general policy of expediency unconnected with its duty to prosecute offenders under the law, directs the Public Prosecutor to withdraw from the prosecution and the Public Prosecutor merely does so at its behest. ( 11 ) IN M. Balakrishna Reddy v. Principal secretary to Government Home Department, this Court, while considering the scope of section 321 Cr. P. C. and dealing with the question of locus standi, held that in a case filed under Section 498-A IPC at the instance of the wife, when the Public Prosecutor filed an application to withdraw the prosecution against the accused, the wife being the de-facto complainant can agitate the matter before the appropriate Court in a revision. The Court further observed that the Public prosecutor merely guided by the Government made the application without applying the fresh mind independently and failed to mention that the withdrawal is in the public interest, however mentioned that there were bleak chances for the prosecution to succeed the revision filed by the wife, can be maintained. ( 12 ) THERE is no dispute regarding the above legal position. But in the present case, the prosecution was launched against the petitioners and the respondents 2 to 4 for failure to pay the contribution of provident fund on behalf of the first petitioner.
( 12 ) THERE is no dispute regarding the above legal position. But in the present case, the prosecution was launched against the petitioners and the respondents 2 to 4 for failure to pay the contribution of provident fund on behalf of the first petitioner. It is an established principle that the person who is managing and in-charge of the affairs of a company is liable to be prosecuted under the said statute for failure to pay the contribution. The second petitioner did not dispute that he is the Managing Director and in-charge of the affairs of the company, but contends that the respondents 2 to 4 are also looking after the affairs of the company, therefore, the prosecution cannot be withdrawn against respondents 2 to 4 leaving the prosecution to be continued against the petitioners. ( 13 ) THE Learned counsel for the revision petitioners submitted that since the names of the second petitioner as well as respondent 2 to 4 were mentioned as the persons-in-charge and responsible for the conduct of the business of the establishment, in column 11 in Form No. 5-A of the Employees provident fund Scheme 1952 filed on behalf of the first petitioner, it is a clear indication that the respondents 2 to 4 are also persons-in-charge of the affairs of the company. ( 14 ) THE first respondent, prima facie, felt that the second petitioner is the person-in-charge of the affairs of the company. The prosecution is not against the second petitioner in his individual capacity. The fine amount, if any, to be realized would be against the assets of the first petitioner and not against the personal properties of the managing director or the Directors of the company. However, there is a provision in the Act that if the person-in-charge of the affairs of the company fails to pay the contribution, he is liable to be prosecuted and liable for sentence of imprisonment also. If there were more than one person-in-charge of the affairs of the company, all of them may be liable for prosecution but non-prosecution of the other Directors would not absolve the managing Director from his liability. ( 15 ) THIS is not a matter involving public interest. It is only a prosecution for realization of the contribution due from the first petitioner- company.
( 15 ) THIS is not a matter involving public interest. It is only a prosecution for realization of the contribution due from the first petitioner- company. If the prosecution was in respect of an offence involving public interest, the position would have been different. Since the first respondent did not make any specific allegations in the complaint about the responsibility of respondents 2 to 4 as directors for the administration of the affairs of the company, the first respondent is justified in filing petitions before the lower Court for withdrawal of the cases against respondents 2 to 4. The second petitioner, being the co-accused, cannot raise any objection for withdrawal of the cases against respondents 2 to 4. If the withdrawal of the cases is not in accordance with law and if it is shrouded with any illegality, it is for the revision petitioners to take advantage of it and to get any benefit to which they are entitled underthe provisions of the Act. ( 16 ) I do not find any merits in the revision cases. Accordingly, the revision cases are dismissed.