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2007 DIGILAW 167 (CAL)

A. v. Hittooran VS STATE OF WEST BENGAL

2007-03-09

S.P.TALUKDAR

body2007
Judgment :- (1) THE subject-matter of controversy in all the five abovementioned cases being substantially the same, the said applications under Sections 401/482 of the Code of Criminal Procedure were heard at a time. (2) GRIEVANCES of the petitioners as ventilated in the various applications, may briefly be stated as follows: (3) THOUGH employees share of contributions towards Provident Fund were deducted by the respective employers from the wages of the employees, they failed to pay or deposit such contributions to the statutory find. By not paying such amount to the statutory fund though recovered from the wages of the members of the employees, there had been a failure on the part of the employers which amounted to an offence of criminal breach of trust under Section 405 of the Indian Penal Code. (4) CONCERNED Provident Fund authorities lodged complaints against the petitioners in the various cases, as referred to. On the basis of the same cases under Sections 406/409 of Indian Penal Code were started against the petitioners. By filing such applications under Sections 401/482 of the Code of Criminal Procedure, the petitioners in the various cases sought for quashing of the said cases on the grounds which may be capsulated in a few sentences as follows:-In C. R. R. No. 97 of 2006, it was claimed on behalf of the petitioners that due to various reasons like labour problem, loss of capital, shortage of power, general recession in the tea market, there had been active financial crisis for a considerable period. Such unforeseen circumstances stood in the way of the Companys depositing the Provident Fund dues in time for the period from October, 2003 to January, 2004. The petitioners in the said case claimed that subsequently the entire amount of Rs. 8,82. 701/-was duly deposited. The said case was investigated and Police after completion of investigation submitted charge-sheet under Sections 406/409 of Indian Penal Code. In C. R. R. No. 37 of 2006, the default in making such deposit was to the tune of Rs. 10,80,883/-for the period from February, 2005 to April, 2005, in C. R. R. No. 3300 of 2005, the alleged default in deposit of the employees share of the Provident Fund for the period from April, 2005 to August, 2005 was to the tune of Rs. 7,75,895/ -. In C. R. R. No. 670 of 2006 the amount involved was Rs. 10,80,883/-for the period from February, 2005 to April, 2005, in C. R. R. No. 3300 of 2005, the alleged default in deposit of the employees share of the Provident Fund for the period from April, 2005 to August, 2005 was to the tune of Rs. 7,75,895/ -. In C. R. R. No. 670 of 2006 the amount involved was Rs. 9,33,477/- for the period from January, 2003 to December, 2004. In C. R. R. No. 1446 of 2005, the amount was Rs. 28,19,703/-and it was for the period from March, 2004 to December, 2004. (5) PETITIONERS in different cases were represented by the respective learned Counsel. Both the O.P./State and the O.P./P.F. authority were also represented by different learned Counsel. (6) THE main thrust of argument on behalf of the petitioners was that the Directors of a Company cannot be termed as owners of the same and they cannot be fastened with criminal liability inasmuch as it is the company which is the owner and is responsible for payment of Provident fund dues with the authorities. Prosecution of the Directors by invoking the principle of vicarious liability is not tenable-more so when the deposits had already been made with the concerned Provident Fund authorities. (7) LEARNED Counsel, Mr. Sekhar Basu, appearing on behalf of the petitioners submitted that this Court in the best interest of justice is required to take into consideration the fact that subsequently the entire amounts were, deposited. According to him, in absence of any guilty mind or mens rea, there could not be any offence either under Section 406 or Section 409 of Indian Penal Code. (8) MR. Basu referring to the decision in the case of Jasoda Glass and silicate and Ors. v. Regional Provident Fund Commissioner and Ors. , reported in 2002 (2) CHN 407 , submitted that the learned Division Bench of this court in a similar situation disposed of a writ appeal with a direction upon the petitioners to approach concerned learned Courts of Magistrates and to satisfy the claim that the amounts had already been deposited. (9) IN support of the submission that since the amount allegedly not paid had subsequently been paid, there can be no justification for further continuation of the proceeding, reference was made to the decision in the case of Adoni Cotton Mills Ltd. and Ors. v. Regional Provident Fund commissioner and Ors. (9) IN support of the submission that since the amount allegedly not paid had subsequently been paid, there can be no justification for further continuation of the proceeding, reference was made to the decision in the case of Adoni Cotton Mills Ltd. and Ors. v. Regional Provident Fund commissioner and Ors. , reported in 1995 Supp. (4) SCC 580. In the said case, the Apex Court took into consideration the fact that the offence was allegedly committed about fifteen years back and the offence alleged is the failure to deposit the amounts under the enactments for a short period of four months immediately following the discharge of the concerned company from the receivership The amount of default, as alleged, was in the region of about Rs. 90,000/- only. After taking into account all these circumstances, the Apex Court took the view that the proceedings by way of prosecution need not be pursued provided the amount deposited in court and secured by the Bank guarantee are paid over to the Regional provident Fund Commissioner. (10) IN the case of Employees State Insurance Corporation v. S. K. Aggarwal and Ors. , reported in JT 1998 (5) SC 233, the liability of the directors in a Public Limited Company was dealt with. The Apex Court held that the directors are not employer as in the case of Public Limited Company, the Company itself is principal employer. This was in the context of Exp. 2 of Section 405 of Indian Penal Code. This significant aspect may perhaps be better appreciated in the context of the factual backdrop of a particular case. Any dispute involving mixed questions of law and facts can certainly be better decided at the time of trial. (11) LEARNED Single Bench of this Court in the case of Mr. Debidas Dutta v. The State of West Bengal, reported in 2006 (1) CLJ (Cal) 593, relying upon the Division Bench decision of this Court in the case of Jasoda Glass and. Silicate and Ors. v. Regional Provident Fund Commissioner and ors. , reported in 2002 (2) CHN 407 , directed the learned Trial Court to dispose of the case after considering the claim of the petitioner that the entire amount had since been paid. But, learned Single Bench did not quash the proceeding in the said case. Silicate and Ors. v. Regional Provident Fund Commissioner and ors. , reported in 2002 (2) CHN 407 , directed the learned Trial Court to dispose of the case after considering the claim of the petitioner that the entire amount had since been paid. But, learned Single Bench did not quash the proceeding in the said case. (12) REFERENCE was also made to an earlier decision of this Bench in the case of M/s. Air Transport Corporation and Ors. v. The State of West Bengal and anr. , reported in 2006 (1) C Cr. LR (Cal) 616. The amount involved in the said case was Rs. 80,000/-only and the Provident Fund authorities accepted the claim that such amount was duly paid. (13) MR. Basu relying upon the decision in the case of K. J. B. L. Rama reddy v. Annapurna Seeds and Anr. , reported in 2005 SCC (Cri) 1652, contended that the entire amounts having been paid, there can be no justification for proceeding further. The said case related to an offence under Section 138 of the Negotiable Instrument Act and the controversy therein has hardly any bearing to the facts of the present case. (14) MR. Joymalya Bagchi appearing as learned Counsel for the petitioners in one of the cases submitted that the expression entrusted with property or with any dominion over property has been used in a wide sense in Section 405 of Indian Penal Code. Relying upon the decision in the case of Central Bureau of Investigation, SPE, SIU (X), New Delhi v. Duncans Agro Industries Ltd. , Calcutta, reported in 1996 C Cr. LR (SC) 320, it was submitted by Mr. Bagchi that the property in respect of which criminal breach of trust can be committed must necessarily be the property of some person other than the accused or the beneficial interest in or ownership of it must be in other person and the offender must hold such property in trust for such other person or for his benefit. (15) THE Apex Court in the said case observed that the banks had already filed suits for recovery of the dues of the Banks on account of credit facility and the said suits had been compromised on receiving the payments from the concerned companies. (15) THE Apex Court in the said case observed that the banks had already filed suits for recovery of the dues of the Banks on account of credit facility and the said suits had been compromised on receiving the payments from the concerned companies. It was observed that any action by way of quashing the complaint is an action to be taken at the threshold before evidences are placed in support of the complaint. For quashing the complaint by way of action at the threshold, it is, therefore, necessary to consider whether on the face of the allegations a criminal offence is constituted or not. (16) MR. Bagchi drew attention of the Court to the decision in the case of Union of India and Anr. v. Azadi Bachao Andolan and Anr. , reported in 2004 (10) SCC 1 . In the said case it was argued by the learned Counsel that "interpretation given to Section 90 of the Income Tax Act, a Central act, by several High Courts without dissent has been uniformly followed; several transactions have been entered into based upon the said exposition of the law, that several tax treaties have been entered into with different foreign Governments based upon this law, hence, the doctrine of stare decision should apply or else (17) THE Apex Court found such submission sound and accepted the same. The relevant observation of the Apex Court is reproduced as follows:-"it is not possible for us to say that the judgments of the different High Courts noticed have been wrongly decided by reason of the arguments presented by the respondents. As observed in Mishri Lai even if the High Courts have consistently taken an erroneous view (though we do not say that the view is erroneous), it. would be worthwhile to let the matter rest, since large number of parties have modulated their legal relationship based on this settled position of law. " (18) THE aforesaid observation of the Apex Court does not, however, seem to have much relevance in the facts and circumstances of the present case. (19) MR. Safiullah, learned Public Prosecutor, echoing the submission made by Mr. Ashim Roy, who also appeared on behalf of the State in one of the cases, referred to the decision in the case of Rajneesh Aggarwal v. Amit J. Bhalla, reported in AIR 2001 SC 518 . (19) MR. Safiullah, learned Public Prosecutor, echoing the submission made by Mr. Ashim Roy, who also appeared on behalf of the State in one of the cases, referred to the decision in the case of Rajneesh Aggarwal v. Amit J. Bhalla, reported in AIR 2001 SC 518 . This was in support of the stand that so far as the criminal complaint is concerned, once the offence is committed, any payment made subsequent thereto will not absolve the accused of the liability of criminal offence, though in the matter of awarding of sentence, it may have some effect on the Court trying the offence. (20) THE Apex Court in the said case which related to a complaint under section 138 of the Negotiable Instrument Act further observed as follows:- "but by no stretch of imagination, a criminal proceeding could be quashed on account of deposit of money in the Court or that an order of quashing of criminal proceeding, which is otherwise unsustainable in law, could be sustained because of the deposit of money in this Court. In this view of the matter, the so-called deposit of money by the respondent in this Court is of no consequence. " (21) LEARNED Counsel Mr. Mihir Kundu joined learned Counsel Mr. S. C. Prosad and Mr. Mukherjee while appearing for the P. F. authorities and submitted that the amount of default in deposit of the employees share of the P. F. in the cases under reference are so huge that the accused persons do not deserve any leniency or compassion. It was categorically mentioned that by non-deposit of the said employees share of the P. F., despite deduction of the said amount from the salaries of the concerned employees, a serious offence of breach of trust had been committed by the petitioners. According to them, in the circumstances of the present cases, the claim that the said amounts were subsequently paid cannot wash the sin. It was also contended that the Court cannot afford to lose sight of the fact that such huge amount of money would have had accrued substantial amount of interest. (22) IT clearly emerges from the aforesaid discussion that there is no such law, nor any decision which conclusively dictates that in case of subsequent payment of the amount of employees share of contribution towards P. F., however, belated it might be, the criminal prosecution must be quashed. (22) IT clearly emerges from the aforesaid discussion that there is no such law, nor any decision which conclusively dictates that in case of subsequent payment of the amount of employees share of contribution towards P. F., however, belated it might be, the criminal prosecution must be quashed. It is rather the settled position of law that subsequent payment does not by itself condone the lapse but certainly is a factor to be taken into consideration at the subsequent stage and most certainly at the time of imposition of punishment, if at all. (23) LIABILITY of the Directors, as earlier indicated, can be best decided at a subsequent stage. There could be Directors who cannot be held responsible for the alleged offences. But, it is neither possible nor desirable for this Court to quash the criminal proceedings initiated against them now. This Court at this stage is also not in a position to analyse the allegations against any particular accused person. (24) IT is perhaps needless to mention that the Employees Provident fund and Miscellaneous Provisions Act, 1952 is a social legislation. It is the result of decades of struggle of millions and millions of bare-footed workers. No authority can be permitted to unnecessarily tinker with it. Much was sought to be submitted regarding the difficult position the various companies were facing at the relevant time. Labour unrest, recession, decline of value in the market and many other grounds had been highlighted in the applications under reference. But, can all these be considered as sufficient justification for not depositing the money. This court is, however, of the firm opinion that subsequent deposit, though welcome, as it is better late than never, cannot and does not absolve the accused persons of the liability of the criminal offence. Ours is a welfare state and the E. P. F. and Misc. Provisions Act is undoubtedly a welfare legislation. It helps the weak, the exploited, the oppressed and the wretched of the earth to survive in the midst of the turmoil created by stagflation in our economy. It attempts to take care of the future of the employees. The Scheme cultivates among the workers spirit of saving something regularly. The employees cannot be left to the mercy of their masters. The legislation attempts to ensure that the future of the employees is not thrown into an ocean of uncertainty. It attempts to take care of the future of the employees. The Scheme cultivates among the workers spirit of saving something regularly. The employees cannot be left to the mercy of their masters. The legislation attempts to ensure that the future of the employees is not thrown into an ocean of uncertainty. (25) CONSIDERING all these aspects, this Court is not inclined to quash the criminal proceedings under reference. (26) ALL the applications being C. R. R. No. 97 of 2006, C. R. R. No. 37 of 2006, C. R. R. No. 3300 of 2005, C. R. R. No. 670 of 2006 and C. R. R. No. 1446 of 2005 be accordingly disposed of with liberty to the petitioners to approach the learned respective Courts of Magistrates with the claims that the amounts involved had been subsequently deposited. If such claims are made, it is expected that the learned Courts will certainly take the same into proper and effective consideration and pass orders in accordance with law. But, there is no ground to the satisfaction of the judicial conscience of this Court so as to hold that further proceedings of the cases under reference will by any stretch of imagination be an abuse of the process of Court. (27) INTERIM orders, if any, stand vacated. (28) THIS order governs all the five cases, as referred to earlier. (29) IT may be mentioned that the learned Trial Courts will proceed in accordance with law without being influenced by any observation made hereinbefore. (30) SEND a copy of this order to the respective learned Trial Court for information and necessary action. Xerox certified copy, if applied for, be supplied as expeditiously as possible.