Conceria Viriginia Chennai Private Limited, Rep. by its Managing Director, Mohammed Yavan Dhala v. Enforcement Officer/Provident Fund Inspector Employees-Provident Fund Organization, Tambaram, Chennai
2021-10-26
C.V.KARTHIKEYAN
body2021
DigiLaw.ai
JUDGMENT : (Common Prayer: Criminal Original Petitions filed under Section 482 Cr.P.C., to call for the records in CC.Nos.455/2014, 456/2014, 476/2014, 458/2014, 477/2014, 480/2014, 502/2014, 503/2014, 504/2014, 505/2014506/2014 [Crl.OP.Nos.19893 to 19902/2015] ; 444/2014, 445/2014, 446/2014, 447/2014, 448/2014, 468/2014, 469/2014, 470/2014, 488/2014, 489/2014, 466/2014, 467/2014, 490/2014, 491/2014 and 492/2014 [Crl.OP.Nos.15045 to 15059/2015] ; 455/2014, 456/2014, 457/2014, 478/2014 and 479/2014 [Crl.OP.Nos.21266 to 21670/2015] now pending on the file of the learned Judicial Magistrate, Tambaram and STC.Nos.604/2014, 605/2014, 607/2014, 608/2014, 609//2014, 610/2014, 611/2014, 612/2014, 613/2014, 614/2014, 617/2014, 618/2014, 615/2014, 616/2014, 619/2014, 620/2014, 621/2014, 622/2014 and 606/2014 [Crl.OP.Nos.16518 to 16535 & 16578/2015] now pending on the file of the learned Judicial Magistrate No.2, Chengalpattu and quash the same.) 1. Arguments were advanced with respect to all the above Criminal Original Petitions and both the learned counsels stated that the point involved in all the cases, is similar. This has given rise to the necessity of passing a common order in all the petitions. 2. The petitioners in all the above cases are Companies which are inter-linked with each other. They are manufacturers of full shoes, shoes upper and also own tanneries. 3. In all the cases, the employer/petitioners Companies, employed large number of employees and there was an obligation on their part to pay Provident Fund contribution with respect to their employees. 4. It is claimed that the Companies suffered loss and the properties were also attached by Financial Institutions. The petitioners had also borrowed money and also had overdrawn their accounts. They were all not in a position to even pay salary. They could not pay the Provident Fund dues. The respondent had issued notices to the petitioners to pay contribution for the default period. 5. The petitioners pointed out that they could not pay the amount owing to their properties being attached and owing to the fact that they had suffered economic loss and they had no money to pay. 6. It is complained by the petitioners that however, the respondent continued to pass orders under Section 7A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, [hereinafter referred as ‘the Act, 1952’] claiming contribution to be paid. Since the amounts demanded had not been paid in spite of orders passed under Section 7A of the Act, 1952, the respondent issued Recovery Certificates under Section 8C of the Act, 1952. The respondent also attached the properties of the petitioners. 7.
Since the amounts demanded had not been paid in spite of orders passed under Section 7A of the Act, 1952, the respondent issued Recovery Certificates under Section 8C of the Act, 1952. The respondent also attached the properties of the petitioners. 7. It is claimed that the business operations of the petitioners Companies came to a halt in the year 2012. 8. The respondent then issued Proclamations for sale of the properties. Notices were issued in the newspapers. This was questioned by the Bank Authorities who were also secured creditors. A writ petition was filed. The Bank, namely, the State Bank of India, was directed to proceed with the sale of the attached properties by an order of this Court. It was directed that the sale proceeds can be adjusted towards the Provident Fund dues. The properties could not be brought for sale since there were no bidders. The respondent, therefore, issued a Show Cause Notice as to why the Managing Director of the petitioners’ Companies should not be prosecuted under Section 14 of the Act, 1952. The petitioners then filed an application before this Court questioning the Show Cause Notice. 9. However, the respondent had filed complaints before the competent Court under Section 14 of the Act, 1952. The present Criminal Original Petitions have been filed seeking to quash those proceedings. 10. Mr.Harron, learned counsel appearing on behalf of the petitioners stated that the dues payable to the respondent have now been paid and therefore, urged that this Court should quash the criminal prosecution. It is pointed out by the learned counsel that the prosecution had been launched only because the Employees’ Provident Fund contribution payable by the petitioners Companies/employers, had not been paid. It has now been paid. It is, therefore stated by the learned counsel for the petitioners that continuation of the criminal prosecution would only be an exercise in futility as the petitioners have paid the amounts. Further, calling upon the petitioners to suffer prosecution is an ordeal which can be prevented by this Court and should be prevented by this Court. 11. Mr.R.Vishnu, learned counsel appearing on behalf of the respondent also stated that the entire dues had been paid.
Further, calling upon the petitioners to suffer prosecution is an ordeal which can be prevented by this Court and should be prevented by this Court. 11. Mr.R.Vishnu, learned counsel appearing on behalf of the respondent also stated that the entire dues had been paid. The learned counsel however pointed out that the respondent had been put to loss owing to the institution of criminal prosecutions in the competent Magistrate Courts and also stated that even though the petitioners had now paid the amount, on the date when the complaints were preferred, they had committed the offence under Section 6C read with Section 14[1B]/14A of the Act, 1952. Learned counsel also stated that the petitioners should be called upon to pay compensation under Section 357 Cr.P.C., to the Employees’ Provident Fund Organization, owing to the loss suffered by the respondent in proceeding against the petitioners herein and prayed for dismissal of these petitions. 12. I have carefully considered the arguments advanced and also perused the materials placed. 13. The facts are not in dispute. The petitioners herein are manufacturers of leather products and can be termed as ‘‘tanneries’’. They employed several employees. There is a continuous obligation to pay the Employees’ Provident Fund with respect to the contribution payable by any employer. The petitioners herein uniformly claimed that they suffered economic loss in the business and that their properties were attached by the creditors/Bankers and that, they could not therefore, pay the contribution which they were obliged to pay under the Act, 1952. 14. The respondent, on the other hand, stated that necessary notices had been issued and only thereafter, criminal prosecution came to be launched. It is the submission of the learned counsel for the respondent that the respondent should be compensated for the loss suffered in initiating criminal prosecution. 15. It transpires that though the petitioners had suffered business loss, they actually obtained a windfall owing to the fact that their properties were sold and thereafter, they were left with more than sufficient residue amount. Even without transacting any business or even without expending their sweat, they were able to pay the entire dues to the respondent herein. In view of that particular fact, indulgence is sought by the petitioners herein and they now claim that they should be liberalized from facing prosecution in all the above Calendar Cases. 16.
Even without transacting any business or even without expending their sweat, they were able to pay the entire dues to the respondent herein. In view of that particular fact, indulgence is sought by the petitioners herein and they now claim that they should be liberalized from facing prosecution in all the above Calendar Cases. 16. As a fact, it is true that the amounts payable, have been paid. However, that would not absolve the petitioners herein from all liabilities. I hold that they should still be called upon to pay compensation to the respondent for the loss and expenses incurred in initiating criminal proceedings. I also hold that the continuation of the prosecution would not be to any advantage to either the petitioners or the respondent herein. It has now become a redundant exercise. Even before the Trial Court, the petitioners would naturally be putting forward their case that nothing survives for prosecution since they have paid the entire dues. 17. Therefore, I would interfere with the continuation of all the above Calendar Cases and would allow the above petitions. But, at the same time, I would place a caveat that the petitioners herein, in each one of the case, should pay a sum of Rs.5,000/- [Rupees Five Thousand only] totalling to Rs.2,45,000/- [Rupees Two Lakhs and Forty Thousand only] as compensation under Section 357 Cr.P.C., to the Employees’ Provident Funds Organization and to the credit of the Employees’ Provident Funds Account No.2 maintained with the State Bank of India. The compensation should be paid within a period of two months from the date of receipt of a copy of this order. 18. With the said observations and on such caveat, the Criminal Original Petitions stand allowed and the proceedings in CC.Nos.455/2014, 456/2014, 476/2014, 458/2014, 477/2014, 480/2014, 502/2014, 503/2014, 504/2014, 505/2014506/2014 [Crl.OP.Nos.19893 to 19902/2015] ; 444/2014, 445/2014, 446/2014, 447/2014, 448/2014, 468/2014, 469/2014, 470/2014, 488/2014, 489/2014, 466/2014, 467/2014, 490/2014, 491/2014 and 492/2014 [Crl.OP.Nos.15045 to 15059/2015] ; 455/2014, 456/2014, 457/2014, 478/2014 and 479/2014 [Crl.OP.Nos.21266 to 21670/2015] on the file of the learned Judicial Magistrate, Tambaram and STC.Nos.604/2014, 605/2014, 607/2014, 608/2014, 609//2014, 610/2014, 611/2014, 612/2014, 613/2014, 614/2014, 617/2014, 618/2014, 615/2014, 616/2014, 619/2014, 620/2014, 621/2014, 622/2014 and 606/2014 [Crl.OP.Nos.16518 to 16535 & 16578/2015] on the file of the learned Judicial Magistrate No.2, Chengalpattu are hereby quashed. Consequently, connected miscellaneous petitions are closed.