A.G. ASHOK Vs. STATE AND ORS.

JUDGEMENT

(1.) Petitioner is prosecuted for the offences punishable under Sections 406 and 409 of IPC on the accusations that the petitioner being the Managing Director of Scorpion Security Pvt. Ltd., Bangalore, deducted the Employees Provident Fund amount of Rs.4,89,254/- for the month of May 2008 and failed to deposit the same to the Provident Fund and Family Pension Fund as required under Section 6 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the 'Act', for short).

(2.) The learned counsel for the petitioner submits that the alleged offences were committed by the Company namely Scorpion Security Pvt. Ltd., Bangalore. The said company is not arrayed as accused; instead the petitioner is being prosecuted in his capacity as the Managing Director, which is not tenable under law. Secondly, he contends that the provident fund amount collected by the company is deposited with the Provident Fund Authority vide cheque dated 27.06.2008 and the same was encashed on 04.07.2008 and therefore, there is no violation of the provisions of the Act. Further placing reliance on the decision of the Hon'ble Supreme Court in the case of S.K. Alagh Vs. State of Uttar Pradesh and others reported in (2008) 5 SCC 662, the learned counsel would submit that in terms of the explanations appended to Section 405 of the Penal Code, a legal fiction has been created whereby the employer is deemed to have committed an offence of criminal breach of trust and a person in charge of the affairs of the company and in control thereof has been made vicariously liable for the offence committed by the company along with the company. But, in a case falling under Section 406 of the Penal Code vicarious liability has been held to be not extendable to the Directors or officers of the company and hence the prosecution of the petitioner for the alleged offence under Section 406 of IPC is liable to be quashed.

(3.) Disputing the submission, the learned Addl. SPP has placed reliance on the decision passed by this Court in Crl.P.No.5480/2013 and connected matters dated 22.04.2014 and would submit that the question whether the amount deducted by the petitioner was not misappropriated by him, could be decided only during the trial. Since the facts alleged in the charge sheet prima-facie disclose temporary misappropriation of the funds, there is no case for quashing of the proceedings.