KRISHNA KUMAR DALMIA Vs. STATE

JUDGEMENT

(1.) These 17 Rules arise on 17 applications for quashing the proceedings on the ground that the petition of complaints were filed out of time and also on other grounds. We classify the Rules under two heads. In the first group, we place Criminal Revision Nos. 2249 to 2262 of 1979. In these 14 Rules the contention of the petitioner, amongst others, is that the petitions of complaint have been filed out of time Fourteen cases, namely, C/311 to C/324 were started for non-deposit of Provident Fund amounts for the months of Oct., 1973 to Nov., 1974. The petitions of complaint in all the cases were filed on 10.1.76 Relying on the provisions of Sec. 468(2)(b) of the Code it is contended by the learned Advocate for the petitioner that the petitions of complaint in all these cases ought to have been filed within one year from the date of the alleged offence. In support of his contention, Mr De, learned Advocate for the petitioner, refers to a Bench decision reported in 1978 CHN 293 (M/s. Wire Machinery Manufacturing Corpn. Ltd & Ors ) in this case, first of all it was held that under paragraph 38 of the Scheme the infringement for the failure to deposit within 5 days of the close of every month occurs on the close of fifteenth day of a month and is complete on the employer failing to make the payment by that date. Once the defaults were made the offences were committed once for all and became complete on the close of the due date. As such there would not be any ingredient of continuance-in the offence to make it a continuing offence". As regards limitation, it was held that "the complaints having been filed beyond a period of one year they are time barred in accordance with Sec. 468(2)(b) of the Code and the cognizance taken on the basis of such complaints are without jurisdiction " Admittedly, in these 14 cases the petitions of complaint have been filed on 10.1.76 and the alleged offence being for the period from Oct., 1973 to Nov., 1974 it must be said that the complaints were filed beyond the period of limitation. Mr. Harasit Ghosh, learned Advocate appearing on behalf of the Union of India, has nothing to say with regard to this legal position and concedes that these 14 applications should succeed on the ground of limitation.

(2.) We classify Criminal Revision Nos. 2263 to 2265 of 1979 under the second group These Rules arise out of cases being C/325 to C/327 of 1976. These cases were filed for the alleged offences for the months of Dec., 1974, Jan., 1975 and Feb., 1975. In all these cases, the petitions of complaint were filed on 10.1.76. That being so, the petitions were filed within the prescribed time. In these three Rules Mr. De contends that for alleged violation of non-payment of the amount of Provident Fund, the Company is only responsible. According to the provisions of Sec. 14A (l)(2) of the Employees' Provident Fund and Miscellaneous Provisions Act, 1132, the Company can be held liable; otherwise for the alleged offence committed by a Company simply because some persons are Directors, they cannot be held liable. The petitioner alias been made a party simply because he is one of the Directors of the Company. In support of his contention, Mr. De first relies on a Supreme Court decision reported in AIR 1971 SC 2162, Girdhari Lal Gupta Vs. D.N. Mehta & anr . This was a case under Foreign Exchange Regulation Act, 1947. Provisions of Sec. 23C(l) and (2) of the said Act are almost similar to the provisions of Sec. 14A(1) & (2) of the present Act. It has been held in this case that "the expression "person in charge" occurring in the Sec. means a person who is to over all control of the day to day business of the Company or Firm". Mr. De next roadies on a Branch decision of this Court reported in 1978 CHN 336 (M/s. Mahalderam Tea Estate institute Limited & Ors Vs. D N. Prodhun & Anr) . In this case, it has been held that "under - 14A of he Act (meaning Employees' Provident Fund Act), a Company is made primarily liable for an offence committed under the Act. The liability may be extended to other persons vicariously only under the conditions laid down in the section. A director of a company may be concerned only with the policy to be followed and might not have any hand in the management of its day to day affairs. Such person must necessarily be immune from such prosecution. In the instant case, there is no material from which the learned Magistrate could satisfy himself that the petitioners took some part in the running of the business of the company. In the absence of such averments in the petitions of complaint the cognizance taken is bad in law and must be quashed". The next case relied on by Mr. De has been reported in 1679 Cr. LJ 86 (G Atherton & Co IP) Ltd. & ors. Vs. Corporation of Calcutta) This was a case under the Prevention of Food Adulteration Act. Sec. 17 of this Act is in similar terms with Sec. 14A of the Employees' Provident Fund Act. It has been held in this case "under Sec. 17 a company has been made primarily liable, to make other persons vicariously liable, it has to be shown that such person were in charge of or were responsible to the Company for the conduct of its day to day business. In the absence of any mention in the petition of complaint as to how the accused persons were concerned in the carrying on of the day to day business of the company, process could not have been issued against them. Mr. De draws our attention to the petitions of complaint. In paragraph 3, it has been simply stated that the accused Nos. 2 to 6 are the Directors in charge of M/s. Alokudyog Vanaspati and Plywood Ltd. and accused No. 7 is the Chief Executive and thus, they are responsible for the conduct of its business. In paragraph 8, it has been stated the accused persons were during relevant period in charge of the said establishment and were responsible to it for the conduct of its business and/or the aforesaid offences were committed by the raid establishment with their consent or connivance or attributable to their neglect the said accused persons have committed offences under Sec. 14A (1) and (2) of the Employees' Provident Fund & Family Pension Act, 1952.........................Mr. De with much emphasis contends that assuming that these averments are correct, even then it has not been said that the petitioners were in charge of the business or in over all control of the day to day business of the Company. These averments cannot make the petitioner vicariously liable for the offences alleged to have been commuted by the Company simply because he is a Director. We accept the contention of Mr. De and relying on the decisions referred to above hold that the statements in the petitions of complaint have not made out a case against the petitioner.

(3.) In the result, Criminal Revision Nos. 2249 to 2262 of 1979 are made absolute. The proceedings being C/311 to C/324 are quashed. Criminal Revision Nos. 2263 to 2265 of 1979 are made absolute. The proceeding is quashed so far as the petitioner Krishna Kumar Dalmia is concerned. Let the records go down immediately.