BALGOPAL GOENKA Vs. STATE OF WEST BENGAL

JUDGEMENT

(1.) THIS Rule arises on an application under Section 482 of the Code and is for quashing the proceeding being case No. C/817 dated 30 -12 -1975 of Hare Street Police Station, Calcutta at the instance of the Regional Provident Fund commissioner, West Bengal. The facts of the case may briefly be stated as follows: -

(2.) THE petitioner is a Director of M/s. Bharat Overseas Private Limited. The principal business of the said company was the sole Selling Agency for sale of cement manufactured by Jaipur Udyog Limited. At all material times the petitioner was not in charge of the affairs of the company, nor responsible for the conduct of the business of the company, nor was responsible for day to day administration of the business of the Company relating to the Provident Fund. The said company had a plywood factory known as "Albion Plywood" situated at Budge Budge. The said Undertaking was exempted Industry within the meaning of Section 17 of the Employees Provident Funds and Family Pension Fund Scheme, 1952. The Company agreed to transfer the ownership and possession of the Plywood Manufacturing Undertaking to M/s. Aloke Udyog Vanaspati and Plywood Limited. The said transaction was finalised on 9 -2 -73. In terms of the agreement it was agreed that during the period from the date of agreement to completion of sale, entire personnel working in the said Albion Plywood shall be working as employees of the Vendee Company and the Vendee Company would be liable to Day the salaries and other dues. After completion of sale on 9 -12 -73 the Vendor Company ceased to be employer within the meaning of Section 2 (8) (i) of the Employees' Provident Funds Act, 1952 in respect of the employees of Albion Plywood undertaking. Thereafter, the Regional Provident Fund Commissioner by its letters dated 29 -10 -1973 and 19 -2 -1974 directed the Vendor Company to show cause why the exemption should not be withdrawn for non -filing of the returns and other reasons. Ultimately, the opposite Party by its letter dated 17 -9 -1974 purported to withdraw with effect from 1 -7 -1974 the exemption granted under the Provident Funds Act. The Vendor Company by its letter dated 15 -11 -1973 informed the opposite party No. 3 particulars of the payment made by the Vendor Company. By a notice dated 13 -8 -1975 opposite party No. 3 directed the Vendor Company to submit returns of provident Fund for the period ending 30 -6 -1974. Thereafter, by a letter dated 10 -10 -1975 the opposite party informed the Vendor Company that the Company had not deposited the provident fund dues in respect of the employees of the said Albion Plywood for the period from July, 1972 to 14 -10 -1973. By a letter dated 4th September, 1975 the Vendor Company informed opposite party No. 3 that in respect of the past accumulations up to 30th June, 1975 the Trustees of the Bharat Overseas Employees' provident Fund have already transferred the investment securities aggregating to the value of Rs. 13.72 lakhs and the balance in their Bank Account of Rs. 22,665.15 deposited in A/c. No. 1 of opposite party No. 3. It was also stated that since the date of transfer there was no trading or industrial activity with the Vendor Company. By a letter dated 6 -11 -1975 the Vendor Company again reiterated the fact. In spite of the aforesaid communications on 30 -12 -1975 the opposite party No. 1 filed a letter of complaint dated 23 -10 -1975 along with a report of Sri J. C. Mazumdar, Provident Fund Inspector, Grade -1, dated 15 -10 -1975 at the Hare Street Police Station, Calcutta. The said letter and the report was treated as FIR whereupon the Officer -in -Charge of the said Police Station started proceedings being G Case No. 817 dated 30 -12 -1975. In the said F.I.R. four persons including the petitioner were named as accused. The Vendor Company moved an application under Article 226 of the Constitution of India challenging the validity and legality of the notices and the said investigation whereupon a Rule being C. R. No. 410 (W) of 1976 was issued on 19 -1 -1976. Stay of operation of the impugned notice and of the Criminal case was ordered on condition that the Petitioner -Company would deposit 1,60 lakhs and further amounts by instalments. The company complied with the said direction and paid monthly instalments till March, 1978. In the said Writ proceeding, on behalf of the Regional Provident Fund Commissioner an application dated 3 -6 -1976 was filed for vacating the interim order. It is stated that the petitioner has been advised that the F.I.R. discloses no offence and is a gross abuse of process of law and the investigation pursuant thereto is wholly illegal and void ab initio. The petitioner states that Explanation 1 was added to Section 405 of the Penal Code by the Amending Act 40 of 1973 (The Employees' P. F. and Family Pension Fund (Amendment) Act 1973) which received assent of the President on 6 -9 -1973 but the said amendment clause came into force on 1 -11 -1973 as per Notification dated 17 -10 -1973. As such the period of offence mentioned in the F. I. R., namely, July 72 to 14 -10 -1973 is entirely outside the applicability of the said amendment. It has been further stated that there was no amendment up to 14 -10 -1973 under which non -payment of provident fund contributions could be treated as an offence of criminal breach of trust under Ss. 405, 406 and 409 and the said criminal case is clearly violative of the prohibition under Art.20 (1) of the Constitution. It is further stated that during the period of the alleged offence as mentioned in the F.I.R., the facts and circumstances mentioned in the F.I.R. did not make out any case of entrustment and the alleged non -fulfilment of obligations under the Provident Funds Act, 1952 did not constitute any offence under Secs. 405, 406 or 409 of the Penal Code. It is also stated that prior to 1 -11 -73 the failure to deposit Provident Fund Contribution and other allied or incidental contributions was only an offence, if any, within the provisions of Provident Funds Act, 1952 subject to the law of Limitation provided for such offence, such failure to deposit as aforesaid could never constitute any offence under the provisions of the Penal Code. The petitioner state, that contribution deducted, if any, from wages of employees under Provident Funds Act, 1952 does not amount to an entrustment within the meaning of Section 405 (before amendment) and failure to credit such sum did not make the employer liable under Sec. 405 of the Penal Code or S.406 or 409 thereof. It is further stated that the Explanation 1 to Sec. 405 of the Penal Code does not apply to the period of offence disclosed in the F.I.R. It is also stated that no cognizable offence of any kind is disclosed in the F.I.R. In the facts and circumstances stated above, it is prayed that the proceeding is liable to be quashed.

(3.) MR . Dey next contends that it is now necessary to see whether any offence has been committed under the Employees' Provident Funds Act. Even if the allegations made in the F. I. R. amount to an offence then the period of limitation for filing complaints is one year. The liability of the petitioner as stated in the F.I.R. is up to 14 -10 -1973. The F. I. R. has been filed on 30 -12 -75, that is much beyond the period of limitation. On the point of limitation, Mr. Dey refers to our unreported decision in C. R. Nos. 2268 to 2282 of 1979 Bal Gopal Goenka v. State of West Bengal and also to our decision reported in (1981) 2 Cal HN 301 Krishna Kumar Dalmia v. State. In the present case also we find that the F. I. R. was filed at a time much beyond the period of limitation. We are, however, conscious of the fact that delay in filing complaints can be condoned by Court on sufficient grounds being shown.