SAMPAT MAL LODHA Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) By this order, I shall be deciding Criminal Misc. Application No. 87 of 1986 and also Criminal Misc. Application No. 81 of 1986, both filed by Sampat Mal Lodha, under S. 482 Cr. P.C. in one case to quash the cognizance taken by the judicial Magistrate No. 2 Bhilwara for the offence u/s. 406 I.P.C. against the petitioner in Criminal Case No. 177 of 1986 of this court and in another to quash the cognizance and the entire proceedings in Criminal Case No. 56 of 1984 of the Court of Judicial Magistrate, Bhilwara as against the petitioner for the offence under S. 14 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as 'the Act').

(2.) Facts leading to these two applications are that Mewar Textile's Mills Ltd. is a company incorporated under the Companies Act, 1956 and is located at Bhilwara. The petitioner Sampat Mal Lodha is said to be Managing Director of the company. On Nov. 21, 1984 S.C. Choudhary, Inspector Provident Funds filed a criminal complaint against the company and also the petitioner for their having committed an offence under S. 14 of the Act alleging that the company was covered by the provisions under the Act and it had been allotted Code No. R-J/16 in accordance with Cl. 6 of the Provident Funds Act and paras 30 and 38 of the Employees' Provident Fund Scheme. It was asserted that the petitioner ought to have deposited the employees' share of the provident fund and family pension fund which had been deducted from their wages by the end of 15th of each month. The petitioner failed to deposit the amount of said contribution to the provident fund for the period Feb. 1984 to April 1984 amounting to Rs.4,12,672/- and as such, he committed the offence under Ss.14 and 14A of the Act and Para 76 of the Employees' Provident Fund Scheme. It was further alleged that the petitioner was a responsible officer of the company and the offence had been committed with his consent, knowledge or inaction and as such he was liable to. be prosecuted and punished in view of S. 14A of the Act. Requisite sanction had been adopted from the Provident Fund Commissioner on Oct. 31, 1984. On this complaint, the Judicial Magistrate, Bhilwara took cognizance of the said offence against the company as well as the petitioner and ordered for the issue of summons in their name returnable on Feb. 13, 1985. The petitioner has, therefore, invoked the inherent jurisdiction of this court by moving Criminal Miscellaneous Application No. 87 of 1986 praying that order of the Judicial Magistrate, Bhilwara whereby he has taken cognizance of the offence against the petitioner in Criminal Case No. 56 of 1984 of his court may be quashed.

(3.) Facts giving rise to Criminal Miscellaneous Application No. 81 of 1986 are that on 4th Nov., 1985, the Inspector Provident Fund, Udaipur lodged a first information report at Police-Station, Pratapnagar, District Bhilwara against the petitioner alleging therein that the petitioner was in the habit of deducting workers' share of provident fund and family pension fund from the wages but had not been remitting the same to the accounts of the Employees' Provident Fund and thus he misappropriated the employees' share of provident fund and family pension contribution which had been deducted from the wages payable to the employees of the company. This report was with regard to misappropriation of a sum of Rs. 2,19,706/-made during the period from Feb. 84 to April, 1984. On the basis of this first information report, the Station House Officer of Police Station, Pratapnagar registered a case against the petitioner for the offence under S. 406 of the Penal Code and after necessary investigation, filed a charge-sheet against the petitioner in the court of the judicial Magistrate No. 2, Bhilwara. On the basis of the report made u/s. 173 Cr. P.C. the Judicial Magistrate No. 2, Bhilwara took cognizance u./s. 190(1) (b) of the Cri. P.C. It seems that the petitioner was reported by the police as not traceable and, therefore, the Magistrate took proceedings under Ss. 82 and 83 of the Cri. P.C. and issued a standing warrant against the petitioner on Nov. 17, 1986. The petitioner alleges that no prima facie case under S. 406 of the Penal Code had been made out against him in as much as he was the Managing Director of the company at the relevant time and he cannot be held responsible of any offence of not depositing the employee's contribution to the Provident Fund account in as much as by a resolution dt. Nov. 29, 1982, the company had appointed Mr. S. N. Bhattacharya General Manager of the company as occupier for the purposes of Factories Act, 1948 and his appointment as such was notified to the Chief Inspectors of the Factories. By resolution at item No. 14 passed on the same date, Mr. S. N. Bhattacharya was authorised inter alia to make payment of provident fund contribution, family pension fund contribution and Employees' State Insurance dues etc. It has also been pleaded by the petitioner that the company was an industry within the meaning of the Rajasthan Relief Undertaking (Special Provisions) Act, 1961 and it was declared as a relief undertaking by the State Govt. Under S. 3 of the said Rajasthan Act of 1961 and Shri I. S. Kawadia I.A.S. nominee of the Government of Rajasthan has been appointed as Managing Director of the company since Feb. 1985. It has been stated that on account of S. 4(b) of the said Act of 1961, no legal proceeding can be initiated against the company during the period it remains a relief undertaking.