Gujarat High Court
Rishi Kamlesh Agrawal vs State Of Gujarat on 3 July, 2025
NEUTRAL CITATION
R/SCR.A/6264/2021 ORDER DATED: 03/07/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CRIMINAL APPLICATION (QUASHING) NO. 6264 of 2021
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RISHI KAMLESH AGRAWAL
Versus
STATE OF GUJARAT & ANR.
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Appearance:
HARSHANG H PATEL(7349) for the Applicant(s) No. 1
MS E.SHAILAJA(2671) for the Respondent(s) No. 2
MR CHINTAN DAVE, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 03/07/2025
ORAL ORDER
1. By way of this application under Section 482 of the Code of Criminal Procedure, 1973 (hereinafter referred to as "the Code"), the petitioner has prayed for quashing and setting aside FIR being C.R.No.I - 1 of 2019 registered with Vayor Police Station, Bhuj for the offences punishable under Sections 406, 409 and 420 of the IPC as well as all other consequential proceedings arising out of the aforesaid FIR qua the petitioners herein.
2. Brief facts of the case are as under:-
2.1 The allegations in short as narrated in FIR are to the effect that the applicants are alleged to have failed to deposit the amount of employee of provident fund being provident fund contribution of its employees, by not depositing the same with the office of Provident Fund Commissioner and thereby, Page 1 of 7 Uploaded by SATISH C. VEMULLA(HC00206) on Sat Jul 05 2025 Downloaded on : Mon Jul 07 22:19:53 IST 2025 NEUTRAL CITATION R/SCR.A/6264/2021 ORDER DATED: 03/07/2025 undefined they have committed the aforestated offences. Hence, present petition.
3. Learned advocate, Mr. Patel appearing for the petitioners referring to the judgments in cases of (1) Savindersing Bhatti Vs. State of Gujarat, Criminal Misc.
Application No.8949 of 2010 (2) BR Daga, Managing Director, Air Control and Chemical Engineering Company Ltd. Vs. State of Gujarat and another, Criminal Misc. Application No.6879 of 2009 (3) Sangramsinh Gaikwad Vs. State of Gujarat and another, Special Criminal Application No.1909 of 2009 as well as judgment of the Hon'ble Apex Court in case of KL Chachra @ Krishan Lal Chachra Vs. State of Jharkhand, AIR online 2019 SC 2038, would mainly argue that though the petitioners were facing financial crunch and could not deposit share of provident fund of their employee with the department within stipulated time period, subsequently, they have deposited entire fund of the share of their employee. He would further submit that various proceedings were started under the provisions of the Provident Fund Act/Scheme against the petitioners and various demands were raised pursuant to such proceedings, however, the petitioners have already deposited funds of their share. He would further submit that now the prosecution may not be continued against the petitioners as it is a futile exercise. It is also submitted that after making payment, the company is would up. Therefore, he would submit that in these peculiar facts and circumstances, the prosecution against the petitioners may not be continued.
Page 2 of 7 Uploaded by SATISH C. VEMULLA(HC00206) on Sat Jul 05 2025 Downloaded on : Mon Jul 07 22:19:53 IST 2025NEUTRAL CITATION R/SCR.A/6264/2021 ORDER DATED: 03/07/2025 undefined Upon such submission, learned advocate Mr. Patel requests to allow the petition.
4. On the other hand, learned advocate, Ms. E. Shailaja appearing for the private respondent would submit that section 29 of the Employee Provident Fund Scheme, 1952 defined "contribution". She would further refer to section 32- A of the Scheme and submit that any sum deducted by an employer from the wages of an employee under the Scheme shall be deemed to have been entrusted to him for the purpose of paying the contribution in respect of which it was deducted. She further referred to section 38 of the Scheme and submit that the employer is duty bound to deposit his share of contribution within 15 days of the close of every month, failing, which offence under section 405 of the IPC is made out. She also referred to Explanation 1 of section 405 of the IPC and submit that since the petitioners being an employer has not deposited the amount of provident fund after deducting it from the salary of the employee for more than four years, he has admittedly committed the offence under section 405 of the IPC having punishment in section 406 of the IPC. She would further submit that since the offence is admittedly made out, it cannot be wiped on paying the amount of contribution subsequent to filing of the FIR. She would further submit that the offence would relate back to the date on which the employee was required to pay contribution. She would further submit that no sooner 15 days of the month has been completed and if the employee has not Page 3 of 7 Uploaded by SATISH C. VEMULLA(HC00206) on Sat Jul 05 2025 Downloaded on : Mon Jul 07 22:19:53 IST 2025 NEUTRAL CITATION R/SCR.A/6264/2021 ORDER DATED: 03/07/2025 undefined deposited amount of contribution after deducting it from the salary of the employee, he has committed offence. Thus she would submit that under these circumstances, the FIR cannot be quashed.
5. Adopting the argument of learned advocate for the private respondent, learned APP requests to pass necessary orders.
6. Having heard learned advocates for both the sides, at the outset, it is clear that the petitioners have deposited contribution of their share, however, subsequent to registration of the FIR. He was in default of paying the contribution since 2015 until the FIR was filed.
7. Notably, for non-payment of contribution of provident fund, the office of the Provident Fund has initiated another proceeding against the petitioners by issuing notice and subsequent to making of all payments by the petitioner, notice under section 8F of the Employees' Provident Fund and Misc. Provisions Act, 1952 was withdrawn by the department of the Provident Fund. It is also to be noted that after making payment, company is wound up.
8. In case of Provident Fund Inspector, Faridabad Versus Jaipur Textile, Faridabad, AIR 1987 SC 1738, the Hon'ble Apex Court held his under:-
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1. We have heard learned counsel for the parties. We set aside the Judgement passed by the High Court in each of these cases. In view of the statement made by M/s. T.V.S.N. Chari and P.H. Parekh, learned counsel for the respondents on behalf of some of the respondents that they have paid all the arrears of Provident Fund in respect of which the prosecution was instituted we direct that the prosecution against them shall not be proceeded with. If any of the respondents has not paid all the arrears in respect of which the prosecution has been instituted they may deposit whatever arrears are due from them on or before 31.12.1986 and if they do so the prosecution against them shall come to all end. If they do not pay the arrears accordingly the prosecution shall be proceeded with. The order will not serve as a precedent as it is passed in the peculiar facts and circumstances of these cases.
2. The Criminal Appeals and Special Leave Petition are disposed of accordingly."
9. In the multiple judgments relied upon by learned advocate Mr. Patel, it indicate that when the amount is paid by the petitioners, this court has exercised discretion to quash the FIR or subsequent proceedings.
10. In case of Madhavrao Jiwajirao Scindia & Ors. v. Sambhajirao Chandrojirao Angre & Ors., reported in (1988) 1 SCC 692, the Hon'ble Apex Court held as under:-
"The legal position is well-settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the court is as to whether the uncontroverted allegations as made prima facie establish the offence. It is also for the court to take into consideration any special features Page 5 of 7 Uploaded by SATISH C. VEMULLA(HC00206) on Sat Jul 05 2025 Downloaded on : Mon Jul 07 22:19:53 IST 2025 NEUTRAL CITATION R/SCR.A/6264/2021 ORDER DATED: 03/07/2025 undefined which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. This is so on the basis that the court cannot be utilised for any oblique purpose and where in the opinion of the court chances of an ultimate conviction is bleak and, therefore, no useful purpose is likely to be served by allowing a criminal prosecution to continue, the court may while taking into consideration the special facts of a case also quash the proceeding even though it may be at a preliminary stage."
11. Thus, from the facts of the present case, it appears that chances of ultimate conviction are bleak and therefore no fruitful purpose would be served or likely to be served by allowing criminal prosecution to continue against the petitioners. The petitioners have already closed his business as per communication to the Regional Director, PPFO, ESIC.
12. In view of that since the amount of contribution is already paid and disbursed to the employee, there is no fruitful purpose serve to continue the criminal prosecution against the petitioners.
13. In the result, present petition is allowed and impugned FIR being C.R.No.I - 1 of 2019 registered with Vayor Police Station, Bhuj as well as all other consequential proceedings arising out of the aforesaid FIR qua the petitioner herein is hereby quashed and set aside. Direct service is permitted.
14. The petitioner is directed to file an undertaking before this Court as well as before the respondent - EPFO, within Page 6 of 7 Uploaded by SATISH C. VEMULLA(HC00206) on Sat Jul 05 2025 Downloaded on : Mon Jul 07 22:19:53 IST 2025 NEUTRAL CITATION R/SCR.A/6264/2021 ORDER DATED: 03/07/2025 undefined seven days from today, to the effect that they will be more careful in future and not commit any offence of similar nature.
(J. C. DOSHI,J) SATISH Page 7 of 7 Uploaded by SATISH C. VEMULLA(HC00206) on Sat Jul 05 2025 Downloaded on : Mon Jul 07 22:19:53 IST 2025