M/S Braithwaite & Co. Ltd. & Anr vs S. K. Auddy
2023 Latest Caselaw 6045 Cal

                      IN THE HIGH COURT AT CALCUTTA

                      (Criminal Revisional Jurisdiction)

                              APPELLATE SIDE



Present:

The Hon'ble Justice Shampa Dutt (Paul)



                               CRR 29 of 2019



                      M/s Braithwaite & Co. Ltd. & Anr.

                                     Vs.

                                 S. K. Auddy



For the Petitioners                        : Mr. Sabir Ahmed,
                                             Mr. Mujibar Ali Naskar,
                                             Mr. Suman Biswas.




For the Opposite Party/EPFO                : Ms. Debjani Ghosal.



Hearing concluded on                       : 17.08.2023

Judgment on                                : 12.09.2023
                                          2


Shampa Dutt (Paul), J.:



1.

The present revision has been preferred against the Judgment and Order

dated 24th day of December, 2018 passed by the Learned Additional

District & Session Judge, 17th Court, Alipore in Criminal Appeal No. 39

of 2018/(CIS-Crl. Appeal-22/18) thereby affirming the Judgment and

Order dated 19th day of January, 2018 passed by the Learned Additional

Chief Judicial Magistrate, Alipore, South 24 Parganas, in C. Case No. 04

of 2004.

2. Judgment and order dated 19th day of January, 2018 was passed by the

Learned Additional Chief Judicial Magistrate, Alipore, South 24

Parganas, in C. Case No. 04 of 2004, convicting the petitioners for the

commission of offence punishable Under Section 14(2A) of the Employees

Provident Funds and Miscellaneous Provisions Act, 1952 and sentencing

the petitioner no. 1 to pay a fine of Rs. 5,000/- and petitioner no. 2 to

suffer simple imprisonment for 1(one) month and to pay a fine of Rs.

5,000/-, in default to suffer simple imprisonment for 1(one) month.

3. On 9th July, 2004, the Provident Fund Inspector, the opposite party

herein, filed six complaint cases before the Learned Additional Chief

Judicial Magistrate at Alipore, South 24 Parganas, which are as follows:-

C. Case No. 01 of 2004                    C. Case No. 02 of 2004

S.K. Auddy .....Complainant                 S.K. Auddy ...... Complainant

                   Vs                                        Vs

1. M/s Braithwaite         & Co. Ltd.     1. M/s Braithwaite & Co. Ltd.

Provident Institution                     1939 Provident Institution

2. A.K. Bhattacharyya                     2. A.K. Bhattacharyya

3. M.K. Das                               3. M.K. Das

4. Anup Banerjee                          4. Anup Banerjee

5. P.K. Mishra                            5. P.K. Mishra

6. P. Chatterjee        .........Accuseds       6. P. Chatterjee    ..........Accuseds

For non-submission of audited             For non-submission of audited

annual provident fund accounts            annual provident fund accounts

for the year 2002-2003. for the year 2002-2003.

C.Case No. 03 of 2004                     C.Case No. 04 of 2004

S.K. Auddy .....Complainant                 S.K. Auddy .....Complainant

                   Vs                                        Vs

1. M/s Braithwaite & Co. Ltd.             1. M/s Braithwaite & Co. Ltd.

2. A.K. Bhattacharyya                     2. A.K. Bhattacharyya

                        .........Accuseds                               .........Accuseds

For non-submission of monthly             For non-submission of monthly

return for the months July, 2003          returns for the months October,

to September, 2003.                       2003 to December, 2003.



     C.Case No. 05 of 2004                    C.Case No. 06 of 2004

     S.K. Auddy .....Complainant                S.K. Auddy .....Complainant

                      Vs                                      Vs

     1. M/s Braithwaite & Co. Ltd.            1. M/s Braithwaite & Co. Ltd.

     2. A.K. Bhattacharyya                    2. A.K. Bhattacharyya

                           .........Accuseds                             .........Accuseds

     For non-submission of monthly            For non-submission of monthly

     returns for the months January,          return for the month April, 2004.

     2004 to March, 2004.

4. The present application arises out of Criminal Appeal No. 39 of 2018

which relates to C. Case No. 04 of 2004 and complainant's case leveled

against the petitioners is to the effect that:-

The opposite party/complainant filed the complaint before the Court of the Learned Additional Chief Judicial Magistrate, Alipore, South 24 Parganas against the petitioners for prosecution for offences committed under Sections 14(2A) and 14A of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter to be referred as "the Said Act"). The opposite party/complainant is an Inspector appointed under Section 13 of the said Act and a public servant within the meaning of Section 21 of the Indian Penal Code and filed the complaint under order of his superiors.

M/s Braithwaite & Co. Ltd. is an establishment and exempted under Section 17 of the said Act and the petitioner no. 2 was the person in charge of and responsible to the conduct of its business and they have failed to submit monthly returns for the months April, 2004 in contravention of Section 17(3)(a) of the said Act read with relevant Govt. of

India Notification issued in this regard, and have thus committed offences under Sections 14(1A), 14(2), 14(2A) read with Section 14A of the said Act and the Employees Provident Funds Scheme, 1952 (hereinafter to be referred as "the said Scheme").

5. The Learned Trial Court upon perusal of the material placed before him

was pleased to frame charge for commission of offence punishable under

Section 14(2A) of the Employees Provident Funds and Miscellaneous

Provisions Act, 1952 against the petitioners by an order dated

01.04.2005.

6. The complainant in order to establish the said charge examined 3

witnesses, P.W.-1 to P.W.-3 and also relied upon documentary evidences

which have been marked as Exhibit 1 to 12 and the petitioners on their

part did not examine any witness. The specific defence plea was that of

innocence and false implication and also protection under the Proviso to

Section 14A(1) of the said Act. However the petitioners have relied upon

documents like Appendix-A, letters dated 15.02.2002 and 31.05.2003,

permission for withdrawal of amounts and letters dated 05.03.2002 and

01.07.2003 issued by the Assistant Provident Fund Commissioner (EX.)

W.B. to the petitioner company, permitting to withdraw the amounts

which have been marked as Exhibit - A collectively, but the said Exhibit-

A did not find a place in the impugned judgment passed by the Learned

Trial Court as well as before the Appellate Court.

7. The Learned Trial Court upon conclusion of the trial and after hearing

the parties was pleased to pass the Judgment and order dated 19th day

January, 2018 in C. Case No. 04 of 2004, convicting the petitioners for

the commission of offence punishable under Section 14(2A) of the

Employees Provident Funds and Miscellaneous Provisions Act, 1952 and

sentencing petitioner no. 1 to pay fine of Rs. 5,000/- and petitioner No. 2

to suffer simple imprisonment for 1(one) month and to pay a fine of Rs.

5,000/-, in default to suffer simple imprisonment for 1(one) month.

8. The petitioners preferred an appeal before the Court of Learned Sessions

Judge at Alipore, South 24 Parganas, which was registered as Criminal

Appeal No. 39 of 2018.

9. The Learned Appellate Court after hearing the respective parties was

pleased to pass the judgment and Order dated 24th day of December,

2018 in Criminal Appeal No. 39 of 2018 thereby affirming the Judgment

and order dated 19th day of January, 2018 passed by the Learned Trial

Court in C. Case No. 04 of 2004.

10. The petitioners state that the aforesaid Six Complaints were filed on

similar facts and accusation and the Learned Trial Court after conclusion

of trial has convicted the accuseds/petitioners in all the Six complaint

cases and challenging the six judgments of conviction, Six Appeals were

preferred before the Court of Learned Sessions Judge at Alipore, South

24 Parganas which were registered as Criminal Appeal Nos. 36 to 41 of

2018 respectively.

11. After hearing all the six appeals, the Learned Appellate Court was

pleased to allow Criminal Appeal No. 36 of 2018 and Criminal Appeal No.

37 of 2018, which relates to C. Case No. 01 of 2004 and C. Case No. 02

of 2004 respectively and set aside the judgments and orders of conviction

and was also pleased to partly allow Criminal Appeal No. 38 of 2018,

which relates to C. Case No. 03 of 2004 and set aside the judgment and

order conviction of petitioner no. 2 therein. However the Court affirmed

the judgment of conviction of petitioner no. 1.

12. Mr. Sabir Ahmed, learned counsel for the petitioners has submitted,

on filing a written notes of argument that the impugned Judgment and

order of conviction and sentence is the result of total non-application of

Judicial mind by the Learned Trial Court and is apparent on the face of

it, as the points taken up for consideration by the Learned Trial Court,

remained unconsidered and/or unanswered and the same has also been

followed by the Learned Appellate Court.

13. It is submitted that the learned Trial Court failed to consider exhibit 5, 6

and 7 and also failed to appreciate the facts that the Trustees including

petitioner no. 2 were appointed in the middle of retirement process of

huge number of employees and being the petitioner company a

Government undertaking under Ministry of Railway it was a priority to

the inexperienced Trustees to settle the accounts of the retired employees

and in doing so, after following the statutory procedure, it caused delay

in submission of returns and the Learned Trial Court without

considering such facts has whimsically passed the judgment of

conviction and the same was whimsically affirmed by the Learned

Appellate Court without looking into such facts, which is arbitrary, illegal

and unlawful and as such the instant Judgment and Order of conviction

and sentence being devoid of proper appreciation of the evidence on

record, is liable to be set aside, being not in accordance with law.

14. Ms. Debjani Ghosal, learned counsel for the opposite party no.

2/complainant has also submitted on filing a written notes of argument,

that the charge has been proved beyond reasonable doubt against the

petitioners and the order of conviction and sentence being in accordance

with law, the revision is liable to be dismissed.

15. From the materials on record, it appears that the complainant has

clearly stated in his petition of Complaint that the petitioner no. 1

is an establishment exempted under Section 17 of the Employees

Provident Fund Act, 1952 (hereinafter referred to as the EPF Act).

16. Section 17 of the EPF Act lays down:-

"[17. Power to exempt.--

(1) The appropriate Government may, by notification in the Official Gazette, and subject to such conditions as may be specified in the notification, [exempt, whether prospectively or retrospectively, from the operation] of all or any of the provisions of any Scheme--

(a) any [establishment] to which this Act applies if, in the opinion of the appropriate Government, the rules of its provident fund with respect to the rates of contribution are not less favourable than those specified in section 6 and the employees are also in enjoyment of other provident fund benefits which on the whole are not less favourable to the employees than the benefits provided under this Act or any Scheme in relation to the employees in any other [establishment] of a similar character; or

(b) any [establishment] if the employees of such [establishment] are in enjoyment of benefits in the nature of provident fund, pension or gratuity and the appropriate Government is of opinion that such benefits, separately or jointly, are on the whole not less favourable to such employees than the benefits provided under this Act or any Scheme in relation to employees in any other [establishment] of a similar character.

[* * *]

[Provided that no such exemption shall be made except after consultation with the Central Board which on such consultation shall forward its views on exemption to the appropriate Government within such time limit as may be specified in the Scheme.]

[(1A) Where an exemption has been granted to an establishment under clause (a) of sub-section (1),--

(a) the provisions of sections 6, 7A, 8 and 14B shall, so far as may be, apply to the employer of the exempted establishment in addition to such other conditions as may be specified in the notification granting such exemption, and where such employer contravenes, or makes default in complying with any of the said provisions or conditions or any other provision of this Act, he shall be punishable under section 14 as if the said establishment had not been exempted under the said clause (a);

(b) the employer shall establish a Board of Trustees for the administration of the provident fund consisting of such number of members as may be specified in the Scheme;

(c) the terms and conditions of service of members of the Board of Trustees shall be such as may be specified in the Scheme;

(d) the Board of Trustees constituted under clause (b) shall--

(i) maintain detailed accounts to show the contributions credited, withdrawals made and interest accrued in respect of each employee;

(ii) submit such returns to the Regional Provident Fund Commissioner or any other officer as the Central Government may direct from time to time;

(iii) invest the provident fund monies in accordance with the directions issued by the Central Government from time to time;

(iv) transfer, where necessary, the provident fund account of any employee; and

(v) perform such other duties as may be specified in the Scheme."

17. The petitioner no. 2 is stated to be the chairman of the Board of trustees

(appointed as per Section 17(1)(b) and person responsible to conduct its

business and also file return as per Section 17(1)(d)(ii). Being only a

member of the Board of Trustees, the question of sanction does not

arise in respect of the petitioner no. 2.

18. The offence alleged in this case is that as the monthly return for the

months of October, 2003 to December, 2003, was submitted on

06.08.2004 (as seen from judgment under revision), beyond the date

of submission, an offence under Section 17(1A)(d) of the act and

punishable under Section 14(A)(i) of the Act was committed.

19. The petitioner no. 2 has taken the defense of the proviso to section

14A(1) of the act which is:-

"[ 14A Offences by companies .--

(1) If the person committing an offence under this Act [,the Scheme or [the [Pension] Scheme or the Insurance Scheme]] is a company, every person, who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well

as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub- section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence."

20. It is the case of the petitioner no. 2 that he exercised all due diligence to

prevent the commission of the offense as alleged, reason being that:-

i) During the period 2000-2004 the Government of India

initiated Voluntary Retirement Scheme (VRS) and huge

number of employees retired during that period, which was

over 800 including senior officials, the members of Board of

Trust and P.F. administration of the petitioner no. 1 and to fill up

the vacuum created by such retirement, inexperienced employees

were appointed in the Board of Trust (appointments were made

since March, 2003), which is evident from exhibit 6 and 7.

ii) The company being a Government Undertaking, settlement of

accounts of retired employees was the first priority and to do that

the inexperienced members of Trustee had to first learn the

procedure of doing such settlement and then took permission for

sale of investment under Para 27AA Condition 20 of the said

Scheme, which is evident from Exhibit-A, and after getting

permission the members of Trustee followed the Sale procedure

and then upon receipt of the sale proceeds, the Accounts of the

retired employees was settled and payments were made.

iii) After the payments were made and the Accounts of the retired

employees was settled, accounting statements were prepared and

in conducting the whole process of taking permission for sale of

investments, organizing sale procedure and settling the accounts of

the retired employees by these inexperienced Trustees consumed

much time and took several months to complete since the

retirements were not at a time and was in phases and beside that

preparation of the accounts of such huge number of retired

employees is itself time consuming for the inexperienced Trustees,

hence submission of returns caused delay.

iv) Until and unless the accounts of the retired employees were

settled, no statement of accounts could be prepared and

without preparing the same, the petitioners could not submit

the returns or otherwise the same would also be an offence

under the said Act and Scheme.

v) Appendix - 'A' of Exhibit - 8/1 to 8/7, Exhibit-A and Exhibit-9,

clearly prove the fact of retirement of employees, permission for

withdrawal of monies and settlements of Accounts and this

supports the contention of the petitioner that in carrying out such

procedure, it consumed time and caused the delay.

vi) Mens Rea :-

The complainant/opposite party filed the case on 09.07.2004,

whereas the petitioners started submitting returns on and from

04.05.2004, two month before the case was initiated against

them, which goes to prove that the petitioners had no intention to

cause the delay in submitting the returns and that it was

submitted as soon as it became ready after following the statutory

procedure for settling the accounts of retired employees. This

shows the diligent attempts of the inexperienced Trustees

including the petitioner no. 2.

21. The reason as given is thus sufficient to show that prima facie the

petitioner no. 2 exercised all due diligence to prevent the

commission of the offence alleged.

22. It is on record that the same Appellate Court has acquitted the

Accused alleged to have failed to file the annual report but

convicted the one who failed to file monthly return, for the same

reasons and on the same grounds.

23. Considering all the facts and circumstances as stated, it is seen that the

petitioner has shown sufficient reasons so as to entitle him to get

the benefit of the proviso to Section 14A(1) of the Act. The Trial

Court and the appellate court have thus come to the wrong findings,

which not being in accordance with law requires the interference of this

court.

24. CRR 29 of 2019 is thus allowed.

25. Accordingly the Judgment and Order dated 24th day of December, 2018

passed by the Learned Additional District & Session Judge, 17th Court,

Alipore in Criminal Appeal No. 39 of 2018/(CIS-Crl. Appeal-22/18)

thereby affirming the Judgment and Order dated 19th day of January,

2018 passed by the Learned Additional Chief Judicial Magistrate,

Alipore, South 24 Parganas, in C. Case No. 04 of 2004 are set aside.

26. The petitioners/convicts are accordingly acquitted of all charge and

discharged/released from Bail bonds.

27. Petitioners are at liberty to withdraw the amount deposited along with

interest with the learned Registrar General of this Court, as per direction

of this Court vide order dated 20.09.2019.

28. All connected applications, if any, stands disposed of.

29. Interim order, if any, stands vacated.

30. Copy of this judgment be sent to the learned Appellate Court and Trial

Court for necessary compliance.

31. Urgent certified website copy of this judgment, if applied for, be supplied

expeditiously after complying with all, necessary legal formalities.

(Shampa Dutt (Paul), J.)