Om Prakash Saxena & Ors vs The State Of West Bengal
2023 Latest Caselaw 6359 Cal

                                       1


              IN THE HIGH COURT AT CALCUTTA
                Criminal Revisional Jurisdiction
Present: -      Hon'ble Mr. Justice Subhendu Samanta.
                       C.R.R. No. - 3262 of 2017
                              With
                       C.R.R. No. - 3263 of 2017

                         IN THE MATTER OF

                    Om Prakash Saxena & Ors.
                              Vs.
                     The State of West Bengal
For the Petitioners       : Mr. Pawan Kumar Gupta, Adv.,
                              Mr. A.K. Rai, Adv.,
                              Ms. Sofia Nesar, Adv.,
                              Mr. Santanu Sett Adv.

For the O.P no. 2              :   Mr. Satyender Agarwal, Adv.,
                                   Ms. Sikha P. Chaudhury Adv.

For the State                 :    Mr. Narayan Prasad Agarwala, Adv.
                                   Mr. Pratick Bose, Adv.


.

    Judgment on                    :       21.09.2023



Subhendu Samanta, J.

Both the criminal revisions have been preferred u/s 482

of the Code of Criminal Procedure for quashing criminal

proceedings pending being Nos. - C/327 of 2016 and C/323 of

2016 before the Learned Judicial Magistrate 1st Court

Barrackpore u/s14(1)/14(1A)/14(B)/14(2A)/14(AA) of the

Employee's Provident Fund and miscellaneous provident fund

Act 1952 pending against the present petitioners.

The brief fact of the case is that one Sanjay Biswas as

enforcement officer of the Employee's Provident Fund

organisation, Sub-regional office Barrackpore lodged a petition

of complaint against the present petitioners being the director

of M/s Bengal Waterproof Limited for the offence punishable

u/s 14(1)/14(1A)/14(B)/14(2A)/14(AA).

It has alleged in the said petition of complaint that the

present petitioners were in charge of the M/s Bengal

Waterproof Limited to all material times and were responsible

for the conduct of its business in discharge of such

responsibility took on the running of its business. It has

further alleged that the present petitioners as the employer of

the establishment failed to submit monthly return according to

the provision of Clause 16 of Appendix "A" of the Paragraph

27AA of EPF scheme 1952.

After receiving such petition of complaint the Learned

Jurisdictional Magistrate had taken cognizance and issued

process against the present petitioners.

Hence this instant criminal revision.

Learned Advocate for the petitioners submits that the

allegation levelled against the present petitioner is false and

concocted; no such offence was committed by the present

petitioner. The opposite party No. 2 has suppressed the

materials fact before the Learned Magistrate and initiated the

false complaint. He argued that the M/s Bengal Waterproof

Limited is non-operational since 2013. All the employees of the

said establishment had resigned from the establishment in

November 2011. The said fact of the resignation was brought to

the notice of the opposite party No. 2; accordingly opposite

party No. 2 has released the funds held under the PF deposit

schemes for final settlement of Provident Fund dues to all

employees. Since the factory was non-operational in 2013 and

all the employees had already resigned in 2011. The question

of filing monthly return during the period cannot arise. It is the

further case of the petitioners that all the employees has

received their final settlement of Provident Fund and there are

not a single disputes before the authority. It is the further

contention of the petitioners that after resignation of the

employees the permission for payment of PF settlement to all

the employees was sought for from the Provident Fund

Authority and the permission was granted. After the payment

of such final settlement of Provident fund to the employees one

utilisation certificate was also forwarded to the authority

including all particulars. After the payment of such provident

fund of the employees and as the establishment became non-

functional, an application was forwarded to the Provident Fund

Authority for dissolution of the Trust of the said establishment.

The authority has issued a letter directing the establishment to

audit through the empanelled auditor. The surrender of

exemption in respect of the establishment in question was

approved by the Regional Provisional Commission and

forwarded to the same for issuing specific notification to the

Central Provident Fund Commission. It is the submission of

the Learned Advocate for the petitioner that the instant

criminal proceeding filed against the present petitioners is

baseless and purposive. The prosecution against the present

directors cannot be allowed to be continued as the directors are

not vicariously liable to the act of the Company itself.

Furthermore the petitioners argued that the instant

criminal proceedings are initiated after the period of limitation.

Thus, the order of taking cognizance by the Learned Magistrate

is barred by limitation. It is the further argued that the

Regional Provident Fund Authority was initiated the false

complaint only to harass the present petitioners if the said

proceeding is allowed to be continued that would tantamount

the abuse of process of law.

The opposite party No. 2 submitted that the offence has

already been committed by the present petitioner under the

provision of Employees Provident Funds and Miscellaneous

Provisions Act 1952. The present petitioners were the Board of

Director of Trustees of the said Establishment. They had the

authority and control over the acts and business of the said

establishment and were in-charge of the establishment. They

are being the directors of the said trustee of the Establishment

are responsible for the conduct of its business. It has been

proved that they have run the business of the establishment at

the relevant point of time but they did not comply the

provisions of the Act and the Scheme in respect of the said

establishment. Under the direction of the competent authority

the squad of enforcement officer vitiated the M/s Bengal

Waterproof Limited on 06.01.2016 and 14.01.2016. During the

visit of the establishment they have perused the records

produced by the establishment and recorded the defects during

such visit. Report was filed with the authority and on the basis

of the sanction of the competent authority the prosecution was

initiated by filing the petition of complaint before the Learned

Magistrate. He submitted that the prima facie violation of the

provisions conduct by the present petitioners has well proved

so at this juncture the criminal proceeding cannot be quashed.

In support of his contention he cited some decisions of

Hon'ble Supreme Court and High Court Regional Provident

Fund commission (RPFC) Vs. Hooghly Mills Company

Limited. Wherein the Supreme Court has categorically held

that in case of default by the employer of exempted

establishment in coming its contribution to the Provident Fund

Section 14 B of the Act will be applicable. In the cited case the

respondent company was granted exemption under the EPF

and Miscellaneous Provisions Act (MPA) 1952 and after such

grant of exemption the companies were defaults in making

timely payment of dues towards the Provident Fund.

In Shrikanta Dutta Narshima Raja Vs. Enforcement Officer

Mysore. The Hon'ble Supreme Court has held that the criminal

proceeding pending before the Learned Magistrate and

cognizance taken therein is very much correct. At the last

paragraph, it has held that--

Therefore, every such person who has the ultimate

control over the affairs of company becomes employer. To say

therefore that since paragraph 36A requires an employer to do

certain acts the responsibility for any violation of the provision

should be confined to such employer or owner would be

ignoring the purpose and objective of the Act and the extended

meaning of employer in relation to establishments other than

the factory. The declaration therefore in Form 5A including

appellant as one of the persons in charge and responsible for

affairs of the company was in accordance with law therefore his

prosecution for violation of the scheme does not suffer from

any error of jurisdiction or law.

He also cited a decision passed by a Coordinate Bench of

this Court in CRR No. 2866 if 2006 wherein the Single Bench

has refused to quash a Criminal proceeding, on the ground

that the there was no scope for the employer to escape from the

responsibilities as vested in the 1952 Act. He also cited

decision of another Coordinate Bench of this court passed in

CRR No. 128 of 2005 wherein the application u/s 482 of the

Criminal Procedure Code was dismissed.

He also cited ratio of this Hon'ble Court passed in

Kamala Tea Company Limited Vs. State of West Bengal &

Anr. Wherein the directors of the establishment has failed to

deposit the provident fund with the authority. Subsequently

though deposited but such deposit at the subsequent stage

does not exonerate them from criminal liability.

On the other hand the petitioner has cited a decision

reported in Kartik Chandra Das Vs. State of West Bengal

(2010) SCC Online CAL 1895 wherein this Hon'ble Court has

quashed several complaints of the Provident Fund Authority

which was lodged before the Jurisdictional magistrate for

failing of filing return in time.

Heard the Learned Advocates. Perused the materials on

record and also perused the citations as filed by the parties. It

appears that the opposite party No. 2 has lodged the complaint

before the Learned magistrate against the present petitioner to

be the directors of M/s Bengal Waterproof Limited. The petition

of complaint was filed in the month of June 2016. It has been

mentioned in Paragraph 6 of the said petition of complaint that

the regional provident fund Commission II Sub-regional Office

Barrackpore has accorded sanction for prosecution. The letter

of sanction was annexed with the petition of complaint the

letter of sanction bear no date. It has been stated in Paragraph

6 of the said complaint that the sanction was accorded on the

basis of the report dated 29.03.2016. It has been alleged in the

petition of complaint that the present petitioners being the

employer has failed to submit monthly return in form 6 (PS) for

the period of 04/2009,12/2011,01/2012 and 11/2013,1/2014

under the provisions of Clause 6 of Appendix A of paragraph 27

AA of EPF Scheme 1952.

Clause 16 of Appendix A enumerates "The Board of

Trustees and the employer shall filed such returns

monthly/annually as may be prescribed by the Employees'

Provident Fund Organisation within the specified time limit,

failing which it will be deemed as a default and the Board of

Trustees and employer will jointly and separately be liable for

suitable penal action by the Employees' Provident Fund

Organisation:

So according to this provision the Board of Trustees of

the employer shall file returns monthly/annually as prescribed

by the Employees Provident Fund organisation within specific

time limit. It has been alleged that the petitioner has not

complied with the provisions and disobeyed to file return for

the said period.

The Learned magistrate has taken cognizance for the

said offence. The punishment of such offence was enumerated

in Section 14 of the said Act 1952. Section 14(1A) (b) of the

said act provided highest punishment to be 6 months and a

fine of Rs. 5,000/-.

For the violation of offence under Paragraph 76 (b) of

EPFS 1952 the punishment is one year.

For the violation of Para 29 (b) of Employees Deposit

Linked Insurance Scheme 1976, enumerated punishment of

one year and fine.

Paragraph 41(b) of EPFS 1971 also enumerated the

punishment of one year. So, the alleged offence of non-filing of

return was committed in the year 2013; for such offence

according to the provisions of 468 of Cr.P.C. the Magistrate can

take cognizance of offence within one year. The period of

Limitation mentioned in Section 468 of Cr.P.C is as follows:

468. Bar to taking cognizance after lapse of the period of limitation.--

(1) Except as otherwise provided elsewhere in this code, no court shall take cognizance of an offence of the category specified in sub-section (2), after the expiry of the period of limitation.

(2) The period of limitation shall be--

(a) six months, if the offence is punishable with fine only;

(b) one year, if the offence is punishable with imprisonment for a term not exceeding one year;

(c) three years, if the offence is punishable with imprisonment for a term of exceeding one year but not exceeding three years.

Considering the law of the land it appears that the

Magistrate has taken cognizance beyond the period of

limitation which is barred under the provisions of Section 468

of Cr.P.C.

On perusal of the decisions cited by the Learned

Advocate on behalf of the opposite party No. 2, it appears to me

that the alleged offences as mentioned in the cited cases are

completely separate. However, the ratio of Kartik Chandra Das

(supra) is more applicable in respect of facts and circumstances

of this case. Admittedly the employees of the said

establishment has forwarded their resignations in the year

2011. The employees have received their provident fund. There

were no dispute. The factory of the establishment became non-

functional since 2013. The Trust has been dissolved according

to the direction and observing formalities of the Provident

Fund. At this juncture searching the periodical returns by the

said establishment is nothing but a futile exercise. The criminal

complaints for the violation of provisions of EPF Act, 1952 of

one establishment which has actually became defunct 10 years

also will be misuse of procedural safeguards.

It further appears to me that the Learned Magistrate

has taken cognizance of the offences beyond the period of

limitation. The order taking cognizance is bad in law.

Learned Advocate for the petitioner further argued

during the argument that several cases were filed by the

concern authority for non-filing of the returns which is a waste

of huge public exchequer. However, the matter of wasting

Public exchequer is not an issue in this instant revisional

application. Thus, the same cannot be entertained at this

stage.

Considering the facts and circumstances and considering

the materials on record it appears to me that the order of

taking cognizance by the Magistrate and the Criminal

Proceeding pending before the Learned Magistrate bearing Nos.

- C/327 of 2016 and C/323 of 2016 pending against the

present petitioner before the Learned Jurisdictional Magistrate

is hereby quashed.

Connected CRAN applications if pending are also

disposed of.

Any order of stay passed by this court by the instant

criminal revision is also vacated.

Parties to act upon the server copy and urgent certified

copy of the judgment be received from the concerned Dept. on

usual terms and conditions.

(Subhendu Samanta, J.)