Gujarat High Court
Amit Suresh Bhai Lodha vs State Of Gujarat on 11 July, 2025
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R/CR.MA/18218/2019 ORDER DATED: 11/07/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CRIMINAL MISC.APPLICATION (FOR QUASHING & SET ASIDE
FIR/ORDER) NO. 18218 of 2019
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AMIT SURESH BHAI LODHA
Versus
STATE OF GUJARAT & ANR.
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Appearance:
ROHAN A SHAH(7497) for the Applicant(s) No. 1
RUSHABH H SHAH(7594) for the Applicant(s) No. 1
MR AV NAIR(5602) for the Respondent(s) No. 2
MR. ROHAN SHAH, APP for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE J. C. DOSHI
Date : 11/07/2025
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/72/2019 registered with Halol Police
Station for the offences punishable under Section 409 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 present petition has been filed under Section 482 of
the Code of Criminal Procedure, 1973 for quashing of the
First Information Report bearing C.R. No. I/72/2019
registered with Halol Police Station on 13.09.2019 for the
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alleged offence punishable under Section 409 of the Indian
Penal Code. The complainant, an official from the Employees'
Provident Fund Organization (EPFO), visited the factory
premises of Indsur Global Limited at Halol, where it was
disclosed by Ms. Manisha Vyas that although wages up to July
2019 were paid, the provident fund (PF) contributions for the
period March to July 2019 had not been deposited. On
verification with the EPF portal, it was found that PF
contributions amounting to ₹7,90,565/- under Company Code7,90,565/- under Company Code
GJ/VDBRD/230 were pending. Despite the explanation
provided to the complainant that the challans could not be
downloaded due to power disconnection and that
contributions had since been uploaded and processed, the FIR
came to be lodged against the present applicant, a Director of
the company. Subsequently, on 17.09.2019, an amount of
₹7,90,565/- under Company Code8,05,883/- was credited to the EPFO's account. It is the case
of the applicant that no ingredients of Section 409 IPC are
made out against him, as he does not fall within the class of
persons contemplated under the said provision.
3. Learned advocate, Mr. Rohan Shah appearing for the
petitioner 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
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@ 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
petitioner and various demands were raised pursuant to such
proceedings, however, the petitioner has already deposited
funds of their share. He would further submit that now the
prosecution may not be continued against the petitioner 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 petitioner may not be continued.
Upon such submission, learned advocate Mr. Patel requests to
allow the petition.
4. On the other hand, learned advocate Mr. A.V. Nair,
appearing for the private respondent, submitted that Section
29 of the Employees' Provident Fund Scheme, 1952 defines
the term "contribution." He further referred to Section 32-A of
the Scheme to contend that any sum deducted by an employer
from the wages of an employee shall be deemed to have been
entrusted to the employer for the specific purpose of
depositing the same with the Provident Fund authorities.
Referring to Section 38 of the Scheme, he submitted that the
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employer is under a statutory obligation to deposit the
employer's as well as the employee's share of contribution
within 15 days of the close of every month. Failure to do so,
he submitted, constitutes a criminal breach of trust in a
fiduciary capacity, thereby attracting the offence punishable
under Section 409 of the IPC. It was further contended that
the petitioners, being directors and in control of the affairs of
the company, are liable as they failed to deposit the provident
fund contributions deducted from employees' salaries for a
prolonged period exceeding four years. It was argued that the
offence under Section 409 IPC, being a continuing and
cognizable offence committed in the capacity of a public or
fiduciary trustee, cannot be effaced merely by depositing the
amount subsequent to the registration of the FIR. According
to him, the offence stands complete on the date the
contributions were due but not deposited, and therefore, the
FIR discloses a prima facie case under Section 409 IPC and
should not 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.
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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:-
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."
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9. In the multiple judgments relied upon by learned
advocate Mr. Shah, it indicate that when the amount is paid
by the petitioner, 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
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 petitioner has already closed his business as
per communication to the Regional Director, PPFO, ESIC.
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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 petitioner.
13. In the result, present petition is allowed and impugned
FIR being C.R.No.I/72/2019 registered with Halol Police
Station for the offences punishable under Section 409 of the
IPC 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. Since the company is under the process of liquidation,
no further directions for filing an affidavit are required to be
passed.
(J. C. DOSHI,J)
MANISH MISHRA
