Krishna Kumar Dalmia vs The State and Others

N.C. Mukharji, J.—These 17 Rules arise on 17 applications for quashing the proceedings on the ground that the petition of complaints were filed out of lime and also on other grounds. We classify the Rules under two heads. In one first group, we, place Criminal Revision Nos. 2249 to 2262 or 1919. In these 14 Rules the contention of the petitioner, amongst others, is that the petitions of complaint have been filed out of time. Fourteen cases, namely, C/311 to C/324 were started for non-deposit of Provident Fund Amounts for the months of October, 1973 to November, 1974. The: petitions of complaint in all the cases were tiled on 10.1.76. Relying on the provisions of section 468 (2) (b) of the Code it is contended by the learned Advocate for the petitioner that the petitions of complaint in all these cases ought to have been filed within one year from the date of the alleged offence.

In support of his contention Mr i)e, learned Advocate for the petitioner refers to a Bench decision reported in 1978 C.H.N. 293 (M/s Wire Machinery-Manufacturing Corpn. Ltd. & Ors). In this case, first of all, it was held that under paragraph 38 of the Scheme the infringement for the failure to deposit within 15 days of the close of every month occurs oh the close of fifteenth day of a month and is complete on the employer failing to make the payment by that date. Once the defaults were made the offences were committed once for all and become complete in the elfse of the due date. As such there would not be any ingredient of continuance in the offence to make it a continuing offence. As regards limitation, it was held that "the complaints having been filed beyond a period of one year they are time barred in accordance with Section 468 (2) (b) of the Code and the cognizance taken on the basis of such complaints are without jurisdiction." Admittedly, in these 14 cases the petitions of complaint have been on 10.1.76 and the alleged offence being for the period from October, 1975 to November, 1914 it must be said that the complaints were meet beyond the period or limitation. Mr. Harasit Ghosh, learned Advocate appearing on behalf of the Union of India, has nothing to say with regard to this legal position and concedes that these 14 applications should succeed on the ground of limitation.

We classify Criminal Revision Nos. 2263 to 2265 of 1979 under the second group. These Rules arise out of cases being Cj325 to C/327 of 1976. These cases were filed for the alleged offences for the months of December, 1974, January, 1975 and February, 1975. In all these cases, the petitions of complaint were filed on 10.1.76. That being so, the petitions were filed within the prescribed time. In these three Rules Mr. De contends that for alleged violation of nonpayment of the amount of Provident Fund, the Company is only responsible. According to the provisions of Section 14A (1) (2) of the Employees'' Provident Fund and Miscellaneous Provisions Act, 1952, the Company can be held liable; otherwise for the alleged offence committed by a Company simply because some persons are Directors, they ear not be held liable. The petitioner has been made a party simply because he is one of the Directors of the Company in support of his contention.

Mr. De first relies on a Supreme Court decision reported in Girdhari Lal Gupta Vs. D.H. Mehta and Another, . This was a case under Foreign Exchange Regulation Act, 1947. Provision''s of section 23C (1) and (2) of the said Act are almost similar to the provisioins or section 14A (1) & (2)(sic) the present Act. It has been held in this case that the expression "person in charge occuring in the section means a person who is in over all control of the day to day Business of the Company or firm.

Mr. De next relies on a Bench decision of this court reported in 1978 C.H.N 336 (m/s. Mahalderam Tea Estate private Limited & Ors). v. D.N. Prodhan & Anr.). In this case it has been held that "under section 14A of the Act (meaning Employees" Provident Fund Act), a Company is made primarily liable for an alience committed under the Act. The liability may be expended to other persons vicariously only under the conditions laid down in the section. A director of a company may be concerned only with the policy to be followed and might not have any hand in the management of its day to day affairs. Such person must necessarily be immune from such prosecution. In the instant case, there is no material from which the learned Magistrate could satisfy himself that the petitioners took some part in the running of the business of the company. In the absence of such averments in the petitions of complaint the cognizance taken is bad in law and must be quashed".

The next case relied on by Mr. De has been reported in 1979 Cr. L. J. 86 (G. Atherton & Co. (P) Ltd. and others v. Corporation of Calcutta), This was a case under the Prevention of Food Adulterator, Act. Section 17 of this Act is in similar terms with section 14A of the Employees Provident Fund Act It has been held in this case u/s 17 a comany has been made primarily liable, to make other persons vicariously liable, it has to be shown that such persons were in charge of or were responsible to the company for the conduct of its day to day business.In the absence of any mention in the petition of persons were concerned in the carrying on of the day to day business of. the company process could not have been issued against them.

Mr. De draws our attention to the petitions of complaint, in paragraph 3, it has been simply stated that the accused Nos. 2 to 6 are the Directors in charges of M/S. Alokudyog Vanaspati and Plywood Ltd. and accused No. 7 is the Chief Executive and thus, they are responsible for the conduct of its business. In paragraph 8, it has been stated the accused persons were during relevant period in charge of the said establishment and were responsible to it for the conduct of its business and or the aforesaid offences were committed by the said establishment with their consent or connivance or attributable to their neglect the said accused persons have committed offences u/s 14A (I) and (2) of the Employees Provident Fund & Family Pension Act 1952.

Mr. De with much emphasis contends that assuming that these (sic) ments are correct even then it has not been said that the petitioners were in charge of the business or in over all control of the day to day business of the Company. These averments cannot make the petitioner vicariously liable for the offences alleged to have been committed by the Company simply because he is a Director. We accept the contention of Mr. De and relying on the decisions referred to above hold that the statements in the petitions of complaint have not made out a case against the petitioner.

In the result. Criminal Revision Nos. 2249 to 22G2 of 1979 are made absolute. The proceedings being 0311 to C,324 are quashed. Criminal Revision Nos. 2263 to 2265 of 1979 are made absolute. The proceeding is quashed so fst as the petitioner Krishna Kumar Dalmia is concerned. Let the records go down immediately.

N.G. Chaudhuri, J.

I agree.