The Inspector of Provident Fund, Pondicherry vs A.S. Kandaswamy Pillai

M.N. Moorthy, J.—These are appeals preferred by the Inspector of Provident Fund, Pondicherry against the order of the Sub Divisional

Judicial Magistrate, Pondicherry in C.C.Nos.179 to 187 of 1977 acquitting the respondent who was charged for an offence under Paragraph 76

(b) and (d) of the Employees Provident Funds Scheme 1952, read with S. 14(2) of the Employees Provident Funds and Family Pension Fund

Act, 1952, (hereinafter referred to as the ''Act''), in that, he failed to submit the return in Form Nos.5, 10 and 12 and failed to pay the contribution

towards provident fund and administrative charges in the months covered in the nine cases. Excepting the periods, the facts of all the cases are

similar and as the contentions are the same, I propose to pass a common order.

The prosecution has examined the same two witnesses to prove the case against the respondent. P.W.2 is the Inspector of Provident Fund,

Pondicherry. According to him, be inspected Messrs. Kandan Talkies and found that the respondent is one of the partners. The respondent

employed more than twenty persons as employees and furnished a statement, Ex.P1, dated 30th April, 1969. A memo Ex.P2 was issued by the

Regional Provident Fund Commissioner, on receipt of which the respondent paid the dues and also submitted returns thereunder. Ex.P3 is the last

return and Ex.P4 is the chalan. Afterwards, the respondent failed to implement the provisions of the Act and the Scheme. The cases cover the

period from April, 1972 to April, 1974 and the respondent has not paid the provident fund dues of the employees, his contribution and the

administrative charges. The respondent has also not submitted returns in Form No. 5, 10 and 12. He was asked to appear before the Regional

Provident Fund Commissioner by Ex.P6 notice. Ex.P6 is the copy of the order of enquiry under S. 7(A) of the Act, Ex.P7 is the show cause

notice and Ex.P8 is the sanction order for prosecution.

According to P.W.2, the Assistant Provident Fund Commissioner the provisions of the Act were extended to Cinema theatres with effect from

30th July, 1961 and that on 30th April, 1969 he visited Messrs. Kandan Talkies. He checked the register of wages in the presence of one of the

partners of the talkies. Daily wage sheet and vouchers were also checked up. Ex.P1, the extract taken from the register of wages shows that the

strength of employees as on 7th April, 1969 is 27. The enquiry report was sent to the Regional Provident Fund Commissioner. The partner paid

the dues and furnished returns upto May, 1970.

The respondent has denied having committed any offence and he has not examined any witness on his behalf.

Learned counsel for the appellant contended that the trial court was in error in holding that the sanction order was made without the Regional

Provident Fund Commissioner applying his mind. The subjective satisfaction has been clearly proved. The other three partners of M/s. Kandan

Talkies not being prosecuted is not a ground to acquit the respondent. The respondent was the Managing Partner and he was in charge of the

affairs of the theatre and hence he was prosecuted. Finally, it was contended, Ex.P1 clearly shows that more than 20 persons were employed in

the theatre and the acquittal under these circumstances cannot stand.

The respondent being the Managing Partner of Messrs. Kandan Talkies, the fact that P.W. 2 inspected the premises on 30th April, 1969, the

preparation of Ex.P1 and the signing of it by one of the partners are all not disputed. After this inspection, the respondent has submitted, the returns

in the prescribed Form upto 31st March, 1972 and thereafter defaulted. One of the contentions of the prosecution is if an establishment is covered

under the provisions of the Act, it cannot question subsequently the correctness of extending the provisions of the Act as per S. 15. In Ex. P1, five

names of the workers-were repeated and on the basis of this contract taken from the register of wages, this case has been filed against the

respondent. In Ex.P1 only the first six names were shown as permanent employees and the other employees were shown as daily wage coolies.

For the purpose of the Act, it is necessary that an employer ought to employ 20 persons. If the respondent has submitted the returns upto 31st

March, 1972 on the basis of Ex.P1 on an accidental miscalculation or on a bona fide mistake and subsequently failed to submit the returns, I am of

the opinion that he is not liable for what he is not bound to do under the law. In Ex. P1, we find the signature of the son of the respondent K.

Sankar in his capacity as partner of the firm. It is admitted by P.W. 2, the Assistant Provident Fund Commissioner, that the respondent was

present when he inspected the premises. What made him not to get an acknowledgment in Ex. P1 from the respondent who was the Managing

Partner of the theatre instead of his son is not explained. P.W. 2 has admitted that he has not seized any account book of the theatre. He is not

able to say how many persons worked on 6th April, 1969 and 8th April, 1969 (Ex.P1 showing date of 7th April 1969) or whether they were

working continuously. P.W. 1, the Provident Fund Inspector, processes ignorance whether the persons mentioned in Ex. P1, are employees or

not. He admits it is not necessary to deduct all the employees, shares but only those who are eligible persons. An employee becomes eligible, if he

has put in 240 days of service as on that day, to contribute towards the Provident fund. A person who has put in less than 240 days of service

need not contribute towards the provident fund. P.W. 1 has stated that Ex. P1 had showed the strength of the employees as 27 as on 7th April,

1969, but as five of the names were repeated in another register he excluded them and arrived at the figure of actual strength at 22. This is only an

allegation-without being established by any proof. Employment for the purpose of the Act is employment in the regular course of business of the

establishment. It would not include employment of a few persons for a short period on account of some pressing need or some temporary

requirement. In the instant case, the prosecution has not placed enough materials to conclusively prove that the theatre had 20 employees at the

relevant date.

Learned counsel for the respondent submitted that the prosecution against the respondent alone is illegal as there ate other partners and Messrs.

Kandan Talkies also must have been made an accused. There is no explanation forthcoming from the side of the prosecution as to why the

respondent alone was chosen to be prosecuted. This may not be in consonance with the terms of S. 14-A of the Act.

The premises of the respondent''s theatre was inspected on 30th April, 1969. The sanction to prosecute the respondent was accorded on 3rd

August, 1974. The complaint in court was filed on 27th August, 1974. P.W.2 got into the witness box on 9th April, 1976. Thus we see there is

enormous delay at every stage of the proceeding and there is no proper explanation forthcoming. The utility of prosecution in cases like this largely

lies in its promptitude. The order of the lower court acquitting the respondent is correct and does not require my interference. The criminal appeal

against acquittal stand dismissed.