Madhya Pradesh High Court
Rev. Naveen Paul Tadge vs The State Of Madhya Pradesh on 17 February, 2026
Author: Sanjeev S Kalgaonkar
Bench: Sanjeev S Kalgaonkar
1
NEUTRAL CITATION NO. 2026:MPHC-IND:4799
IN THE HIGH COURT OF MADHYA PRADESH
AT I N D O R E
BEFORE
HON'BLE SHRI JUSTICE SANJEEV S KALGAONKAR
ON THE 17TH OF FEBRUARY, 2026
MISC. CRIMINAL CASE No. 37825 of 2023
REV. NAVEEN PAUL TADGE
Versus
THE STATE OF MADHYA PRADESH
Appearance:
Shri Pankaj Bagadiya, advocate for the petitioner.
Shri Santosh Singh Thakur, public prosecutor for respondent/State.
.....................................................................................................................
ORDER
This petition under Section 482 of the Code of Criminal Procedure is filed for setting aside of the order dated 26.6.2023 passed by Judicial Magistrate First Class, Ratlam and for quashing of the proceedings and summoning order issued against the petitioner.
2. The exposition of facts, giving rise to present petition, is as under:
a. Jataram Ghosare, Rajesh, Rakesh, Sushila, Kala, Enjalina, Mala, Kusumbai, Rekha Ghosare, Dr. S.R. Dutta, Naveen Tatake and Yohan Chouhan claiming to be employees of Ratlam Christian Hospital filed a written complaint for offence punishable under Section 406 of IPC and Section 7A of The Employees' Provident Funds and Miscellaneous Provisions Act, inter-alia alleging that they were working at Ratlam Christian Hospital. They were given Signature Not Verified Signed by: BHUNESHWAR DATT Signing time: 17-02-2026 19:55:05 2 NEUTRAL CITATION NO. 2026:MPHC-IND:4799 GPF Account number. The respondents/accused were responsible for payment of salary and deposit of provident fund. The accused did not pay salary and their monthly reduction amount towards provident fund since October, 2009 upto July, 2013, thereby accused have committed criminal misappropriation and the offence punishable under Section 7A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (referred to as The Act of 1952' hereinafter). The Judicial Magistrate First Class, Ratlam forwarded the complaint under Section 156(3) of Cr.P.C. for investigation to the Police Station, Industrial Area, Ratlam. The Police Station, Industrial Area, Ratlam after enquiry registered FIR at crime No. 381 of 2014 for offence punishable under Section 406 of I.P.C. The final report was submitted on completion of investigation before the Judicial Magistrate First Class, Ratlam on 21.1.2016.
b. The Judicial Magistrate First Class, Ratlam took cognizance of offence punishable under Section 406 of IPC and Section 7A he Act of 1952 against accused R. Dutta, Yohan Chouhan and father Naveen Pal Tadge (the petitioner herein). The Judicial Magistrate First Class, Ratlam vide order dated 25.5.2016 while hearing on framing of charge, considered the provisions of Section 14AC of he Act of 1952 and directed the prosecution to file sanction for prosecution of the competent authority before further proceeding with the trial. The trial was kept pending for filing the sanction for prosecution. The trial Court vide orders dated 24.6.2022, 21.9.2022 and 12.12.2022 again specifically directed the prosecution and Signature Not Verified Signed by: BHUNESHWAR DATT Signing time: 17-02-2026 19:55:05 3 NEUTRAL CITATION NO. 2026:MPHC-IND:4799 concerned Police Station to file sanction for prosecution by the competent authority. The direction continued till 26.6.2023.
c. The learned Judicial Magistrate First Class, Ratlam vide impugned order dated 26.6.2023 considered the correspondence between the Public Prosecutor and the Collector, Ratlam and concluded that since the Christian Hospital is a private organization, the sanction for prosecution is not required to proceed with the trial. Accordingly, the case was fixed for hearing on charge.
3. The present petition under Section 482 of the Cr.P.C. is filed, feeling aggrieved by the impugned order, on following grounds:-
A. The petitioner Naveen Paul Tadge was appointed as Honorary Chairman as a ceremonial post. He was neither an employee nor the employer of the Christian Hospital. B. Section 14AC of the Act of 1952 mandates previous sanction of the Central Provident Fund Commissioner on report of the authorised Inspector. The trial Court initially held that sanction for prosecution is mandatory but later, recalled its own order and erroneously concluded that sanction for prosecution is not required. C. The learned trial Court committed error in holding that Christian Hospital is a private hospital, therefore, sanction for prosecution is not required. The offence, as alleged, is not made out against the applicant. The launch of prosecution, issuance of process and consequential proceeding against the petitioner is an abuse of process of Court.
On these grounds, it is requested that the impugned order dated 26.6.2023 be set aside and proceedings at RCT No. 4276/2015 be quashed with reference to the petitioner.
4. Learned counsel for the petitioner, in addition to the facts and Signature Not Verified Signed by: BHUNESHWAR DATT Signing time: 17-02-2026 19:55:05 4 NEUTRAL CITATION NO. 2026:MPHC-IND:4799 grounds mentioned in the petition, submitted that the impugned order suffers from illegality as the sanction for prosecution is mandatory. He further contends that the Christian hospital is run by a private society. The petitioner cannot be held vicariously liable without impleading the society. Learned counsel also contends that there was no entrustment of the provident fund deductions with the petitioner as he was not an employee of Christian Hospital or employers of the complainant. No offence, as alleged, is made out against the petitioner. Therefore, the prosecution against the petitioner is an abuse of process of the Court. To buttress of his submission, learned counsel relied upon following judgments:
i) State of Madras Vs. C.V. Parekh reported in 1970(3) SCC 491;
ii) Aneeta Hada Vs. Godfather Travels and Tours Pvt Ltd.
(2012) 5 SCC 661;
iii) Charanjit Pal Jindal Vs. L.N. Metalics (2015) 15 SCC 768;
iv) S.K. Alagh Vs. State of Uttar Pradesh (2008) 5 SCC 662;
v) Sharad Kumar Sanghi Vs. Sangita Rane (2015) 12 SCC 781;
vi) Buddhadev Acharya Vs. State of West Bengal 2023 SCC Online 2759;
vii) Raj Kumar Kanoi and others Vs. State of West Bengal 2025 SCC Online 3846
5. Per contra, learned counsel for the State opposes the petition and contends that the complainants have made specific allegation with regard to non-deposit of their contributory provident fund by the officials of Christian hospital. The petitioner was working as incharge Secretary of Christian hospital, therefore, he was under obligation to deposit the contributory provident fund of the employees of the hospital. The alleged Signature Not Verified Signed by: BHUNESHWAR DATT Signing time: 17-02-2026 19:55:05 5 NEUTRAL CITATION NO. 2026:MPHC-IND:4799 offence is prima facie made out. The petition is meritless.
6. Heard learned counsel for the parties and perused the record.
7. Section 14A of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, provides as under-
"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.
(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act, the Scheme or the Pension Scheme or the Insurance Scheme has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director or manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. Explanation.--Forthe purposes of this section,--
(a) "company" means any body corporate and includes a firm and other association of individuals; and
(b) "director" in relation to a firm, means a partner in the firm.]"
8. The Supreme Court in the case of C.V. Parekh, Aneeta Hada and Charanjit Pal Jindal(supra) considered the pari-materia provision of Section 10 of Essential Commodities Act and Section 141 of N.I. Act and held that the person incharge or the Director or an Officer of the Company may not be prosecuted unless the company is impleaded as an accused. The complaint made against the person incharge or the Director of Company or firm is not maintainable without impleading the company Signature Not Verified Signed by: BHUNESHWAR DATT Signing time: 17-02-2026 19:55:05 6 NEUTRAL CITATION NO. 2026:MPHC-IND:4799 or firm as an accused.
9. In case of S.K. Alagh v. State of U.P. reported in (2008) 5 SCC 662, it was held that-
16. The Penal Code, save and except some provisions specifically providing therefor, does not contemplate any vicarious liability on the part of a party who is not charged directly for commission of an offence.
17. A criminal breach of trust is an offence committed by a person to whom the property is entrusted.
18. Ingredients of the offence under Section 406 are:
"(1) a person should have been entrusted with property, or entrusted with dominion over property;
(2) that person should dishonestly misappropriate or convert to his own use that property, or dishonestly use or dispose of that property or wilfully suffer any other person to do so;
(3) that such misappropriation, conversion, use or disposal should be in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract which the person has made, touching the discharge of such trust."
19. As, admittedly, drafts were drawn in the name of the Company, even if the appellant was its Managing Director, he cannot be said to have committed an offence under Section 406 of the Penal Code. If and when a statute contemplates creation of such a legal fiction, it provides specifically therefor. In absence of any provision laid down under the statute, a Director of a Company or an employee cannot be held to be vicariously liable for any offence committed by the Company itself. (See Sabitha Ramamurthy v. R.B.S. Channabasavaradhya [(2006) 10 SCC 581 : (2007) 1 SCC (Cri) 621] .)
20. We may, in this regard, notice that the provisions of the Essential Commodities Act, the Negotiable Instruments Act, the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, etc. have created such vicarious liability. It is interesting to note that Section 14-A of the 1952 Act specifically creates an offence of criminal breach of trust in respect of the amount deducted from the employees by the company. In terms of the Explanations appended to Section 405 of the Penal Code, a legal fiction has been created to the effect that the employer shall be deemed to have committed an offence of criminal breach of trust. Whereas a person in charge of the affairs of the company and in control thereof has been made vicariously liable for the offence committed by the company along with the company but even in a case falling under Section 406 of the Penal Code vicarious liability has been held to be not extendable to the Directors or officers of the company.
Signature Not Verified Signed by: BHUNESHWAR DATT Signing time: 17-02-2026 19:55:05 7NEUTRAL CITATION NO. 2026:MPHC-IND:4799 (See Maksud Saiyed v. State of Gujarat [(2008) 5 SCC 668 : (2007) 11 Scale 318] .)
10. Recently, the Supreme Court in the case of Anil Khandelwal Vs. Pheoenix India and others reported in 2025 INSC 1069 observed as under:
17. In this regard, we are benefitted of the judgment of this Court in the case of Aneeta Hada v. Godfather Travels and Tours (P) Ltd. wherein it was held that prosecution of the directors or officers of a company can be maintained only when the company itself is arraigned as an accused and 8 (2012) 5 SCC 661 additionally, the directors or officers must have acted in a manner that directly connects his/her conduct to the company's liability. In the absence of the company being impleaded as an accused, its directors or officers cannot be fastened with vicarious liability for offences attributable to the company.
18. Thus, the prosecution of the appellants, without impleading the Bank as an accused in the proceedings, is ex-facie impermissible and cannot be sustained.
19. x x x x x x x x x x x x x x x
20. Suffice it to say that the appellants have been summoned in capacity of the officers of the Bank for the offences punishable under the IPC. However, there is no concept of vicarious liability of the officers or directors for the offences under the IPC as is provided under special Penal Statutes such as The Negotiable Instruments Act, 1881, The Food Safety and Standards Act, 2006, The Drugs and Cosmetics Act, 1940, etc. which specifically creates such liability.
21. In Maksud Saiyed v. State of Gujarat (2008) 5 SCC 668 similar situation arose where, due to an inadvertent error by the bank, allegations of defamation were made, and the Managing Director of the bank was arraigned as an accused, wherein this court observed the following:
"13. Where a jurisdiction is exercised on a complaint petition filed in terms of Section 156(3) or Section 200 of the Code of Criminal Procedure, the Magistrate is required to apply his mind. The Penal Code does not contain any provision for attaching vicarious liability on the part of the Managing Director or the Directors of the Company when the accused is the Company. The learned Magistrate failed to pose unto himself the correct question viz. as to whether the complaint petition, even if given face value and taken to be correct in its entirety, would lead to the conclusion that the respondents herein were personally liable for any offence. The Bank is a body corporate. Vicarious liability of the Managing Director and Director would arise provided any provision exists in that behalf in the statute. Statutes indisputably must contain provision fixing such vicarious liabilities. Even for the said purpose, it is obligatory on the part of the complainant to make requisite allegations which would attract the provisions constituting vicarious liability." (Emphasis Supplied) Signature Not Verified Signed by: BHUNESHWAR DATT Signing time: 17-02-2026 19:55:05 8 NEUTRAL CITATION NO. 2026:MPHC-IND:4799
22. Accordingly, before any officer of a Bank or a body corporate can be prosecuted for an offence under the IPC on the allegation of having acted on behalf of the institution, it is incumbent upon the complainant to produce unimpeachable material indicating the precise role of the officer in the commission of the alleged offence. Mere bald assertions of vicarious liability, without foundational facts to show active participation, authorization, or deliberate omission on the part of the officer, are insufficient to justify issuance of process in such a situation. The law does not permit automatic prosecution of directors or officers merely because of their designation or official status.
23. In this regard, we may refer to the following observations made by this Court in Punjab National Bank v. Surendra Prasad Sinha :-
"6. It is also salutary to note that judicial process should not be an instrument of oppression or needless harassment. The complaint was laid impleading the Chairman, the Managing Director of the Bank by name and a host of officers. There lies responsibility and duty on the Magistracy to find whether the concerned accused should be legally responsible for the offence charged for. Only on satisfying that the law casts liability or creates offence against the juristic person or the persons impleaded then only process would be issued. At that stage the court would be circumspect and judicious in exercising discretion and should take all the relevant facts and circumstances into consideration before issuing process lest it would be an instrument in the hands of the private complaint as vendetta to harass the persons needlessly. Vindication of majesty of justice and maintenance of law and order in the society are the prime objects of criminal justice but it would not be the means to wreak personal vengeance. Considered from any angle we find that the respondent had abused the process and laid complaint against all the appellants without any prima facie case to harass them for vendetta."
(Emphasis Supplied)
24. Hence, in the absence of any specific statutory provision under the IPC creating vicarious liability, coupled with the lack of concrete allegations or material demonstrating the individual role or culpability of the appellants for the alleged defamatory notice, their prosecution cannot be sustained. To permit continuation of criminal proceedings merely on the basis of their official designation in the Bank would amount to a misuse of judicial process, contrary to the settled principles laid down by this Court. Accordingly, the appellants have been wrongly impleaded, and the proceedings against them are liable to be quashed.
11. The material on record is examined in the light of aforestated judgments.
12. Complainant Jataram Ghosra and other 08, submitted a written Signature Not Verified Signed by: BHUNESHWAR DATT Signing time: 17-02-2026 19:55:05 9 NEUTRAL CITATION NO. 2026:MPHC-IND:4799 complaint before the Judicial Magistrate First Class against (1) Dr. Smt. S.R. Dutta, Secretary, Central Regional Board of Health Services, Church of North India, (2) Naveen Takte, Incharge Secretary, Central Regional Board of Health, Church of North India, (3) Mr. Yohan Chouhan, Medical Superintendent/Director Ratlam Christian Hospital(Mission Hospital)for offence punishable u/S 406 of IPC r/W Section 7(A) of the Act of 1952 alleging that the accused had deducted contribution towards the Provident Fund from their salary but did not deposit it with the office of Provident Fund of India.
13. The petitioner is sought to be implicated as incharge of Ratlam Christian Hospital run by Central Regional Board of Health Services, Church of North India. There is no allegation that petitioner has received any contribution of provident fund by the employees in personal capacity. The complaint and consequent FIR is registered without impleading the Ratlam Christian Hospital or the Central Regional Board of Health Services, Church of North India. Thus, the complaint and the consequent FIR suffers from legal infirmity.
14. Section 14(AC) of the Act of 1952 provides as under:
14AC. Cognizance and trial of offences.- ((1) No court shall take cognizance of any offence punishable under this Act, the Scheme or the Pension Scheme or the Insurance Scheme, except on a report in writing of the facts constituting such offence made with the previous sanction of the Central Provident Fund Commissioner or such other officer as may be authorised by the Central Government, by notification in the Official Gazette, in this behalf, by an Inspector appointed under section 13. (2) No court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try any offence under this Act or the Scheme or the Pension Scheme or the Insurance Scheme.
15. Thus, the Court cannot take cognizance of any offence punishable under the Act of 1952 except on a report in writing constituting such an Signature Not Verified Signed by: BHUNESHWAR DATT Signing time: 17-02-2026 19:55:05 10 NEUTRAL CITATION NO. 2026:MPHC-IND:4799 offence, by an appointed Inspector, made with the previous sanction of Central Provident Fund Commissioner or other authorized officer. First, there is no complaint by an appointed Inspector; secondly, the sanction of Central Provident Fund Commissioner is not available. Therefore, the learned Judicial Magistrate First Class committed manifest illegality in taking cognizance of offence punishable u/S 7(A) r/W Section 14 of the Act of 1952.
16. The petitioner is accused of committing the offence of criminal breach of trust punishable under Section 406 IPC. This offence is defined under Section 405, IPC as follows:
"Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes off that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits "criminal breach of trust".
17. The element of "dishonest intention" is an essential element to constitute the offence of criminal breach of trust. So far as the aspect of dishonest intention is concerned, the term "dishonestly" is defined by Section 24 IPC:
"24. 'Dishonestly'.--Whoever does anything with the intention of causing wrongful gain to one person or wrongful loss to another person, is said to do that thing 'dishonestly'."
Thus, an act done with the intention to cause "wrongful gain" can be said to be dishonest. The term "wrongful gain" is defined in Section 23 IPC as follows:
"23. 'Wrongful gain'.--'Wrongful gain' is gain by unlawful means of property to which the person gaining is not legally entitled."Signature Not Verified Signed by: BHUNESHWAR DATT Signing time: 17-02-2026 19:55:05 11
NEUTRAL CITATION NO. 2026:MPHC-IND:4799 The essential ingredient of proof of criminal breach of trust, therefore, is misappropriation with a dishonest intention. The Breach of trust simpliciter, is not an offence as it is not associated with dishonest intention. The term dishonestly defined in Section 24 IPC means doing anything with the intention of causing wrongful gain to one person or wrongful loss to another. So, the offence would be constituted when misappropriation of the property is made dishonestly. It has been held in Onkar Nath Mishra v. State (NCT of Delhi) reported in (2008) 2 SCC 561 that two distinct parts are involved in the commission of the offence of criminal breach of trust. The first consists of the creation of an obligation in relation to the property over which dominion or control is acquired by the accused. The second is a misappropriation or dealing with the property dishonestly and contrary to the terms of the obligation created. Further, in Jaikrishnadas Manohardas Desai v. State of Bombay reported in AIR 1960 SC 889, it has been held that:
"4. ... to establish a charge of criminal breach of trust, the prosecution is not obliged to prove the precise mode of conversion, misappropriation or misapplication by the accused of the property entrusted to him or over which he has dominion. The principal ingredient of the offence being dishonest misappropriation or conversion which may not ordinarily be a matter of direct proof, entrustment of property and failure in breach of an obligation to account for the property entrusted, if proved, may in the light of other circumstances, justifiably lead to an inference of dishonest misappropriation or conversion. Conviction of a person for the offence of criminal breach of trust may not, in all cases, be founded merely on his failure to account for the property entrusted to him, or over which he has dominion, even when a duty to account is imposed upon him, but where he is unable to account or renders an explanation for his failure to account which is untrue, an inference of misappropriation with dishonest intent may readily be made." (emphasis supplied)
18. In matter of N. Raghavender v. State of A.P. reported in (2021) 18 SCC 70, it was observed that-Signature Not Verified Signed by: BHUNESHWAR DATT Signing time: 17-02-2026 19:55:05 12
NEUTRAL CITATION NO. 2026:MPHC-IND:4799
47. It ought to be noted that the crucial word used in Section 405 IPC is "dishonestly" and therefore, it pre-supposes the existence of mens rea. In other words, mere retention of property entrusted to a person without any misappropriation cannot fall within the ambit of criminal breach of trust. Unless there is some actual use by the accused in violation of law or contract, coupled with dishonest intention, there is no criminal breach of trust. The second significant expression is "misappropriates" which means improperly setting apart for ones use and to the exclusion of the owner.
19. There is no allegation that the petitioner personally received the amount of contributory provident fund from the employees of the hospital (complainants). There is no allegation that the petitioner has converted to his own use the contribution/deduction of salary of the employees. Therefore, the essential ingredients to constitute the offence of criminal breach of trust is not made out against the petitioner.
20. In view of the above discussion, this Court is of the considered opinion that continuation of prosecution in the present matter against the petitioner would be an abuse of process of Court. F urther proceeding in the matter would be wastage of precious judicial time. The inherent power under Section 482 of the Criminal Procedure is invoked to prevent the abuse of process of Court and to secure ends of justice.
21. Consequently, the order dated 26.6.2023 passed by Judicial Magistrate First Class, Ratlam is set aside and proceedings at RCT No. 4276/2015 are hereby quashed with reference to the present petitioner/ accused - Naveen Paul Tadge.
22. Petition is accordingly allowed.
( SANJEEV S KALGAONKAR) JUDGE BDJ Signature Not Verified Signed by: BHUNESHWAR DATT Signing time: 17-02-2026 19:55:05