Bangalore District Court
Anand Kotreshwar Sithale vs Enforcement Officer Epfo on 22 November, 2025
1 Crl.Apl.No.1699/2024 JUDGMENT
KABC010269562024
IN THE COURT OF LXIX ADDITIONAL CITY CIVIL
AND SESSIONS JUDGE (CCH 70)
Present:
Smt. Shirin Javeed Ansari, B.A.,LL.B (Hon`s) LL.M.,
LXIX Additional City Civil and Sessions Judge,
Bengaluru. (CCH70)
Dated this the 22nd day of November, 2025
Crl.A.No.1699/2024
Appellant: Sri Anand Kotreshwar Sithale
s/o Kotreshwar Sithale
Aged about 45 years
Director
No.007, SLV Rajdriva Apt
19th Main, 5th Block
38th Cross, Prakruthi Layout
HBR Layout
Bangalore North
Kalyananaar
Bangalore-560 043
(Smt.Deepa.J, Advocate for appellant)
-V/s-
Respondent: The Enforcement Officer
Employees Provident Fund Organisation,
Regional Office,
Koramangala
Bhavishyanidhi Bhavan,
Annapurneshwari Complex,
6th Main, Singasandra,
Bengaluru- 560068.
2 Crl.Apl.No.1699/2024 JUDGMENT
represented by:
Sri Kumar Prabash Chandra
Enforcement Officer
(Sri Harsha.V., Advocate for
respondent)
JUDGMENT
This Criminal Appeal is directed against the well- reasoned Judgment of conviction and order of sentence dated 26.09.2024 passed by the learned Presiding Officer, Special Court for Economic Offences, Bengaluru, in C.C. No.104/2024, whereby the appellant - Accused No.3 was convicted for the offences punishable under Section 14(1A) read with Section 14(2) of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952.
2. Being aggrieved by the impugned judgment and conviction, the appellant/accused No.3 has preferred the present appeal under Section 374(3) of the Code of Criminal Procedure seeking to set aside the same.
3. The accused No.3 in CC No.104/2024 before the trial court has preferred the instant appeal against the complainant. The appellant and respondent are hereby assigned with their original ranks before the trial court i.e., 3 Crl.Apl.No.1699/2024 JUDGMENT the appellant as accused No.3 and respondent as complainant in CC No.104/2024 in the instant discussion for the purpose of brevity and convenience to avoid the confusion and perplexity.
4. The case of the prosecution is that Accused No.1 - M/s. Design Apparels Pvt. Ltd., was a statutorily covered establishment under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and the schemes framed thereunder, namely the Employees' Provident Fund Scheme, 1952 and Employees' Pension Scheme, 1995. The statutory obligation to remit employer's contribution towards the Pension Fund for the wage months of June 2014, July 2014 and August 2014 remained deliberately unfulfilled, resulting in statutory arrears amounting to Rs.2,98,110/-.
5. The prosecution further alleged that Accused Nos.2 to 5 were Directors / persons responsible for the day-to-day management of the establishment as evidenced by Form No.5-A, and thereby stood statutorily liable under Sections 14(1A) and 14(2) of the Act. 4 Crl.Apl.No.1699/2024 JUDGMENT
6. Upon trial, the learned Special Court, by a detailed judgment, recorded conviction and imposed fine and default sentence and also issued statutory directions under Section 14C(1) of the Act.
7. Being aggrieved by the findings of guilt, the conviction and the sentence, Accused No.3 has preferred the instant appeal against the respondent who was the complainant before the trial court on the following:
GROUNDS OF APPLEAL
a) The judgment and order of sentence passed by the Special Court is opposed to law and evidence on record, hence, the order of conviction and sentence is liable to be set aside by this Court.
b) The trial court erred in taking cognizance of the offenses under Section 14(1A) & 14(2) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952, without proper evidence or material to sustain the allegations made in the complaint and the very taking of cognizance and consequential proceedings 5 Crl.Apl.No.1699/2024 JUDGMENT against the appellant is opposed to law and the evidence on record, consequently the order of conviction and sentence is liable to be set aside by this Court.
c) The appellant submits that there has been failure to appreciate by the trial court that, the appellant was merely a director and was not responsible for the day-to-day affairs of the accused No.1 company during his tenure. Furthermore, the appellant had resigned from the company on 22.03.2012 and is not connected to the company's operations or financial matters in any manner. Such being the case The Special Court Holding in it's Judgment that the Appellant/Accused No.3 has not appeared during the enquiry initiated by the complainant authority U/s 7A of the EPF and MP act despite notice being not served and the appellant is not residing in the address mentioned in the cause title of the complaint filed by the respondent under section 200 of Cr.P.C (Ex.P1). It is submitted that while drawing the inference the trial Court has erroneously considered that the appellant has not challenged the 6 Crl.Apl.No.1699/2024 JUDGMENT enquiry order dated 31.10.2017 U/s 7A, when it is very much relevant that the Accused NO.3/Appellant was no longer a director of the company and as such the accused was unaware of any such proceedings. Hence, the impugned order deserves to be set aside by this Court.
d) The Trial Court has erred and passed a cyclostyle order holding the appellant responsible for the actions of the company even after the appellant had resigned from the company and was no longer concerned with the happenings of the company whatsoever. The Appellant/ Accused No.3 had resigned from the directorship of Accused No.1 Company on 22.03.2012 much prior to the alleged period of due date of remittance of Employees Deposit Linked Insurance Fund amount for the alleged months as per Ex.P.l. This resignation was duly communicated to the company, accepted by the company, and updated in the Registrar of Companies (ROC) records. Furthermore, the appellant had also informed the respondent authority of this resignation much prior to 7 Crl.Apl.No.1699/2024 JUDGMENT filing of the complaint. Despite these facts being on record, the Trial Court failed to properly appreciate the evidence has erroneously convicted the appellant.
Consequently, the allegations against the appellant unsustainable in law, and the conviction order is liable to be set aside.
e) The trial Court has erred in considering and marking Exhibit P-2 to P-8 has been addressed to the accused No.3 when the same was addressed to the accused no.1 company. The Appellant was not a director of the company as he resigned from the company on 22.03.2012, and no Notices were served to the appellant, moreover the respondent authority has failed to produce any postal receipt as a proof of such notice being addressed to the Appellant/Accused No.3. Without there being any material of service to the appellant the trial Court has permitted the exhibits of track consignment to be marked despite objections and has erroneously considered Exhibit P-2 to 8, as such the impugned judgment is bad at law and needs to be interfered by this Court. Thus even as per 8 Crl.Apl.No.1699/2024 JUDGMENT Section 27 of the General clauses Act, the address of the appellant is different as per Ex.P1 and hence the court cannot draw the presumption of deemed service of notices to appellant.
f) The trial court failed to appreciate the various contentions raised by the appellant and lack of sufficient material produced by the Respondent authority to sustain the allegations made in the complaint and the charges levelled against the appellant. Hence, the same deserves to be set aside by this Court.
g) The order of conviction is bad at law as far as the appellant is concerned. Further, the trial court has failed to appreciate the evidence of the prosecution, more particularly the cross examination of PW1, which clearly reveals that the complainant/Respondent authority has failed to produce any material to sustain the charges levelled against the appellant/ Accused No.3. In the absence of material to sustain the charges levelled against the accused/appellant, the order of conviction is bad at law and facts. Hence, the same 9 Crl.Apl.No.1699/2024 JUDGMENT deserves to be set aside by this Court.
h) The order of conviction is bad at law for non-production of the vital material by the prosecution to show production of books of accounts, and non-examination of account statements of accused No.1 establishment, list of employees with respect of the contribution of the employers and its details. The non-production of statement of accounts of the employee, passbook, and non-examination of any employees, non examination of the person who has dealt with these files relating to the Employees and employers' contribution to EPF fund by the respondent authority. Due to the non production and non-examination of these vital documents and witnesses, the trial ought to have drawn adverse inference against the prosecution. Hence, the order of conviction is bad at law and evidence.
i) There has been failure to appreciate that, the prosecution has failed to produce the best evidence, and they have also failed to prove the alleged charges against the appellant beyond reasonable doubt by producing cogent and unimpeachable 10 Crl.Apl.No.1699/2024 JUDGMENT evidence to prove the alleged charges. In the absence of any cogent and unimpeachable evidence, either oral or documentary evidence, the order of conviction against the appellant is bad at law and is liable to be set aside.
j) The trial court has wrongly drawn inference from section 305 (6) of Cr.P.C and concluded that the Appellant/ Accused No.3 is a person responsible for the Accused No. 1 along with other Directors. It is a settled position of law that, No one is compelled to represent company and to defend in the court of law, and such being the case the reason mentioned by the trial court in the judgment, which runs contrary to the judgments of the Hon'ble High Court of Karnataka and Hon'ble Apex Court. Hence, the order of conviction passed in by the trial court is totally opposed to the law and is liable to be set aside.
k) The trial court as failed to notice, in the absence of any material to prove the alleged charges and has proceeded to pass order of conviction against the appellant 11 Crl.Apl.No.1699/2024 JUDGMENT holding erroneously that, the complainant has discharged the burden of proof beyond all reasonable doubts, and proceeded to hold accused No.2 as guilty U/s.14(1A) r/ w Section 14A of EPFMP Act in so far as 33.3% of the defaulted contribution amount when the very basis, Muster Roll of Employees of Accused No.1 and EPF Account statements were not furnished to substantiate the allegations made in the complaint. Even otherwise the Respondent authority has failed to establish any connection between the accused No.1 company and the appellant as the appellant is no longer the director, and even during the relevant point of time the appellant was not the one responsible for the day-to-day activities of the company. The trial Court has failed to appreciate the specific contents in the exhibits, where it is categorically specified that the details of the directors in and the particulars of the person in charge and responsible for conduct of business of the establishment. In that, regard the impugned judgment is bad at law and needs to be interfered by this Court.
12 Crl.Apl.No.1699/2024 JUDGMENT
l) The Appellant has engaged his Advocate in the trial court only for himself and the appellant is not a representative of the company. The Accused No. 1 Company has not engaged any advocate. However, the Trial Court instead of placing the Accused No.1 establishment a juristic person and an independent entity as an ex-Parte, on erroneous consideration has held the Accused No.1 establishment is being managed by accused No.2 to 5 and passed the impugned order making the Appellant responsible for the conduct of the Accused No. 1 Company which is arbitrary and illegal. Hence the same needs to be set aside by this Hon'ble Court.
m) The Trial Court has not properly appreciated the relevant judgments relied upon by the appellant, the Trial court has erroneously made the appellant vicariously liable for the activities of the company, even though the appellant is no longer the Director or was responsible for its day to day activities such as paying the employee contribution amount, hence the same is bad at law and needs to be interfered by 13 Crl.Apl.No.1699/2024 JUDGMENT this Court.
n) The Trial Court has failed to notice the very proceedings against the accused persons and more particularly, against the appellant is bad at law as the Accused No.1 which is an establishment which is required to make EPF contribution, and the said company is a juristic person and has been strike off even prior to filing of a complaint by the respondent before the trial Court. Such being the case, when the company is being strike off before filing of a complaint and very taking cognizance against strike off company and its erstwhile directors is bad at law and same is liable to be set aside.
Hence, under the said facts and circumstances, the appellant/accused pray before this court to call for records from the trial court, set aside the impugned judgment conviction and sentence passed by Trial Court in CC No.104/2024 dated 26.09.2024 and acquit the accused in the interest of justice.
8. Heard. The entire original records of the Trial 14 Crl.Apl.No.1699/2024 JUDGMENT Court have been summoned and examined.
9. On the basis of the rival submissions and the record, the following points arise for consideration of this appellate Court:
(1) Whether the judgment of conviction passed by the learned Special Court for Economic Offences in C.C. No.104/2024 suffers from illegality, infirmity, perversity or miscarriage of justice calling for appellate interference?
(2) What order?
10. My findings to the above points are as under:
Point No.1 : In the Negative Point No.2 : As per final order for the following:
REASONS
11. Point No.1:-- The appellant essentially contends: that he had resigned on 22.03.2012 and was not in charge during the default period; that no notice under Section 7A was personally served; that Form 5-A was improperly relied upon; that the Trial Court allegedly 15 Crl.Apl.No.1699/2024 JUDGMENT passed a "cyclostyled" order without independent analysis; that the company stood struck off; that the prosecution failed to produce muster rolls, salary statements, bank accounts and best evidence; that sanction was defective; and that vicarious liability has been wrongly fastened.
12. The EPF & MP Act, 1952 is a beneficial, social welfare legislation enacted to secure economic and social justice to employees. The statute imposes strict statutory obligations on employers. The jurisprudential character of such statutes is not purely punitive but protective. Once coverage is established, liability is not diluted by internal corporate arrangements.
13. This Court is of the considered opinion that offences under social welfare legislation fall within the category of strict liability offences, where the element of mens rea is substituted by statutory obligation.
14. Form No.5-A is not a private document, but a statutory declaration made to the competent authority. It is a legal representation under statutory mandate, and therefore attracts presumptive evidentiary value under 16 Crl.Apl.No.1699/2024 JUDGMENT Section 114 of the Evidence Act.
15. The appellant's name appearing in Form No.5-A creates a legal presumption of responsibility, which cannot be rebutted by mere private resignation unless the same is communicated and acknowledged by the statutory authority.
16. The default in remittance of statutory contribution constitutes a continuing offence. Every day of non-remittance is a fresh breach of statutory duty. This doctrine defeats the argument of limitation or the technical plea based on delay.
17. A resignation in corporate law has civil effect inter se between the Director and the Company. However, in social welfare jurisprudence, resignation does not absolve statutory responsibility unless the statutory authority is informed in conformity with Para 36-A of the Scheme.
18. The appellant failed to demonstrate any proof of such statutory intimation. The Trial Court has rightly 17 Crl.Apl.No.1699/2024 JUDGMENT relied upon the binding ratio of Srikantadatta Narasimharaja Wodiyar v. Enforcement Officer (1993) 3 SCC 217.
19. The law does not demand proof of actual manual service in every instance. Once postal and electronic modes of service are established, statutory presumptions under General Clauses Act and Evidence Act arise. The evidence of track reports and 65-B certificates constitutes legally admissible proof.
20. An order under Section 7A of the Act is not an administrative whim but a quasi-judicial determination. When such an order is not challenged, it attains legal finality and binds the parties. The appellant cannot collaterally challenge the correctness of the 7A order in criminal proceedings after acquiescence.
21. Although a Company is a juristic person, criminal responsibility does not evaporate upon "strike off". Liability already crystallised survives dissolution. Directors are proceeded against in their statutory representative capacity.
18 Crl.Apl.No.1699/2024 JUDGMENT
22. The doctrine of vicarious liability under penal statutes ordinarily requires strict construction. However, welfare legislation constitute an exception where statutory definition of "employer" includes those exercising control over affairs of establishment. Directors named in statutory forms stand clothed with legal responsibility.
23. The prosecution is not required to multiply proof when statutory determinations exist. Once an assessment order is produced, the burden shifts on the accused to rebut. The non-production of certain auxiliary documents does not defeat the prosecution when primary statutory documents are on record.
24. An Appellate Court is not expected to substitute its view merely because another view is possible. Interference is warranted only when findings are perverse, irrational, or illegal. The Trial Court's reasoning is cogent, structured and rooted in law.
25. The Trial Court has duly considered the admissions elicited in cross-examination. Minor procedural irregularities do not vitiate criminal liability under welfare 19 Crl.Apl.No.1699/2024 JUDGMENT legislation.
26. The judicial process must balance the liberty of accused and the socio-economic rights of vulnerable employees. A hyper-technical approach favours defaulters and defeats legislative intent.
27. Statutory contributions are held in fiduciary capacity by the employer. Non-remittance is not a mere default but breach of public trust. No perversity, arbitrariness or miscarriage of justice is demonstrated. The appeal lacks merit. The conviction is legal, justified and sustainable. Accordingly, I answer Point No.1 in the Negative.
28. Point No.2: In view of the reasons mentioned above and the findings arrived at on Point No.1, I proceed to pass the following:
ORDER The Criminal Appeal filed by the appellant/accused No.3 under Section 374(3) Cr.P.C. is hereby dismissed.
The judgment of conviction and 20 Crl.Apl.No.1699/2024 JUDGMENT order on sentence dated 26.09.2024 passed by the Presiding Officer, Special Court for Economic Offences, Bengaluru, in C.C. No.104/2024, are hereby confirmed in its entirety.
The appellant shall comply with the sentence imposed by the Trial Court.
Office is hereby directed to send back the records to the trial court along with a copy of this judgment.
(Dictated to Stenographer Grade-I directly on computer, typed by him, revised and corrected by me and then pronounced in open court on this the 22nd day of November, 2025) SHIRIN JAVEED Digitally signed by SHIRIN JAVEED ANSARI ANSARI Date: 2025.11.26 15:19:36 +0530 (Shirin Javeed Ansari) LXIX Addl.C.C. & Sessions Judge, Bengaluru.