Andhra HC (Pre-Telangana)
Provident Fund Inspector, Guntur vs Chirala Co-Operative Spinning Mills ... on 12 November, 1997
Equivalent citations: 1998(1)ALD(CRI)168, 1998(1)ALT(CRI)232, 1998CRILJ1690
ORDER
1. This batch of Appeals have been filed by the provident Fund Inspector, Guntur against the order passed by the 1st Addl. Munsif Magistrate, Chirala in the respective calender cases on different dates acquitting the respondents herein of the charges under section 14(2), 14(A) and 14(A)(2) of Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred as 'the Act'). The parties in all these appeals being the same and the orders were also passed by the same Magistrate for different periods for non-payment of provident fund contributions by the respondents, the petitioner herein launched seperate prosecutions under the above provisions of the Act. The Magistrate acquitted the respondents by holding that there is no mens rea on the part of the accused in not paying the contributions and the contributions could not be paid because of the circumstances prevailing then in the mill in question are beyond their control i.e., the mill was running in huge losses. As far as the 2nd respondent is concerned the Court below went a step ahead and acquitted him by holding that the prosecution was launched against him without obtaining the necessary permission under section 197 Cr.P.C. as he being a public servant.
He has also taken into consideration the action on the part of the respondents in paying the amounts (contributions) after launching of the prosecution while acquitting the accused.
2. Under Section 6 r/w para-38 of the Scheme every management has to collect the contributions from employees at the time of payment of salaries every month and remit the same along with the employer contribution within 15 days thereafter. If the contributions remain unpaid for over a period of three months, it is open to the provident Fund Commissioner to launch Criminal prosecution against the erring managements and get them punished as contemplated under section 14 of the Act. Separate prosecutions were launched for every three months from March' 86 to February' 89, the period in which the contributions were not paid to the petitioner as required under the Act, Hence, all these appeals can be disposed of by a common order.
3. It is not in dispute that the management of the 1st respondent mill i.e., M/s. Chirala Co-operative Mills Limited, Chirala was collecting employees share of contributions every month regularly, but it failed in remitting the same along with its share in the office of the petitioner for the period mentioned above. The 2nd respondent in all these cases is a Government employee whose services were placed at the disposal of the 1st respondent mill for appointment as Managing Director, incharge of, and was responsible for the conduct of the business of the company. Mr. R. N. Reddy, Counsel for the petitioner strenuously contended that the offence being a statutory offence, the principle of Mens rea cannot be brought in for acquitting the accused as the commission of the offence was admitted by the respondents themselves by paying the contributions after launching of the prosecutions from time to time. He has also contended that the question of obtaining the permission for launching prosecution against the individuals does not arise as the prosecution was launched in the capacity of Managing Director of an establishment which violated statutory provisions. Further, the prosecution was launched against the individual for failure on his part in obeying the command of law intended for the benefit of the workmen and it is nothing but abdication of the duty cast upon the official concerned. Hence, no permission of the Government is required for launching prosecution even if the person at the helm of affairs of an establishment/Managing Director happened to be a public servant as he failed to discharge the statutory obligations cast on him.
4. Countering the above argument, Mr. C. Ramandanda Vittal, counsel appearing for the respondents strenuously contended that as all the prosecutions were launched beyond the period of limitation prescribed under Section 468, Cr.P.C. i.e., within three years of committing the offence and on that ground alone no interference of this Court is called for in the orders of acquittal passed by the Magistrate. He has also contended that the case in question falls under proviso to Section 14(A) i.e., if a person who is incharge and responsible for the conduct of business of a company is able to prove that the offence was committed without his knowledge or he exercised all due deligence for prevention of such offence, the question of imposing any punishment on such an individual does not arise under the provisions of the Act. From the record it is seen that as the mill was running in huge losses, the respondents could not pay the contributions in spite of the due deligence that was exercised by the respondents herein. Hence, on that ground also the order of the Magistrate does not call for any interference by this Court.
5. Nextly, he contended that this Unit (the Mills) was notified as a relief undertaking under section 3(1) of the A.P. Relief Undertaking (Special Provisions) Act 1971 and under section 14(a)(4) of the Act all the liabilities of the company stand suspended during the subsistence of the notification.
6. Lastly he contended that the 2nd respondent being a Government official, he cannot loose the character of a Government official by virtue of his appointment as Managing Director of an undertaking established under the provisions of the A.P. Co-operatives Societies Act and it should be constitution that he is discharging public duties as the public sector undertaking squarely falls under the definition of the "State" under Article 12 of the Constitution of India. Hence, prior permission to launch prosecution is required.
7. In reply to the contention of the counsel for the respondents with regard to limitation, Mr. R. N. Reddy relied on a judgment in, Bhagirath Kanoria v. State of M.P., AIR 1994 SC 1688 : (1984 Lab IC 1578), in which the Supreme Court held that it is a continuing offence under Section 472, Cr.P.C. and contended that the question of limitation in launching prosecution does not arise. But, answering a 'query' why so many prosecutions were launched, he stated that as the Magistrate insisted to file separate complaints for each block-period of three months, the Corporation is forced to file so many complaints and had the matter been left to the wisdom of the Corporation, it would have filed only one complaint.
8. From the above pleadings it is seen that several important questions of law have come up for consideration of this Court and in the normal course the Court would have gone deep into the matter and rendered a judgment on all the aspects of the issue involved in the batch of the Appeals. But, petitioner himself sleptover the issue for a long period after the commission of the offences and launched prosecution for the first time in 1994 i.e., nearly 5 years after the commission of the offence, and the moment the complaints were launched the respondents paid the contributions and in fact, accepted by the petitioner corporation in instalments, which ultimately did not adversely affect the interests of the workmen. Apart from that the 1st respondent mill is considered to be the best among the public sector undertaking that are functioning in the State now. Hence I am not inclined to go into all these questions at this stage. At the same time I would like to make clear that the judgment relied on by the Court below i.e. 1993 (2) ALT 20 NRC, has no application to the facts of the case and as the question that arose for consideration by the Court was whether the Commissioner is justified in levying damages for non payment of contributions without recording a finding on the intention of the defaulter which is purely civil nature. This case being a criminal prosecution, for failure to remit the provident fund contribution which is declared as an offence, punishable with imprisonment or fine or both, the Court cannot rely upon the above judgment.
9. Likewise the Magistrate went wrong in dismissing the complaint by introducing the principle of Mens rea which is considered to be one of the main ingredients while considering the guilt of the accused under the criminal jurisprudence as the offence alleged against the respondent is only statutory in nature and the petitioner need not prove any Mens rea to get the accused punished for violation of the statutory provisions. That being the legal position, it is not in dispute that the contributions were paid only after filing of the complaints. Mere payment of the contribution after filing of the complaint does not absolve the respondent of their liability to face the criminal prosecution. Hence, I hold that the offences as contemplated under the provisions of the Act were committed by the respondents and the offence alleged against them is proved. But with regard to the quantum of sentence to be imposed, as the petitioner corporation itself launched the prosecution very belatedly and the officials of the corporation miserably failed in protecting the interests of the workmen with the necessary deligence as required under the statute and as the amounts (contributions) were already paid the moment the complaints were lodged, I feel that the ends of justice will be met by directing the 1st respondent to pay a fine of Re. 1-00 in every case.
10. In the result, all the appeals are allowed in part and while the accused were found guilty of the offence alleged against them, keeping the totality of the circumstances the 1st respondent is directed to pay Rs. 1/- as fine in each of the appeal.
11. Appeal Partly allowed.