Bangalore District Court
Anand Kotreshwar Sithale vs Enforcement Officer Epfo on 22 November, 2025
1 Crl.Apl.No.1692/2024 JUDGMENT
KABC010269432024
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.1692/2024
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,
2 Crl.Apl.No.1692/2024 JUDGMENT
Bengaluru- 560068.
represented by:
Sri Kumar Prabash Chandra
Enforcement Officer
(Sri Harsha.V., Advocate for
respondent)
JUDGMENT
The present criminal appeal is preferred by the appellant, who was arrayed as Accused No.3 before the Special Court for Economic Offences, Bengaluru, in C.C. No.96/2024, being aggrieved by the judgment of conviction and order of sentence dated 26.09.2024, whereby the learned trial court was pleased to convict the appellant for the offences punishable under Section 14(1A) read with Section 14A 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.96/2024 before the trial court has preferred the instant appeal against the 3 Crl.Apl.No.1692/2024 JUDGMENT complainant. The appellant and respondent are hereby assigned with their original ranks before the trial court i.e., the appellant as accused No.3 and respondent as complainant in CC No.96/2024 in the instant discussion for the purpose of brevity and convenience to avoid the confusion and perplexity.
4. The prosecution case before the trial court was that Accused No.1 establishment, namely M/s. Design Apparels Pvt. Ltd., was covered under the provisions of the EPF & MP Act and allied schemes and was allotted a statutory code number. It was alleged that the said establishment failed to remit employees' and employers' contributions along with administrative charges for the months of December 2012, January 2013 and February 2013, aggregating to ₹6,60,676/-. The appellant along with other accused was prosecuted on the footing that he was a Director and person responsible for and in charge of the affairs of the establishment.
5. The appellant in this appeal has contended that he had resigned from the Board of Directors on 22.03.2012 4 Crl.Apl.No.1692/2024 JUDGMENT and that he was neither in charge of nor responsible for the day-to-day affairs of the company during the period of alleged default. He has further contended that he was never served with notice of the inquiry proceedings and that the trial court has failed to properly appreciate the material placed on record.
6. 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) & 14A of the Employees Provident Funds and Miscellaneous Provisions Act, 1952, without proper evidence or material to sustain the allegations made in the 5 Crl.Apl.No.1692/2024 JUDGMENT complaint and the very taking of cognizance and consequential proceedings 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 6 Crl.Apl.No.1692/2024 JUDGMENT the trial Court has erroneously considered that the appellant has not challenged the 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.pl. This resignation was duly communicated to the company, accepted by the company, and updated in the Registrar of Companies (ROC) records. Furthermore, the appellant 7 Crl.Apl.No.1692/2024 JUDGMENT had also informed the respondent authority of this resignation much prior to 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 8 Crl.Apl.No.1692/2024 JUDGMENT judgment is bad at law and needs to be interfered by this Court. Thus even as per 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 PW-
1, 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 9 Crl.Apl.No.1692/2024 JUDGMENT accused/appellant, the order of conviction is bad at law and facts. Hence, the same 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 10 Crl.Apl.No.1692/2024 JUDGMENT appellant beyond reasonable doubt by producing cogent and unimpeachable 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 11 Crl.Apl.No.1692/2024 JUDGMENT alleged charges and has proceeded to pass order of conviction against the appellant 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(1B) 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 12 Crl.Apl.No.1692/2024 JUDGMENT bad at law and needs to be interfered by this Court.
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 13 Crl.Apl.No.1692/2024 JUDGMENT contribution amount, hence the same is bad at law and needs to be interfered by 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.96/2024 dated 26.09.2024 and acquit the accused in the interest of justice.
14 Crl.Apl.No.1692/2024 JUDGMENT
7. The respondent-department has stoutly opposed the appeal contending that the judgment of the trial court is based on proper appreciation of both oral and documentary evidence. It is contended that the appellant was shown as a Director in statutory Form No.5A and that no mandatory intimation of resignation was ever given to the Provident Fund Authorities as required under Para 36- A of the Scheme, 1952.
8. It is further contended that the assessment order passed under Section 7A of the Act has not been challenged by the appellant and has attained finality. The respondent would submit that defaults under the EPF Act constitute a continuing offence and that the appellant cannot escape liability on technical pleas of resignation or non-service of notice.
9. Heard. The entire original records of the Trial Court have been summoned and examined.
10. On the basis of the rival submissions and the record, the following points arise for consideration of this 15 Crl.Apl.No.1692/2024 JUDGMENT appellate Court:
(1)Whether the appellant has made out a case to show that he was not in charge of and responsible for the affairs of Accused No.1 establishment during the relevant period?
(2) Whether the judgment of conviction and sentence passed by the trial court suffers from illegality, perversity or infirmity so as to call for interference by this Court?
(3) What order?
11. My findings to the above points are as under:
Point No.1 : In the Negative
Point No.2 : In the Negative
Point No.3 : As per final
order for the following:
REASONS
12. Point No.1 and 2:-- The principles governing the exercise of appellate jurisdiction in a criminal appeal against conviction require this Court to proceed with circumspection, mindful of the fact that the trial court had 16 Crl.Apl.No.1692/2024 JUDGMENT the advantage of observing the witnesses and appreciating the evidence at the first instance. Interference is justified only when the findings are shown to be perverse, manifestly illegal or grossly unreasonable. This settled proposition of criminal jurisprudence forms the bedrock of the present analysis.
13. The statute under which the appellant has been convicted is not an ordinary penal enactment but a piece of welfare legislation with constitutional underpinnings. The Employees' Provident Funds and Miscellaneous Provisions Act, 1952, is intended to secure social and economic justice to employees and to guarantee a measure of financial stability in their post-retirement life. Therefore, the obligations under the Act are not merely contractual or corporate in nature, but statutory and fiduciary.
14. The appellant's principal defence of resignation from directorship is required to be tested not under the Companies Act alone, but under the scheme and spirit of the EPF legislation. Para 36-A of the Employees' Provident Fund Scheme, 1952, casts a mandatory duty upon persons 17 Crl.Apl.No.1692/2024 JUDGMENT having ultimate control over the affairs of the establishment to intimate any change in ownership or management to the Provident Fund Authorities within the prescribed time. This requirement is not procedural in nature but is substantive and intended to ensure that the statutory authority is at all times aware of the person answerable under the Act.
15. In the present case, the appellant has not placed any convincing material to show that his alleged resignation was ever communicated to or acknowledged by the Provident Fund Authorities. A mere internal resolution or filing of Form No.32 before the Registrar of Companies does not, by itself, terminate statutory liability under a welfare legislation. The omission to comply with Para 36-A creates a legal continuity of responsibility in favour of the statutory authority.
16. The authoritative pronouncement of the Hon'ble Supreme Court in Srikanta Datta Narasimharaja Wodiyar v. Enforcement Officer, Mysore (1993) 3 SCC 217 lays down that even Directors are covered within the sweep of 18 Crl.Apl.No.1692/2024 JUDGMENT the definition of "employer" when they possess or are deemed to possess control over the affairs of the establishment. The trial court has correctly applied this binding precedent, and this Court finds no reason to take a different view.
17. The plea regarding non-service of notice is also without substance. The documents marked during trial demonstrate issuance of notices through recognised modes. The statutory presumptions under Section 27 of the General Clauses Act and Section 114 of the Evidence Act arise in favour of the prosecution. The appellant has failed to rebut these presumptions by any cogent evidence. Law does not require proof of actual receipt when dispatch in ordinary course is duly made.
18. The contention that the company was "struck off" does not rescue the appellant. A strike-off in corporate records does not extinguish statutory liabilities under labour welfare legislation. More importantly, there is no credible evidence to show that such strike-off was notified to or recognised by the Provident Fund Authorities in the 19 Crl.Apl.No.1692/2024 JUDGMENT manner contemplated by law.
19. The doctrine of continuing offence is of great relevance in cases of provident fund defaults. The default does not crystallise into a single isolated event but continues so long as the statutory dues remain unpaid. In this view, the plea of limitation must necessarily fail. The trial court has rightly invoked this doctrine and this Court finds no infirmity in that approach.
20. The appellant's argument relating to non- production of muster rolls and employee statements also cannot be accepted. The assessment order passed under Section 7A of the Act is a quasi-judicial determination and carries evidentiary value. The appellant did not challenge the said order before the competent forum. Permitting a collateral challenge at the stage of criminal appeal would run contrary to settled principles of finality of adjudication.
21. It is significant to note that Section 14A of the Act creates a statutory deeming fiction whereby persons in charge of the affairs of the establishment are presumed to 20 Crl.Apl.No.1692/2024 JUDGMENT be guilty unless they establish that the offence was committed without their knowledge or despite due diligence. The appellant has not discharged this reverse burden cast upon him by law.
22. The trial court has meticulously analysed the documents, appreciated the oral testimony and applied the correct legal principles. The findings rendered are neither perverse nor arbitrary. This Court does not find any miscarriage of justice warranting interference.
23. Thus, this Court is of the considered view that the appellant has failed to make out any case for interference and that the judgment of conviction calls for affirmation. Accordingly, the Point No.1 and 2 are answered in the Negative.
24. Point No.3: In view of the reasons mentioned above and the findings arrived at on Point No.1 and 2, I proceed to pass the following:
ORDER The Criminal Appeal filed by the appellant/accused No.3 under Section 21 Crl.Apl.No.1692/2024 JUDGMENT 374(3) Cr.P.C. is hereby dismissed.
The judgment of conviction and order on sentence dated 26.09.2024 passed by the Presiding Officer, Special Court for Economic Offences, Bengaluru, in C.C. No.96/2024, 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 15:16:08 +0530 (Shirin Javeed Ansari) LXIX Addl.C.C. & Sessions Judge, Bengaluru.