Bangalore District Court
Anand Kotreshwar Sithale vs Enforcement Officer Epfo on 22 November, 2025
1 Crl.Apl.No.1803/2024 JUDGMENT
KABC010282332024
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.1803/2024
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.1803/2024 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 15.10.2024 passed by the learned Presiding Officer, Special Court for Economic Offences, Bengaluru, in C.C. No.114/2024, whereby the appellant - Accused No.3 was convicted for the offences punishable under Section 14(1B) 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.114/2024 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.1803/2024 JUDGMENT the appellant as accused No.3 and respondent as complainant in CC No.114/2024 in the instant discussion for the purpose of brevity and convenience to avoid the confusion and perplexity.
4. The prosecution case, in substance, is that Accused No.1 establishment is a company covered under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and allied schemes, bearing a valid code number, and admittedly engaged in manufacturing activities with a notified number of employees. The appellant was arrayed as Accused No.3 on the specific allegation that he was one of the Directors of Accused No.1 Company and was, by virtue of statutory declaration in Form No.5A and corporate records, in charge of and responsible for the conduct of the establishment's affairs during the relevant period.
5. It is the consistent case of the complainant that for the months of June 2013 to August 2013, Accused No.1 Company failed to remit the statutory employers' contribution towards the Employees Deposit Linked 4 Crl.Apl.No.1803/2024 JUDGMENT Insurance Scheme along with administrative charges, despite issuance of repeated notices, and despite a statutory inquiry conducted under Section 7A of the Act.
6. Based on sanction accorded by the competent authority, the complaint was instituted. After full-fledged trial, the learned Special Court convicted the company as well as Accused Nos.2 to 5, including the present appellant.
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(1B) & 14(A) of the Employees Provident Funds and 5 Crl.Apl.No.1803/2024 JUDGMENT 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 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 6 Crl.Apl.No.1803/2024 JUDGMENT 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 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 7 Crl.Apl.No.1803/2024 JUDGMENT 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 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 8 Crl.Apl.No.1803/2024 JUDGMENT 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 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 9 Crl.Apl.No.1803/2024 JUDGMENT 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 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, 10 Crl.Apl.No.1803/2024 JUDGMENT 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 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 11 Crl.Apl.No.1803/2024 JUDGMENT 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 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 12 Crl.Apl.No.1803/2024 JUDGMENT 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.
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 13 Crl.Apl.No.1803/2024 JUDGMENT 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 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 14 Crl.Apl.No.1803/2024 JUDGMENT conviction and sentence passed by Trial Court in CC No.114/2024 dated 15.10.2024 and acquit the accused in the interest of justice.
8. Heard. The entire original records of the Trial 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 appellant proves that he had ceased to be responsible for the affairs of Accused No.1 establishment during the period of default?
(2) Whether the findings of the learned Trial Court suffer from perversity, illegality or material irregularity?
(3) Whether interference is warranted in the conviction and sentence imposed on Accused No.3?
(4) What order?
10. My findings to the above points are as under:
Point No.1 : In the Negative 15 Crl.Apl.No.1803/2024 JUDGMENT Point No.2 : In the Negative Point No.3 : In the Negative Point No.4 : As per final order for the following:
REASONS
11. Point No.1 to 3:-- The appellant has raised several grounds, inter alia contending that:
He had resigned as Director on 22.03.2012.
He was not in charge of day-to-day affairs.
Notices were not served upon him.
Inquiry under Section 7A was ex-parte.
No direct evidence was produced to connect him with the default.
Company was allegedly struck off.
Trial Court passed a "cyclostyled" order.
12. At the outset, it is necessary to emphasise that the Provident Fund welfare legislation are special social security enactments, designed to protect the economic interests of workmen. The jurisprudence governing such statutes is distinctly purposive, rather than technical.
13. The very architecture of Section 14 and Section 16 Crl.Apl.No.1803/2024 JUDGMENT 14A of the Act creates a legal fiction whereby persons who are in charge of and responsible for the conduct of the business of the establishment are deemed to be guilty of contraventions, unless they establish due diligence or absence of knowledge.
14. The defence of "resignation" is not a mere matter of corporate formality. It is a matter laden with statutory consequences. Mere resignation in internal company records does not ipso facto absolve statutory liability, unless such resignation is communicated to the Provident Fund authorities in the manner prescribed by law.
15. Paragraph 36-A of the EPF Scheme, 1952 unequivocally casts a statutory obligation upon the employer and persons having ultimate control to intimate changes in ownership, management or address within fifteen days. The appellant admitted in cross-examination that no such formal intimation was given.
16. The reliance on Form No.32 and ROC records is legally insufficient in the absence of proof of statutory 17 Crl.Apl.No.1803/2024 JUDGMENT intimation to the Provident Fund authorities. This Court finds the ratio laid down in Srikantadatta Narasimharaja Wodiyar v. Enforcement Officer, Mysuru, (1993) 3 SCC 217 squarely applicable.
17. The Hon'ble Supreme Court therein categorically held that Directors are deemed to be employers for the purposes of EPF legislation, and mere internal or corporate technicalities cannot dilute the statutory object of employee welfare.
18. The appellant cannot be permitted to rely upon a private act of resignation, while simultaneously failing to discharge the public duty of notifying statutory authorities.
19. In matters of social welfare enactments, the doctrine of strict liability assumes significance, and technical defences cannot be permitted to override substantive justice.
20. The defence of non-service of notice is equally untenable. Service of notice to the registered address available in official records attracts the statutory 18 Crl.Apl.No.1803/2024 JUDGMENT presumption under Section 27 of the General Clauses Act and Section 114 of the Indian Evidence Act.
21. The appellant did not discharge the burden of rebutting such statutory presumptions by cogent and convincing evidence.
22. The plea that the company was "struck off" also does not advance the appellant's case. A company cannot take advantage of its own default. Moreover, such fact was never formally communicated to the Provident Fund authorities.
23. The argument that the inquiry under Section 7A was ex-parte holds no water. The order under Section 7A was never challenged by the appellant before any competent forum. When a statutory order attains finality, its correctness cannot be collaterally impeached in criminal proceedings.
24. The Trial Court has rightly drawn an adverse inference against the appellant for his inaction in challenging the assessment order. 19 Crl.Apl.No.1803/2024 JUDGMENT
25. The absence of production of muster rolls or account books does not vitiate the prosecution case, when statutory assessment under Section 7A has already quantified the liability.
26. Criminal jurisprudence in welfare legislation operates on a distinct plane; the existence of statutory assessment carries evidentiary value greater than ordinary documentary evidence.
27. The argument that the Trial Court passed a cyclostyled order is factually incorrect. A careful reading of the impugned judgment demonstrates application of mind, detailed discussion of evidence and conscious appreciation of law.
28. The Trial Court analysed oral and documentary evidence, considered rival submissions, and rendered findings based on settled principles of law. No perversity or arbitrariness is discernible.
29. The burden to disprove statutory presumption rested heavily upon the appellant. This burden has 20 Crl.Apl.No.1803/2024 JUDGMENT remained completely undischarged.
30. It is well-settled that appellate interference in criminal convictions is warranted only when findings are manifestly illegal or result in miscarriage of justice. In the present case, the conviction is founded on sound legal reasoning.
31. Vicarious liability under labour welfare legislation is not an extension of criminal law doctrine, but a conscious statutory creation to ensure compliance and deterrence.
32. The appellant's attempt to disassociate himself from statutory responsibility is legally unsustainable and morally incongruent with the objectives of the statute.
33. This Court finds that the Trial Court has correctly appreciated the evidence, drawn legally permissible presumptions, and applied the correct principles of law.
34. The conviction is based on cogent reasoning, not conjecture, and does not suffer from any infirmity 21 Crl.Apl.No.1803/2024 JUDGMENT warranting interference. No illegality, perversity or irregularity is found in the impugned judgment. The findings are in consonance with the evidence and settled legal principles. The appellant has failed to make out any ground for interference. The appeal is devoid of merit.. Accordingly, I answer Point No.1 to 3 in the Negative
35. Point No.4: In view of the reasons mentioned above and the findings arrived at on Point No.1 to 3, 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 order on sentence dated 15.10.2024 passed by the Presiding Officer, Special Court for Economic Offences, Bengaluru, in C.C. No.114/2024, are hereby confirmed in its entirety.
The appellant shall comply with the sentence imposed by the Trial Court.
Office is hereby directed to send 22 Crl.Apl.No.1803/2024 JUDGMENT 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) Digitally signed by SHIRIN SHIRIN JAVEED JAVEED ANSARI ANSARI Date: 2025.11.26 15:23:41 +0530 (Shirin Javeed Ansari) LXIX Addl.C.C. & Sessions Judge, Bengaluru.