Bangalore District Court
The Enforcement Officer Epfo, ... vs Design Apparels Pvt Ltd on 26 September, 2024
KABC090001122024
Presented on : 17-02-2024
Registered on : 19-02-2024
Decided on : 26-09-2024
Duration : 0 years, 7 months, 9 days
BEFORE THE SPECIAL COURT FOR ECONOMIC
OFFENCES: AT BENGALURU
Dated this the 26th day of September 2024
:Present:
Sri. VISHWANATH C GOWDAR., B.A.L., LL.M.,
Presiding Officer,
Special Court for Economic Offences,
Bengaluru
C.C. No.97/2024
Complainant: Enforcement Officer,
Employee's Provident Funds Organization,
Regional Office, Koramangala,
Bhavishyanidhi Bhavan,
Annapoorneshwari Complex, Sy.No.37/1,
6th Main, Singasandra,
Bengaluru - 560 068.
Represented by: Sri. Kumar Prabash Chandra,
Enforcement Officer,
(Reptd. By Sri. HV., Advocate)
Vs.
Accused : 1. M/s. Design Apparels Pvt. Ltd.,
#180/4, 1st Floor, Govindappa Complex,
Whitefield Road,
B. Narayanapura,
Bengaluru - 560 016.
2 C.C. No.97/2024
2. Shri. Prabhakara V Shetty,
S/o. Vittal Shetty,
Director,
#156, Ramamurthy Nagar,
Ambedkar Nagar, 1st Main Road,
5th Cross, Bengaluru East,
Bengaluru - 560 016.
3. Shri. Anand Kotreshwar Sithale
S/o. Kotreshwar Sithale,
Director,
Plot No.25, K.H. Sithale,
Biddapur Colony, Afzalpur Road,
Gulbarga - 585 102.
4. Shri. Sundresh B.M.
Director,
No.246, Bileshivale,
Doddagubbi Post,
Off Hennur Baralur Main Road,
Bengaluru - 562 149.
5. Smt. Rekha Prabhakar Shetty,
Addl. Director,
#156, Ramamurthy Nagar,
Ambedkar Nagar, 1st Main Road,
5th Cross, Bengaluru East,
Bengaluru - 560 016.
(A-1 Establishment)
(A-2 & 5 Reptd. By Sri. LA., Advocate)
(A-3 Reptd. By Sri. KRP., Advocate)
(A-4 Reptd. By Sri. KR., Advocate)
:JUDGMENT:
The instant complaint has been made by the complainant against the accused persons alleging to have committed the offences punishable U/s.14(1A) r/w Section 3 C.C. No.97/2024 14A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (hereinafter referred as to "the Act").
2. The complainant's case in nutshell is as under:
The accused No.1 company is an establishment within the meaning of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, the Employees' Provident Fund Scheme 1952, the Employees Pension Scheme, 1995 and Employees Deposit Linked Insurance Scheme, 1976. The said statues are very much applicable to the accused No.1 establishment, the same has been allotted with Code No.PY/BOM/34197. It is further complainant's allegations that, the accused Nos.2 to 5 are the persons, in-charge of day to day affairs and conduct of the accused No.1 establishment as per Form No.5A submitted by the said establishment. Thereby, the said accused Nos.2 to 4, who are the Directors and accused No.5 who is Addl. Director are equally and statutorily bound to pay the employees and employers share of contributions along with administrative charges to the Provident Fund for every month within 15 days of close of that month in respect of the employees working in the accused No.1 establishment, as per paragraph Nos.30 & 38 of the Employees Provident Fund Scheme, 1952. It is further complainant's case that, the accused persons have defaulted in remittance of aforesaid statutory contributions between March 2013 and May 2013 as below:4 C.C. No.97/2024
Month & Employees Employers Adm.
Due Date
Year share share Charges
Mar 2013 Rs.1,57,134 Rs.48,056 Rs.14,404 15.04.2013
Apr 2013 Rs.1,55,689 Rs.47,615 Rs.14,272 15.05.2013
May 2013 Rs.1,20,539 Rs.36,864 Rs.11,049 15.06.2013
Total Rs.4,33,362 Rs.1,32,535 Rs.39,725
3. The accused persons despite several requests by the complainant having failed to comply in remittance of the aforesaid contributions. The Inquiry Authority has also after providing sufficient opportunities to the accused has passed order U/s.7A of the Act. The accused have failed to comply the said order and pursuant to default committed supra, are alleged to have committed the offences punishable U/s.14(1A) r/w Section14A of the said Act. Hence, this complaint.
4. Upon receiving the instant complaint, this court acting U/s.200(a), the sworn statement of the complainant was dispensed, pursuant to the complainant being the public servant, took cognizance of the offences punishable U/s.14(1A) r/w Section 14A of the Act and issued process.
5. The accused Nos.2 to 5 appeared before this court on service of summons through their counsel and made a bail application. The same came to be allowed and were enlarged on bail.
6. After the evidence before charge as contemplated U/s.244 of Cr.P.C., being recorded. Having heard the counsels representing the complainant and accused persons, 5 C.C. No.97/2024 the charge was framed, the accused Nos.2 to 5 pleaded not guilty and claimed to be tried.
7. The complainant in order to substantiate its claim and allegations put-forth in the complaint got examined its Enforcement Officer as PW-1 and got marked 9 documents as Ex.P-1 to Ex.P-9 and got closed its side of evidence.
Thereafter, the statements of accused persons as contemplated U/s.313 of Cr.P.C., was recorded. The accused No.3 filed statement U/s.313(5) of Cr.P.C., along with certified copy of Form No.32 pertaining to accused No.3 as available in MCA portal. The accused No.4 has also submitted statement U/s.313(5) of Cr.P.C. The accused persons denied incriminating materials and have not chosen to adduce their defence evidence.
8. The compliance U/s.437(A) of Cr.P.C., was dispensed by accepting the earlier personal bond and cash security furnished by the accused persons at the time of being enlarged on bail.
9. Heard the arguments canvassed by learned counsel for the complainant and the accused Nos.2 to 5. The counsel for complainant and accused No.4 have submitted memos along with authorities in support of their arguments.
10. Having due regard to the complaint, evidence on record and arguments canvassed by the either parties, the 6 C.C. No.97/2024 following points would arise for the consideration of this court namely:
1. Whether the complainant proves beyond all reasonable doubts as to the accused No.1 being the establishment failed to pay the employees and employers contributions to the Provident Fund along with Administrative Charges for the period between March 2013 and May 2013 within 15 days of the close of every month to the tune of Rs.6,05,622/- and thereby accused No.1 establishment being managed by accused Nos.2 to 5 have committed the offences punishable U/s.14(1A) r/w Section 14A of the EPF and MP Act?
2. What order?
11. The answer of this court to the aforesaid points is as under:
Point No.1: In the Affirmative
Point No.2: As per final order
for the following:
REASONS
12. Point No.1: The complainant in order to establish the guilt of the accused persons beyond all reasonable doubts has examined the complainant/Enforcement Officer arrayed as CW-1 as PW-1 and got marked 9 documents as Ex.P-1 to Ex.P-9 and got closed its side of evidence.
13. It is the complainant's allegations as to the accused No.1 company/establishment duly covered under EPF and MP Act, 1952, the said accused No.1 company duly managed by the Directors i.e., accused Nos.2 to 4 and accused No.5 7 C.C. No.97/2024 being Addl. Director respectively, defaulted in remittance of the employees and employers share of contributions towards Provident Fund along with Administrative Charges in the succeeding month within 15th day pertaining to the period between March 2013 and May 2013 to the tune of Rs.6,05,622/-.
14. The complainant CW-1 has reiterated the allegations put-forth in the complaint in his oral testimony while being examined as PW-1. It has been also deposed regarding the default by the accused Nos.2 to 4 being the Directors and accused No.5 being Addl. Director, responsible for day to day affairs of accused No.1 establishment, the Inquiry being conducted after the inspection so also regarding the order of sanction being obtained from the competent Authority.
15. In support of the said oral testimony, the complainant has produced and got marked in all 9 documents as Ex.P-1 to Ex.P-9. Ex.P-1 is the complaint lodged in the case on hand by the complainant on the basis of the sanction accorded by Regional PF Commissioner-1, Bengaluru. Ex.P-2 is the sanction order dated 14.02.2024, wherein on the basis of the report submitted by the Enforcement Officer, the Regional PF Commissioner-1, R.O., Bengaluru (Koramangala), Bengaluru has accorded sanction to prosecute the accused persons for having committed the offence alleged in the complaint. Ex.P-3 is the certified true copy of Return of Ownership in Form No.5A submitted to the 8 C.C. No.97/2024 Regional Commissioner of complainant Department by the accused No.1 establishment, wherein accused Nos.2 to 4 are shown to be the owners in column No.8 and accused Nos.2 is shown to be the person in-charge of and responsible for the conduct of the business of the accused No.1 establishment as per column No.11. Ex.P-4 is the certified true copy of the Assessment Order dated 31.10.2017 pertaining to accused No.1 establishment in an Inquiry conducted U/s.7A of the EPF and MP Act. Ex.P-5 is the certified true copy of the e-mail dated 04.01.2024 addressed to accused No.2 by attaching notice dated 27.04.2018, show cause notice dated 30.08.2019 and order U/s.7A of the Act. Ex.P-6 is the certified true copy of show cause notice dated 18.01.2024 addressed to accused Nos.1 to 5. Four certified true copies of track reports pertaining to Ex.P-6 addressed to accused Nos.2 to 5 are collectively marked as Ex.P-7. Ex.P-8 is the certified true copy of e-mail dated 18.01.2024 addressed to accused No.2 having attachment of the show cause notice dated 18.01.2024 as per Ex.P-6. Ex.P-9 is Certificate U/s.65B of the Indian Evidence Act pertaining to Ex.P-5 & Ex.P-7.
16. PW-1 has been subjected to cross-examination by the learned counsel for the accused No.3, wherein, it has been deposed as to the accused No.3 has not intimated regarding his resignation to the position of Director of accused No.1 establishment. The PW-1 has pleaded ignorance regarding accused No.3 having tendered his resignation to the position of Director of accused No.1 9 C.C. No.97/2024 establishment with effect from 22.03.2012 so also, the same being accepted by the accused No.1 establishment. The other suggestions as to the PW-1 is deposing falsely to implicate the accused No.3, though he was not responsible for the day to day affairs of accused No.1 establishment has been specifically denied by the witness.
17. The learned counsel for the accused Nos.2 & 5 has subjected the PW-1 for cross-examination, wherein, it is deposed as to there is no need to verify the books of accounts of accused No.1 establishment after the issuance of notice U/s.7A of the Act. It is admitted as to there is no reference regarding number of employees working in accused No.1 establishment as per the covenants of Ex.P-1 to Ex.P-9. It is admitted regarding the reasons for submitting inspection report after the lapse of three months from the date of conducting inspection has not been stated in the complaint. It is deposed regarding the notice to accused No.1 establishment was generated and sent in the on-line portal i.e., Shram Suvidha portal. The witness has pleaded ignorance regarding the said on-line notice being served on accused No.1 establishment, so also to accused Nos.2 & 5. It is admitted as to the inspection report submitted by the Enforcement Officer to the Regional PF Commissioner has not been submitted before this court. The other suggestions as to the witness is not aware of number of employees of accused No.1 establishment, the particulars regarding the salaries, their employment being regular or temporary, the complaint 10 C.C. No.97/2024 has been lodged though accused Nos.2 & 5 were not responsible for day to day affairs of the establishment has been denied by the witness.
18. The PW-1 has been subjected to cross-examination by the learned Sr. Counsel on behalf of Advocate for accused No.4, wherein, it is admitted as to the accused No.1 establishment is shown as "strike off". It is also admitted as to the order as per Ex.P-4 was an Ex-parte order. The witness has deposed as to he needs to verify regarding the reports referred in Ex.P-4 being served upon employers of accused No.1 establishment. It is admitted as to except the List of Directors appended to Ex.P-3, no any documents to show accused No.4 being responsible for the day to day affairs and conduct of accused No.1 establishment has been submitted before this court. It is also admitted as to the reasons for belated lodging of complaint with respect to assessment orders pertaining to 2012 to 2014 has not been explained in the complaint. The other suggestions as to the witness is deposing falsely has been denied by the witness.
19. The accused Nos.2 to 5 have not chosen to adduce their evidence.
20. During the course of arguments, the learned counsel for the complainant vehemently argued that, the complainant has very much discharged the burden of proving the guilt against the accused persons by cogent documentary and oral evidence. It has been also emphasized as to the 11 C.C. No.97/2024 evidence of PW-1 has withstood the test of cross-examination and Ex.P-4 i.e., the order in the Inquiry proceedings U/s.7A of the EPF and MP Act till date has not been challenged by the accused persons. It is also stressed regarding the default of accused persons having very much jeopardized the employees of the accused No.1 establishment. It is also highlighted as to the act of the accused persons being contrary to the very object of the statute and very much affecting the rights of the employees. Amongst these grounds, it has been sought to convict the accused persons for the offences alleged in the compliant.
21. The counsel for the accused Nos.2 & 5 has vehemently argued that, the aspect of the accused Nos.2 & 5 being only the Director and Addl. Director not being responsible for day to day affairs of accused No.1 establishment. It has been argued as to the accused No.1 establishment was not at all in existence as per the company information of Ministry of Corporate Affairs dated 17.01.2024. It is emphatically argued that, the number of employees and particulars regarding the employees, their salaries and their positions has not been placed before this court, in order to demonstrate arrears of contributions as alleged in the complaint. It is also argued as to PW-1 is not having the personal knowledge and in absence other corroborating testimony, the claim of the complaint Department cannot be accepted. Amongst these arguments it is also highlighted regarding the accused Nos.2 & 5 being falsely implicated in 12 C.C. No.97/2024 the case on hand though their involvement has not been substantiated to the satisfaction of this court by cogent, oral and documentary evidence. Amongst these arguments, learned counsel for the accused Nos.2 & 5 sought to acquit the accused Nos.2 & 5 to meet the ends of justice.
22. The counsel for accused No.3 emphatically argued that, pursuant to accused No.3 having tendered his resignation to accused No.1 establishment on 22.03.2012, he cannot be made liable for the offence set out in the complaint. It is also argued as to the company information of the Ministry of Corporate Affairs discloses the resignation tendered by accused No.3. It is claimed that the accused No.3 was not at all responsible for the conduct and day to day affairs of accused No.1 establishment during the relevant period. Hence, sought to acquit the accused No.3 in the interest of justice.
23. The learned counsel for the accused No.4 argued as to the assessment order as per Ex.P-4 is based on two reports and the said order is Ex-parte order. It is also highlighted the notice U/s.7A of the Act was not served upon accused No.4 and no document has been produced for that effect and the said notice was only served upon the accused No.1 establishment. It is emphasized as to the accused No.4 is not shown in column No.11 of Ex.P-3 and thereby he cannot be claimed to be person being responsible for the conduct and day to day affairs of the accused No.1 establishment. It is 13 C.C. No.97/2024 also pointed out as to the complaint does not explain the inordinate delay, as such, the complaint is barred by limitation as per the provisions of Cr.P.C. Amongst these arguments, the learned counsel placing reliance upon the authorities listed infra, sought to acquit the accused No.4.
1. (1984)42 CTR 0180 in case of P. Jayappan V/s. S.K. Perumal (ITO)
2. 1981 SC 573 in case of State of Karnataka V/s. Prathap Chand and others
3. (1979)4 SCC 172 in the case of Mohammed Iqbal Ahmed V/s. State of Andhra Pradesh
4. Crl. Appeal No.356/2006 in the case of T.A. Varghese V/s. M/s. Rambahudur Thakur Ltd., & others Analysis and Evaluation of Evidence as well as Contentions
24. The complainant has very much established the fact of the accused No.1 establishment being very much covered under EPF and MP Act, 1952. This aspect is very much forthcoming from Ex.P-3.
25. The complainant has also substantiated regarding the default on the part of the accused No.1 establishment in so far as remittance of employees and employers share of contribution along with administrative charges towards Provident Fund between March 2013 and May 2013. This aspect is very much forthcoming from the examination of Inquiry Order passed by the competent authority as per Ex.P-
4. At this juncture, this court is also justified to draw an 14 C.C. No.97/2024 adverse inference on account of accused persons having not challenged the said Assessment Order as per Ex.P-4 as contemplated U/s.115 of the Indian Evidence Act. Furthermore, the show cause notice dated 18.01.2024 as per Ex.P-6 was duly served upon accused Nos.2 to 5 as per track reports marked as Ex.P-7. But, none of the accused persons have complied the terms of the Ex.P-6. Thereby the specific defence of accused No.4 as well as other accused persons as to the said order was Ex-parte order, cannot be the tenable defence.
26. The defence urged by the accused Nos.3 & 4 by way of cross-examination as to the accused No.1 establishment was not at all in existence during the default period as alleged in the complaint more particularly as per Company Information of Ministry of Corporate Affairs portal being part of Ex.P-3 will not hold the water as neither accused No.1 establishment nor accused Nos.3 & 4 have chosen to report regarding the aforesaid status of accused No.1 establishment to complainant Department. Admittedly, the said fact of accused No.1 establishment being "strike off" was within the personal knowledge of accused Nos.3 & 4 as well as the persons responsible for management of accused No.1 establishment i.e., other accused persons.
27. The specific defence of the accused No.3 as to having tendered resignation to accused No.1 establishment on 22.03.2012. Pursuant to having not intimated the complainant Authority regarding the said aspect which 15 C.C. No.97/2024 resulted into change of ownership is very much contrary to Para 36A of the Employees Provident Fund Scheme, 1952, which mandates the duty of person or persons, who have the ultimate control over the affairs of establishment to intimate the Regional Commissioner by Registered Post and in such other manner within 15 days of such change. The accused No.3 has not produced any document to show his resignation being intimated to the complainant Department as laid down in Para 36A of the Scheme. Hence, having due regard to the ratio laid down in the decision reported in (1993)3 SCC 217 in case of Srikanta Datta Narasimharaja Wodiyar V/s. Enforcement Officer, Mysore.
28. The other contention of accused Nos.2, 4 & 5 as to the complaint is barred by limitation as contemplated U/s.468 of Cr.P.C., will not survive pursuant to the show cause notice as per Ex.P-6 being issued to accused Nos.2 to 5 on 18.01.2024, so also, on account of the alleged offence being continuing offence as set out in Section 472 of Cr.P.C., as rightly argued by the counsel for the complainant the specific contention and defence as to complaint is barred by limitation will not hold water.
29. The arguments of the learned Sr. counsel for accused No.4 as to the sanction order as per Ex.P-2 does not discloses the role of the individual persons, who were responsible for the conduct of accused No.1 establishment and thereby there is no application of mind by the 16 C.C. No.97/2024 Sanctioning Authority will not be amenable on account of accused No.4 having not challenged the said sanction order before the competent authority. Moreover, there is specific mention regarding the accused No.4 as well as other accused persons as to their status as Employers U/s.2(e) of the Act and there is also mention regarding the opportunity being given by the Sanctioning Authority prior to passing order as per Ex.P-2. The decision relied upon by accused No.4 reported in (1979)4 SCC 172 in support of his arguments has been examined and the ratio laid down therein has been considered while appreciating the aforesaid defence put-forth by the accused No.4.
30. The accused persons having not challenged the Ex.P-4 i.e., the Inquiry Order are very much precluded from asking as to the complaint is false and frivolous, as the accused persons have very much been represented during the inquiry initiated by the complainant Authority U/s.7A of the EPF & MP Act. This court is of the considered view that, the Return of Ownership as per Ex.P-3 and the Assessment Order as per Ex.P-4 are very much covered U/s.114 of the Indian Evidence Act.
31. It is the specific defence of the accused Nos.2 to 5 that, the complainant has not demonstrated regarding the accused Nos.2 to 5 being responsible for the day to day affairs of the accused No.1 establishment, by cogent oral and documentary evidence. In this regard, it has been further 17 C.C. No.97/2024 highlighted by the complainant regarding the accused Nos.2 to 4 being the Directors and accused No.5 being Addl. Director are very much covered U/s.2(e) of the Act, which defines "Employer", are statutorily bound by the day to day affairs of the accused No.1 establishment. In the case on hand, the defence urged by the accused persons in so far as the responsibility of accused Nos.2 to 5 being not demonstrated or proved will not survive in light of the dictum of the Hon'ble Apex Court in the decision reported in (1993)3 SCC 217 in Srikantadatta Narasimharaja Wodiyar V/s. Enforcement Officer, Mysuru, wherein, it has been laid down that:
"when it comes to establishment other than factory it is not confined to owner or occupier but to all those who have control or are responsible for the affairs of the Company. It includes even Director. Therefore, every such person who has the ultimate control over the affairs of Company becomes employer. To say therefore that since paragraph 36-A requires an employer to do certain acts the responsibility for any violation of the provision should be confined to such employer or owner would be ignoring the purpose and objective of the Act and the extended meaning of employer in relation to establishments other than the factory. The declaration therefore in Form 5-A including appellant as one of the person in charge and responsible for affairs of the Company was in accordance with law. Therefore, his prosecution for 18 C.C. No.97/2024 violation of the Scheme does not suffer from any error of jurisdiction or law"
Further, the decisions relied upon by the learned counsel for accused No.4 reported in (1984)42 CTR 0180 and (1981) SC 573 both are pertaining to the Income Tax Act. However, the ratios laid down are duly considered by this court. Furthermore, the ratio laid down by the Hon'ble High Court of Kerala in Crl. Appeal No.356/2006 has been duly considered with due respect to Hon'ble High Court of Kerala, the facts and circumstances involved in the said decision are contrary to the facts and circumstances leading to the case on hand. However, the ratio enunciated are aptly applied in the case on hand.
32. An anxious examination of the Ex.P-3, it transpires that, as per column No.11, the accused No.2 is shown to be the person in-charge and responsible for the conduct of the business of the accused No.1 establishment. Further, the column No.8 discloses the accused Nos.2 to 4 as owners of accused No.1 establishment. That apart, the company information as available in the MCA portal discloses accused No.5 as Addl. Director of accused No.1 establishment is sufficient to gather the said accused Nos.2 to 5 being responsible in managing the day to day affairs of accused No.1 establishment.
33. This court is of the considered view that the accused No.1 establishment being the juristic person is very much 19 C.C. No.97/2024 managed by the accused Nos.2 to 4, who designated as the Directors of the accused No.1 establishment, accused No.5 who is designated as Addl. Director are responsible for the day to day affairs of the accused No.1 establishment and the said accused Nos.2 to 5 have failed to comply the provisions of the EPF & MP Act by contributing employees and employers share of contributions towards Provident Fund along with Administrative Charges as per paragraph Nos.30 & 38 of the Employees Provident Scheme pertaining to the period alleged in the complaint i.e. between March 2013 and May 2013 for the sum of Rs.6,05,622/-, by cogent, oral and documentary evidence. As such, this court holds that, the accused No.1 establishment and accused Nos.2 to 4 the Directors and accused No.5 Addl. Director of the accused No.1 establishment as guilty of having committed the offences punishable U/s.14(1A) r/w Section 14(A) of the Act.
CONCLUSION
34. In the light of the discussion made supra, this court is of the considered view that, the complainant has discharged the burden of demonstrating the guilt of the accused Nos.1 to 5 beyond all reasonable doubts, the default on the part of the accused No.1 establishment being managed by the accused Nos.2 to 5, having not remitted the employees and employers share of contributions towards Provident Fund along with Administrative Charges for the period between March 2013 and May 2013 as per the provisions of the EPF & MP Act and Employees Provident Fund Scheme, 1952. As 20 C.C. No.97/2024 such, this court proceeds to hold accused Nos.2 to 5 as guilty U/s.14(1A) & 14A of the Act with respect to the defaulted contribution amount. Accordingly, this court without any hesitation proceeds to answer Point No.1 in the Affirmative.
35. Point No.2: In the light of the discussion and findings, assigned supra while appreciating the Point No.1, this court proceeds to pass the following:
ORDER The accused Nos.1 to 5 are found to be guilty of the offences punishable U/s.14(1A) & 14A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.
For hearing on sentence.
(VISHWANATH C GOWDAR) Presiding Officer, Spl. Court for Economic Offences, Bengaluru.21 C.C. No.97/2024
HEARING ON SENTENCE Heard the learned counsel for the complainant on the quantum of sentence.
Heard the accused Nos.2 to 5 and the counsel for the accused Nos.2 to 5.
The learned counsel for the complainant submitted that, the accused persons have been found guilty of the alleged offences and the complainant has succeeded to establish the guilt of the accused persons beyond all reasonable doubts and the factors alleged by the counsel for accused Nos.2 to 5 that, the accused No.1 was not at all in existence during the subject period and other aspects cannot be considered as the accused persons are involved in committing an offence which is affecting socio-economic rights of employees of accused No.1 establishment who have contributed their hard earned wages having regard to the object and intent of the statute sought for maximum punishment prescribed to the alleged offences.The learned counsel for the accused Nos.2 to 5
emphasized that, the accused Nos.2 to 5 are noway responsible for the affairs of accused No.1 establishment and they are sole bread earners of their families and they have an obligation to look after their families so also their old aged parents and as the accused Nos.2 to 5 are not involved in the 22 C.C. No.97/2024 offence which are punishable with death sentence or life imprisonment have sought for lenient view.
The counsel for accused No.3 also argued as to the sentence imposed in other six cases shall run concurrently as per Section 427 of Cr.P.C.
Considering the submissions of accused Nos.2 to 5, arguments advanced by the learned counsel for the accused Nos.2 to 5 and the learned counsel for complainant this court, on over all examination of the facts and circumstances and evidence on record, this court is of the considered opinion that, the accused Nos.2 to 4 being the Directors and accused No.5 being Addl. Director are responsible for the day to day affairs of accused No.1 establishment was also entrusted with the responsibility to look after the welfare of the employees of accused No.1 establishment. The accused Nos.2 to 5 have totally disregarded the belief of the employees of accused No.1 establishment, who being law abiding citizens have respected the statute to the core. This court is of the considered view that, the accused Nos.2 to 5 cannot be given lenient approach as the allegation against the accused Nos.2 to 5 have been proved by the complainant beyond all reasonable doubts. In view of the accused Nos.2 to 5 being held guilty of offences punishable under section 14A of the Act, so also the accused Nos.2 to 4 being Directors and accused No.5 being Addl. Director are responsible for accused No.1 establishment having committed offence punishable 23 C.C. No.97/2024 U/s.14(1A) of the Act are not entitled to the benefit of the Probation of Offenders Act as more fully discussed supra.
Further arguments of the learned counsel for the accused No.3 seeking for order of imprisonment to run concurrently along with six other cases will not survive in light of the other six cases as well as the instant case being based upon separate period of violations, separate sanctions and the cases being altogether registered separately.
Considering the submission of the accused Nos.2 to 5, learned counsel for the accused Nos.2 to 5 and the learned counsel for the complainant, this court proceeds to pass the following :
ORDER Acting under section 248(2) of Cr.P.C., the accused Nos.1 to 5 are convicted of the offence punishable under sections 14(1A) r/w Section 14A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.
The accused No.1 being establishment i.e., juristic person is hereby sentenced to pay fine of Rs.5,000/- for being guilty U/s.14(1A) of the Act.
Further, the accused Nos.2 to 5 being the Directors of accused No.1 establishment are sentenced to undergo SI for 6 months and pay fine of Rs.5,000/- each for the offence committed 24 C.C. No.97/2024 under Section 14A r/w Section 14(1A) of the Act. In default of payment of fine, the accused Nos.2 to 5 shall undergo further SI for a period of 1 month.
Pursuant to accused No.1 establishment being managed by accused Nos.2 to 5, they shall jointly pay the fine of Rs.5,000/- on behalf of accused No.1 establishment. In default of payment of fine on behalf of accused No.1 establishment, the accused Nos.2 to 5 shall undergo further SI for a period of 10 days.
Furthermore, while acting U/s.14C(1) of the Employee's Provident Funds and Miscellaneous Provisions Act, 1952, the accused Nos.2 to 5 are hereby directed to pay the employees and employers contributions as well as administrative charges towards Provident Fund pertaining to the period between March 2013 and May 2013 i.e., Rs.6,05,622/- within three months to the complainant Authority from the date of this order.
The complainant is entitled to the compensation of Rs.1000/- out of the fine amount as contemplated under section 357 of Cr.P.C.
The aforesaid sentence shall run concurrently.25 C.C. No.97/2024
Office is hereby directed to furnish the free copy of this judgment to the accused Nos.2 to 5 in compliance of section 353(4) of Cr.P.C. forthwith.
(Dictated to the Stenographer directly on computer, typed by him, corrected and then pronounced by me, in open court on this the 26th day of September 2024) (VISHWANATH C GOWDAR) Presiding Officer, Spl. Court for Economic Offences, Bengaluru.26 C.C. No.97/2024
ANNEXURE:
List of the witnesses examined on behalf of the Complainant:
PW-1 : Sri. Kumar Prabhash Chandra List of the Documents exhibited on behalf of the Complainant:
Ex.P-1 : Complaint
Ex.P-2 : Sanction Order
Ex.P-3 : Certified true copy of Form No.5A
Ex.P-4 : Certified true copy of Inquiry Order
U/s.7A of the Act
Ex.P-5 : Certified true copy of E-mail dt: 04.01.2024
Ex.P-6 : Certified true copy of Show Cause Notice
Ex.P-7 : Certified true copies of Track Reports (4 in Nos.)
Ex.P-8 : Certified true copy of E-mail dt: 18.01.2024
Ex.P-9 : Certificate U/s.65B of Indian Evidence Act
List of witnesses examined on behalf of the Accused:
- Nil -
List of Documents examined on behalf of the Accused:
- Nil -
Presiding Officer, Spl. Court for Economic Offences, Bengaluru.27 C.C. No.97/2024
26.09.2024 Complt.: HV A-1 : Establishment A-2 & 5: LA A-3 : KRP A-4 : KR For Judgment Judgment pronounced in the open court (vide separate order) ORDER Acting under section 248(2) of Cr.P.C., the accused Nos.1 to 5 are convicted of the offence punishable under sections 14(1A) r/w Section 14A of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.28 C.C. No.97/2024
The accused No.1 being establishment i.e., juristic person is hereby sentenced to pay fine of Rs.5,000/- for being guilty U/s.14(1A) of the Act.
Further, the accused Nos.2 to 4 being the Directors and accused No.5 being the Addl. Director of accused No.1 establishment are sentenced to undergo SI for 6 months and pay fine of Rs.5,000/- each for the offence committed under Section 14A r/w Section 14(1A) of the Act. In default of payment of fine, the accused Nos.2 to 5 shall undergo further SI for a period of 1 month.
Pursuant to accused No.1 establishment being managed by accused Nos.2 to 5, they shall jointly pay the fine of Rs.5,000/- on behalf of accused No.1 establishment. In default of payment of fine on behalf of accused No.1 establishment, the accused Nos.2 to 5 shall undergo further SI for a period of 10 days.
Furthermore, while acting U/s.14C(1) of the Employee's Provident Funds and Miscellaneous Provisions Act, 1952, the accused Nos.2 to 5 are hereby directed to 29 C.C. No.97/2024 pay the employers contributions as well as administrative charges towards Provident Fund pertaining to the period between March 2013 and May 2013 i.e., Rs.6,05,622/- within three months to the complainant Authority from the date of this order.
The complainant is entitled to the compensation of Rs.1000/- out of the fine amount as contemplated under section 357 of Cr.P.C.
The aforesaid sentence shall run concurrently.
Office is hereby directed to furnish the free copy of this judgment to the accused Nos.2 to 5 in compliance of section 353(4) of Cr.P.C. forthwith.
PRESIDING OFFICER.
The learned counsel for the accused persons have filed the application under section 389(3) of Cr.P.C. seeking to enlarge the accused Nos.2 to 5 on bail till the expiry of appeal period. It is further submitted that, 30 C.C. No.97/2024 the accused Nos.2 to 5 are intending to file appeal and as they have been convicted.
Hence, has sought for enlarging them on bail.
The learned counsel for the complainant has orally objected to the said application and submitted that, the accused Nos.2 to 5 are not entitled to the said relief as the accused Nos.2 to 5 are involved in the socio-economic offence and has also submitted as to the chances of accused Nos.2 to 5 are absconding from the jurisdiction of this court and failure to comply the order of this court to appear in order to undergo the punishment as per the Judgment, as such sought for dismissal of application.
Considering the fact that, the accused Nos.2 to 5 have been granted bail during the course of trial and in view of the sentence being imposed is not exceeding three years, having due consideration as to the accused Nos.2 to 5 intending to challenge the Judgment by preferring an appeal, it is just and appropriate to grant the bail to the accused Nos.2 to 5 till the 31 C.C. No.97/2024 expiry of the appeal period only.
Accordingly, the bail application is hereby allowed and the accused Nos.2 to 5 have been granted bail till the expiry of appeal period.
The bail application is allowed subject to condition that, the accused Nos.2 to 5 shall execute the personal bond for Rs.10,000/-.
Office is hereby directed to take personal bond of the accused Nos.2 to 5.
The accused Nos.2 to 5 shall be present before the court to undergo the sentence on 26-10-2024.
Call on: 26.10.2024.
PRESIDING OFFICER.