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1. This Rule is at the instance of the accused-petitioner Nathmull Poddar, for quashing proceedings under Sections 406/403, I.P.C., being Case No. C-1583 of 1969, pending in the court of the learned Chief Presidency Magistrate, Calcutta.

2. The facts leading on to the Rule are short and simple. The accused-petitioner, Nathmull Poddar, is the Manager of M/s. Naskarpara Jute Mills Company Limited having its office at 220/2. Shib Gopal Banerjee Lane. Ghusuri, Howrah while the co-accused, K. L. Jalan, is a Director thereof. The opposite party, Salil Kumar Chakraborty, is an Insurance Inspector attached to the Regional Office of the Employees' State Insurance Corporation at 5/1, Grant Lane, Calcutta. A petition of complaint was filed on the 5th June, 1969 by the abovementioned Insurance Inspector in the court of the learned Chief Presidency Magistrate, Calcutta under Sections 406/403. I.P.C. averring inter alia that the accused being the principal employers of the aforesaid factory deducted contributions from the wages of the employees for the period between March 1967 and October 1968 and also for certain earlier periods but failed to deposit the same with the Employees' State Insurance Corporation as required under Section 40 of the Employees' State Insurance Act, 1948 read with Regulation 26, wrongly stated as Regulation 23 in the petition of complaint, of the Employees' State Insurance (General) Regulations, 1950 thereby committing offences of criminal breach of trust and misappropriation in respect of Rs. 1,00,898.94 p. The learned Chief Presidency Magistrate by his order of the same date took cognizance and issued summons against the accused persons under Sections 406/403, I.P.C. A search-warrant was also issued, as prayed for. In pursuance of the summons the accused No. 1, Nathmull Poddar, appeared before the learned Chief Presidency Magistrate, Calcutta through his lawyer on 2-7-09 and filed two applications, viz., one under Section 205, Cr. P. C. for exemption of both the accused persons from personal attendance and another for dropping the proceedings under Sections 406/403. I.P.C. as not maintainable in law. The applications were heard in part on that date and further heard on 7-7-69. Ultimately by his order dated the 19th July, 1969, Shri K. J. Sen Gupta, Chief Presidency Magistrate, Calcutta rejected the prayer for dropping the proceedings at that stage and directed that the same shall continue and the search-warrant issued shall not be recalled. This order has been impugned by the accused No. 1, Nathmull Poddar, and the present Rule was issued on the 28th July, 1969.

3. Mr. Ajit Kumar Dutta, Advocate (with Mr. Amiya Kumar Chakraborty. Advocate) appearing in support of the Rule on behalf of the accused-petitioner, Nathmull Poddar, has made a three-fold submission. Mr. Dutt contended in the first instance that a contravention of Section 40 of the Employees' State Insurance Act, 1948 read with Regulation 26 of the Employees' State Insurance (General) Regulation, 1950 being punishable under Sub-sections (a) and (g) of Section 85 of the said Special Act, the present proceedings under Sections 406/403 of the Indian Penal Code, which is a General Act, are not maintainable in law. A reference was made to an un-reported decision dated the 2nd June, 1969 by Bagchi, J. in Criminal Revn. Case No. 1193 of 1968 (Cal). Mr. Dutta in this context further submitted that the proceedings under the General Act have been started in order to circumvent the mandatory provisions relating to sanction and limitation, as enjoined under Sub-sections (1) and (3) of Section 86 of Act XXXIV of 1948. The second contention of Mr. Dutta is that even if the proceedings be otherwise maintainable under the Indian Penal Code, the essential ingredients of 'entrustment'. within the bounds of Section 405 of the Indian Penal Code, are non est inasmuch as, amongst others, there is only a fictional transfer and not an actual physical transfer by the owner of the property concerned vitiating thereby the present proceedings under Sections 406/403. I.P.C. Several cases were cited by the learned Advocate for the accused-petitioner in support of his contention. The third and the last submission of Mr. Dutta is that the present proceedings are bad and improper inasmuch as there cannot be any prosecution in law of the accused persons under Sections 406/403, I.P.C. in their fictional capacity of "principal employer" as defined in Section 2(17) of Act XXXIV of 1948. Mr. Debesh Chandra Mukherjee, Advocate appearing on behalf of the opposite party, Salil Kumar Chakraborty, an Insurance Inspector attached to the E.S.I. Corporation, submitted that the first contention made on behalf of the accused-petitioner is not maintainable in law in view of the material provisions of Section 26 of the General Clauses Act and he referred in that context to an unreported decision dated the 11th September, 1961 by S. K. Sen and N. K. Sen. JJ. in Criminal Revn. Case No. 1569 of 1960 (Cal.). In reply to the second submission of Mr. Dutta that the essential ingredients of "entrustment" not being satisfied the present proceedings under Sections 406/403. I.P.C. are not maintainable, Mr. Mukherjee contended that the proceedings under Sections 406/403, I.P.C. are the proper proceedings relating to the contravention of Section 40 of the Employees' State Insurance Act, 1948, in view of the provisions of Sub-section (4) thereof, enjoining that any sum deducted bv the principal employer from wages under the said Act "shall be deemed to have been entrusted to him by the employee for the purpose of paying the contribution in respect of which it was deducted". Mr. Mukherjee further submitted that Section 85 does not provide the penalty for all cases of failure to pay contribution under Section 40 of Act XXXIV of 1948 and that Section 85(a) merely lays down the punishment for a contravention of Section 40(1) of the Employees' State Insurance Act. 1948, constituting a pre-deduction offence or an offence committed by a failure to pay contribution before the employees' share is deducted from his wages under Section 40(2) and that with respect to cases of post-deduction offences or offences committed after deductions have been made by the principal employer from the wages of the employees, such deductions being deemed to have been entrusted to such employer, the proper proceedings are under Sections 406/403. I.P.C. In this context Mr. Mukherjee further contended that the essential ingredients of "entrustment" within the bounds of Section 405, I.P.C. include a notional or a fictional transfer and not merely an actual physical transfer by the owner of the property concerned and that the submissions made in this behalf by Mr. Dutta, if accepted, would unnecessarily circumscribe the meaning of the expression "entrustment" and defeat the intention of the legislature. Several cases were cited by Mr. Mukheriee, in support of his submissions and the same would be considered in the proper context. Mr. Mukherjee lastly contended that the third submission of Mr. Dutta is more technical than real and that when the business of the company is being carried on or conducted by some persons, any one in charge thereof or responsible for the conduct of the same, at the time when the offence is committed including the "principal employer" as defined in Section 2(17) of Act XXXIV of 1948, can be saddled with the responsibility for the same.

5. The second contention put forward by Mr. Dutta is however of some importance and requires consideration in all its facets. Mr. Dutta submitted that even if a prosecution under the General Act is permissible under Section 26 of the General Clauses Act, the present proceedings under Sections 406/403, I.P.C. are not however maintainable because there is no "entrustment" constituted by the facts alleged within the bounds of Section 405. I.P.C. Mr. Dutta urged that the essential ingredients of "entrustment" are five-fold and the absence of any one of these material ingredients would fail to constitute "entrustment" forming the corner-stone of a prosecution under Sections 406/403. I.P.C. The steps of Mr. Dutta's reasoning in this context are that in order to constitute entrustment the complainant must be the owner of the property; that there must be a transfer of possession; that such transfer must be an actual transfer and not a fictional or notional one; that the transfer must be made to somebody who has no right, excepting that of a custodian; and that such entrustment must be made to a person "and not to a company or a firm. These five ingredients, according to Mr. Dutta, when satisfied, will constitute "entrustment" within the ambit of Section 405 I.P.C. leading on to a valid prosecution, if otherwise entertainable on merits, under Sections 406/403, I.P.C. Mr. Dutta submitted that one looks in vain to the facts incorporated in the petition of complaint in this case for the presence of any one of these elements and that it appears on the other hand that the sheet-anchor of the prosecution case is the deeming clause in Sub-section (4) of Section 40 of Act XXXIV of 1948 which certainly cannot do duty for an actual transfer of the property forming the subject-matter of the present proceedings, implicating the accused in their fictional capacity of a principal employer. Mr. Mukherjee joined issue and submitted that the interpretation put by Mr. Dutta on the concept of "entrustment" would unnecessarily circumscribe the meaning thereof and frustrate the intention of the legislature. It is relevant in this context to consider the various cases cited by the learned Advocates appearing on behalf of the respective parties in support of their contentions as to what constitutes in law "entrustment" within the ambit of Section 405, I.P.C. forming the basis of a prosecution under Sections 406/403. I.P.C. In the case of Bhuban Mohan Das v. Surendra Mohan Das, , Harries, C. J. observed at page 70 that "Before criminal breach of trust is established it must be shown that the person charged has been entrusted with property or with dominion over property and that he has been guilty of 'breach of trust' using that latter phrase loosely. There must be entrustment and therefore the person accused must be shown to have held the proprety in a fiduciary capacity."

6. The third submission of Mr. Dutta also stands on a firm footing. It is abundantly clear from the facts of the present case that the accused are being prosecuted under Sections 406/403, I.P.C. not in their personal capacity for having committed the offence of criminal breach of trust or of misappropriation of any article actually made over to them but on the footing of their fictional capacity as the "principal employer" of M/s. Naskarpara Jute Mills, for not making over the contributions which under Act XXXIV of 1948 are liable to be paid to the authority concerned. A prosecution of the accused for a failure on their part to pay the contributions enjoined under Section 40 of Act XXXIV of 1948 in their fictional capacity as principal employers, may be good enough for a prosecution under Section 85 read with Section 86 of the Employees' State Insurance Act, 1948 inasmuch as for the purpose of the said Act XXXIV of 1948 any sum deducted by the principal employer from the wages under this Act can be deemed to have been entrusted to the said accused, but the concept of such entrustment cannot transgress the bounds of the said special Act to form a necessary ingredient of entrustment within the ambit of Section 405, I.P.C., which alone can form the basis of a valid prosecution under Sections 406/403, I.P.C. Anything short of that would be long off the mark and do here the intention of the legislature. I find on ultimate analysis that the entrustment alleged in this case is merely on the footing of the deeming provision incorporated in Sub-clause (4) to Section 40 and in the fictional capacity of the accused as principal employers. The ingredients constituting a valid entrustment within the ambit of Section 405, I.P.C. are covered by the principles referred to above, receiving the imprimatur of judicial decisions and I accordingly uphold the third and last submission of Mr. Dutta.