Harjaspal Singh Juneja and Another vs Recovery Officer, Employees' Provident Fund Organisation and Another

Mahesh Grover, J.—The petitioners pray for quashing of complaints (Annexure P-3) and the consequent summoning order (Annexure P-4). Three complaints have been initiated against the petitioners all of which have been appended as Annexure P-3. The first complaint as appended to the petition sequentially refers to the alleged violation made by the petitioners on account of their failure to pay administrative charges qua the insurance fund. The second complaint refers to the non-payment of Employees Provident Fund and the pension fund while the third complaint refers to the insurance fund contribution and insurance fund administrative charges for the periods which have been mentioned in the complaints i.e. November, 2001 to October, 2004.

The prayer for quashing has been made primarily on two grounds; (i) that all the complaints referred to the same period and violation of similar provisions and therefore persistence with three different sets of complaints is impermissible in law. (ii) pursuant to the procedure adopted by the competent authority u/s 8-B, 8-B(1) the petitioner already stood arrested and therefore they cannot be subjected to these proceedings which would at best result in imprisoning then as this would amount to double jeopardy considering the fact that the petitioners had already been arrested.

I am not in agreement with what has been stated by the learned counsel appearing for the petitioners in support of his plea for quashing the complaints. Section 6 of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the ''Act'') contemplates various schemes which may be applicable to the employees upon the Central Government making a proclamation by way of notification to this effect. Such schemes such as the employees pension scheme, the employees provident fund scheme and the deposit linked insurance schemes are all notifications with beneficial intent expected to be adhered to by the employer in terms specified.

Concededly the petitioners have defaulted in adhering to the terms of the scheme and have invited a liability which stands determined against them under the provisions of Section 7-A and 14-B of the Act.

Section 8-B provides the mode of recovery of such amounts and empowers a recovery officer to issue a certificate under his signatures specifying the amount of arrears which can be effected either by attachment or sale of immovable or movable property of the establishment or arrest of the employer or his detention in prison.

Section 14 talks of penalties in the event of it being established that a person has violated the terms of the scheme or schemes envisaged in Section 6 of the Act. For the purposes of reference Sections 14, 14(1)A, 14(1)B, 14(2), 14(2)(A) and 14-A(2) are extracted hereinbelow which are relevant to appreciate the controversy:--

Section 14 Penalties--(1) Whoever, for the purposes of avoiding any payment to be made by himself under this Act (the scheme the pension scheme or the insurance scheme) or of enabling any other person to avoid such payment, knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to (one year or with fine of five thousand rupees, or with both)

(1A) An employer who contravenes, or makes default in complying with, the provisions of section 6 or clause (a) of sub-section (3) of section 17 in so far as it relates to the payment of inspection charges, or paragraph 38 of the Scheme insofar as it relates to the payment of administrative charges, shall be punishable with imprisonment for a term which may extend to (three years) but

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(1B) An employer who contravenes or makes default in complying with the provisions of section 6C or clause (a) of sub-section (3A) of section 17 insofar as it relates to the payment of inspection charges, shall be punishable with imprisonment for a term which may extend to (one year) but which shall not be less than (six months) and shall also be liable to fine which may extend to (five thousand rupees)

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(2) (subject to the provisions of this Act, the scheme) (the pension scheme or the insurance scheme) may provide that any person who contravenes or makes default in complying with any of the provisions thereof shall be punishable with imprisonment for a term which may extend to (one year or with fine which may extend to four thousand rupees, or with both)

Section 14(A) Offences by companies

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(2A) Whoever, contravenes or makes default in complying with the provision of this Act or of any condition subject to which exemption was granted u/s 17 shall, if no other penalty is elsewhere provided by or under this Act for such contravention or non-compliance be punishable with imprisonment which may extend to (six months but which shall not be less than one month and shall be liable to fine which may extend to five thousand rupees).

(2) Notwithstanding anything contained in sub-section (1), where an offence under the Act (the scheme or the pension scheme or the insurance scheme) has been committed by a company and it is proved that the offence has been committed with the consent or connivance of or is attributable to any neglect on the part of any director or manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

It is evident from the aforesaid extracted provisions of law that the apart from the recovery which may be carried out in terms of Section 8, Law also visualizes penal consequences to be visited upon the defaulter in terms of Section 14 of the Act warranting imprisonment. Imprisonment on account of the procedure adopted in Section 8 would necessarily be distinct from the detention ordered upon establishing the violation of the provisions of the schemes and the failure of the employer to deposit the amount in the procedure enshrined u/s 14-A of the Act.

The Act, therefore, clearly distinguishes between civil proceedings initiated to effect and to ensure recovery and penal consequences as a deterrent. No provision of the statute prescribes that one remedy is dependent on the other and therefore, the plea that once a defaulter has been detained in prison u/s 8-B it would liberate him of the consequences of Section 14-A of the Act would be without any substance.

For the aforesaid reasons, the plea of the learned counsel for the petitioners that the complaints be quashed is without any basis and therefore has to be negated. Similarly his plea that the complaints are overlapping and only one complaint could have sufficed is also without any basis as reading of the complaints would show that they pertain to the violation of different schemes and thus constitute separate causes to the complainant. Besides, even if it is accepted for the sake of arguments that these three separate complaints are not maintainable on account of some overlapping it does not result in any serious prejudice to the petitioners except for procedural inconvenience.

Hence, the instant petition is held to be without any merit and the same is hereby dismissed.

In case the petitioners make an application before the Trial Court for clubbing of the complaints, the same shall be considered and decided by it in accordance with law. Similarly, in case the petitioners make an appropriate application, for personal exemption, the same shall be considered by the learned Trial Court and in the eventuality of its coming to the conclusion that the petitioners deserve the concession of personal exemption, the same shall be granted to them subject to their filing an affidavit to the following terms:--

(i) undertake to appear before the Trial Court as and when so directed;

(ii) undertake that they would have no objection if the evidence is recorded in their absence.

(iii) Undertake not to raise any dispute as to identity;

(iv) undertake to comply with such other conditions, as may be imposed by the Trial Court.

(v) Undertake that they would not delay the proceedings.