AI Structured Summary
Not yet generated for this judgment
Judgment
Daya Chauuhary, J.—The present petition under Section 482 Cr.P.C. has been filed for quashing of complaint No 2569/2008 dated 8.12.2008 and summoning order dated 8.12.2008 vide which the petitioner has been summoned under Section 14(2) of the Employee Provident & Misc Provisions Act, 1952 read with Section 76(B) of the Employees Provident Fund Scheme, 1952 (for short "the Act").
Notice of motion was issued on 10.9.2009.
Learned counsel for the petitioner by relying upon the judgment of Karnataka High Court in C.B. Bhandari v. Provident Fund Inspector, Bangalore 1988 II LLJ 400, Jharkhand High Court in Satyanarayan Kauntia & Ors. v. State of Jharkhand and others 2010(5) R.C.R.(Criminal) 259 : 2010 Crl. L.J. 1964, Bombay High Court in Transport Corporation of India Ltd. and others v. R.M. Gandhi and others (1999) III LLJ 312, Relied of Calcutta High Court in Wire Machinery Manufacturing Corporation Ltd. and others v. State and another 1978 Crl. L.J. 839 contends that there is no deliberate violation of the Act by the petitioner. The present complaint pertains to the period 1981 82 and the same was filed after a delay of more than 27 years, which is not maintainable and the same A liable to be quashed on the ground of limitation alone. Learned counsel for the petitioner also submits that in the complaint whifli is filed after expiry of period of limitation, the Magistrate has no jurisdiction to take cognizance of the offence as nonfiling of the return is not a continuing offence. The complaint cannot be filed after expiry of period of limitation and the summoning order has been passed without taking into consideration the period of limitation and the fact that it is not a continuing offence.
Learned counsel appearing for U.T., Respondent opposes the prayer of learned counsel for the petitioner and submits that the petitioner has not field the Provident Fund returns intentionally inspite of giving sufficient opportunity and non deposit of annual provident fund return is a continuing offence and the complain cannot be treated as time barred being a continuing offence. Learned counsel has also relied upon the judgment of Hon''ble the Apex Court in Bhagirath Kanoria and others v. State of M.P. 1984(2) R.C.R. (Criminal) 393 : AIR 1984 SC 1688, of Karnataka High Court in Joseph M.R. v. Jon, Menezes 200411 LLJ 650 and of this Court in Provident Fund Inspector, Batala v. Harjit Singh and another 1994 LLJ (HI) 660.
Heard the arguments advanced by learned counsel for the parties and have also gone through the contents of the complaint as well as summoning order.
As per case of the petitioner, the petitionercompany was incorporated in the year 1962 under the Companies Act, 1956, remained functional till May, 1983 and was closed permanently vide general notice dated 1.12.1984. Thereafter, a winding up petition was filed by on its creditors namely, M/s Gaja Nand Oil arid Dal Mills and order of winding up the company was passed by Hon''ble High Court of Delhi vide order dated 6.11.1986. After passing of the winding up order, the company was brought under the control of Official Liquidator and remained under its control till 14.3.1995. After the appointment of Official Liquidator, possession of the assets as well as the record of the company were taken over by the Official Liquidator. During the pendency of winding up proceedings, M/s Usha Rectifier Corporation on Limited, now known as M/s Usha India Limited, filed an application for sanction of a scheme to revive the company in liquidation before the Company Judge. The High Court of Delhi vice order dated 14.3.1995, confirmed/sanctioned the scheme submitted by the Company. Since the company was closed vide general notice dated 1.12.1984 due to severe labour unrest and the winding up order was passed on 6.11.1936, therefore, the records of the Company remained In possession of the official liquidator during the pendency of winding up proceedings. The company could not furnish the statutory returns. Several letters were written to the company to furnish returns for the time it remain closed. The company was also directed to pay the amount of contribution provident fund along with interest vide orders of Delhi High Court on 8.2.22002 and the amount was deposited by the Company in installments along with interest.
Subsequently, respondent filed a complaint against the petitionercompany for offence under Section 76(b) of the EPF Scheme, 1952 on the ground that the company did not submit the statutory returns and has committed an offence under the provisions of the Act and the scheme made thereunder. On the complaint filed by the respondent, JMIC, Faridabad summoned the petitioner and other accused on the ground that the respondent is public servant and a prima facie case is made out against the petitioners.
The complaint as well as summoning order is the subject matte, of challenge in the present petition. The complaint has been challenged mainly on the ground that the a complaint is barred by limitation under Section 468 Cr.P.C. as it has been filed in the Court on 8.12.2008 i.e. after a period of 27 years.
Now the question for consideration before this Court is whether nonfiling of return is a continuing offence or not. In view of the ratio of law laid down by Hon''ble the Supreme Court in the case of State of Bihar v. Deokaran Nenshi and another AIR 1973 SC 908 as the same issue was raised before the Hon''ble Court as to whether nonsubmission of annual return within the time frame under the Act would be a continuing process or not. While discussing this question, Hon''ble the Supreme Court observed as under :
"A continuing offence is one which is susceptible of continuance and is distinguishable from the one which is committed once and for all. It is one of those offences which arises out of a failure to obey or comply with a rule or its requirement and which involved a penalty, the liability for which continues until the rule or its requirement 1691 is obeyed or complied with. On every occasion that such disobedience or noncompliance occurs and recurs, there is the offence committed. The distinction between the two kinds of offence is between an act or omission which constitutes an offence once and for all and an act or omission which, continues and therefore, constitutes a fresh offence evert times or occasion on which it continues. In the case of a continuing offence, there is thus the ingredient of continuance of the offence which is absent it the case of an offence which takes place when an act or omission is committed offence and for all."
The same issue also came before Bombay High Court in the case of Transport Corporation of India Ltd. and others (supra), wherein, it was held that failure to submit statement under Section 12A and contribution card in form 3A and 6A will not constitute continuing offence.
In the present case, the complaint was filed by Provident Fund Inspector, Faridabad on 8.12.2008 by stating that as per Employees Provident Fund Scheme, 1952, the petitionercompany was required to submit the statutory returns in respect of employees of establishment every year within a period of one month of the close of the financial year. As the statutory return was not filed inspite of repeated reminders sent by the Provident Fund Office, therefore, offence under Section 14(2) of the Act read with pars 43 and 38(3) of the Employees Provident Funds Scheme, 1952 was found to have been committed. It was also mentioned in the complaint that there are sufficient circumstances for imposition of normal punishment of both imprisonment as well As fine on the petitionercompany.
Learned counsel for the petitioner submits that the complaint was barred by limitation as the Incident pertains to year 198182 and the complaint was filed on 8.12.2008 i.e. after expiry of 27 years and the same is not maintainable and is liable to the quashed on this scope only. On merits, it has been argued tint the petitionercompany remained functioned till May 1983 and ''hereafter it was closed vide general notice dated 1.12.1984. Thereafter the petition for winding up was filed by one of its creditors and the petitionercompany was ordered to be winded up by Delhi High Court vide order dated 6.11.1986. After passing of winding up order, the company was brought under the control of Official Liquidator till 14.3.1995. After the appointment of Official Liquidator, possession of assets and the record of the Company was taken over by the Official Liquidator and nothing remained with the then Directors of the Company. During the pendency of winding up proceedings, an application was filed before the Company Judge for sanction of a scheme to revive the company in liquidation. The Delhi High Court vide order dated 14.3.1995 confirmed/sanctioned the scheme submitted by the company. It appears from the record that the complainantrespondent had written letters to the petitioner company to furnish the returns for the earlier period and reply thereto was also sent by the petitioner company stating that as the record of the company was not available as the same was with the Official Liquidator, therefore, return could not be furnished. After sanction of the scheme by the Delhi High Court, an application was filed by the Provident Fund Commissioner before Delhi High Court, wherein claim of Rs. 21,98,562,56/ was raised towards the contribution fund against the Company under Section 17 (B) of the Act and the said application was disposed of by the Delhi High Court vide order dated 8.2.2002 with a direction to the petitioner company to pay a sum of Rs. 21,98,562,56/ being contribution towards Employee Provident Fund along with interest at the rate of 9% per annum. The said amount as deposited by the company in 12 instalments along with interest. The respondent has also not disputed the deposit of the said amount along with the interest. Subsequently the impugned complaint was filed and the only allegation in the complaint is that the petitioner company had not deposited the statutory return and as such has committed an offence under the provisions of the Act and the Scheme made thereunder. He further submits that on the basis of complaint filed, summoning order has been passed without recording any finding.
Learned counsel for the respondent has argued that the complaint cannot be dismissed only on the ground limitation as the offence is a continuing offence and the provision of limitation is not applicable in the present case.
Section 14,14A of the Act and para 76 of the Employees Provident Fund Scheme, 1952 are reproduced as under:
"14. Penalties: (1) whoever, for the purpose 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 mode 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 make default in complying with, the provisions of
Section 6 of clause (a) of subsection (3) of Section 17 in so far as it relates to the payment of inspection charges, or paragraph 38 of the Scheme in so far as it relate to the payment of administrative charges, shall be punishable with the imprisonment for a term which may extend not three years but :
(a) which shall not.be less than on year and fine of then thousand rupees in case of default in payment of the employees contribution which has been deducted by the employer from the employees wages;
(b) which shall not less that Six months and a fine of five thousand rupees, in any other case;
Provided that the Court may, for any adequate and special reasons to be recorded in the judgment/impose a sentence of imprisonment for a lesser term.
(1B) An employer who contravenes or make default in complying with the provisions of Section 6C, or clause (a) of sub section (3A) of Section 17 in so far as it relate to the payment of inspection charge, shall be punishable with imprisonment for a term which may extend not one year but which shall not less than six months and shall also be liable to fine which may extend to five thousand rupees;
Provided that the Court may for any adequate and special reasons to be recorded in the judgment, impose a sentence of imprisonment for a less term;
(2) Subject to the previsions of this Act, the scheme or the Insurance Scheme may provide that any person who contravenes or make default in complying with any of the provisions there under shall be punishable with imprisonment for a term which may extend to one year, or with fine which mad extend to four thousand rupees, or with both.
(2A) whoever contravenes or makes default in complying with any provisions of this Act or any condition subject to which exemption was granted under Section 17 shall, if not other penalty is else where provided by or under this Act for such contravention or non compliance, be punishable with imprisonment which may extend o six months, but which shall not be less than ore month and shall also be Fable to fine which may extend to five thousand rupees.
14A Offence by companies: (1) If the person committing an offence under this Act, the Scheme or the pension scheme or the insurance scheme, is a company, every person, who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the busirless of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable, to be proceeded against the punished accordingly.
Provided that nothing contained in this sub section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prever the commission of such offence.
(2) Notwithstanding anything Contained in sub section (1), where an offence under this 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 cretary or other officer shall be deemed to be guilty of the t offence and shall he liable to the proceeded against and punished accordingly.
Explanation : For the purpose of this Section.
(i) company" means any body corporate and includes a firm and other association of individuals; and
(ii) "director", in relation to a firm, means a partner in the firm.
Punishment for failure to pay contribution etc : If any person
(a) deducts or attempts to deduct from the wages or other remuneration of a member the whole or any part of the employer''s contribution, or
(b) fails to refused to submit any return, statement or other documents required by this Scheme or submits a false return, statement or other document, or makes a false declaration, or
(c) Obstructs any Inspector or other official appointed under the Act or this Scheme in the discharge of his duties or fails to produce any record for inspection by such Inspector or other official, or
(d) is guilty of contravention of or non compliance with any other requirement of this Scheme,
He shall be punishable with imprisonment which may extend to one year or with fine which may extend to four thousand rupees or With both."
As per Section 14 and 14A of the Act, the maximum imprisonment can be awarded is one year along with fine and there is bar to take cognizance after lapse of the period of limitation. Section 463 of the Cr.R.C. is reproduced as under:
"468. Bar to taking cognizance after lapse of the period of limitation (1) Except as otherwise provided elsewhere in this Code, no Court, shall take cognizance of an offence of that category specified in sub section (2) after the expiry of the period of limitation.
(2) The period of limitation shall be
(a) six months, if the offence is punishable with fine only;
One year, if the offence is punishable with imprisonment for a terms no exceeding one year;
Three years, if the offence is punishable with imprisonment for a term exceeding one year but not exceeding three years.
(3) For the purpose of this section, the period of limitation, in relation to offences which may be tried together, shall be determined with reference to the offence which is punishable with the more severe punishment or, as the case may be, the most severe punishment."
As per Section 468 of the Cr.P.C., the period of limitation is one year if it is punishable with imprisonment for a term not exceeding one year. In the present case, the offence under Section 14 (2) of the Act, read with para 76 (t) of the EPF Scheme, 1952 has been alleged to be committed and for contravention of the said provisions, the imprisonment for a term of one year has been provide a The complaint has been filed after a delay of more than 27 years, which is contrary to the provisions of Section 468 of Cr.P.C. Moreover, it is not a case of deliberate violation of the Act as the order for winding up of the company was there and remained in liquidation as per orders passed by the Court and the assets as well as the records of the Company were taken over by the Official Liquidator. The record of the Company was not with the petitioner company and it cannot be said that the act committed was deliberate. The incident pertains to the year 198182 whereas the complaint was filed before the Court on 8.12.2008 i.e. after a period of 27 years, which is not maintainable. Subsequently, as per orders passed by Delhi High Court, the amount in dispute along with interest was deposited by the petitioner company and the same was also accepted by the complainant. Even in response to notices sent by the complainant, letters were written by the petitioner company and it was informed (hat as the record was not with the petitioner company and because of that reason the said amount was not deposited. The judgments relied upon by the counsel for the respondent are not applicable in the present case as the act of the petitioner company was not deliberate and the amount could not deposited and was deposited alongwith interest subsequently. At the most, it can be a case of penalty only and not of fi ling the criminal complaint and delay in itself is a ground of quashing of complaint as well as summoning order as the complaint has been filed after a lapse of 27 years, which is not maintainable.
In view of the facts and circumstances mentioned above, the present petition is allowed and impugned criminal complaint No. 2569/2008 dated 8.12.2008 and summoning order dated 8.12.2008 passed by Chief Judicial Magistrate, Faridabad are quashed.
However, the complaint is at liberty impose penalty as provided under law.