Allowed

S Girish Kumar v. Employees Provident Fund Organization

Karnataka HC1 Sept 2023CRL.P/3287/2018

Case brief

AI extract

What is this about?

The High Court quashed private prosecution against a Managing Director of HMT Limited for EPF Act offences. Ruling that he was not an in-charge of the employer and noting full payments were made, the court held prosecution was not prudent and allowed the petition.

What did the court decide?

The criminal prosecution in C.C.No.356/2017 against the petitioner for offences under the EPF Act, 1952 was quashed.

S Girish Kumar Vs Employees Provident Fund Organization — Corruption | Karnataka HC (2023)

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1 - NC: 2023:KHC:31545 CRL.P No. 3287 of 2018

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 1^ST DAY OF SEPTEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE R. NATARAJ CRIMINAL PETITION NO. 3287 OF 2018

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BETWEEN:

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Digitally signed by SUMA Location: HIGH COURT OF KARNATAKA

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S. GIRISH KUMAR, SON OF LATE SADASIVAN NAIR, AGED ABOUT 56 YEARS, RESIDING AT M2, HMT TOWNSHIP, BENGALURU - 560 013. WORKING AS CHAIRMAN AND MANAGING DIRECTOR, HMT LIMITED, A COMPANY REGISTERED UNDER THE INDIAN COMPANIES ACT, 1913, HAVING ITS REGISTERED OFFICE AT NO.59, HMT BHAVAN, BELLARY ROAD, BENGALURU - 560 032. DESCRIBED IN THE COMPLAINT AS S. GIRISH KUMAR, CHAIRMAN-CUM-MANAGING DIRECTOR, M/S. HMT LIMITED CORPORATE OFFICE AND MARKETING DIVISION, HMT BHAVAN, NO.59, BELLARY ROAD, BENGALURU - 560 032. …PETITIONER

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(BY SRI. KUMAR M.N., ADVOCATE)

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AND:

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EMPLOYEES PROVIDENT FUND ORGANIZATION, MINISTRY OF LABOUR AND EMPLOYMENT, GOVERNMENT OF INDIA, REGIONAL OFFICE, YELAHANKA, BENGALURU - 560 064. REPRESENTED BY ENFORCEMENT OFFICER, ASHA MARY VARGHESE. …RESPONDENT (BY SMT. B.V. VIDYULATHA, ADVOCATE)

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2 - NC: 2023:KHC:31545 CRL.P No. 3287 of 2018

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THIS CRL.P IS FILED UNDER SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE, 1973 PRAYING TO QUASH THE COMPLAINT DATED 12.12.2017 FILED BY THE RESPONDENT IN SPECIAL COURT (ECONOMIC OFFENCES), BENGALURU DESCRIBING THE PETITIONER AS CHAIRMAN-CUM-MANAGING DIRECTOR OF "HMT LIMITED CORPORATE OFFICE AND MARKETING DIVISION" ACCUSED NO.1 AS WELL AS ACCUSED NO.2 IN THE INDIVIDUAL CAPACITY AS CHAIRMAN-CUM-MANAGING DIRECTOR OF ACCUSED NO.1 FOR THE OFFENCES ALLEGED IN THE COMPLAINT PUNISHABLE UNDER SECTION 14-1A(b), 14(2A) AND 14A OF THE EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952.

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THIS PETITION, COMING ON FOR ADMISSION, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The petitioner being the Managing Director of a Public Sector undertaking, has filed this petition challenging the prosecution launched against him in C.C.No.356/2017 for the offences punishable under Section 14-1A(b), 14(2A) and 14(A) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 ('the Act of 1952' for short).

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The respondent initiated prosecution of the petitioner for offences punishable under Section 14-1A(b), 14(2A) and 14(A) of the Act of 1952 by a private complaint under Section 200 of Cr.P.C, contending that the establishment was not transferring the contributions payable to the Provident Fund Trust within the prescribed time limit and was not remitting the Employees Pension Scheme contribution in time

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3 - NC: 2023:KHC:31545 CRL.P No. 3287 of 2018

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and was also not remitting the inspection charges in time to the respondent. It also alleged that the Board of Trustees of the trust did not maintain the accounts of the members electronically and that the trust had appointed the same auditor for two consecutive years and that the same auditor was appointed for more than two occasions in a block of six years.

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The trial Court after recording the pre-summons evidence of the respondent took cognizance of the aforesaid offences and issued process to the petitioner.

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The petitioner being the Managing Director of

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M/s.HMT Limited, the employer has filed this petition challenging the prosecuting on three grounds, viz:

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i. M/s.HMT Limited, was the employer which was not arrayed as an accused in the private complaint and therefore he was not answerable for the charge of violation of Section 14(1A).

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ii. The employer had paid up all the contributions to the Employee Provident Funds Trust and the administration charges and other expenses to the

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4 - NC: 2023:KHC:31545 CRL.P No. 3287 of 2018

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respondent and therefore, the employer is not liable to be prosecuted.

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iii. The petitioner being a public servant cannot be prosecuted for the offences under the Act of 1952 without obtaining prior sanction of the employee of the petitioner.

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The learned counsel for the respondent, on the other hand, contended that one of the accused arrayed before the Trial Court was M/s.HMT Limited, Corporate Office and Marketing Division, of which the petitioner was a Chairman cum Managing Director. She submitted that the petitioner was also arrayed as accused No.2 and therefore the contention urged by the learned counsel for the petitioner is not sustainable. She also contended that even if the contributions were made by the employer. The offence was already committed and therefore the respondent was justified by taking out prosecution against the accused. She contended that the petitioner was the Managing Director of the employer and therefore, by virtue of the provisions of Section 14(A) of the Act of 1952, he was liable to be prosecuted. That the question of sanction under Section 197 of Cr.P.C does not arise as the Act is a complete code and

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5 - NC: 2023:KHC:31545 CRL.P No. 3287 of 2018

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in the event of any offence, it is the employer and all officers incharge who can be prosecuted. She therefore contends that there is no need to comply with the requirement of obtaining a sanction under Section 197 of Cr.P.C as offences under the Indian Penal Code are not attracted.

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I have considered the submissions made by the

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learned counsel for the petitioner and the learned counsel for the respondent.

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As rightly contended by the learned counsel for the petitioner, under Section 14(A) of the Act of 1952, when an offence is committed by an employer and in case the employer is a Company, then the person in-charge of and responsible to the company for the conduct of business as well as the company shall be deemed to be guilty of an offence and shall be liable to be proceeded against and punished accordingly. In the present case, the petitioner is not shown as the Managing Director of the employer but is arrayed as Chairman cum Managing Director of HMT Limited, Corporate office and Marketing Division which is certainly not the employer and therefore, the trial Court could not have taken cognizance of

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6 - NC: 2023:KHC:31545 CRL.P No. 3287 of 2018

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an offence punishable under Section 14-1A(b), 14(2A) and 14A of the Act of 1952 and could not have issued process to the petitioner. The petitioner could have been arrayed as an accused only by virtue of his position in employer and not as a person in charge of the Corporate Office and Marketing Division of the employer.

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In view of the fact that the employer has made all the contributions as observed by the audit team of the respondent, it is not prudent to pursue the prosecution of the petitioner for the offences punishable under Section 14-1A(b), 14(2A) and 14A of the Act of 1952.

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Consequently, the petition is allowed and the impugned prosecution of the petitioner in C.C.No.356/2017 for the offences punishable under Section 14-1A(b), 14(2A) and 14(A) of the Employees Provident Funds and Miscellaneous Provisions Act, 1952, pending trial before Special Court for Economic Offences, Bangalore is hereby quashed.

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Sd/JUDGE

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CT: THK

S Girish Kumar v. Employees Provident Fund Organization

Case brief

What is this about?

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S Girish Kumar v. Employees Provident Fund Organization

Case brief

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