TMI Blog2010 (4) TMI 615X X X X Extracts X X X X X X X X Extracts X X X X ..... lgiris (District) are hereby quashed. Consequently, connected miscellaneous petitions are quashed. - CRL. O. P. NO. 1095 OF 2007 AND M.P. NO 1 OF 2007 AND M.P. NO 1 OF 2009 - - - Dated:- 27-4-2010 - C.T. Selvam J. P. Sukumar for the Petitioner. J.C. Durairaj and T.R. Sundaram for the Respondent. JUDGMENT C.T. Selvam, J. The petitioners are accused Nos. 1, 2, 3, 5 and 6 in case pending in C. C. No. 177 of 1999 on the file of the learned Judicial Magistrate, Gudalur, Nilgiris (District). The petitioners seek quashing of the proceedings in such case as against them. The case in C. C. No. 177 of 1999 is a complaint case wherein the Provident Fund Inspector alleges commission of offences under sections 14(1A)/14A and 14AA of the Employees' Provident Funds and Family Pension Fund and Miscellaneous Provisions Act, 1952. The accusation is that the establishment by name M/s. Mahavir Plantations having collected employees' contribution of the provident fund and family pension funds had failed to remit such amount as also the employer's contribution to the provident fund account, as it is required to do under sections 6 and 6A read with paragraphs 30 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority which, has the ultimate control over the affairs of the establishment, and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent." 4. Section 14A of the Act reads as follows : "If the person committing an offence under this Act, the Family 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 business 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 and 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 prevent the commission of such offence." 5. Section 14(1A) of the Act, inter alia , provides punishment for offences of non compliance by the employer with the provisions of section 6 of the Act. Section 6 is the provision for contributions payable by the employer to the provident fund a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e factory, the person who runs the factory in whatever capacity, becomes the principal employer by virtue of being the occupier of the factory. The word 'or' must, therefore, be read disjunctively and cannot be read as 'and', because reading of the word 'or' as 'and' is bound to introduce an uncertainty in fastening the obligation to deduct and pay the employer's contribution as well as the employee's contribution. 14. The concept that a limited company could be an occupier of a factory is recognised in the Factories Act, 1948, itself. Indeed, the concept that a partnership firm or a body of individuals is also recognised in section 100 of the Factories Act. Sub-section (1) of section 100 begins with the words 'where the occupier of a factory is a firm or other association of individuals'. Similarly, sub-section (2) begins with the words 'where the occupier of a factory is a company . Section 2( n ) of the Factories Act defines 'occupier' to mean the person who has ultimate control over the affairs of the factory. If we read this definition along with the provisions of section 100, it is obvious that the Legislature has clearly contemplated that the person referred to in the defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat where the owner or occupier of a factory is a company, the directors of a company cannot automatically be called 'occupier' merely by virtue of being directors of the company which owns or runs the factory within the meaning of section 2( n ) of the Factories Act. 16. It may be pointed out that the definition of 'occupier' in section 2( n ) of the Factories Act refers to the person 'who has ultimate control over the affairs of the factory and not 'affairs of the company . But even under the Companies Act so far as the affairs of the company are concerned, the ultimate control of the company will not lie with any particular director at all. The directors act collectively and they function collectively as a board of directors. We may refer to a passage from Gower's Principles of Modern Company Law, fourth edition, page 152, where the learned author has observed : 'Where powers are conferred on the directors under clauses such as those considered above, they are conferred upon the directors collectively as a board. Prima facie , therefore, they can be exercised only at a board meeting of which due notice has been given and at which a quorum is present . Mr. Tulzapurkar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed against them. Learned counsel submitted that necessary averments, when contained in the complaint alone can lead to prosecution of the petitioners, was woefully lacking. 8. Learned counsel for the respondent would state that the first accused-company had as many as 13 establishments and huge sums were owed by it. Even the employees contributions were not credited to the concerned provident fund account. The first accused-company and these petitioners had had the benefit of the funds and misused them. Learned counsel would submit that all the persons whose names are mentioned in Form No. 5(A) would fulfil the description of the word "employer". The names of the petitioners were found in Form No. 5A and they had been shown to be the owners/directors of the first accused-company. Learned counsel placed reliance on the decision of the hon'ble apex court in Srikanta Datta Narasimharaja Wodiyar v. Enforcement Officer, AIR 1993 SC 1656. 9. In the instant case, we find that the eighth accused specifically has been named as the manager in Form No. 5A. The contention of learned counsel for the respondent that all those whose names find mention in Form No. 5A either as owners/d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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