TMI Blog1993 (5) TMI 190X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Provident Fund Account No. NK2260 under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, for short 'the Act', Employees' Provident Funds Scheme, 1952, Employees' Family Pension Scheme, 1971 and Employees' Deposit-Linked Insurance Scheme, 1976, for short 'the Schemes' punishable under Section 14A of the Act read with para 76 of 1952 scheme. On the Magistrate's taking cognizance thereof, the appellant laid Crl. M.Ps. in the High Court to quash the complaints as they do not contain the relevant averments constituting the offences against the appellant. It is his case that he is a mere Director of the Company. He was neither Incharge of the Company, nor is responsible to comply with the provisions of the Act and the Schemes. In support thereof he placed reliance on the definition 'employer' and the liability has been fastened on the Managing Director or the Manager or occupier of the establishment to abide by the Act and the Schemes. The High Court by its order dated March 3, 1992, dismissed the applications. Thus these appeals. 3. Sri Nesargi, learned Sr. counsel for the appellant contended that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n who is incharge or responsible for in management or ultimate control over the affairs of the factory or establishment. In the event of entrustment to a Managing Agent, such Managing Agent shall also be deemed 'to be the occupier of the factory'. Section 6 fastens the obligation on the employer in this behalf. It postulates that the contribution shall be made by the employer to the Fund and shall be 8-1/3% of the basic wages, dearness allowances and retaining allowances, if any, for the payment being payable to each of the employees, whether employed by him directly or through a Contractor. The employee's contribution shall be equal to the contribution payable by the employer in respect of him, etc. in its application to any establishment or class of establishments. Other provisions are not relevant, hence they are omitted. Under para 30 of the Employees' Provident Fund Scheme, 1952 and the other Schemes, the employer shall deposit the contribution to the Fund. 6. Under para 36A of the Scheme the employer is enjoined to furnish particulars of the ownership of the factory which provides thus: 36-A. Employer to furnish particulars of own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifies particulars thus: 'Particulars of the persons mentioned above, who are Incharge of, and responsible for the conduct of the business of the establishment'. Therein it was stated that as per the details mentioned in item 8 . As stated earlier in column 8 the names of the Managing Director, the Joint Managing Director and two Directors including the appellant have been mentioned. 9. Section 14A which is penal states thus: A. Offences by Companies: - (1) If the person committing an offence under this Act, the Scheme or the Family Pension Scheme or the Insurance Scheme in a company, every person who at the time the offence was committed was Incharge 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 offences 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and are responsible for conduct of its business. They are thus required to comply with all the provisions of the Act and the Schemes in respect of the said establishment . It is made mandatory to the employer to abide by the same and non-compliance thereof is liable for prosecution under Section 14A of the Act. Section 14(1-A) relied on by Sri Nesargi relates to only liability for punishment for contravention or making default to comply with Section 6 or Section 17(3-A) in so far as it relates to the payment of inspection charges and para 38 of the Scheme in so far as it relates to payment of administrative charges. That has no application as regards the offence covered under Section 14A by the companies are concerned. Accordingly we hold that the appellant having been declared himself as one of the person Incharge of and responsible for conduct of the business of the establishment or the factory, the complaint and non-compliance thereof having been enumerated in subsequent paras of the complaint, it was validly made against the appellant along with other accused for the alleged contravention. Necessary allegations bringing out the ingredient of offence have been made out in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aragraph 36A of the Provident Fund Scheme framed by Central Government under Section 5 of the Act requires the employer in relation to a factory or other establishment to furnish Form 5A mentioning details of its branches and departments, owners, occupiers, directors, partners, managers or any other person or persons who have ultimate control over the affairs of the factory or establishment. The purpose of giving details of the owners, occupiers and directors etc. is not an empty formality but a deliberate intent to widen the net of responsibility on any and every one for any act or omission. It is necessary as well as in absence of such responsibility the entire benevolent scheme may stand frustrated. The anxiety of the Legislature to ensure that the employees are not put to any hardship in respect of Provident Fund is manifest from Section 10 and 11 of the Act. The former grants immunity to provident fund from being attached for any debt outstanding against the employee. And the latter provides for priority of provident fund contribution over other debts if the employer is adjudged insolvent or the company is winded up. Such being the nature of provident fund any violation or bre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extend the liability for any offence by any person including a partner by virtue of explanation if he was in charge or was responsible to the company at the time of committing the offence. The expression, 'was in charge of and was responsible to the company for the conduct of the business 'are very wide in their import. It could not, therefore, be confined to employer only. The employer is defined by Section 2(e) to mean, (e). - 'employer' means - (i) in relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and, where a person has been named as a manager of the factory under Clause (f) of Sub-section (1) of the Section 7 of the Factories Act, 1948, the person so named; and (ii) in relation to any other establishment, the person who, or the 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; Both Clauses ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
