D.P. Hiremath, J.
1. These petitions are taken up for final hearing at the admission stage itself with the consent of both learned counsels.
2. These criminal petitions arise out of eighteen independent complaints filed by the respondent-Enforcement Officer, Mysore Division against the present petitioner and five others for offences under paragraph 76 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the 'Act'), Employees' Provident Fund Scheme, 1952 and Employees' Family Pension Scheme, 1971 and Employees' Deposit-Linked Insurance Scheme, 1976 before the Judicial Magistrate First Class, II Court, Mysore. As the accused persons named in the complaints, the complainant and the provisions under which such defaults could fee punished are the same, these petitions are disposed of by this common order. Sections 14(1-A) and 14-A of the Act are the relevant provisions as also Section 14-AC of the Act. These contributions relate to different months of the year 1990 and it was the Regional Provident Fund Commissioner who accorded sanction under Section 14-AC of the Act to prosecute the employers for these different offences. The establishment called M/s. Ideal Jawa (I) Ltd., Yadavagiri, Mysore which is registered as a factory under the Factories Act, has the Managing Director, General Manager and the Directors to run the establishment. On these complaints the trial Court of the Judicial Magistrate First Class, Mysore took cognizance and issued process to the accused persons named in the complaints. Out of them the present petitioner is Accused No. 6. In para 3 of the complaint which is the same in all of them the complainant has alleged thus:
"That Accused Nos. 2 to 6 are the persons in-charge of the said establishment and responsible to it for the conduct of its business. They are thus required to comply with all the provisions of the said Act, and the scheme in respect of the said establishment".
The rest of the paragraphs are with regard to the amount due from Accused-1 the Factory and the defaults committed. Being aggrieved by the order of the trial Magistrate taking cognizance of the offences in all these cases the petitioner has challenged the same contending that there are no averments in these complaints that he was in-charge of the establishment and responsible for day-to day business of the factory. Because these material allegations are totally absent in these complaints the trial Magistrate could not have taken cognizance of the offences against him. As the complainant is a public servant being Enforcement Officer, on receipt of the complaints, the trial Magistrate appears to have taken cognizance dispensing with his examination under Section 200, Cr. P.C. and issued process.
3. Section 14-A of the Act which is common to all these schemes under which according to the complainant the default has been committed reads as follows :-
"14-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 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.
(2) Notwithstanding anything contained in Sub-section (1), were an offence under this Act, the scheme or the Family 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."
Explanation: For the purposes of this section,-
(a) "company" means any body corporate and includes a firm and other association of individuals; and
(b) "director" in relation to a firm, means a partner in the firm".
It would thus be seen that there should be an allegation that at the time the offence was committed the petitioner along with others was in-charge of and was responsible to the company for the conduct of the business of the company. The word 'employer' as defined under Section 2(e) reads as follows.
"2(e) "employer" means- :
(i) in relation to an establishment which is a factory, the owner or occupier of a 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 Section 7 of the Factories Act, 1948 (63 of 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."
Thus, this word 'employer' embraces the owner or occupier as the case may be as well as the manager of the factory referred to thereunder. This word 'employer' assumes importance in view of paragraph 38 of the Employees' Provident Funds Scheme, 1952. Under that paragraph it is mandatory for the employer to deduct the employee's contribution from his wages which together with his own contributions as well as an administrative charge of such percentage of the pay for the time being payable to the employees other than an excluded employee etc., shall be the contribution to be made by the employer. Similar is the provision in Employees' Family Pension Scheme, 1971 as well and in all these schemes the word 'employer' is common when the liability to make contributions is sought to be fastened.
4. It is urged for the petitioner that paragraph 4 of these complaints do not in any way allege that this petitioner was incharge of or responsible for the conduct of the business. According to the counsel appearing for the petitioner unless the complaint makes specific averment of this fact, the Magistrate could not have taken cognizance of the offences alleged.
5. Reference has been made to some of the decided cases and among them is the one in the case of Municipal Corporation of Delhi v. Ram Kishan . Referring to the decision of the Supreme Court in the case of Sharda Prasad Sinha v. State of Bihar it was observed at para 10 of the report that it is manifestly clear that proceedings against an accused in the initial stages can be quashed only if on the face of the complaint or the papers accompanying the same, no offence is constituted. The test is that taking the allegations in the complaint as they are, without adding or subtracting anything, if no offence is made out then the High Court will be justified in quashing proceedings in exercise of its powers under Section 482 of the Code. In that case there was no clear averment of the fact that the directors were really in-charge of the manufacture and responsible for the conduct of business but the words 'as such' indicate that the complainant had merely presumed that the directors of the company must be liable because they were holding a particular office. It was averred in the case before the Supreme Court that accused No. 3 was the manager of accused No. 2, accused Nos. 4 to 7 were the directors of accused No. 2 and as such they were in-charge of and responsible for the conduct of business of accused No. 2 at the time of sampling. This is how the Supreme Court referred with emphasis to the word 'as such' occurring, in the complaint allegation thus giving scope to argue that, it was inferential in nature or the complainant proceeded with an assumption that they were responsible for the conduct of business of accused No. 2 by reason of their directorship. Referring in particular to the averment with regard to the directors the Supreme Court pointed out that there is not a whisper nor a shred of evidence nor anything to show apart from the presumption drawn by the complainant that there is any act committed by the directors from which a reasonable inference can be drawn that they could also be vicariously liable. In the case of Shrenikraj and Ors. v. Labour Officer, Raichur, the complainant did not
disclose that any of the petitioners arrayed as accused was incharge of or was responsible to the firm for the conduct of the business of the firm. The firm was not arrayed as an accused. All that was stated in the complaint was that the petitioner was present when the Inspector had visited the office of the firm and called upon him to produce the registers required to be maintained. That has a very important bearing on the propriety of the Magistrate taking cognizance of the offence on that complaint. Section 29 of the Payment of Bonus Act, 1965 under which the case arose provided that if a person committing an offence under the Act 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. It, therefore, follows that merely arraying the partners of the firm was not sufficient. The complainant must also state that one or the other of the partners of the firm arrayed as accused in the complaint was in-charge of and was responsible to the firm for conduct of the business of the firm at the time the offence was committed. Even in the case of Sham Sundar v. State of Haryana the Supreme Court again pointed out that more often it is common that some of the partners of a firm may not even be knowing of what is going on day to day in the firm. There may be partners, better known as sleeping partners who are not required to take part in the business of the firm. There may be ladies and minors who were admitted for the benefit of partnership. They may not know anything about the business of the firm. It would be a travesty of justice to prosecute all partners and ask them to prove under the proviso to Sub-section (1) of Section 10 of the Essential Commodities Act of 1955 that the offence was committed without their knowledge. It was significant to note that the obligation for the accused to prove under the proviso that the offence took place without his knowledge or that he exercised all due diligence to prevent such offence arises only when the prosecution establishes that the requisite condition mentioned in Sub-section (1) is established. Even in the case of State of Karnataka v. Pradeep Chand, the view taken is the same. Learned counsel for the petitioner has also referred to the decision in Naktala Iron Works v. State of West Bengal 1978 LIC at page 899 and of the Judicature of Calcutta High Court in Crl. Rev. Petition No. 764/1986 in the case of Bluban Mohan Bose v. The State. Relying on these decisions it has been urged for the petitioner that unless there is a specific averment in the complaint that this petitioner was incharge of or was responsible for the conduct of the business, the trial Court could not have taken cognizance of the offence against him.
6. Respondent's counsel does not dispute this proposition. On the other hand he has referred to the complaint allegations as also to some documents produced as annexures to the complaints and has urged that there is a clear averment in para 3 of the complaints with regard to the responsibility of the accused persons and even Accused-1-factory had sent certain particulars in the prescribed Form to show who are all incharge of the factory and responsible for its business. Material among them are the particulars sent by the Administrative Officer for Accused-1, dated 30.4.1986 in Statutory Form No. 5-A under paragraph 36-A of the Employees' Provident Funds Scheme, 1952. Paragraph 36-A reads:
"36-A. Employer to furnish particulars of ownership.- Every employer in relation to a factory or other establishment to which the Act applies on the date of coming into force of the Employees' Provident Funds Scheme, 1961, or is applied after that date, shall furnish in duplicate to the Regional Commissioner in Form No. 5-A annexed hereto particulars of all the branches and departments, owners, occupiers, directors, partners, manager or any other person or persons who have the ultimate control over the affairs of such factory or establishment and also send intimation of any change in such particulars, within fifteen days of such change, to the Regional Commissioner by registered post and in such other manner as may be specified by the Regional Commissioner:
Provided that in the case of any employer of a factory or other establishment to which the Act and the Family Pension Scheme, 1971, shall apply the aforesaid form may be deemed to satisfy the requirements of the Employees Family Pension Scheme, 1971, for the purpose specified above."
Thus, there is statutory obligation on the employer to furnish particulars of ownership and other particulars required therein and Form No. 5-A is the prescribed Statutory Form. Col No. 8 refers to particulars of owners in which the name of the petitioner finds place in SI. No. 4 and it shows that he was the director from 7.6.1971. Col. No. 11 is more material for our purpose and it reads:
"Particulars of the persons mentioned above, who are in-charge of, and responsible, for the conduct of the business of the establishment".
7. With regard to these particulars what is stated in Col. No. 11 is "Same as per the details mentioned in Item No. 8". Col. No. 10 relates to the Manager or occupier and occupier's name is shown as N.K. Irani and Manager's name as S. Darashah. These are all independent columns and Col. No. 8 requires the employer to furnish particulars regarding owners and Col. No. 11 refers to the same details as in Col. No. 8. According to the respondent's counsel there is sufficient allegation in the complaint as these annexures are part of the complaint and on their own showing Accused-1 company has informed concerned authority that petitioner-Accused No. 6 among others was the owner and was also in-charge of and responsible for the conduct of the business of the establishment. My attention was also drawn to the show-cause notice dated 5.3.1991 calling upon the persons responsible to make contributions and below this show-cause notice there are names of the persons to whom they were sent and out of them at Sl. No. 6 is the name of present petitioner. However, petitioner's counsel invited my attention to certain acknowledgments produced for having received these show-cause notices and they are from B.S. Irani, R.S. Irani and Ideal Jawa (I) Ltd. Therefore, according to the petitioner's counsel there is no acknowledgment from the petitioner at all. Reply of the respondent s counsel is that though some of the acknowledgments are not produced the show-cause notices which were sent to all these accused persons were the same and allegations were the same in each of such notices. Whatever claims are made in these complaints are stated therein and therefore when notice has been issued to the present petitioner as well, according to him he is also alleged to have been in-charge of the factory or responsible for the conduct of the business of the factory. It would be a matter of evidence if he was duly served. It is also argued that during trial the factory would inform the Court who had sent these particulars and in what circumstances but prima facie as the records stand there is sufficient material to show that the very factory had informed the Provident Fund Commissioner who were all owners and who were all responsible for the conduct of the business of establishment including the present petitioner. I do find sufficient force in the argument of the respondent's counsel that, though there is no specific averment as to how this petitioner was taking part either in the business or in the management of the establishment the statement in statutory Form Prima facie shows that he was also one of those directors or persons mentioned therein to be responsible for the conduct of the business of the factory and was in-charge of the same. These are the papers accompanying the complaints) as referred to by the Supreme Court in the case of Sharda Prasad Sinha (supra) and the same along with the complaint allegations should form material for consideration to take cognizance of the offence against the petitioner and others. These constitutes sufficient grounds to proceed against him as required under Section 204(1) Cr.P.C., I do not find that the learned magistrate committed any error in taking cognizance of the offences against the petitioner.
These petitions therefore fail and they are dismissed.
Keep a copy of this order in each of the petitions.