IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.GIRI THURSDAY, THE 17TH JANUARY 2008 / 27TH POUSHA 1929 WP(C).No. 19531 of 2006(A) ---------------------------------------- PETITIONER: ------------------- T.C. KHALID, THEKKENCHERRY HOUSE, P.O. PALUVAYI, VIA. CHAVAKKAD, THRISSUR DISTRICT. BY ADV. SRI.K.JAJU BABU SMT.M.U.VIJAYALAKSHMI RESPONDENTS: ------------------------ 1. STATE OF KERALA, REPRESENTED BY SECRETARY TO GOVERNMENT, INDUSTRIES DEPARTMENT, GOVERNMENT SECRETARIAT, TRIVANDRUM. 2. SHRI E.SIVARAMAKRISHNAN, HOUSE NO.3, P.S.C. NAGAR, NEERAZHI LANE, ULOOR, TRIVANDRUM. *ADDL.R3 IS IMPLEADED: R3. STEEL INDUSTRIALS KERALA LTD., ATHANI P.O., THRISSUR, REPRESENTED BY ITS MANAGING DIRECTOR. (*ADDL.R3 IS IMPLEADED AS PER ORDER DTD.5/12/2007 IN I.A.NO.14291/06) **ADDL.R4 TO R7 ARE IMPLEADED: R4. THE REGIONAL DIRECTOR, EMPLOYEES STATE INSURANCE CORPORATION, REGIONAL OFFICE, ROUND NORTH, THRISSUR. Kss ...2/- ....2..... WPC.NO.19531/2006 A R5. THE REGIONAL PROVIDENT FUND COMMISSIONER, EMPLOYEES PROVIDENT FUND CORPORATION, SUB REGIONAL OFFICE, BHAVISHYANIDHI BHAWAN, KALOOR, KOCHI – 682 017. R6. THE REGIONAL PROVIDENT FUND COMMISSIONER, EMPLOYEES PROVIDENT FUND ORGANISATION, SUB REGIONAL OFFICE, ELANJIPALAM, KOZHIKODE. R7. THE SUB REGIONAL PROVIDENT FUND COMMISSIONER, EMPLOYEES PROVIDENT FUND ORGANISATION, FORT, KANNUR. (**ADDL.R4 TO R7 ARE IMPLEADED AS PER ORDER DTD. 16/01/2008 IN I.A.NO.783/08) R2 BY ADV. SRI.K.ANAND (A.201) SMT.LATHA KRISHNAN SRI.S.GOPAKUMARAN NAIR (SR.) SRI.S.GOWTHAM R4 BY ADV. SRI. SANKARANKUTTY NAIR BY SMT. T.N. GIRIJA, SC THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 17/01/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: Kss WPC.NO.19531/2006 A APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF G.O.(RT) NO.655/2001/ID. DTD. 18/07/2001 ISSUED BY THE 1ST RESPONDENT. EXT.P2: COPY OF G.O.(RT) NO.597/04/ID DTD. 21/06/04 ISSUED BY THE 1ST RESPONDENT. EXT.P3: COPY OF G.O.(RT) NO.708/05/ID DTD. 1/08/05 ISSUED BY THE 1ST RESPONDENT. EXT.P4: COPY OF LIST OF PENDING CASES AGAINST THE PETITIONER BEFORE DIFFERENT COURTS THROUGHOUT THE STATE. EXT.P5: COPY OF REPRESENTATION SUBMITTED BY THE PETITIONER BEFORE THE HON'BLE MINISTER FOR INDUSTRIES DTD.5/07/06. EXT.P6: COPY OF G.O.(RT) NO.793/06/ID DTD. 21/07/06 ISSUED BY THE 1ST RESPONDENT. EXT.P9: COPY OF C.C.NO.931/2005 FILED BEFORE THE JUDICIAL MAGISTRATE OF FIRST CLASS, CHERTHALA.(I.A.NO.279/2008) /TRUE COPY/ P.A.TO JUDGE Kss V.GIRI,J. ------------------------- W.P ( C) No. 19531 of 2006 -------------------------- Dated this the 17th January, 2008 J U D G M E N T Peculiar facts are involved in this writ petition and therefore it has become necessary to adopt an unusual approach to resolve the dispute involved in this writ petition. 2. Petitioner was appointed as Managing Director of the Additional 3rd respondent Company, as per Exhibit P1 Government Order, which was extended under Exhibits P2 and P3. The 3rd respondent company has been running at a loss for more than three years, according to the petitioner. There is no serious dispute on the fact that the 3rd respondent has been running at a loss for the past many years. Apparently, the 3rd respondent also defaulted payment of statutory dues to the Employees State Insurance Corporation and Employees Provident Fund Board. 3. Petitioner’s services in the 3rd respondent company was dispensed with, as evidenced by Exhibit P6 order, though he had sought for an extension from 18.7.2006. After that the W.P ( C) No. 19531 of 2006 2 2nd respondent was appointed as the Managing Director in the place of the petitioner 4. Petitioner submits that he sought for an extension for two years essentially on account of the fact that he was facing criminal prosecutions in several complaints lodged by the Employees Provident Fund Commissioner and the Employees' State Insurance Corporation, against the 3rd respondent Company. Petitioner was arrayed as an accused on account of the fact that he was the Managing Director during the relevant period. Petitioner submits that he has been facing prosecutions by the above-mentioned two statutory authorities in as many as 49 criminal prosecutions pending before different Magistrate Courts in the State. He would be in a position to defend himself, for his Official acts, only if he is permitted to continue as the Managing Director of the 3rd respondent for a reasonable period, till the cases are over. He points out that at least 14 cases had ended in conviction and he was sentenced to pay fine along with imprisonment till the rising of the court. There are 36 other prosecutions currently pending. W.P ( C) No. 19531 of 2006 3 5. Learned counsel for the petitioner Mr. Jaju Babu submits that he is the accused in 36 criminal prosecutions only because he was the Managing Director of the Company. Prosecution involves statutory offences arising from the failure or negligence on the part of the 3rd respondent Company to remit the statutory dues to the Provident Fund Commissioner as also to the E.S.I. Nevertheless, there does not seem to be a provision for substituting the petitioner with the present Managing Director. In other words,even without having any involvement in the affairs of the Company the petitioner is still required to defend himself in 49 cases involving offences arising from the default on the part of the Company in paying amounts to statutory authorities. There was no independent contributory act on the part of the petitioner, resulting in such prosecutions. 6. The facts pleaded by the petitioner no doubt, show a picture revealing considerable hardship and difficulty faced by the petitioner for no fault of his. Apart from the expenditure which he has to incur for defending those prosecutions in court, the hardship that is caused to him in appearing before five different Magistrates on several days in a month can also be W.P ( C) No. 19531 of 2006 4 imagined. These are the peculiar facts which I have adverted to in the opening portion of the judgment. 7. Amounts due to the statutory authorities will have to be paid by the Company and the persons responsible for the conduct of the affairs of the company. The poor financial position of the Company as such may not be an excuse for exoneration from liability. Company will have to find its resources to meet its statutory obligations. 8. After having heard the learned counsel for the petitioner Mr. Jaju Babu, the learned standing counsel for the Employees State Insurance Corporation as also the Provident Fund Commissioner and the learned Senior Government Pleader Mr. Nandakular and taking note of the factors mentioned above, this writ petition is disposed of in the following terms: i) Petitioner may file a representation before the 1st respondent pointing out the aspects mentioned in this writ petition with reference to the fact that there are still 36 criminal prosecutions faced by him at the instance of the Provident Fund Commissioner and E.S.I Corporation. The details of the cases may also be incorporated in the representation. W.P ( C) No. 19531 of 2006 5 ii) On receipt of such representation, the 1st respondent shall ascertain the amounts necessary for enabling payment of the statutory dues by the 3rd respondent Company in favour of the Employees' Provident Fund Commissioner and E.S.I. The authorised representatives of the said two statutory authorities may also be requested to attend a meeting to be convened in that regard by the 1st respondent. This shall be done within three months from the date of receipt of the representation from the petitioner. iii) The 1st respondent shall prepare a schedule for payment of statutory dues by the 3rd respondent. Directions, if any, issued by the 1st respondent in that regard shall be binding on the 3rd respondent Company. In the facts and circumstances of the case, taking note of the directions issued in this judgment, additional respondents 4 to 7 shall file petitions before the concerned learned Magistrate in the respective complaints lodged by them for dispensing with the personal appearance of the petitioner in those criminal complaints where he is the accused till the Government passes an order. Government shall pass an order in this regard , within W.P ( C) No. 19531 of 2006 6 a period of one year from the date of receipt of a copy of this judgment. The motion for dispensing with the personal appearance of the petitioner/accused in criminal prosecutions being faced by him is to be made by additional respondent 4 to 7, keeping in mind the abovementioned time frame. If the statutory dues to the Employees' State Insurance Corporation and Provident Fund Board are paid by the 3rd respondent, pursuant to the efforts to be taken by the Government in that regard, respondents 4 to 7 may consider making an appropriate motion before the respective Magistrate for compounding the offences in terms of the provisions of the E.S.I Act and the EPF Act read with the relevant provisions of the Criminal Procedure Code. (V.GIRI, JUDGE) ma W.P ( C) No. 19531 of 2006 7 K.THANKAPPAN,J CRL.A. NO.92 OF 1999 ORDER W.P ( C) No. 19531 of 2006 8 25th May, 2007