Case: State Vs. Girdharlal Bajaj &amp; Another

2. The complainant, was employed sometime in 1941 as a Manager in the New Pralhad Mills. The company commenced a provident Fund Scheme and appointed Trustees of the Provident Fund on the 1st of April 1949. Thereafter, the New Pralhad Mills was sold to a company known as the Amrit Banaspati and Co. Ltd. on 1st July 1951, and the latter Company were appointed their managing agents in 1952. The respondents Nos.1 and 2, who were the accused before the trial Court, are the General Manager and the Chairman of the Amrit Banaspati and Co. Ltd. It is also not in dispute that consequent upon the taking over of the New Pralhad Mills by the Amrit Banaspati and Co. Ltd. the accused, who were the principal officers of the company, became trustees of the Provident Fund of the New Pralhad Mills, which was transferred to the Amrit Banaspati and Co. Ltd.3. The services of the complainant were for a time continued by the Amrit Banaspati and Co. Ltd. On 29th May 1957, however the complainant was informed that he was dismissed from service of the New Pralhad Mills as from 31st May 1957.4. There is some dispute between the parties as to whether the complainant was, in fact, dismissed from service or whether his services were merely terminated. But that dispute is not really germane to the point for decision in this appeal, and we shall without prejudging the issue refer to if as a dismissal.5. Consequent upon his dismissal, the complainant, on 28th March 1959, addressed a letter, through his attorneys, to the Trustees of the Amrit Banaspati Co. Ltd., who were holding the Employees Provident Fund of the New Pralhad Mills. That letter is Ex.B. The complainant requested to that letter that he should be furnished with a statement of account of his Provident Fund Account, as the last statement, which had been submitted to him, was for the financial yearsThe complainants attorneys also asked the Trustees "please also give us an appointment for inspection of the securities in which the trust funds are invested by you as Trustees. Please note that if the aforesaid requisitions are not complied with as stated aforesaid, we have instructions to take immediate proceedings in the matter." This letter was signed by the complainants attorneys.6. On behalf of the accused and the Trustees of the Amrit Banaspati Co. Ltd., a reply was sent on the 18th of April, 1959 to the complainants letter, wherein the company and the Trustees declined to give inspection as required and, on the other hand, they took the stand that "Since your client was dismissed from the service of the company on account of misconduct, he is entitled to his contribution to Provident Fund only. Under the rules, he is not at all entitled for the companys contribution." It is clear that no specific reply was given to the complainants demand for inspection of the securities in which the trust funds were invested.7. The complainant filed the present complaint on 22nd of April 1959. He alleged breaches on the part of the two accused, who were Trustees of the Provident Fund, under section 420 of the Indian Companies Act. He also charged the accused under section 406 of the Indian Penal Code.8. The view which the Additional Chief Presidency Magistrate has taken is that the complainant was not dismissed from the service of the New Pralhad Mills, but that his services were merely terminated with effect from the 31st of May 1957; but in any case he had become a past employee of the company and having regard to the provisions of sections 417 to 420, and particularly of section 420, of the Indian Companies Act, he, as a past employee, was not entitled to the inspection which he had claimed. The Additional Chief Presidency Magistrate held that the word "employee" in section 419 can have reference only to a person who was employed under contract of service and that upon the termination of the contract he had ceased to be an employee within the meaning of section 419 of the Indian Companies Act.

Court's reasoning:
9. The right which section 419 of the Indian Companies Act, confers upon the employee to see the Banks receipt for moneys or securities pertaining to his Provident Fund Account, is conferred upon him by theLooking to the language used in Sec.419, it would appear that the words of the section would ordinarily admit of no doubt of difficulty and that when the section uses the word "employee", it means an employee.The decision to which we have just referred undoubtedly laid down that the words of a statute, when there is doubt about their meaning are to be understood in the sense in which they best harmonise with the subject of the enactment and the object which the Legislature has in view. Their meaning is to be found not so much in a strictly grammatical or etymological propriety of language, nor even in its popular use, as in the subject or the occasion on which they are used, or the object to be attained.The passage which we have juststates the exception and not the general rule. The passage itself indicates that the first and cardinal rule of construction of a statute is to give effect to the words of the statute; but that it is only in exceptional cases where there is any doubt or difficulty as to the interpretation of the statute or any word thereof, that the Court can legitimately look to the object of the enactment or in the purpose for which it was made.12a. We have already observed that upon a plain reading of section 419 of the Indian Companies Act, 1956, it would appear that there is no such doubt orwill be clear from the passage which we have quoted above, that the decision in Wilkinsons case (1948) 1 KB 721 turned upon the particular provisions of the statute which fell to be construed in that case, namely, the Local Government Act, 1937, and it was because that Court found in the statute itself an indication that the word "contributory employee" could include anor past employee that they interpreted the word "employee" as having the same connotation. That is not the position here so far as the provisions of the Indian Companies Act are concerned. Neither do the words "contributory employee" occur in the Indian Companies Act; nor is the word "employee" anywhere defined. Moreover, their is no other indication in the Act that when the Legislature used the word "employee," they might have intended to refer to anor past employee. Therefore, it can be given only its normalseems to us that the word "employee" as used in section 419 of the Indian Companies Act, has been used into the word "employer" and that in the use of the word "employee" the legislature contemplated the existence of a relationship of master and servant or what is the same thing between the employer and the employee. Obviously, an employee would be a person under the control of the employer and would be bound to obey the orders of the employer not only as to the work which he shall execute, but also as to the details of the work and the manner of its execution. The attributes of an employee have been stated with clarity in Diamonds Law of Master and Servant, Second Edition, at pages 1 and 2. The word "employee" used in section 419 cannot, in our opinion, in the absence of anything contained in the section itself, or in the statute, carry any higher or other meaning. It seems to us then that there is no doubt or difficulty here as to the interpretation of the word "employee" used in section 419 and, so it is not necessary to go back to a consideration of the scope and object of theargument, is no doubt well taken but cannot affect the question of interpretation. Moreover, it seems to us that when sections 417, 418, 419 and 420 of the Indian Companies Act, were enacted, thenotions of social justice between employer and employee were not the same and it is conceivable that the legislature may have thought that upon termination of the contract of service the employee should be relegated to his normal remedies of a suit and the normal remedies which the employee has to safeguard the payment of provident fund amount pending his suit, such as are given to him by the Code of Civil Procedure. It seems to us that the legislature contemplated that it would be a serious inroad upon the rights of the employer to permit the employee who has ceased to be an employee, to inspect the securities and Bank receipts for moneys of his former employer. If is not as if the employee whose contract of service has been terminated would be entirely without a remedy. Upon the termination of his services, his right would be an immediate right to the receipt of the provident fund amount, whereas during the continuance of his contract of service he has no right to recover the provident fund amount from the employer or the trustees. Hence, the difference in the remedies made available to the employee and the consequent difference in the right toneed not decide these contentions because of the view which we have taken of the provisions of Sec.419 itself if that the word "employee" means an employee as such and not anor past employee or a person whose contract of service has been put an end to.17. In the course of the arguments at the Bar it was alleged, but controverted, that the employers to this case have not set apart the amounts of the contribution of their employees, nor kept or deposited them in a special account, but that, on the other hand, the trustees have permitted the moneys and securities to be utilised by the company for its own purposes. In view of these allegations, when the matter came up before us at the last hearing on 10th February 1961, we had ordered the respondents 1 and 2, who were admittedly trustees of the Provident Fund, to file an affidavit stating whether the amount of the provident fund of its employees has been set apart in a separate account or not and whether it was separately invested or not and if invested in what securities. We had also asked them to furnish a statement showing the date from which the provident fund amount had been kept apart and/or invested. While, no doubt, Mr. Amin had contended at the hearing that he was not in a position to state whether an affidavit would be filed or not, Mr. Shellim Samuel has stated before us today that in spite of an intimation to respondents Nos.1 and 2, they do not intend to file such an affidavit. The refusal on the part of the respondents Nos.1 and 2 to place the facts before the Court undoubtedly indicates that in all probability they have not complied with the provisions of section 417(1) and (2) and that that is the reason why a clear affidavit could not be filed by them.