Case: Srikanta Datta Narasimharaja Wodiyarb Vs. Enforcement Officer, Mysore

2. Since common question of law arises in these 18 appeals for decision they are disposed of by a common judgment. The appellant is one of the Directors of M/s. Ideal Jawa (India) Ltd., Yadavgiri, Mysore a Private Ltd. Company established under the Companies Act. It was also registered under the Factories Act, 1948. Its object is to manufacture motor cycles and its accessories. It has its Managing Director, joint Managing Director and Directors including the appellant to manage the establishment. The respondent laid 18 complaints against six accused including the appellant(A-6) and the Company, employer, for their failure to deposit the contribution for the periods of October to December 1990 to the Provident Fund Account No. NK 2260 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 14-A of the Act read with para 76 of 1952 scheme. On the magistrates taking cognizance thereof the appellant laid criminal miscellaneous proceedings 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 in charge 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 of 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

Court's reasoning:
It is made mandatory to the employer to abide by the same and non-compliance therewith is liable for prosecution under Section 14-A of the Act. Section 14(1-A) relied on by Shri Nesargi relates to only liability for punishment for contravention or making default to comply with Section 6 or Section 17(3-A) insofar as it relates to the payment of inspection charges and para 38 of the Scheme insofar as it relates to payment of administrative charges. That has no application as regards the offence covered under Section 14-A by the companies are concerned. Accordingly we hold that the appellant having been declared himself as one of the persons in charges of and responsible for conduct of the business of the establishment or the factory, the complaint and non-compliance therewith having been enumerated in subsequent paras of the complaint, it was validly made against the appellant along with order accused for the alleged contravention. Necessary allegations bringing out the ingredient of offence have been made out in the complaint. Therefore, the learned Magistrate has rightly taken cognizance of the offence alleged against the appellant11. Employees State Insurance Corpn. v. Gurdial Singh 1991 (S1) SCC 204 : 1991 SCC(L&S) 833) is the case relating to an admission made by the prosecution that the Directors were not in charge nor are responsible for compliance with the provisions of the Employees State Insurance Act, 1948. "Admittedly the company had a factory and it is not in dispute that the occupier of the factory had been duly named. It is also not in dispute that it has a Manager too". In view of this admission the Directors were held not responsible for non-compliance with the provisions of the Employees State Insurance Act, 1948. The ratio therein, therefore, does not assist the appellant. Equally in Municipal Corpn. of Delhi v. Ram Kishan Rohtagi 1983 (1) SCC 1 : 1983 SCC(L&S) 833) for an offence under Prevention of Food Adulteration Act specific provisions of Food Adulteration Rules provide for nomination of occupier of Manager responsible for the production or manufacture of articles of food, etc. by the company and were nominated. Under those circumstances, this Court upheld the quashing of the proceedings against the Directors as the complaint did not contain necessary allegations constituting the offence against the Directors. The appeals are thus dismissed