IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 29TH DAY OF AUGUST 2019 BEFORE THE HON’BLE MR. JUSTICE JOHN MICHAEL CUNHA WRIT PETITION NOS.42758-759 OF 2015(GM-RES) BETWEEN:
1. M/S ADITHYA BIRLA NUVO LTD (UNIT: MADURA CLOTHING ) NO.52/2, BILVARDA HALLI, JIGANI HOBLI, ANEKAL TQ BENGALURU-560083 REPRESENTED BY ITS: AUTHORIZED SIGNATORY MR VIKAS AGARWAL 2. M/S ADITYA BIRLA NUVO LTD (UNIT: MADURA CLOTHING ) NO.52/2, BILVARDA HALLI, JIGANI HOBLI, ANEKAL TQ BENGALURU-560083 REPRESENTED BY ITS:
MR PREMJIT C K GENERAL MANAGER ... PETITIONERS (BY SRI: S.N. MURTHY, SENIOR ADVOCATE A/W SRI: ANAND K R, ADVOCATE) AND 1. THE ENFORCEMENT OFFICER EMPLOYEES PRIVIDENT FUND ORGANISATION SUB REGIONAL OFFICE, BOMMASANDRA BHAVISHYANIDHI BHAWAN, ANNAPOORNESHWARI COMPLEX SY NO.37/1, 6TH MAIN SINGASANDRA, BENGALURU-560068 2. THE REGIONAL P.F. COMMISSIONER-II EMPLOYEES PROVIDENT FUND ORGANISTATION (MINISTRY OF LABOUR, GOVERNMENT OF INDIA) SUB REGIONAL OFFICE, BOMMASANDRA ‘BHAVISHYANIDHI BHAWAN’, ANNAPOORNESHWARI COMPLEX SY NO.37/1, 6TH MAIN SINGASANDRA, BENGALURU-560068 3. THE UNION OF INDIA REPRESENTED BY ITS SECRETARY LABOUR SHRAM SHAKTI BHAWAN RAFI MARG NEW DELHI-110001 ... RESPONDENTS (BY SMT: NANDITA HALDIPUR, ADVOCATE FOR R1 & R2 SRI: C.SHASHIKANTH, ASG FOR R3) THESE WRIT PETITIONS ARE FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA R/W SECTION 482 OF THE CODE OF CRIMINAL PROCEDURE PRAYING TO QUASH THE SANCTION ORDER DTD:23.04.2015 AT ANNEXURE-C AND ALSO BE PLEASED TO QUASH SECTION 14(2-A) OF THE EMPLOYEES PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 IN SO FAR AS THE PUNISHMENT OF COMPULSORY IMPRISONMENT IS CONCERNED HOLDING SECTION 14(2-A) AS ULTRA VIRES OF THE CONSTITUTION.
THESE WRIT PETITIONS COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:-
O R D E R Heard learned Senior counsel for petitioners, learned counsel for respondent Nos.1 and 2 and learned Assistant Solicitor General of India for respondent No.3.
2. Learned counsel for petitioners files a memo giving up the relief insofar as the challenge to the constitutional validity of section 14(2A) of The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (for short ‘the Act’). Memo is placed on record.
3. In view of the said memo, prayer relating to challenge to the Act stands deleted.
4. The contention of the learned counsel for petitioners is that the facts alleged against the petitioners make out the ingredients of the offence under para 76 (b) of the Employees’ Provident Funds Scheme, 1952(for short ‘EPF scheme’), whereas the petitioners are sought to be prosecuted under section 14(2A) of the Act, which is legally untenable and is liable to be quashed.
5. Learned counsel for respondent Nos.1 and 2 while disputing the above contentions pointed out that the petitioners are sought to be prosecuted not only for the violations under section 14 (2A) of the Act, but also for the alleged violation of para 36A of EPF Scheme r/w para 36(7) and para 76(b) of the EPF Scheme as per the order dated 25.02.2015 produced at Annexure-R4 and therefore, there is no illegality in the prosecution of the petitioners.
6. It is seen from the records that the charge against the petitioners is that the petitioners herein failed to send the change of ownership in Electronic forms. Requirement to send change in electronic forms is prescribed in para 36A of the EPF Scheme, which reads as under:-
“36A. 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 (Tenth Amendment) Scheme, 1961, or is applied after that date shall furnish [in duplicate] to the Regional Commissioner in Form No.5A annexed hereto, (particulars of all the branches and departments, owners], occupiers, directors, partners, manage 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 Employees’ 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:] [Provided further that above mentioned details shall be furnished by the employer in the electronic format also, in such form and manner as may be specified by the Commissioner.] 7. Non-compliance of said requirements is made punishable under para 76 of the EPF scheme which reads as under:-
“76. Punishment for failure to pay contribution, etc-If any person— (a) deducts or attempts to deduct from the wages or other remuneration of a member the whole or any part of the employer's contribution, or (b) fails or refuses to submit any return, statement or other document required by this Scheme or submits a false return, statement or other document, or makes a false declaration, or (c) obstructs any Inspector or other official appointed under the Act or this Scheme in the discharge of his duties or fails to produce any record for inspection by such Inspector or other official, or (d) is guilty of contravention of or non- compliance with any other requirement of this Scheme.
he shall be punishable with imprisonment which may extend to [one year, or with fine which may extend to four thousand rupees], or with both.
8. From the reading of the above provision, it is clear that it is a self-contained provision, which not only defines the offence, but also provides for punishment. Since the petitioners are alleged to have violated the provisions of para 36A of the EPF Scheme, petitioners were required to be proceeded only under Para 76(b) of EPF scheme which provides for a punishment with imprisonment which may extend to one year or with fine of Rs.4,000/- or with both. But sanction has been accorded for prosecution of the petitioners under section 14(2A) of the Act r/w 76(b) of the EPF Scheme. Section 14(2A) of the Act reads as under:-
“14(2A). Whoever, contravenes or makes default in complying with any provision of this Act or of any condition subject to which exemption was granted under section 17 shall, if no other penalty is elsewhere provided by or under this Act for such contravention or non-compliance, be punishable with imprisonment which may extend to six months, but which shall not be less than one month, and shall be liable to fine which may extend to five thousand rupees.
9. It is not the case of the respondents that the petitioners have contravened any of the provisions of the Act, rather, the specific case of the respondents is that the petitioners have violated the provisions of the EPF Scheme. It is also not the case of the respondents that the petitioners were exempted under section 17 of the Act. Under the said circumstances, there was no scope for respondent Nos.1 and 2 to proceed against the petitioners under section 14(2A) of the Act. In that view of the matter, the contention urged by learned counsel for the petitioners deserves acceptance. Consequently, it has to be held that the prosecution of the petitioners under section 14(2A) of the Act is liable to be quashed and is accordingly quashed. The prosecution of the petitioners shall be continued only under para 76(b) of EPF Scheme.
Accordingly, the petitions are disposed of.
Sd/- JUDGE *mn/-