Criminal Application No. 1026 of 1989

13th December, 1995

Petitioner Counsel: Ms. JYOTI PINGALE for Shri P.K.DHAKEPHALKAR
Respondent Counsel: Shri. R.Y.MIRZAShri H.V.MEHTA

Cases Cited:
1) J.T.1995(7) SC 299 [Para 6,8]

JUDGMENT

JUDGMENT :- This is a Petition under Section 482 of the Code of Criminal Procedure and under Article 227 of the Constitution of India for quashing the F.I.R. in C.R.No. 130 of 1988 recorded by the R.C.F. Police Station, Chembur, Bombay. Heard both the sides.

2. Few facts which are necessary for the disposal of this Petition are as follows:

The Petitioner is a Director of Union Carbide India Limited who has filed the present Petition. The Company has 7500 employees all over India. For the employees at Calcutta, the Regional Provident Fund Commissioner has granted exemption from the provisions of the Employees' Provident Funds Act and allowed the Company to have its own Scheme for Provident Fund in the interest of the employees. There are 18 employees of the Company in Chembur Unit at Bombay. Inspite of the Company having addressed a letter to the Regional Provident Fund Commissioner at Bombay for exemption from the provisions of the Act and for permission to deposit the contributions in separate Scheme of the Company, no reply was received from Respondent No.2. Hence the Company has been deducting the contributions from the employees and also paying its own contribution and crediting the amount in the Company's Provident Fund Scheme with the consent of the employees. The company has been doing this in good faith pending approval from the Provident Fund Commissioner. Now the Company has come to know that the Provident Fund Commissioner's office has lodged a complaint with the police alleging that the Company has committed an offence under Section 406 of the Indian Penal Code in not crediting the Provident Fund contribution under the provisions of the Act. Having come to know of the same, the Director of the Company applied to this Court and got an Order of anticipatory bail. Then the Company has approached this Court for quashing the F.I.R. on the ground that no offence is committed by the Company and they have been depositing the amount in the Company's Provident Fund Scheme with the bona fide belief pending approval from the Provident Fund Commissioner.

4. The learned Counsel for the Provident Fund Commissioner contended that in view of the Law declared by the Apex Court normally the High Court should not interfere by exercising inherent power to quash criminal proceedings at the stage of F.I.R. There is no dispute about this proposition of law. Though there are many decisions of the Apex Court on this point, suffice it to refer to the latest decision of the Apex Court on the point which is reported in J.T.1995(7) SC 299 (R.D.Bajaj & Anr. v. K.Pal Singh Gill & Anr.). In fact the Apex Court has observed that F.I.R. can be quashed by a High Court on certain grounds which are enumerated in paragraph 7 of the reported Judgment. One such ground is that if the allegations in the complaint or F.I.R. taken at its face value does not constitute a cognizable offence.

5. Therefore, we have to find out from the complaint whether cognisable offence is made out or not. If once the Court comes to the conclusion that the F.I.R. does not disclose a cognisable offence then this Court should exercise its power in quashing the F.I.R. at this stage.

6. The only allegation against the Company is that it has not deposited the contribution to the Provident Fund Scheme with the Department and therefore, it amounts to an offence of criminal breach of trust punishable under Section 405 of the Indian Penal Code which has been defined in Section 403 of the Indian Penal Code. The definition of criminal breach of trust shows that the act has been done dishonestly by the accused. Dishonestly means wrongful loss to one or wrongful gain to another. No doubt explanation (1) provides that if the contribution is deducted from the employees' wages by the Company and it is not credited to the Provident Fund Account, it shall be deemed to have dishonestly committed the offence.

In the present case, the Company has deposited the contribution in a separate Provident Fund Scheme of the Company, since its application for exemption from the provisions of the Act was pending with the Department. By any stretch of imagination we cannot attribute any motive in not depositing the amount with the Department. The object of the Act is to safeguard the interest of the employees. Here instead of depositing the amount with the Department, the Company has formed its own provident fund scheme and deposited the amount in that scheme and even provided loans to the employees. There is no grievance by the employees. Whether the amount is deposited with the Department or not, by a separate provident scheme, the object of the Act is achieved namely, to safeguard the interest of the employees. In fact, the Calcutta Provident Fund Commissioner has approved the Company's request for having a separate Scheme and granted exemption from the provisions of the Act. The Company's application for exemption from the provisions of the Act was still pending with the Department, when in anticipation, the Company went on depositing the amount in its own Scheme. In these circumstances, the F.I.R. does not disclose cognisable offence under Section 406 of the Indian Penal Code.

7. We do not know as on today whether any such permission or approval has been granted by the Commissioner. We do not know whether after this F.I.R. and in the last 6/7 years what has happened to the Scheme. The learned Counsel for the Commissioner contended that if there are breaches committed under the Act, the Commissioner or the Department has powers to take action and claim damages and interest etc. It is open to the Department to take whatever action that is permissible under the law after giving show cause notice to the Company. We are only concerned with the question whether a cognisable offence of criminal breach of trust has been committed by the Company or not. Irrespective of the decision in this case the Department has every right to take whatever action it deems fit in accordance with law under the provisions of the Act.

8. In the result, the Petition is allowed. The F.I.R. in C.R.No.130 of 1988 and all the proceedings on the basis of this F.I.R. and further criminal proceedings are hereby quashed. This order is however, without prejudice to the right of the Provident Fund Commissioner to take whatever action that is deemed necessary to safeguard the interest of the employees and to ensure the compliance of the provisions of the Act according to law. Rule made absolute.

Certified copy of this Judgment be issued expeditiously.

Petition allowed.