K.K. Sharma vs The State & Anr. on 3 November, 2017

* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Judgment: 3rd November, 2017

+ CRL.M.C. 3010/2015 CRL.M.A. 10727/2015

1. K.K. SHARMA ….. Petitioner

Through: Mr. Manoj Ohri, Senior Advocate
with Mr. Rakesh Malhotra,
Mr. Abhimanyu Singh, Mr. Rajiv
Ranjan, and Mr. Siddharth Handa and
Mr. Bharat Malhotra, Advocates.
versus

1. THE STATE

2. THE ADDL. COMMISSION EMPLOYEES PROVIDENT FUND
ORGANIZAION, MINISTRY OF LABOUR, GOVT OF INDIA
….. Respondents

Through: Mr. K. K. Ghei, APP for State with SI
Harish Kumar, P. S. Naraina
Mr. Keshav Mohan and Mr. Piyush
Choudhary, Advocate for R-2.

CORAM:
HON’BLE MR. JUSTICE I.S.MEHTA

JUDGMENT

I.S. MEHTA, J.

1. Instant petition under Section 482 Cr.P.C. has been filed
by the petitioner-K.K. Sharma for quashing the proceedings in
FIR NO. 75/2010 dated 10.06.2010 registered at Police Station

CRL.M.C. 3010/2015 Page 1 of 9
Naraina under Sections 406/409 IPC, and all the proceedings
emanating thereof.

2. Brief facts as per the complaint are that the petitioner is
the Managing Director of M/s Aimil Pharmaceutical (I) Ltd.
(herein after termed as the company) doing the business of
manufacturing and trading of pharmaceutical items and the
strength of the staff of the company at the relevant time was 793
employees. It is further alleged that the Regional Provident
Fund Commissioner on 08.06.2010 made a complaint against
the said company to the Additional Commissioner of Police
(South West) to register a case under Sections 406/409 IPC
stating therein that the employer/company of the petitioner had
deducted the employee’s share of Provident Fund contribution
from the salaries of the employees for the period of May, 2009
to January, 2010 amounting to Rs. 35,58,377/- but did not
deposit the same in the Employees Provident Funds (EPF)
account as per para 30 and 32 of the Employees Provident Fund
Scheme and an offence under Section 406 IPC is made out
against the petitioner. It is further alleged that the
employer/petitioner deposited the deducted PF amount of the
employees share after filing of the said complaint with the
police vide separate deposit challans dated 26.06.2009,
25.07.2009, 15.11.2009, 12.02.2010, 15.03.2010, 17.03.2010
and 18.03.2010.

CRL.M.C. 3010/2015 Page 2 of 9

3. Thereafter, vide order dated 21.11.2012 the learned
Metropolitan Magistrate-11, Dwarka Courts, New Delhi framed
charge under Sections 406/409 IPC against the petitioner.

4. Aggrieved from the aforesaid orders on charge the
petitioner on 25.02.2013 moved a revision petition before the
Court of District Sessions Judge, Dwarka Courts, New Delhi
and the learned Additional Sessions Judge vide judgment dated
01.08.2013 in CR No. 41/13 dismissed the said petition being
devoid of merit.

Hence the present petition.

5. The learned senior counsel appearing for the petitioner
has submitted that the present dispute pertains to non deposit of
Provident Fund dues with respect to its employees for the
period from May, 2009 to January, 2010. In the present case the
F.I.R is dated 10th June, 2010 and the employer has deposited
the due amount on 26th June, 2009; 25th July, 2009; 12th
January, 2010; 15th March, 2010; 17th March, 2010; 18th March,
2010 after receiving the notice by the respondent
No.2/complainant, i.e. Department of EPF (Employees
Provident Fund Organization).

6. The learned senior counsel for the petitioner further
submitted that the F.I.R itself shows that before registration of
the F.I.R the employer has deposited the said due amount. He
further submits that once on the notice employer has submitted
the amount due, F.I.R should not have been registered and
further proceedings under criminal law should not have been

CRL.M.C. 3010/2015 Page 3 of 9
initiated. Reliance is placed on the judgments of the Apex Court
in Provident Fund Inspector, Faridabad vs. Jaipur Textiles,
Faridabad and Ors; AIR 1987 SC 1738 and Adoni Cotton
Mills Ltd. and Others vs. Regional Provident Fund
Commissioner and Others; 1996 (2) LLJ 739.

7. The learned senior counsel for the petitioner further
submits that in the instant petition the company has not been
made party to it because even if at all or any offence stated to be
there is under the company and present petitioner is Managing
Director of the company. Reliance is placed upon judgment of
Aneeta Hada vs. Godfather Travels Tours Private Limited;
(2012) 5 SCC 661.

8. On the contrary the learned counsel for the
respondentNo.2 has submitted that the petitioner was negligent
in not depositing the Provident Fund dues even after deducting
the same from the wages of employees itself. Once the
employer takes away the money from wage of employees he is
duty bound to deposit the same on the due date. Violation of the
Employees Provident Funds Act deems to be a criminal breach
of trust under Section 405 IPC explanation 1. It is further
submitted that subsequent to the filing of complaint with the
police the petitioner paid the Provident Fund amount due.

9. The learned counsel for the respondent No.2 has further
submitted that the judgment relied by the petitioner are passed
in peculiar facts and circumstances and those judgment would
not apply in the present case. If applied there would be similar

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type of breach in every corner of business activity. The learned
counsel for the respondent No.2 has relied upon the judgment in
case M/s Jenson Nicholson (India) Limited and Another; 2013
LLR 934 wherein the Court made the observation that
subsequent payment cannot condone the offence.

10. In the instant case it is an admitted fact emerging on the
record that an amount of Rs. 35,58,377/- was deducted from the
share of Provident Fund contribution from the salaries of the
employees for the period of May, 2009 to January, 2010 by the
petitioner/employer.

11. Further, the complaint made to the Additional
Commissioner of Police on 08.06.2010 by the Regional
Provident Fund Commissioner indicates that the Provident
Funds of the employees so collected was not deposited in the
Employees Provident Funds account as per para 30 and 32 of
the Employees Provident Fund Scheme by the
petitioner/employer.

The plea of the petitioner that subsequently before
registration of the FIR after making the complaint by the
complainant/respondent No.2 qua against the petitioner he had
deposited the said amount with the Provident Fund Department
ipso facto does not absolve his liability to deposit the same in a
stipulated period. The said factum of the stipulated period is to
be determined during the trial before the Trial Court after
adducing the material witnesses by both the parties which is
emerging as a mixed question of fact and law which will be

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determined during the trial by the concerned Trial Court.
Reliance is placed on the judgment in the case Jenson
Nicholson (supra) and the relevant para is reproduced as under:-
“…The dispute here regarding non-payment of Provident Fund
contribution and subsequent payment of the same has to be
gone into through evidence inasmuch as it is a mixed question
of fact and law. While treating a case under section 482 of the
Code of Criminal Procedure initially the Court is not supposed
to go into any merit…”

12. At this stage there is sufficient material to proceed with
the trial. Therefore, in view of the complaint no ground is made
to discharge the present petitioner and quash the criminal
proceeding qua against the petitioner in view of the judgments
Amit Kapoor vs. Ramesh Chander and Anr.; (2012) 9 SCC
460, relevant para is reproduced as under:-
“27. Having discussed the scope of jurisdiction under these two
provisions, i.e., Section 397 and Section 482 of the Code and
the fine line of jurisdictional distinction, now it will be
appropriate for us to enlist the principles with reference to
which the courts should exercise such jurisdiction. However, it
is not only difficult but is inherently impossible to state with
precision such principles. At best and upon objective analysis of
various judgments of this Court, we are able to cull out some of
the principles to be considered for proper exercise of
jurisdiction, particularly, with regard to quashing of charge
either in exercise of jurisdiction under Section 397 or Section
482 of the Code or together, as the case may be:

27.1. Though there are no limits of the powers of the Court
under Section 482 of the Code but the more the power, the more
due care and caution is to be exercised in invoking these
powers. The power of quashing criminal proceedings,
particularly, the charge framed in terms of Section 228 of the

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Code should be exercised very sparingly and with
circumspection and that too in the rarest of rare cases.

27.2. The Court should apply the test as to whether the
uncontroverted allegations as made from the record of the case
and the documents submitted therewith prima facie establish the
offence or not. If the allegations are so patently absurd and
inherently improbable that no prudent person can ever reach
such a conclusion and where the basic ingredients of a criminal
offence are not satisfied then the Court may interfere.

27.3. The High Court should not unduly interfere. No
meticulous examination of the evidence is needed for
considering whether the case would end in conviction or not at
the stage of framing of charge or quashing of charge.

27.4. Where the exercise of such power is absolutely essential to
prevent patent miscarriage of justice and for correcting some
grave error that might be committed by the subordinate courts
even in such cases, the High Court should be loathe to interfere,
at the threshold, to throttle the prosecution in exercise of its
inherent powers.

27.5. Where there is an express legal bar enacted in any of the
provisions of the Code or any specific law in force to the very
initiation or institution and continuance of such criminal
proceedings, such a bar is intended to provide specific
protection to an accused.

27.6. The Court has a duty to balance the freedom of a person
and the right of the complainant or prosecution to investigate
and prosecute the offender.

27.7. The process of the Court cannot be permitted to be used
for an oblique or ultimate/ulterior purpose.

27.8. Where the allegations made and as they appeared from
the record and documents annexed therewith to predominantly

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give rise and constitute a ‘civil wrong’ with no ‘element of
criminality’ and does not satisfy the basic ingredients of a
criminal offence, the Court may be justified in quashing the
charge. Even in such cases, the Court would not embark upon
the critical analysis of the evidence.

27.9. Another very significant caution that the courts have to
observe is that it cannot examine the facts, evidence and
materials on record to determine whether there is sufficient
material on the basis of which the case would end in a
conviction, the Court is concerned primarily with the
allegations taken as a whole whether they will constitute an
offence and, if so, is it an abuse of the process of court leading
to injustice.

27.10. It is neither necessary nor is the court called upon to
hold a full-fledged enquiry or to appreciate evidence collected
by the investigating agencies to find out whether it is a case of
acquittal or conviction.

27.11. Where allegations give rise to a civil claim and also
amount to an offence, merely because a civil claim is
maintainable, does not mean that a criminal complaint cannot
be maintained.

27.12. In exercise of its jurisdiction under Section 228 and/or
under Section 482, the Court cannot take into consideration
external materials given by an accused for reaching the
conclusion that no offence was disclosed or that there was
possibility of his acquittal. The Court has to consider the record
and documents annexed with by the prosecution.

27.13. Quashing of a charge is an exception to the rule of
continuous prosecution. Where the offence is even broadly
satisfied, the Court should be more inclined to permit
continuation of prosecution rather than its quashing at that
initial stage. The Court is not expected to marshal the records

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with a view to decide admissibility and reliability of the
documents or records but is an opinion formed prima facie.

27.14. Where the charge-sheet, report under Section 173(2) of
the Code, suffers from fundamental legal defects, the Court may
be well within its jurisdiction to frame a charge.

27.15. Coupled with any or all of the above, where the Court
finds that it would amount to abuse of process of the Code or
that interest of justice favours, otherwise it may quash the
charge. The power is to be exercised ex debito justitiae, i.e. to
do real and substantial justice for administration of which
alone, the courts exist.”

(underlining supplied)

13. Therefore, in view of the above, this Court find no merit
in the contentions of the learned counsel for the petitioner and
the judgments relied by him are not helpful in view of the facts
and circumstances of the present case.

14. Consequently, the present petition is dismissed having no
merit. One copy of this judgment be sent to the concerned
Court. No order as to costs.

15. All the pending applications (if any) are also disposed of.

I.S.MEHTA, J

NOVEMBER 03, 2017/sr

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