Full Judgment
R.K. Batta, J.
1. These applications for anticipatory bailare filed on account of a complaint lodged bythe Provident Fund Inspector for offence underSections 406 and 409 read with Section 34 ofI.P.C. against the present applicants andothers. The allegation in the complaint is thatduring the period January 1999 to October2000, Maharashtra Antibiotics andPharmaceuticals Limited (hereinafter referredas MAPL) deducted the amount of providentfund from the salary of the employeesamounting to Rs. 54,00,851/-, but did notdeposit the same with the appropriate authorityand as such offences under Sections 406 and409 read with Section 34 of I.P.C. have beencommitted. The applicants sought anticipatorybail from the Sessions Court which wasrejected by the learned II Additional Sessions,Judge, Nagpur vide order dated July 6, 2001.These applicants have, therefore, moved thisCourt for anticipatory bail. Since all theseapplications are connected, they were heardtogether and it is proposed to dispose of the,same by common order. Learned advocate ShriH.D. Dangre argued for the applicants inCriminal Application Nos. 975 of 2001 and 976of 2001. Learned advocate Shri R.P. Joshiargued the bail application on behalf of theapplicant in Criminal Application No. 940 of2001 and learned A.P.P. Ms. Neeta Jog arguedon behalf of the State and was assisted bylearned advocate Shri S.B. Wahane, who waspermitted to assist the prosecution.
2. Learned advocate Shri Dangre took me through the record and pointed out that MAPL has been passing through financial crisis for quite long and even in spite of all efforts made the company could not be brought out of woods completely though present applicants have considerably improved the financial condition of the company. He pointed out that the company had gone before the Board of Industrial and Financial Reconstruction (BIFR) and ultimately was ordered to be wound up. Therefore, his submission is that if there is any lapse in not complying with the provisions of law relating to the Provident Fund, it has to be viewed in the light of the financial crisis which the company has been facing for the past many years. He also pointed out that the notices issued by the Provident Fund Authorities were duly replied explaining the financial condition of the company through which it was passing. According to him, there is no case at all for misappropriation but at the most it may be said to be a case of misplaced priority. It was categorically argued by him that no deductions were made from the salary of the employees at any time and these facts have been categorically stated by the applicants not only in their applications before this Court but in affidavit filed before the Sessions Court as also in the rejoinder filed in this Court. According to him, employees were being paid only advances against the salary and these advances ranged from 50 per cent to 100 per cent of the net salary payable and the provident fund was never deducted. It is further urged by him that salary slips were issued on account of the Ghaerao tactics used by the employees for accounting purpose only and that provident fund of the employees was never deducted and, therefore, there is no question of deposit of the provident fund and there is no case of misappropriation.
3. Learned advocate for the applicants also urged that the applicants are not at all responsible for the deduction of the provident fund and in this connection, reliance has been placed on the judgment of the Apex Court in Employees' State Insurance Corporation v. S.K. Aggarwal and Ors., : 1998 CriLJ4027 . In respect of the applicant in Criminal Application No. 975 of 2001, it is urged that his regular posting is General Manager, Engineering, but he was holding only the additional charge with effect from May 5, 2000. He also urged before me that the police has already seized all records and the applicants had even appeared before the police on June 28, 2001 and as such the contention of the police that the applicants are absconding or are not co-operating with the police is without any basis. According to learned advocate for the applicants, the applicant in Criminal Application No. 976 of 2001 has already retired and no document is in his custody. In view of the above, it is urged by him that the applicants be enlarged on anticipatory bail and they are ready to co-operate with the police.
4. Learned advocate Shri R.P. Joshi appearing on behalf of the applicant in Criminal Application No. 940 of 2001 has stated that in view of the judgment of the Apex Court upon which reliance has been placed by learned advocate Shri Dangre, the applicant is not at all responsible for either deduction of provident fund or for any offence alleged to have been committed. He further submits that the applicant is an employee and not employer and that if there are any irregularities, Section 14 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred as said Act) takes care of it. He drew my attention to the statements on record at page 25 and page 27 that it is M.D. who is responsible for deduction of provident fund and M. Ds. in question are the applicants in the Criminal Application Nos. 975 of 2001 and 976 of 2001. He has also pointed out that notices at pages 175 and 176 are signed by the M.D. After placing reliance on State of West Bengal and Ors. v. Swapan Kumar Guha and Ors., : 1982 CriLJ819 , State of Kerala v. Mathai Verghese and Ors., : 1987 CriLJ308 and Lt. Col. P.R. Chaudhari (Retd.) v. Municipal Corporation of Delhi, : (2000)4SCC577 , it is urged by him that the applicant be released on anticipatory bail. He adopted the arguments advanced by learned advocate Shri Dangre.
5. Learned A.P.P. on the other hand, argued that provident fund amounting to Rs. 54,00,851/- was deducted from the salaries of the employees from January 1999 to October 2000 and the same was not deposited which is an offence in view of Explanation (1) of Section 405 I.P.C. and as such the applicants have committed offences under Sections 406 and 409 of the Indian Penal Code. She submitted before me that the relevant documents are not being produced by the applicants and the Investigation Officer has only been able to lay his hands in respect of disbursement of salary through salary slips of the month of January 1999 which shows that the provident fund was deducted which amounts to Rs. 2,49,006/- and the same has not been deposited at all. She states that likewise provident fund has been deducted from February 1999 and even earlier to that till October 2000 but the provident fund has not been deposited and according to her the salary slips which have been issued to the employees show such deduction. She has also pointed out that the Investigating Officer has recorded the statements of many witnesses who have stated that the deductions of provident fund were being made. According to her the ruling of the Supreme Court upon which reliance has been placed by the learned advocate for the applicants is not attracted to the facts and circumstances of this case in view of the provisions of the said Act and the scheme thereunder. She also pointed out that the Apex Court was dealing with the provisions of Employees' State Insurance Fund under the Employees' State Insurance Act, 1948, after taking into consideration, the expression 'principal employer' used there. She further pointed out that theory of Ghaerao has been introduced at a belated stage and this theory was never advanced in so many words in the representation made by the applicants in reply to notice issued by the Provident Fund Authorities regarding payment of the providentfund. She pointed out that according to Section11 of the said Act there is priority of paymentof contribution over other debts, but thecompany even after deducting the providentfund did not deposit the provident fund with theconcerned authority and on the contrary madepayment to sundry creditors and miscellaneouspayments. She also pointed out that provisionsof Section 22 of the Sick Industrial Companies(Special Provisions) Act, 1985 do not apply toprovident fund dues and in this connectionreliance has been placed on the judgment of thisCourt in Ralliwolf Ltd. v. Regional ProvidentFund Commissioner-1. 2001-I-LLJ-1423. Shepointed out to the documents at page 25, page27 in Criminal Application Nos. 975 of 2001and 976 of 2001 and to page 100 in CriminalApplication No. 940 of 2001 to show that theapplicants are responsible for deducting anddepositing of provident fund and that evenManager or Deputy Manager dealing with thematter would be responsible. She stated that notonly the applicants are not co-operating butthey are also not producing the relevant recordsand as such the anticipatory bail applications berejected since their custody is absolutelyessential for the purpose of investigation of thematter pertaining to the provident fund of theworkers.
6. Learned advocate Shri Dangre, in reply, argued that no deductions of provident fund were made but if in alternative it is found, that if any deductions have been made and not deposited still the provisions of Section 405 would not be attracted in view of the financial crisis through which the company was passing. It was also pointed out by him that the applicant in Criminal Application No. 976 of 2001 is himself sufferer and had to file writ petition to return payment of his provident fund etc. which writ is yet to be admitted though notice has been issued. He also stated that there is nothing to show that the amount has been misappropriated by the applicants or the applicants in any manner have been benefited by not depositing the provident fund if deducted. He submitted that the applicants will not only fully co-operate with the police but, will produce all records and till now no demands have been made by the police for record.
7. In reply, learned advocate for the applicant in Criminal Application No. 940 of 2001 relied upon judgment of Madras High Court in S. Palaniappan and Ors. v. Sub-Inspector of Police, 2000 (3) Crimes 305.
8. On further clarifications, learned advocate Shri Dangre produced salary slips for the months of February 1999 to July 1999 and matter of fact provident fund was deducted from the salary paid to the employees for the months of January 1999 to July 1999 amounting to Rs. 22,85,243/- but the company has deposited Rs. 22,79,500/- from April 1999 to June 2001 and as such the difference of the amount which is not deposited is only Rs. 3,000/-. He also produced before me the payment sheets from the month August 1999 which according to him show that only advance salary ranging between 50 per cent to 100 per cent of the net salary payable was paid to the employees and no provident fund in respect of the months from August 1999 to October 2000 has been deducted.
9. The basic question which has to be examined is whether the provident fund was deducted from the salary of the employees and if it was deducted whether it has been deposited with the concerned authority. According to the learned advocate for the applicants the entire employees' contribution which is deducted has to be deposited with M.A.P.L. E.P.F. Trust and out of the employer's contribution, 8.33 has to be deposited with the Regional Provident Fund Commissioner and 3.67 has to be deposited with M.A.P.L. E.P.F. Trust. Section 405 of the I.P.C. which deals with criminal breach of trust reads as under:
'405. Criminal breach of trust. - Whoever, being in any manner entrusted with property, or with any dominion over property, dishonestly misappropriates or converts to his own use that property, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which he had made touching the discharge of such trust, or wilfully suffers any other person so to do, commits 'criminal breach of trust'.
Explanation 1.- A person, being an employer, who deducts the employee's contribution from the wages payable to the employee for credit to a Provident Fund or Family Pension Fund established by any law for the time being in force, shall be deemed to have been entrusted with the amount for the contribution so deducted by him and if he makes default in the payment of such contribution to the said fund in violation of the said law, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.
Explanation 2.- A person, being an employer, who deducts the employee's contribution from the wages payable to the employee for credit to the Employees' State Insurance Corporation established under the Employees' State Insurance Act, 1948 (34 of 1948) shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution in the said Fund in violation of the said Act, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.'
Explanation (1) provides that an employer who deducts the employee's contribution from the wages payable to the employee for credit to a Provident Fund or Family Pension Fund established by any law for the time being in force, shall be deemed to have been entrusted with the amount of the contribution so deducted by him and if he makes default in the payment of such contribution to the said fund in violation of the said law, shall be deemed to have dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid. Therefore, it is bounden duty of the employers to deduct employee's contribution from wages and to credit the amount in accordance with law and for that purpose an employer is deemed to have been entrusted with the said amount and in case of default, it is deemed that the employer has dishonestly used the amount of the said contribution in violation of a direction of law as aforesaid.
10. Coming to the facts of the case, all thethree applicants in their application foranticipatory bail, in the affidavit filed beforethe Sessions Court, as also affidavit in rejoinderfiled in this Court have categorically stated thatno deductions of any provident fund was madeduring the period of the offence in question. Ishall refer to the said averments made by theapplicants in Criminal Application No. 975 of2001, the applicant has stated in para 16 thatthe applicant in his counter affidavit filedbefore the trial Court has demonstrated that atno point of time there were deductions from thesalaries of the employees towards the providentfund contribution and though the company wasfacing financial crisis and was not able to paythe salaries to the employees, to mitigate thehardships and inconvenience of the employeesthe company had paid advance against thesalary and, therefore, no deductions of anyamount from employees' salary were made andas such question of commission of offenceunder Sections 406 and 409 did not arise. Inpara 6 of the counter affidavit filed by theapplicant before the Additional Sessions Judge,Nagpur it is stated that it is not the case at allas alleged that the company at any point of timemade deductions from the salary of employeesand did not deposit the said amount with theProvident Fund authorities/trust and, thereforeconstituting the offence under Sections 406 and409 does not arise. It is also pointed out thatthe company had filed necessary forms/returnsfor various periods which show that thecompany could not pay salary to the employeesand, therefore, no deductions have been made.It was further clarified that for all these periodsfrom November 1998 till date, the companywas having hardship and could not pay salarybut to avoid hardship salary advances werepaid. It was very categorically stated by theapplicant that at no point of time the deductionsare made from the salaries of the employeestowards the provident fund contribution for theperiods in dispute and during this period asstated above the employees were paid advance salary and not salary. It is only after eliciting information and clarifications were sought that salary slips for the months of February 1999 to July 1999 were produced which show that in fact the provident fund contribution was deducted and as such this categorical statement made by the applicant in Criminal Application No. 975 of 2001 and before Sessions Court is apparently false and made with a view to mislead the Court to obtain anticipatory bail. Even in affidavit in rejoinder filed in this Court in relation to the reply filed by the State, averments to that effect are found. The State, in its reply, had stated in para 1 that there are specific allegations that the Managing Director including the present applicant as well as the General Manager have deducted an amount of Rs. 54,00,851- from the salary of the employees towards the provident fund, loan recovery etc. for the period January 1999 to October 2000. In reply to this paragraph, the applicant had stated that there was no occasion at all at any point of time that the amount of provident fund was deducted from the salary of the employees and the same has not been deposited with the concerned authorities. Without prejudice, it is urged by the applicant that at the worst in view of the peculiar financial crisis it can be said that the provident fund contribution of the employees has not been deducted and, therefore, could not be deposited with the concerned Provident Fund Authorities and even if it is assumed that the amount was liable to be deposited with the Provident Fund Authorities has not been deposited, it can be seen that the said amount has been used for other essential and reasonable purposes, keeping in view the priorities of making payment in the backdrop of the peculiar financial crisis and with a genuine intention that the company should continue its activities. Section 11 of the said Act provides for priority of payment of contributions over other debts. Admittedly sundry creditors have been paid and miscellaneous expenses have been incurred but the priority charge has been totally ignored.
11. In para 4 of the reply of the State, it was stated that the salary slips of January 1999 had been seized which show that amount of Rs. 2,49,006/- was deducted from the salary, but the said amount has not been deposited. In reply to this paragraph in para 4 of the rejoinder, the applicant has nowhere dealt with or denied this fact.
12. Similar is the position in respect of other applicants and similar averments are found at pages 16, 140, 248 in Criminal Application No. 976 of 2001 and pages 16, 140, 248 in Criminal Application No. 940 of 2001.
13. The applicants who have so categorically stated that no provident fund was deducted during the period in issue had to shell out the records after repeated enquiries were made with them. These records which are very relevant to decide the issue whether the provident fund was deducted were withheld by the applicants from this Court and it is only after making queries that the records had ultimately been produced before this Court. These records consist of salary slips from February 1999 to July 1999 which in clear and categorical terms show that a sum of Rs. 22,85,243/- had been deducted from the salaries of the employees during the said period. An explanation is sought to be given that though during this period a sum of Rs. 122,85,243/- was deducted which of course was initially denied by the applicants, that the applicants have deposited a total sum of Rs. 22,49,500/- during the period April 1999 to June 2001 and the difference of the amount which is not deposited is only Rs. 3,000/-. The arguments and explanation looked very very attractive on the face of it, but on deeper investigation into the matter, the explanation is nothing but to hoodwink the Court of the real situation. What amount had been paid by the applicants from April 1999 to June 2001 is not the provident fund which is deducted from the period January 1, 1999 to July 1999 but it pertains to the provident fund which was deducted in the months of September, October and November 1998 which shows that the concerned applicants even prior to January 1, 1999 have made defaults in depositing the provident fund even though the provident fund had been deducted prior to that. Some slips of the employees have been produced before me showing the statement of provident fund accumulation as on March 31, 2000 wherein it is stated that contribution from October 1998 to July 1999 is included but it is yet to be received from M.A.P.L. The provident fund which was so deducted would run into lacs of rupees and the same was not deposited with the concerned authority in accordance with law which prima facie makes out an offence under Sections 406 and 409 keeping in view Section 405 and Explanation (1) appended thereto.
14. In respect of the payment sheets, thecontention of the applicants is that during thisperiod when the payment sheets have beenmaintained from August 1999 to May 2001, noprovident fund was deducted and the employeeswere being paid only advances ranging from 50per cent to 100 per cent of the net salarypayable. It was pointed out by the learnedA.P.P. that salary slips have been issued by theconcerned authorities showing deduction forthe said period August 1999 to May 2001 whichis sought to be explained by the applicants thatthe salary slips were issued for the purpose ofaccounting only and that too on account of theGhaerao tactics adopted by the workers. In theearlier representation, which was made to theProvident Fund Authorities in reply to noticefor deposit of provident fund, no suchcategorical Stand relating to Ghaerao has beenadvanced by the applicants. The ProvidentFund Inspector in his complaint has stated thateven during this period provident fund wasdeducted. The Investigating Officer hasrecorded the statements of many witnesses whoalso state that provident fund was beingdeducted throughout. The said statements areof Vijay Patil, Scientific Assistant, SureshKale, Production Assistant Grade-II, SureshGotmare, Assistant Grade-I and Secretary ofM.A.P.E.A. (I.N.T.U.C.), Sharad Patra,Company Secretary, Department's AssistantOfficer, Dyaneshwar Ambedkar, Grade-I Production Assistant and Secretary of CastribeEmployees' Union. The matter relating todeduction of provident fund during the periodAugust 1999 to May 2000 requires thoroughinvestigation.
15. In this respect, it is also pertinent to note that some of the notices which were displayed by Deputy General Manager (Finance) in Criminal Application No. 940 of 2001 have been placed before this Court after being directed to produce the same. Notice dated March 31, 1999 shows that the employees were informed that part payment of salary and wages for the month of March 1999 (around 50 per cent of the net payable) would be disbursed on or before April 7, 1999 and the balance of 50 per cent would be utilised for the part payment of old/pending statutory dues of employees related. Notice dated July 2, 2001 states that it is specifically agreed during the discussion with the representative of Recognised Workers' union that no deductions are made on whatsoever account including P. F. from this amount and net ad hoc advance be paid to the employees, in view of the needs of the employees for their school going children and other needs. This means that specifically for this month it was agreed that no deductions will be made for P.F., but there is no such record available for the earlier period.
16. Coming now to the points raised by the learned advocates for the applicants that the applicants being Directors and Deputy General Manager are not liable in view of the judgment of the Apex Court in Employees' State Insurance Corporation v. S. K. Aggarwal and Ors., (supra). We may first refer to the said judgment. In this case, the Apex Court was dealing with criminal proceedings against employer for default in payment of contribution to Employees' State Insurance. After taking into consideration, various relevant provisions of the Employees' State Insurance Act, the Apex Court came to the conclusion that the principal employer is the company which owns the factory and that the directors would not be liable. The Apex Court has considered the definition of 'principal employer' contained in Section 2(17) of the Employees' State Insurance Act, 1948 and also the provisions of Section 40 of the Employees' State Insurance Act, 1948. The Apex Court was dealing with case of factory and in this connection Section 2(17) which defines 'Principal Employer' reads as under:
'2(17) 'principal employer' means-
(i) in a factory, the owner or occupier of the factory and includes the managing agent of such owner or occupier, the legal representative of a deceased owner or occupier, and where a person has been named as the manager of the factory under (the Factories Act, 1948), 63 of 1948 the person so named;
(ii) in any establishment under the control of any department of any Government in India, the authority appointed by such Government in this behalf or where no authority is so appointed, the head of the Department;
(iii) in any other establishment, any person responsible for the supervision and control of the establishment.'
The Apex Court was not dealing with situation in relation to Section 2(17)(ii) and (iii). Apex Court then referred to definition of occupier as contained in Section 2(15) and noticed that under Sub-section (2) of Section 100 of Factories Act where occupier was a company, any director thereof could be prosecuted and punished for any offence for which occupier was liable. The Apex Court has noticed that in Section 2(17) of the Employees' State Insurance Act, principal employer in a factory is defined as either owner or occupier of factory taking care of all eventualities and when owner of the factory is the principal employer, mere is no need to examine who is occupier. It was also noticed by the Apex Court that the Employees' State Insurance Act does not define the term 'employer' although under Sections 85-B and 85-C of that Act the term 'employer' is used. It is in this background that the judgment has been rendered by the Apex Court. Hence, the Apex Court held that when definition of Principal Employer in Section 2(17) refers to 'owner' or occupier' of a factory, the principal employer can be either owner or occupier depending upon facts of each case. When there is an owner of the factory that owner must be considered as the Principal Employer liable for contribution and not its director. The Apex Court noticed that explanation (2) to Section 405 Criminal Procedure Code has been inserted by Employees' State Insurance Amendment Act, 38 of 1975 and it was observed that in any event, in the absence of any express provision in the I.P.C. incorporating the definition of 'Principal Employer' in Explanation (2) to Section 405, this definition cannot be held to apply to the term 'employer' in Explanation (2). It is in this context that Apex Court observed that the term 'Employer' in Explanation (2) must be understood as in ordinary parlance as company which is the employer and not its directors.
17. The position, in so far as the Employees' State Insurance Act and the scheme thereunder is concerned is somewhat different. Section 2(e) of the said Act defines 'employer', as under:
'2(e) 'employer' means-
(i) in relation to an establishment which is a factory, the owner or the occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier and, where a person has been named as manager of the factory under Clause (f) of Sub-section (1) of Section 7 of the Factories Act, 1948 (63 of 1948), the person so named; and
(ii) in relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment, and where the said affairs are entrusted to a manager, managing director or managing agent; such manager, managing director or managing agent.'
Clause 30 of the Employees' Provident Fund Scheme, 1952 reads as under:
'30. Payment of contribution. -(1) The employer shall, in the first instance, pay both the contributions payable by himself (in this scheme referred to as the employer's contribution) and also, on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member (in the scheme referred to as the member's contribution).
(2) In respect of employees employed by orthrough contractor, the contractor shallrecover the contribution (payable by suchemployee) in this scheme referred to as themember's contribution and shall pay to theprincipal employer the amount of member'scontribution so deducted together with anequal amount of contribution (in this schemereferred to as the employer's contributions)and also administrative charges.
(3) It shall be the responsibility of the principal employer to pay both the contributions payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges.
Explanation,--For the purpose of this paragraph the expression administrative charges means such percentage of the pay (basic wages, dearness allowance, retaining allowance, if any and cash value of food concession admissible thereon) for the time being payable to the employees other than an excluded employee, and in respect of which provident fund contributions are payable as the Central Government may, in consultation with the Central Board and having regard to the resources of the Fund for meeting its normal administrative expenses, fix'.
Clause 32 of the said Scheme provides recovery of a member's share or contribution by means of deductions from wages. Clause 38 of the Scheme lays down that the employer shall before paying the members his wages in respect of any period or part of period for which contributions are payable, deduct the employee's contribution from his wages as also his own contribution along with administrative charges and within 15 days pay the same to the fund. Sub-clause (3) of Clause 32 lays down that any sum deducted by an employer or a contractor from the wages of an employee under the scheme shall be deemed to have been entrusted to him for the purpose of paying the contribution in respect of which it was deducted.
18. Explanation (1) of Section 405 which was inserted by Act 40 of 1973 speaks of employer whose responsibility is to deduct the contribution and deposit the same in accordance with law and in default of deposit the employer is deemed to have dishonestly used the amount of said contribution in violation of a direction of law as aforesaid.
19. In accordance with Clause 36(a) of the Employees' Provident Fund Scheme, 1952 the employer is required to furnish the particulars of ownership. These particulars were furnished by the applicants which are at page 25 in relation to applicant in Criminal Application No. 976 of 2001 and at page 27 in respect of applicant in Criminal Application No. 975 of 2001. There is also evidence on record to show that the applicant in Criminal Application No. 940 of 2001 who is Deputy General Manager has not only issued notices from time to time but had also filed various returns relating to the Employees' contribution of Provident Funds. Some of the said returns have been filed but the returns for the relevant period from October 1998 to July 1999 have still been withheld from this Court and they have not been produced before this Court, Accordingly, all the applicants fall within the scope and ambit of 'Employer' as defined in Section 2(e)(ii) of the said Act which states that employer in relation to any other establishment, the person who, or the authority, which has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager, a managing director or managing agent, such manager, managing director or managing agent. It is urged by the learned advocate for the applicant in Criminal Application No. 975 of 2001 that the applicant has joined as managing director only in the month of May 2000 even though provident fund was deducted in relation to January 1999 to July 1999 prior to his term, but on taking over, it was incumbent upon him to ensure that the said amounts which were deducted should be deposited with the authority at the earliest but nothing of this sort was done by him and the amounts which have been deposited from April 1999 to June 2001 are relating to the provident fund which was deducted in the months of September, October and November 1998. The financial crisis cannot be taken as a shield to bye-pass the statutory provisions of law and even Section 22 of SICA does not come to the rescue of the applicant. It has been held in Ralliwolf Ltd. v. Regional Provident Fund Commissioner-1, (supra) that recovery of provident fund dues of employees under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 does not fall within the scope and purview of Section 22(1) of the said Act. These dues are payable whether or not an undertaking is sick. It appears that the applicants have played with the provident fund of the large number of employees who will be ultimate sufferers in spite of the fact that provident fund deduction has a priority charge under Section 11 of the Act.
20. Applicants have not only tried to mislead the Court by stating that P.P. contribution was not deducted at any point of time during the relevant period but have withheld relevant documents from the Court and it was only after repeated queries and clarification that the same were produced in Court. Applicants also tried to mislead that contribution deducted for the period January 1999 to July 1999 had been deposited and only Rs. 3,000/- remained to be deposited. Applicants had earlier stated that all relevant records had been seized. Returns for October 1998 till July 1999 are still not forthcoming and the explanation regarding issuing of salary slips showing P.F. deductions with effect from August 1999 till October 2000 is not satisfactory. The matter requires thorough probe.
21. In this view of the matter, I do not consider this to be a fit case for granting anticipatory bail. The anticipatory bail applications filed by the applicants are accordingly rejected. The records which have been produced before me by the applicants shall be handed over to the Investigating Officer after preparing the index of the files and after obtaining acknowledgment receipts from the Investigating Officer.
22. Certified copy be expedited.