ORDER
G. Yethirajulu, J.
1. These revisions are filed by the Provident Fund Inspector, Vijayawada, who filed the cases against the respondents 1 and 2 in the Court of the Additional Judicial Magistrate of First Class, Gudiwada, Krishna District, for the offences punishable under Section 6(c) read with Paras. 29, 30 and 38 of Employees' Provident Funds and Miscellaneous Provisions Act, 1952, (for short, 'the Act') punishable under Section 14(1-A) read with Section 14A of the Act for failure of the respondents 1 and 2 in paying the provident fund contribution and administrative charges for various periods from 1993.
2. The learned Magistrate took cognizance of the offences and after receipt of summons, the respondents 1 and 2 made their appearance. They were examined under Section 251, Cr.P.C. through the Special Vakalath holder and they pleaded not guilty of the offences and claimed for trial.
3. The petitioner in order to prove the guilt of the respondents 1 and 2 examined P.W. 1 and marked Exhibits P. 1 to P. 7. On defence side, DWs. 1 to 3 were examined and Exhibit D1-pass book was marked.
4. After conclusion of the trial, the learned Magistrate found the respondents 1 and 2 guilty of the offences. They were convicted for the offences under Section 6 read with Paras 29, 30 and 38 of the Act and sentenced to pay a fine of Rs. l,000/-each, in default, A. 2 has to undergo simple imprisonment for one month in each case. They were also directed to pay the contribution amount payable towards provident fund and administrative charges to the Provident Fund Department. The respondents/accused being aggrieved by the judgment of the learned Additional Judicial Magistrate of First Class, Gudiwada, preferred Criminal Appeals before the I Additional District and Sessions Judge, Krishna District,. at Machilipatnam. The appellate Court through its judgment dated April 29, 2000 allowed the appeals by setting aside the judgment of the trial Court and the fine amount remitted by the respondents 1 and 2 was directed to be refunded to them after the expiry of time for preferring the appeal. The complainant being aggrieved by the judgments of the appellate Court preferred these revision cases challenging its validity and legality.
5. Except variance in the periods, the parties are common in all the petitions. There is a common question of law involved. Therefore, all the revision cases are clubbed and this common judgment is being delivered.
6. The revision petitioner is the Provident Fund Inspector, Vijayawada. The first respondent is a firm known as Kodali and Sons Transport, Gudiwada represented by the second respondent.
7. The case of the prosecution is, briefly, as follows: The respondents 1 and 2 are described as A. 1 and A. 2 in this judgment for the purpose of convenience. A. 1 firm, which is a proprietary concern, was brought within the purview of the provisions of the Act. A. 1 firm was allotted Employees Provident Fund Code No. AP/21328 with effect from March 1, 1992. The firm was established by the father of the second respondent by name Kodali Arjun Rao and he used to do transport business by running buses to various destinations. After the death of Kodali Arjun Rao, the second respondent, being his son, took up the management of the firm. Respondents 1 and 2 are under a statutory obligation to pay the employees provident fund contribution and administrative charges on or before 15th of every succeeding month to the Regional Provident Fund Commissioner, Guntur. The second respondent failed to pay the said contribution for various periods. P.W. 1, the Provident Fund Inspector, issued notice to the second respondent asking to furnish the assessment with regard to the provident fund payment. The second respondent refused to receive the said notice. Subsequently, the Assistant Commissioner of Provident Fund issued a show cause notice on July 4, 1996 to the second respondent for payment of the provident fund contribution for the respective periods. Despite that the respondents 1 and 2 did not pay any amount. Later the Assistant Commissioner of Provident Fund, Guntur, conducted an enquiry under Section 7A of the Act as a quasi judicial authority. During the enquiry before the Assistant Commissioner of Provident Fund, the respondents 1 and 2 were not represented by anybody. Therefore, the Assistant Commissioner, after completion of the enquiry, based on the material available on record, passed orders on August 13, 1996 and sent the copies of orders to both the respondents by registered post. The registered letter sent to the respondents 1 and 2 were returned unserved. Later, the orders of the Assistant Commissioner were affixed to the door of the first respondent firm by P.W. 1 and other three Inspectors on March 11, 1998. Subsequent to that date also the respondents 1 and 2 did not pay any amount towards provident fund and administrative charges for various periods. The Regional Provident Fund Commissioner issued sanction orders to prosecute the respondents 1 and 2. Accordingly, P.W. 1 filed complaints against the respondents 1 and 2 for failure to pay the contribution for various periods.
8. The respondents 1 and 2 resisted the contentions of the prosecution by contending that the father of the second respondent used to run Kodali and Sons Transport, Gudiwada. After the death of Kodali Arjun Rao, four buses, out of six buses, were taken away by their owners and the remaining two buses, which were owned by Kodali Arjun Rao were shared by the second respondent and his brother-DW.2. The second respondent and DW.2 are running those buses individually. Kodali and Sons Transport was closed immediately after the death of Kodali Arjun Rao. Kodali and Sons Transport, Gudiwada was not in existence by the date of alleged offence. The second respondent did not commit any offence as alleged by the prosecution. Therefore, the prosecution is liable to be quashed.
9. In the light of the contentions raised by both parties, the point for consideration is, whether the Sessions Court is justified in setting aside the common judgment of the trial Court dated September 7, 1999 and whether the judgment of the appellate Court, dated April 29, 2000 is liable to be set aside?
10. Point: The prosecution alleged that the first respondent-firm represented by the second respondent failed to pay the provident fund contribution after the death of Kodali Arjun Rao, therefore, they are liable for prosecution under the Act. The respondents 1 and 2 contended that after the death of Kodali Arjun Rao, the transport business conducted by the said firm was discontinued and as the said firm was not in existence by the date of the notices issued by the Regional Provident Fund Commissioner, the prosecution cannot fasten any liability on the respondents 1 and 2.
11. In the light of the contentions of both parties, it would be appropriate to refer to the evidence to find out whether the business of Kodali and Sons Transport, Gudiwada, was being continued by the second respondent after the death of Kodali Arjun Rao after succeeding to the said business.
12. P.W. 1, the Provident Fund Inspector, Vijayawada, deposed that the first respondent-firm is represented by the second respondent, who is the proprietor of the first respondent-firm under the purview of the Act, it was allotted Code number with effect from March 1, 1992. Respondents 1 and 2 are under the statutory obligation to pay the employees provident fund contribution and administrative charges on or before 15th of every succeeding month to the Regional Provident Fund Commissioner, Guntur. Since the second respondent failed to pay the contribution to the Commissioner of Provident Fund, Guntur, for the periods covered by these cases, he issued notice to the second respondent regarding payment of the provident fund contribution. The second respondent refused to receive the said notice. Later, the Assistant Commissioner of Provident Fund issued a show cause notice on July 4, 1996 to the second respondent. The show cause notice was sent under certificate of posting. The respondents 1 and 2 did not pay the contribution. Therefore, an enquiry under Section 7A of the Act was conducted. After completion of the enquiry, the Assistant Commissioner of Provident Fund passed an order on August 13, 1996 and the copies of the order were sent to respondents 1 and 2 through registered post. The registered post covers were returned and later the copies of the orders were affixed to the door of the first respondent-firm by him and three other Inspectors on March 11, 1998. Even after that the respondents 1 and 2 did not pay any amount towards contribution. Therefore, the respondents 1 and 2 are liable to be punished.
13. During the cross-examination, suggestions were given to P.W. 1 that late Kodali Arjun Rao gave the buses for nominal value, which is payable to the convenience of workers. After the death of Kodali Arjun Rao, the bus business was not continued by anybody. Kodali Arjun Rao had two sons and one daughter. He has no knowledge whether the bus covered by Registration No. A.P.C-5222 fell to the share of the second respondent. In the further cross-examination, he stated that during the lifetime of Kodali Arjun Rao in the year 1992, the second respondent was shown as one of the workers in the list of the workers. He does not know whether the second respondent was driving the said bus on his own. Out of 36 workmen, 13 regular workers used to be paid by Kodali Arjun Rao. He denied a suggestion that the second respondent is running his bus by maintaining an office at Autonagar, Gudiwada. He volunteered that the office of Kodali and Sons Transport was being run by the date of evidence in the Post Office Road, Gudiwada.
14. The respondents 1 and 2 in support of their plea adduced the evidence of DWs. 1 to 3. DW. 1 deposed that the proprietary firm established by Kodali Arjun Rao is not in existence from the date of his death i. e. January 26/27, 1993. He discontinued his job in the company as Supervisor. He further stated that Kodali Arjun Rao owned two buses during his lifetime and after his death, the two buses were shared by his sons including the second respondent. During the lifetime of Kodali Arjun Rao, he used to run other four buses owned by others. But, he does not know who are the owners of those four buses. He further stated that after the death of Kodali Arjun Rao, the firm Kodali and Sons Transport was closed. Four buses were taken away by the respective owners and are running the buses under their managements. He further stated that during his lifetime Kodali Arjun Rao used to subscribe provident fund contribution for 15 or 16 employees. Subsequently, he withdrew the provident fund under Exhibit D. 1-pass book. The other employees, who worked during the lifetime of Kodali Arjun Rao, were also discontinued.
15. DW.2, the younger brother of the second respondent, deposed that during the life of Kodali Arjun Rao, their father used to run the company with two buses of his own and four buses of others. The second respondent also worked as an employee in the said company during the life time of Kodali Arjun Rao. After the death of Kodali Arjun Rao, the second respondent and himself shared two buses i.e. each one and the other buses were taken away by the respective owners. Since the date of death of their father, the office of Kodali and Sons Transport is not in existence and they closed down the said firm after the death of their father.
16. DW.3, in his chief-examination deposed that he discontinued his job after the death of Kodali Arjun Rao. He reiterated the evidence of DW. 1 and DW.2.
17. After considering the above evidence, the trial Court observed that the respondents 1 and 2 did not choose to examine the owners of the buses and the second respondent did not enter the witness box to speak about the sharing of two buses between him and DW.2. No documentary proof was placed in support of the plea of the respondents 1 and 2. The respondents 1 and 2 did not file any documents to show that after the death of Kodali Arjun Rao, DW.2 and his brother shared the two buses. In the absence of documentary proof, the evidence of DWs. 1 to 3 cannot be believed and it is not helpful to the second respondent to disprove the evidence placed by the prosecution. After making the above observations, the learned Magistrate convicted the respondents 1 and 2 and sentenced them to the punishments as indicated above.
18. The appellate Court observed that the prosecution totally failed in placing either oral or documentary evidence to show that after the death of Kodali Arjun Rao, the business was continued by the second respondent. Exhibits P. 1 to P. 7 relied on by the prosecution are not at all relevant to show that the second respondent continued the business. The prosecution failed to establish that the respondents 1 and 2 failed to remit the amounts payable under the Act to the Provident Fund Commissioner, Guntur. The appellate Court further observed that as per Sub-section (1)(iii)(b) of the Act, an establishment comes within the purview of the Act when there are 20 or more workers working in the said firm. In the instant case, the prosecution alleged that there were 13 workers. This piece of evidence goes against the prosecution. The learned Judge further observed that the prosecution failed to prove that the second respondent is the employee of the firm subsequent to the death of Kodali Arjun Rao and the trial Court failed to give reasonable opportunity to the respondents 1 and 2 to represent their cases, though it was mandatory under Section 7A(iii) of the Act and it is an error on the part of the trial Court. As the prosecution failed to prove any of the allegations against the respondents 1 and 2, the judgment of the trial Court is liable to be set aside.
19. The learned counsel for the revision petitioner submitted that when once a firm comes within the purview of the Act, it shall continue to pay the contribution by filing periodical returns and remitting the contribution amount to the Regional Commissioner of Provident Fund, at Guntur. During his life time, Kodali Arjun Rao used to pay the provident fund contribution. After his death, if there are any changes in the ownership of the firm or on account of closure of the business, it is the responsibility of the persons, who succeeded to the property, to file the necessary returns indicating all the particulars regarding the running of the firm. The periodical returns were prescribed to be filed to enable the concerned authorities to know the changes that take place from time to time either in the management or its manpower, its functioning etc. So long as there is no information to the Regional Provident Fund Commissioner, he continues the demand of the. contribution and in the event of default to prosecute such persons, who are responsible for not filing the returns and non- remitting of the contribution to the provident fund. There is a categorical admission from the second respondent that out of six buses possessed by their father, four buses were taken away by the respective owners, one bus fell to his share and the other bus fell to the share of his brother. When there was failure to pay the contribution, an enquiry was conducted under Section 7-A of the Act. But, the respondents 1 and 2 did not care to participate in the said enquiry and failed to furnish the necessary information about the discontinuation of the business. The second respondent did not come forward under what understanding his father used to run four buses of others in whose favour the transport permits were obtained and who are those persons, who lent the buses to his father. The second respondent also did not place any material to show that he got one bus and the other bus was given to DW.2.
20. The non-furnishing of any kind of information regarding the consequential changes in the firm after the death of late Kodali Arjun Rao and about the non-liability of the second respondent to pay any contribution towards provident find, the learned counsel for the respondents 1 and 2 submitted that the affixture of notices by the Assistant Provident Fund Commissioner is an indication of closing of business, the withdrawal of the provident fund amount and the workers leaving the service of the firm after the death of Kodali Arjun Rao is also an indication of closing of the business.
21. Section 6A of the Act indicates the duties of employers and as the second respondent failed to discharge their duties of paying the contribution, the trial Court was right in holding that the offence against the respondents 1 and 2 is proved. The appellate Court came to an erroneous conclusion that as the prosecution failed to prove that the business of the firm continued after the death of Kodali Arjun Rao. When once the firm is governed by the Act, it continues to be governed by it till the concerned authorities come to a conclusion that such firm no more exists and nobody continued the business of the said firm either separately or collectively. In the absence of specific evidence regarding the winding up of the business of the firm, the respondents 1 and 2 continue to have the liability. Therefore, I find sufficient force in the grounds of revision preferred by the Inspector of Provident Fund and the order of the appellate Court is liable to be set aside.
22. In the result, all the revision petitions are allowed. The judgments, dated April 29, 2000, of the appellate Court in Criminal Appeal Nos. 157, 171, 185, 158, 187, 188, 169, 161, 160, 181, 164, 162, 183, 166, 196, 170, 193, 173, 167, 184, 168, 159, 163, 182, 195, 165, 194, 190, 180, 179, 178, 177, 176, 175, 189, 191, 174 and 192 of 1999 are set aside by restoring the common judgment dated September 7, 1999, of the trial Court making the respondents 1 and 2 liable for prosecution and the consequential sentences.