P.D. Dinakaran, J.
1.1. The appeals are directed against the judgment of acquittal dated 12.3.2002 made in C.C.Nos.58 to 69 of 1999 respectively on the file of the learned District Munsif cum Judicial Magistrate, Vaniyambadi, Vellore District, acquitting the respondents herein, who were arraigned as A1 and A3 respectively.
2.1. The prosecution was initiated at the instance of the appellant herein, alleging that the first respondent firm (A1), the Managing Partner of the first respondent firm (A2) and the Manager of the first respondent firm (A3) avoided payment to be made on behalf of the first respondent firm towards the employees provident fund contribution, as contemplated under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (hereinafter referred to as the 'Act') and the Schemes framed thereunder, after getting previous sanction as contemplated under Section 14AC of the Act. Accordingly, they were charged for the offence punishable under Section 14(1A) and 14A in C.C.Nos.58, 59, 61, 62, 64, 65, 67 and 68 of 1999, under Section 14(1B) in C.C. No. 60 of 1999 and under Section 14(1B) and 14A in C.C.Nos.63, 66 and 69 of 1999.
2.2. In all the cases, independent charges were framed against the respondents herein, viz. A1 and A3 as well as the Managing Partner of the first respondent firm, viz. A2.
2.3. During the trial, it was conceded on behalf of the accused that there was a default in the payment of contribution towards the Provident Fund to be made by the first respondent firm, as charged against them.
2.4. The learned District Munsif cum Judicial Magistrate, Vaniyambadi, by judgments dated 12.3.2002, holding that the first respondent partnership firm is not a legal person or a separate entity in the eye of law and the third respondent was only a manager, acquitted the first respondent firm (A1) and the Manager of the first respondent firm (A3) under Section 248(1), Cr.P.C. and convicted the Managing Partner of the first respondent partnership firm (A2) for the respective offence punishable under Section 14(1A), 14(1B) and 14A of the Act, as the case may be and sentenced till the rising of the Court and imposed a fine of Rs.1,500/-, in default, to undergo nine months rigorous imprisonment.
3.1. Admittedly, the Managing Partner of the first respondent partnership firm (A2), has not preferred any appeal against the conviction and sentence imposed on him by judgments dated 12.3.2002 in C.C.Nos.58 to 69 of 1999.
3.2. But, aggrieved by the judgment of acquittal, acquitting the first respondent partnership firm (A1) and the Manager of the first respondent partnership firm (A3), the complainant has preferred the above appeals, assailing the findings of the learned District Munsif cum Judicial Magistrate, Vaniyambadi, that the first respondent partnership firm is not guilty of the offence punishable under Section 14(1A), 14(1B) and 14A of the Act, as referred to above.
4.1. According to Mr. V. Vibishanan, learned counsel for the appellant, the first respondent partnership firm (A1), is also guilty of the offence punishable under Section 14(1A), 14(1B) and 14A of the Act, as referred to above.
4.2. Mr.V. Vibishanan also contends that the second respondent (A3), who happened to be the Manager of the first respondent partnership firm, is also guilty of the offence punishable under Section 14(1A), 14(1B) and 14A of the Act, as referred to above, or otherwise, the partnership firm cannot be proceeded against with for the offence punishable under Section 14(1A) and 14(1B) of the Act, as referred to above.
5.1. In answer to the above contentions raised, Mr. Murali Kumaran, learned counsel appearing for the first respondent partnership firm (A1) submits that when the proviso to Section 14A of the Act refers to the knowledge of the commission of offence and the due diligence to be exercised to prevent the commission of such offence, the first respondent partnership firm (A1) cannot be held guilty of the offence, as both the terms 'knowledge of the commission of offence' and 'due diligence to prevent the commission of such offence' could be attributed only to individual persons, but not to legal persons, viz. the first respondent in the instant case.
5.2. Mr. Murali Kumaran, learned counsel for the first respondent partnership firm (A1), further submits that assuming that the first respondent partnership firm (A1) is found guilty of the offence, the first respondent partnership firm (A1), by itself, cannot be sentenced and therefore, the learned District Munsif cum Judicial Magistrate, Vaniyambadi, is right in acquitting the first respondent partnership firm (A1) under Section 248(1), Cr.P.C.
5.3. Mr. Murali Kumaran, learned counsel for the first respondent partnership firm (A1) also brought to my notice that the second respondent, viz. the Manager of the first respondent partnership firm, (A3) had already retired from service and in any event, since the Managing Partner of the first respondent partnership firm (A2) had already been convicted and sentenced with fine, a lenient view may be taken against the second respondent (A3), who is no more in the service of the first respondent partnership firm (A1).
6. I have bestowed my careful consideration to the submissions of both sides.
7.1. Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and the Schemes framed thereunder, are self contained Code for deduction from the salary of the employees and the responsibilities to contribute equi-proportion of the employer's share and deposit thereof in the account within the specified time under the Act and the Schemes into the account. It is a welfare legislation to provide benefits to the employees as per the Scheme. They need mandatory complaince and any violation thereof provides for penal action.
7.2. Section 2(e) of the Act defines 'employer' as follows.
Section 2: In this Act, unless the context otherwise requires,
(a) ...
(b) ...
(c) ...
(d) ...
(e) 'employer' means -
(i) in relation to an establishment which is a factory, the owner or 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 a 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, such manager, managing director or managing agent;
(f) ...
... '
7.3. The definition of an employer under Section 2(e) of the Act is, therefore, inclusive and brings within its ambit the owner or occupier as well as its Manager. It is an extended definition which sweeps, enlarges and brings within its scope the person who is incharge of or responsible for the management or ultimate control over the affairs of the factory or establishment. Therefore, the guilty of non payment of contribution towards provident fund to the complainant, by the accused A1, A2 and A3 in the instant case, stands constituted, in view of their own admission of non payment or delayed payment of the contribution towards the provident fund under the Scheme, as there is no dispute that there was a default and delay in the payment of employees provident fund contribution, as contemplated under the provisions of the Act, by the employer, viz. the first respondent partnership firm (A1), the Managing Partner of the first respondent partnership firm (A2), and the Manager of the first respondent partnership firm (A3), who are in charge and responsible for the conduct and the business of the first respondent partnership firm, they are held to be guilty of the offence punishable under Section 14(1A), 14(1B) and 14A of the Act, as referred to above.
7.4. If so, the only question that arises for consideration is whether the first respondent partnership firm (A1), as well as the Manager of the first respondent partnership firm (A3), are also guilty of the offence punishable under Section 14(1A), 14(1B) and 14A of the Act, as referred to above, along with the Managing Partner of the first respondent partnership firm (A2)?
7.5. For the purpose of deciding the above issue, it is relevant to refer Section 14A of the Act, which reads as under.
'Section 14A:
Offences by companies. - (1) If the person committing an offence under this Act, the Scheme or the Family Pension Scheme or the Insurance Scheme is a company, every person, who at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of the business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to proceeded against and punished accordingly.
Provided that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of such offence.
(2) Notwithstanding anything contained in sub-section (1) where an offence under this Act, the Scheme or the Family Pension Scheme or the Insurance Scheme has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of, any director or manager, secretary or other officer of the company, such director, manager, secretary or other officer shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
Explanation.- For the purposes of this section, -
(a) 'Company' means any body corporate and includes a firm and other association of individuals; and
(b) 'director' in relation to a firm, means a partner in the firm.'
7.6. Explanation to Section 14A of the Act makes it clear that Company includes a partnership firm and the Director in relation to a firm means a partner of the firm. Thus, wherever the word Company is used in Section 14A(1) and 14A(2) of the Act, the firm has to be read into the 'Company'. Therefore, the reason that the partnership firm is not a legal person or a separate entity under the Partnership Act and hence, they cannot be held guilty of the offence under the provisions of the Act, as weighed by the learned District Munsif cum Judicial Magistrate, Vaniyambadi, is, in my considered opinion, contrary to law, illegal and illogical.
7.7. The supplementary question that arises for my consideration is whether the first respondent firm (A1) could be held guilty of the offence punishable under Section 14A of the Act, as the knowledge of the commission of offence or due diligence to prevent the commission of offence cannot be attributed to the first respondent firm (A1)?
7.8. Section 14A(1) and 14A(2) not only holds the person in charge of and responsible to the company for the conduct of the business for the complaince of the provisions of the Act and the Schemes framed thereunder, but also holds them guilty of the offence for non complaince of the same and fastens with the punishment. The words 'liable to be proceeded against' used in Section 14A(1) and 14A(2) of the Act make it clear that the firm is also liable for appropriate action under the Act, apart from the prosecution for non compliance of the provisions of the Act and the Schemes framed thereunder. Hence, the other liabilities of the firm for non compliance of the provisions of the Act or the Schemes framed thereunder have to be gone into, which necessitate to refer Sections 14B and 7Q of the Act.
7.9. Under Section 14B of the Act, apart from the punishment that could be imposed under Section 14A(1) and 14A(2) of the Act against the company or the firm (in the instant case) or on the persons including the Director, Manager, Secretary or any Officer of the Company, empowers the enforcing authority to recover damages thereunder.
7.10. Section 7Q of the Act which renders the employer, viz. the Company or the firm be liable to pay simple interest at the rate of 12% or at such higher rate as may be specified in the scheme on an amount due from the employer, viz. the company or the firm as the case may be, under the Act, from the date on which the amount is due, till the date of its actual payment.
7.11. Action under Section 14B and 7Q of the Act could, therefore, be initiated against the company or the firm, only if the company or the firm is held guilty of the offence punishable under Section 14A of the Act. It follows that the Managing Partner of the first respondent partnership firm, A2, could not be held guilty of the offence independently, if the company is held not guilty of the offence. Hence, non compliance of the provisions of the Act or the Schemes framed thereunder, either by the occupier, manager or agent or any person who comes within the definition of 'employer', as per Section 2(e) of the Act, automatically renders the company, a legal entity, itself guilty of the offence.
8.1. For all these reasons, I am obliged to set aside the judgments dated 12.3.2002 made in C.C.Nos.58 to 69 of 1999 respectively on the file of the learned District Munsif cum Judicial Magistrate, Vaniyambadi, Vellore District, acquitting A1 and A3 for the offence committed by them, punishable under Section 14(1A) and 14(1B) of the Act.
8.2. However, with reference to the sentence, taking note of the fact that the Managing Partner of the first respondent partnership firm A2, had already underwent imprisonment till the rising of the Court and also stated to have paid the penalty imposed by judgments dated 12.3.2002, I am of the considered opinion that the fine paid by the Managing Partner of the first respondent partnership firm (A2) itself is a sufficient punishment as against the respondents herein.
8.3. The appeals are allowed and the judgment of acquittal dated 12.3.2002 against A1 and A3 are set aside. Consequently, both of them are convicted. However, no specific punishment is awarded against the respondents herein, holding that the punishment awarded against A2 itself is sufficient for A1 and A3.