Decided on November 14,1968

HARIDAS V Respondents


- (1.) The respondents in these four appeals are proprietors of firms coming within the Employees' Provident Funds Act and the Employees' Provident Funds Scheme framed thereunder. The facts in these cases are similar; and the cases were disposed of by the lower court in a common judgment. The facts are also not in dispute. The prosecution was under S.405 and 499 of the Penal Code in that the respondents did not remit the deductions they made from the wages of their employees into the Reserve Bank or the State Bank .of Travancore. The lower court acquitted the respondents and hence the appeals by the State.
(2.) The admitted facts are that the contributions to be deposited by the employers were not deposited during a few months. During those months they sent returns regularly; and in those returns also it was not stated that they made the deposits. The case of the respondents in their statements under S.342 of the Code of Criminal Procedure is that they did not know that the deposits were not made, since it was the managers of the firms that were attending to the work; and that when they knew that the deposits were not made, they immediately made the deposits. In other words, they did not have the intentions to retain the deductions with them, nor did they retain the deductions knowingly.
(3.) The first question to be considered in these cases is whether there was entrustment as contemplated by the Indian Penal Code to attract S.406 and 409. The Public Prosecutor draws my attention to Para.32(3) of the Provident Funds Scheme, which provides that any sum deducted by an employer 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. Basing on this the Public Prosecutor argues that there was entrustment and there was a breach of the same when the money was not deposited in the Bank as contemplated by the Scheme.;

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