Amal Kumar Chatterjee, J. - (1.) This rule seeks to quash a prosecution started against the petitioners who happen to be the managing director, directors and the manager of Associated Aesby industries (Private), Ltd., a factory, under Section 406, Indian Penal Code, for failure to deposit in the Fund of the Employees' State Insurance Corporation within the prescribed period, the amount deducted by them as principal employers from the wages of the employees amounting to Rs. 19,657.30 for a certain period. The contention raised in support of the rule was that the complaint was lacking in material particulars to fasten criminal responsibility upon the petitioners as it did not say anything more than that they were the managing director, directors and the manager and were the principal employers at the relevant time.
(2.) The learned advocate for the petitioners has argued that it was incumbent upon the complainant to state in the complaint that the petitioners were in charge of the business or were in overall control of the day to day business of the company and in support of this contention reliance has been placed on the decision in K. N. Genda v. State, 1982-II C. H. N. 223 . That was no doubt a case under the Employees' State Insurance Act and it was held on the basis of a previous decision in Krishna Kumar Dalmia v. State, 1981-II C. H. N. 301 , which, however, was a case under the Employees' Provident Funds and Miscellaneous Provisions Act, that an averment that the accused persons as principal employers failed to deposit the amount in the Employees' State Insurance Fund was not an adequate averment to connect the accused with the alleged offence. It appears from the judgment that Krishna Kumar Dalmia case (vide supra), was under S. 14A of the Employees' Provident Funds and Miscellaneous Provisions Act, or, in other words, the accused persons were sought to be made vicariously liable for an offence committed by the company. The scheme of the Employees' State Insurance Act is altogether different as, under this Act, an offence can be committed not by the company but by the principal employers and, as such, no question can possibly arise of making an accused vicariously responsible for an offence committed by the company by alleging that he was in charge of the business or in overall control of the day to day business of the company. On the other hand, an earlier Division Bench of this Court has held in Bidyut Kumar Sett and another v. Satyesh Chandra Bagchi, 1979-I L. L. N. 78 , that a director of a company can be brought within the meaning of the word "occupier" as mentioned in S. 2(1) of the Employees' State Insurance Act. Under the Employees' State Insurance Act, responsibility is cast upon the principal employer to make deduction from wages of employees and to deposit the same in the Fund of the Employees' State Insurance Corporation within a certain period and if it is not done, he shall be deemed to have committed the offence of criminal breach of trust, looking to explanation 2 to Section 405 of the Indian Penal Code. In the circumstances, on the authority of the decision in Bidyut Kumar Sett case (vide supra), it can be held that the present petitioners are the principal employers being occupiers of the factory in question and the learned Magistrate made no error in taking cognizance of the complaint.
(3.) It may however be noticed that under explanation 2 to Section 405, Indian Penal Code, an employer who deducts contribution from the wages of employees for credit to the Employees' State Insurance Fund and makes default in deposit of such contribution to the Fund is deemed to have dishonestly used the amount in violation of the direction of law. Under the Employees' State Insurance Act, however, it is the responsibility of the principal employer to make deduction from the wages of employees and, therefore, a question may arise whether a principal employer can be held to be liable for the offence of criminal breach of trust as defined in Section 405, Indian Penal Code. Although explanation 2 to Section 405, Indian Penal Code, uses the word "employer" and not "principal employer" still the sensible view will be that the expression "employer" as used in this explanation really means the principal employer because under the Employees' State Insurance Act, to which also reference is made in the explanation it is for the principal employer to make the deduction. Any other interpretation will render the explanation nugatory and, therefore, it can be safely held that the intention of the Legislature was to make the defaulting principal employer liable for the offence of criminal breach of trust.;