Labour Law Reporter

2023 LLR 431
JHARKHAND HIGH COURT
Hon'ble Mr. Gautam Kumar Choudhary, J.
Cr. M.P. No. 519/2021, Dt/– 9-2-2023

EMPLOYEES' PROVIDENT FUNDS AND MISCELLANEOUS PROVISIONS ACT, 1952 – EPF Authority conducted inspection in establishment of MGM Hospital – It found that the employer, a Proprietorship firm claimed Provident Fund on full wages from Principal Employer but paid less amount to employee towards salary – Consequently, less deposit of EPF contributions made to EPFO – Contribution on higher salary was received from principal employer, whereas lower salary was shown to contribute lesser EPF contribution causing loss remittance to EPFO – EPF Authority lodged an FIR – Petitioner challenged action of EPF Authority in writ petition – Held, contention of petitioner that no offence under the IPC will be made in view of the fact that the Act itself provides penalties and punishment etc. is not sustainable – As per settled law unless the penal provisions are specifically excluded by any special enactment, there cannot be suo motu exclusion of it – Provision of IPC will apply in such cases where there was genuine dispute about contribution to be made and not where the salary was deliberately pegged down low from the real, to make lesser EPF contribution – Contention of petitioner that very launching of prosecution was premature as the provisions of section 7A of the EPF Act had not been concluded, also does not hold ground, for the simple reason that this provision will apply in such cases where there was genuine dispute about the contribution to be made and not where the salary was deliberately pegged down low from the real, to make lesser EPF contribution – No infirmity is there in the order of taking cognizance – Criminal Miscellaneous Petition is accordingly dismissed. Paras 9 to 11

It is wrong to contend that no offence under IPC will be made since the Act itself provides penalties and punishment etc. is not sustainable because as per settled law unless the penal provisions are specifically excluded by any special enactment, there cannot be suo motu exclusion of it.
Provision of IPC will apply in such cases where there was genuine dispute about contribution to be made and not where the salary was deliberately pegged down low from the real, to make lesser EPF contribution.
Contention that very launching of prosecution was premature as the provisions of section 7A of the EPF Act had not been concluded, also does not hold ground, for the simple reason that this provision will apply in such cases where there was genuine dispute about the contribution to be made and not where the salary was deliberately pegged down low from the real, to make lesser EPF contribution.

Gautam Kumar Choudhary, J. –1. The instant Cr. M.P. has been filed for quashing of entire criminal proceeding in connection with Sakchi P.S. Case No. 223 of 2018 pending in the court of learned CJM, Jamshedpur.

2. The brief fact of the present case is that an inspection was conducted by the informant (Inspector, Employees Provident Fund) in the establishment of MGM Hospital, Sakchi, Jamshedpur, in which it was found that the employer, viz ., Smt Amrita Ranjan w/o Shri Rajiv Ranjan, Proprietor of M/s Advance Business Corporate, MGM Hospital claimed Provident Fund on full wages from Principal Employer and paid less amount to employee towards salary. This resulted into less deposit of provident contribution in Employees Provident Fund Organisation. Three specific cases have been cited in the official complaint namely, Abha Kumari, Chandan Kumar and Ravi Sandil were provident fund contribution in the Month of November, 2016 was not as per the actual wages of the employee received from the principal principal employer (M.G.M. Hospital).

3. The case in nutshell, is that EPF contribution on higher salary was drawn from principal employer, whereas lower salary was shown to contribute lesser EPF contribution causing loss to Employees Provident Fund Organisation.

4. The instant Cr. M.P. has been filed mainly on the ground that no offence under the IPC will be made out in the present case, in view of the fact that Employees Provident Fund & Miscellaneous Provisions Act, 1952 was enacted in the year 1952 and it came into force on 04.03.1952.

Section 14(1) of the said Act, 1952 provides penalties which reads as follows:–

Whoever, for the purpose of avoiding any payment to be made by himself under this Act [the scheme the (pension) scheme or the insurance scheme] or of enabling any other person to avoid such payment, knowingly makes or causes to be made any false statement or false representation shall be punishable with imprisonment for a term which may extend to [one year, or with fine of five thousand rupees, or with both].

In view of the specific provision providing penalty for the same act, the penal provision of Indian Penal Code will stand excluded by the doctrine of implied repeal.

5. The second ground is that the instant prosecution is premature for the reason that criminal provisions can only be initiated after the initiation of the assessment made under section 7A of the EPF Act.

6. It is argued that since, the proceeding for assessment is still pending. Since the assessment has not been made and definite amount has not been determined by competent authority, such, the criminal proceeding is premature and cannot be launched. It is also submitted that there has been inordinate delay in lodging of the FIR. The offence has been committed in the year 2016 but the FIR is lodged in the year 2018.

7. It is further argued that the salary of the employees were fixed for the years 2016, 2017 and 2018 by a common appointment order. The employees have not raised any objection to the less amount being paid a salary or by way of lesser EPF contribution. It is not the case of the informant that the petitioner raised such bill from the principal employer and did not contribute any amount in the PF account as per the salary of the employee.

8. Learned APP for the State assisted by learned counsel for the O.P. No. 2 has opposed the prayer. It is submitted that section 6 of the Act read with para-38 of the EPF Scheme, 1952 mandates to pay the employee's share of Provident Fund Contribution deducted from the salaries/wages of the employees on or before 15th of the following month. This is not a case of dispute over quantification of the contribution was to be made, but one where the EPF contribution from the principal employer has been swindled, by making false representation regarding the salary received. The salary was deliberately projected to be low and the contribution received on actual wages was not deposited. Reliance has been placed on 2018 SCC Online Kolkata 1367 which has been affirmed by the Hon'ble Supreme Court in SLP (Crl.) No. 29232 of 2018.

9. At the outset it may be noted that the penal provisions of the Employees Provident Act do not exclude the penal provisions of IPC. There is a difference between the principles of exclusion of the general provisions of Cr.PC, by any provision of a Special Act and that of exclusion of the penal provisions under IPC. Unless the penal provisions are specifically excluded by any special enactment, there cannot be suo motu exclusion of it. Section 4(2) of the Cr.PC reads as under:

Section 5 nothing contained in this code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force.

10. From these provisions what can be safely deduced is that by special enactment the procedure as laid down under Cr.PC can be excluded, but as such the penal provisions are not excluded. Unless the special law expressly or impliedly provides that certain offences shall be tried exclusively by court constituted under the Act, the jurisdiction of the court having jurisdiction to try the offences under the Code cannot be said to have been excluded. If the particular Act enacting an offence also provides procedure for investigation, inquiry or trial then the same will exclude the application of the code. Therefore, the plea of exclusion of penal provision of the IPC by the provision of EPF has no substance and is accordingly rejected.

11. The second argument that the very launching of prosecution was premature as the provisions of section 7A of the EPF Act had not been concluded, also does not hold ground, for the simple reason that this provision will apply in such cases where there was genuine dispute about the contribution to be made and not where the salary was deliberately pegged down low from the real, to make lesser EPF contribution.