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TMI Blog1958 (4) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... plicable to the said mills, with the result that the workers thereof were entitled to the benefit of the provident fund created under the Act. The allegations against the respondents were that they failed to remit to the fund the employer's and the employees' share of contribution from 1st April to 31st December, 1954, that they also failed to remit the administrative charges under the Act for aforesaid period and that they also failed to submit the returns prescribed under the Scheme from 1st July to 31st December, 1954. This prosecution was launched on 28-2-1955, by Mr. B. P. Singh, I. A. S., Regional Provident Fund Commissioner and also an inspector appointed under Section 13 of the Act with the previous sanction of the Central Provident Fund Commissioner who is the authority specified in this behalf by the Central Government under Sub-section (3) of Section 14 of the Act. 3. Paragraph 29 of the scheme fixes the rate of contributions payable both by the employer and the employee under the Scheme towards the Provident Fund. Paragraph 30 makes it obligatory upon the employer to pay in the first instance both the contributions, the employers' contribution and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n their part no wilful neglect of, or criminal intention to disobey, the provisions of the Scheme. 5. The learned Magistrate held that the respondents had defaulted in remitting the prescribed contributions and submitting the requisite returns. He was of the opinion; however, that mens rea was a constituent part of the offence under paragraph 76 of the Scheme and since the prosecution had failed to prove that the respondents had got a guilty mind, they had incurred no penalties prescribed by the law. In this Court Mr. Baldeva Sahay appearing for the respondents took an additional ground that the offence was not established since there was no proof of consent, connivance or neglect on the part of at least respondents 1 and 2. This contention he based on the provisions of Sub-section (2) of Section 14A of the Act. Section 14A provides as follows: Offences by companies. (1) If the person committing an offence under this Act or the Scheme made thereunder 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lties imposed by the law, but under Sub-section (1) of Section 14A, apart from the company which has committed an offence under the Act and the Scheme 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, shall also be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly. All officers of the company do not come within the mischief of Sub-section (1). The application of this sub-section is confined only to the officers in the immediate charge of the management of the company. If the officer concerned is not entrusted with the management of the business of the company and owes no responsibility to the company either for good or bad management, he is not covered by Sub-section (1). If, however, where the offence under the Act or the Scheme is committed by a company, every person in charge of and responsible to the company for the conduct of its business shall be deemed to be guilty of the offence and such officer may avoid conviction as enacted by the proviso to Sub-section (1), namely by showing that the offence was committed without his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legislative practice, it would have been provided more usefully in a proviso to Sub-section (1). In my opinion, these two sub-sections deal with different kinds of officers. The officer of the company envisaged in Sub-section (1) is the one who is in direct management of the affairs of the company. Wherever any offence has been committed by the company under the Act or the Scheme, such officer will also be deemed to be guilty of the offence and in his case it will not be necessary for the prosecution to prove consent, connivance or neglect on his part. Since he is in charm of the management and thus directly responsible for the remittance of the contributions to the Fund, both the company and he have been made liable under Sub-section (1) without proof of consent, connivance or neglect on their part. The other officers covered by Sub-section (2) cannot be deemed to be guilty of the offence committed by the company unless the prosecution further establishes that the offence was committed with the consent or connivance of such officer, be he the director, manager or secretary or any other officer of the company. Therefore, in cases falling under Sub-section (2) the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot a necessary element, unless so declared by the legislature in apt words. Although prima facie and as a general rule there must be a mind at fault before there can be a crime, it is not an inflexible rule, and a statute may relate to such subject-matter and may be so framed as to make an act criminal whether there has been any intention to break the law or otherwise to do wrong or not. There is a large body of municipal law in the present day, which is so conceived. By-laws are constantly made regulating the width of thoroughfares, the height of buildings, the thickness of walls, and a variety of other matters necessary for the general welfare, health, or convenience, and such by-laws are enforced by the sanction of penalties, and the breach of them constitutes an offence and is a criminal matter. In such cases it would, generally speaking, be no answer to proceedings for infringement of the by-law that the person committing it had bona fide made an accidental miscalculation or an erroneous measurement. The acts are properly construed as imposing the penalty when the act is done, no matter how innocently, and in such a case the substance of the enactment is that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. (2) A Scheme framed under this Act may provide that any person who contravenes or makes default in complying with, any of the provisions thereof shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. It will appear from the above that in order to constitute an offence under Sub-section (1), the statement or representation must be untrue and must have been made knowingly and with the object of avoiding any payment to be made by him. Thus under Sub-section (1) the knowledge is an essential ingredient of the offence. The statement or representation may be false, but it was not false to the knowledge of the person accused of the offence, in other words, if there was an honest and reasonable belief in the correctness of the statement or representation, even though that were false, a person will not be held guilty of the offence under Sub-section (1) of Section 14. When Sub-section (2) of Section 14 is read with the Scheme itself, it appears that no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therein, the conclusion I come to is that in all cases not covered by Sub-section (1) of Section 14, the criminal intention is not the essential element of the offences. This contention of Mr. Sahay also is without substance and must be rejected. 7. Now, applying the aforesaid principles, it is to be determined which of the respondents is guilty of the charge levelled against him. So far as respondent 3, namely, the Gaya Cotton and Jute Mills Ltd., is concerned, it is crystal clear that the company violated the mandatory provision of paragraph 38 and thereby committed an offence under paragraph 76 of the Scheme. S. P. Bhadani, respondent 1, is the Managing Director of the said mills. As a Managing Director, he was certainly in charge of and was responsible to the said mills for the conduct of their business. His case, therefore, falls under Sub-section (1) of Section 14A, and there is no evidence on his behalf that this offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of it. Therefore, he was also guilty of the offence under paragraph 76 read with Sub-section (1) of Section 14A of the Act. 8. I w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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