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TMI Blog1973 (1) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... by Sri S.A. Ali, a Provident Fund Inspector appointed Under Section 13(1) of the Act alleging that the provisions of the Act are applicable to the Company of which the Respondents being the Directors and being incharge of and responsible to the Company for the conduct of its business are employers within the meaning of Section 2(e) of the Act and responsible for complying with the provisions thereof in relation to that Establishment. It was alleged in the complaint that by a Notification No. E-102 (19)-E/A dated 17th October, 1957, published under S.R.O. 3416 in Part II Section 3 of the Gazette of India dated 26th October, 1957, the Company had been granted exemption Under Section 17(1)(a) of the Act. According to the complaint, the Respondents had failed to invest in Central Government Securities the employers and employees provident fund contributions for the months of July, August and September, 1965 within tie requisite period and had thereby contravened Condition No. 4(c) Contained in Son. II attached to the aforesaid Notification, subject to which exemption had been granted to the Company Under Section 17(1)(a) of the Act. It was alleged an evidence was given to the effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r penalty is elsewhere provided by or under this Act for such contravention or non-compliance, be punishable with imprisonment, which may extend to three months or with fide which may extend to one thousand rupees, or with both. 8. By a notification dated 17th October, 1957, the Government of India in the Ministry of Labour in exercise of powers Under Section 17(1)(a) of the Act exempted each one of the factories enumerated in Schedule I annexed thereto worn the operation of the Provident Finds Scheme, 1952, subject to the condition specified in Schedule II. The Company is one of the factories mentioned in Schedule I of the notification. The relevant portion of paragraph 4(c) of Schedule II off the notification which, according to the prosecution the Respondents defaulted in complying with is in the following terms: The employer shall make all investment of accumulations accruing after the date of exemption in securities of the Central Government.... 9. Sub-section (3) of Section 14 of the Act as it stood at the relevant time was as follows: No Court shall take cognizance; of any offence punishable under this Act except on a report in writing of the facts constituting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )/XXX-VI-A-216-54 dated February 19, 1955 and in exercise of the powers conferred by Sub-section (3) of Section 14 of the Employees' Provident Funds Act, 1952 (Act No. XIX of 1952), read with Government of India Ministry of Labour notification No. P.F. 11/43 (77) dated April 10, 1967, the Governor of Uttar Pradesh hereby specifies the Labour Commissioner, Uttar Pradesh, as the authority for the purposes of the aforesaid sub section in respect of all industrial purposes of the aforesaid sub-section in respect of all industries falling within the State or the Central sphere. It was by virtue of this notification that the Labour Commissioner, U.P., Kanpur, accorded sanction for prosecution of the Respondents. 11. If Section 14(3) of the Act had stood alone it is apparent that the appropriate Government in respect of the Company being the Central Government, sanction could have been granted for prosecution of the Respondents only by the authority specified in that behalf by the Central Government. Section 19(a) of the Act, however, empowers the Central Government to delegate any power or authority or jurisdiction exercisable by it under the Act not only to an officer or aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before us by the learned Counsel for the Respondent, we referred for decision by a larger Bench the following question: AS to whether by virtue of notification No. S.R.O. 1258 dated 10-4-57 issued by the Central Government Under Section 19 of the Employees' Provident Funds Act, 4952 and the corresponding notification No. 5392 (S.T.)/XXXVI-A-261-54 dated December 14, 1060, issued by the Government of Uttar Pradesh, Sri J.N. Tiwari, Labour (Commissioner, Uttar Pradesh, was the duly specified authority for issuing sanction Under Sub-section (3) of Section 14 of the said Act for launching the prosecution for contravening the provisions of the Employees' Provident Funds Act (19 of 1952) As a result of our reference, the question posed by us was considered by a Full Bench of this Court (Since reported in 297 AWR 30). In its opinion dated 5th December, 1972, the Full Bench answered the question referred to it in the affirmative in the following terms (at page 32 Col. 2 of 1973 AWR): The power of the Central Government to specify the authority who could accord sanction for lodging a complaint in respect of any offence punishable under the Act or under any Scheme was dele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ees' Provident Funds Act, 1952, the appropriate Government is the Central Government and it has directed by notification that the power, authority for jurisdiction exercisable by it Under Section 14(3) of the Act be exercised by the State Government, is it open to the State Government to nominate its own officer or authority to exercise any power, authority or jurisdiction delegated by the Central Government to the State Government. This question to our mind was considered by the Full Bench and has been answered in the affirmative. 14. The first submission made by the learned Counsel for the Respondents consequently fails. 15. The next submission made by Sri Brijlal Gupta was based on Section 14-A(1) of the Act which at the relevant date ran as follows: If the person committing an offence under this Act 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 be proceeded against and punished accordingly provided that.... Learned Counsel for the Respondents con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was brought on record. Paragraph 36-A of the Employees' Provident Funds Scheme, 1952, is as follows: Every employer in relation to a factory or other establishment to which the Act applies on the date of coming into force of the Employees' Provident Funds (Tenth Amendment) Scheme, 1961, or is applied after that date, shall furnish to the Regional Commissioner in Form No. 5-A annexed hereto occupiers, directors, partners, manager or any other person or persons who have the ultimate control over the affairs of such factory or establishment and also send intimation of any change in such particulars, within fifteen days of such change, to the Regional Commissioner by registered post and in such other manner as may be specified by the Regional Commissioner. Form No. 5-A submitted by the Company under the signature of Sri S.D. Garg (Respondent), the owner of the factory is described as M/s. Lakshmiratan Cotton Mills Co. Ltd, Kalpi Road, Kanpur. The name of the occupier disclosed in that Form is that of Sri S.D. Garg (Respondent), At Serial No. 11 of the Form, all the four Respondents are mentioned as the Directors of the Company. The Heading at Serial No. 14 of the For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption by the Central Government in exercise of its powers Under Section 17(1)(a) of the Act, it was merely allowed to operate a provident fund scheme approved by the appropriate authority. By cancellation of the exemption in accordance with Section 17(4)(a) of the Act the privilege had' been withdrawn by, an executive order. This to our mind does not involve the imposition of a 'penalty' within the meaning of Section 14(2-A) of the Act. Section 14(2-A) of the Act provides for punishment in cases contemplated by that provision by a criminal court. If the interpretation canvassed by Sri Brijlal Gupta is accepted that Section 17(4)(a) contemplates an alternative penalty for failure to comply with the conditions subject to which exemption was granted to the Company Under Section 17(1)(a) it would render Section 14(2-A) otiose land redundant. The Parliament while enacting the Act was evidently aware of the fact that Section 17(4)(a) provides for cancellation of the exemption in cases where there had been a breach of the Conditions subject to which it had been granted. If it had contemplated that cancellation of the exemption amounted to a penalty within the meaning of S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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